<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934
Commission File Number: 0-27019
Uintah Mountain Copper Company
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(Exact name of small business issuer as specified in its charter)
Utah 87-0369205
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
341 South Main Street, Suite 401, Salt Lake City, Utah 84111
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(Address of principal executive offices) (Zip Code)
(801) 530-1045
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(Issuer telephone number)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ] Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 12,075,985 shares of its
$0.10 par value common stock as of November 15, 1999.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]
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ITEM 1. FINANCIAL STATEMENTS
UINTAH MOUNTAIN COPPER COMPANY
(A DEVELOPMENT STAGE COMPANY)
Condensed Balance Sheets
(Unaudited)
September 30, December 31,
1999 1998
------------- ------------
ASSETS
CURRENT ASSETS
Cash $ 135 $ 112
---------- ----------
TOTAL CURRENT ASSETS 135 112
FIXED ASSETS:
Furniture and fixtures 4,460 4,460
Vehicles 2,900 2,900
Leasehold improvements 1,160 1,160
Less: Accumulated Depreciation (8,085) (7,476)
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435 1,044
OTHER ASSETS
Mine development 80,847 78,159
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TOTAL ASSETS $ 81,417 $ 79,315
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 25,486 $ 25,486
Bank overdraft - 6,430
Accrued expenses 5,076 -
Accrued salaries 507,550 481,300
Income taxes payable 100 100
Notes payable - related entities 2,253 2,584
Accrued interest 226,202 182,897
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TOTAL CURRENT LIABILITIES 766,667 698,797
NOTES PAYABLE - RELATED ENTITIES 243,018 213,659
SHAREHOLDER EQUITY:
Common stock 1,207,598 1,207,598
Additional paid-in capital 257,518 257,518
Retained Earnings (2,393,384) (2,298,257)
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Total Shareholder Equity (928,268) (833,141)
---------- ----------
TOTAL LIABILITIES & SHAREHOLDERS
EQUITY $ 81,417 $ 79,315
========== ==========
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
UINTAH MOUNTAIN COPPER COMPANY
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From Inception
Three Months Three Months Nine Months Nine Months on January 28,
Ended Ended Ended Ended 1946 through
September 30, September 30, September 30, September 30, September 30,
1999 1998 1999 1998 1999
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUE
Sales $ - $ - $ - $ - $ -
Cost of sales - - - - -
------------- ------------- ------------- ------------- -------------
GROSS PROFIT - - - - -
OPERATING EXPENSES
Depreciation 203 383 609 1,149 8,085
General and administrative 22,290 28,288 51,214 90,258 2,158,976
------------- ------------- ------------- ------------- -------------
TOTAL OPERATING EXPENSES 22,493 26,671 51,823 91,407 2,167,061
OPERATING INCOME (LOSS) (22,493) (28,671) (51,823) (91,407) (2,167,061)
OTHER INCOME (EXPENSES)
Interest income 1 15 1 15 579
Interest expense (14,266) (12,797) (43,305) (37,852) (226,202)
------------- ------------- ------------- ------------- -------------
TOTAL OTHER INCOME (EXPENSES) (14,265) (12,782) (43,304) (37,837) (225,623)
Income before income taxes (36,758) (41,453) (95,127) (129,244) (2,392,684)
Income tax expense (benefit) - - - - 700
------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (36,758) $ (41,453) $ (95,127) $ (129,244) $ (2,393,384)
============= ============= ============= ============= =============
Weighted average shares
outstanding:
Basic $ 12,075,985 $ 12,026,985 $ 12,075,985 $ 12,026,985
Diluted $ 12,075,985 $ 12,026,985 $ 12,075,985 $ 12,026,985
============= ============= ============= =============
Net income per share:
Basic Nil Nil Nil Nil
Diluted Nil Nil Nil Nil
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE> 4
UINTAH MOUNTAIN COPPER COMPANY
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
From Inception
on January 28,
For the nine months 1946 through
ending September 30, September 30,
1999 1998 1999
----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (95,127) $ (129,244) $ (2,393,384)
Adjustments to reconcile net
earnings to net cash flows
from (used by) operating
activities:
Depreciation 609 1,149 8,085
Effect of Accounting Change
Changes in operating assets
and liabilities:
Increase in deferred charges (2,688) (10,000) (80,847)
(Decrease)increase in accounts payable - 4,582 25,486
(Decrease) increase in income
taxes payable - - 100
Increase (decrease) in accrued expenses 5,076 - 5,076
Increase (decrease) in accrued salaries 26,250 35,850 507,550
Increase in accrued interest 43,305 37,493 228,202
----------- ----------- ------------
Net cash flows used by
operating activities (22,575) (60,170) (1,707,732)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - - (8,520)
----------- ----------- ------------
Net cash used by investing
activities - - (8,520)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash - 42,500 1,387,756
Proceeds from (payments on)
long-term debt-related entities 29,028 18,831 322,631
Proceeds from(payments) on bank overdraft (6,430) - -
----------- ----------- ------------
Net cash flows from financing
activities 22,598 61,331 1,710,387
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH 23 1,161 135
CASH AT THE BEGINNING OF PERIOD 112 526 -
----------- ----------- ------------
CASH AT END OF PERIOD $ 135 $ 1,687 $ 135
=========== =========== ============
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
UINTAH MOUNTAIN COPPER COMPANY
(A DEVELOPMENT STAGE COMPANY)
Notes to the Unaudited Financial Statements
September 30, 1999
NOTE 1- CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 1999 and 1998
and for all periods have been made.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's audited financial
statements included in its registration statement on Form 10KSB. The results
of operations for the periods ended September 30, 1999 and 1998 are not
necessarily indicative of the operating results for the full years.
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<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
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Uintah Mountain Copper Company, a Utah corporation, (the "Company") was formed
on January 30, 1946. The Company has been developing mining claim, known as,
the Sunshine Quartz/Hematite Claims located in the Ashley National Forest of
Duchesne County, Utah. The mining claims consist of 30 unpatented load
claims. Principal ore found on the 30 unpatented load claims is a high-grade
hematite (iron oxide) ore. The Company has been developing these claims with
the intent of marketing the unique ore in the specialty natural pigments
market.
The first five claims, namely the Sunshine Quartz Mine Nos. 1-5 were located
in 1936 and placed in the Company's ownership when the Company was
incorporated. Thirty-one additional claims, namely Hematite Nos. 1-31 were
located in 1977. In 1989, all claims were reclaimed by the Company. Eight
claims (Hematite 10, 11, 12, 13, 14, 25 & 26) were dropped in 1993 due to new
federal filing requirements and a geologic re-evaluation of the properties.
In 1995, Hematite Nos. 25 and 26 were re-filed. All claims have been legally
filed with Duchesne County, State of Utah, and the Bureau of Land Management.
Net profit royalties of 10% are due to Mid American Minerals, Inc., a Utah
corporation. (See certain transaction).
Through the end of 1997, the Company held special use permits for a 5-acre
mill and mining camp site and a 6.5-mile access road to, and on, the claims.
As of 1998, the use of these facilities has been made part of the Company's
approved continuing Plan of Operation on file with U.S. Forest Service,
("Forest Service") so that annual permitting will no longer be required. The
present Plan of Operation for development activities at this site has been on
file with the Forest Service since 1996 and is currently active.
The Company's prior activity has been focused on the development and
exploration of its mining claims, as well as, the testing of the ore samples
and refinement of the samples into potential products. This activity has been
time consuming particularly since the Company's mine is located in a region of
Utah that is not accessible, at this time, during the winter months. This
allows the Company only a limited operating window after the snow melts and
before the first snow falls.
The Company has completed its initial exploratory drilling and laboratory
testing programs on its claims and is ready, pending financing, to commence
the mining and milling of ore. The Company still needs financing to complete
the mill and provide initial working capital to fund mining operations until
revenue is produced from the mined ore. The Company estimates that it will
need $1,500,000 to complete the mill and provide initial working capital.
Plan of Operation
- -----------------
The Company intends to continue to perform development work, marketing
activities and claim support operations through the summer of 1999, and
pending funding commence construction on a mill. The Company does not
anticipate extensive mining operations in 1999 and likely will not have any
revenue.
Once the EA is complete in 1999, the Company will be able to begin more
extensive development operations in 2000.
<PAGE> 6
The Company has relied on its officers and directors to perform work and
testing on the mine. When needed, the officers and directors have provided
funds to offset the cost of exploratory drilling and laboratory testing. The
Company has also relied on the limited sale of its securities to fund
operations. It is anticipated that the officers and directors of the Company
will continue to provide the work and funding support to continue with claim
maintenance and exploratory drilling. The officers and directors do not have
the funds to provide the $1,500,000 needed to construct a mill and commence
full scale mining operations. The Company intends to seek, initially,
traditional banking arrangements to fund the mill construction. If the
Company is unable to obtain debt financing, the Company will investigate
selling its securities to raise the capital needed to fund the mill and mining
operations.
The Company is hopeful that it will be able to have the mill completed by the
summer of 2000 and commence development/mining operations. If the Company is
unable to keep to this time schedule, it is possible that revenues could not
be received by the end of 2000. The Company has sent out samples of its
potential product to multiple users of high quality pigments and received
positive responses from potential buyers. The buyers can not make any
definitive commitments, at this time, until the Company has the funds to
complete the mill and can provide a time table for the delivery of product.
Liquidity and Capital Resources
- -------------------------------
As of September 30, 1999, the Company had a negative working capital deficit
of $766,532. Current Assets were only $135 requiring the officers and
directors of the Company to continue to use their own funds to keep the
Company operating. The current liabilities of the Company at September 30,
1999, were $766,667, which primarily consist of accrued salaries to the
officers of the Company of $507,550 and interest on related parties notes of
$226,202. The Company's financial position has not changed significantly from
prior quarters other than current assets continue to decline as funds are
needed to pay operating expenses.
All of the officers and directors have agreed to allow the Company to continue
to accrue their salaries until sufficient revenue is produced to pay ongoing
salaries, as well as, back salaries. Additionally, the notes payable are to
the same officers and directors who have agreed to delay the payment of the
notes and related interest until sufficient revenue is produced to allow for
such payments. As of December 31, 1998, the Company owed a total of $228,535
to the estate of Mike Kandaris, 138,897 to Peter Kandaris and $185,196 to Pam
Kandaris-Cha. Even with these understandings among the officers and directors,
the Company still does not have enough funds to pay existing obligations and
in addition to those amounts owed related parties, the Company must pay
approximately $30,662 in current liabilities to third parties.
The Company's management believes the Company will be able to continue in
business but will not be able to generate revenue until it is able to raise
additional capital to fund the mill construction and initial working capital
need. Management estimates that it will require $1,500,000 in additional
capital to move the Company into a position to generate revenue. The Company
will initially seek capital from traditional debt financing. If debt
financing is unavailable, the Company will probably try to sell its securities
in private transactions to generate the required funds. If the Company has to
sell its securities, current shareholders would probably suffer substantial
dilution, given the Company's current financial conditions. There also can be
no assurance that the Company will be able to obtain the needed capital and
will not generate any future revenue.
<PAGE> 8
Results of Operations
- ---------------------
The Company has not generated any revenue since its inception in 1946. All
activities have been focused on the obtaining of claims, developing the claims
and in preparing the claims to commence mining operations. The Company
funding constraints have slowed progress on developing the mining operations
and significant efforts did not commence until 1994. The Company is hopeful
that with a capital infusion, it will be able to commence mining operations.
The Company continues to incur expenses to keep the mining site open, comply
with environmental regulations and complete studies on the iron ore. For the
nine months ended September 30, 1999, the Company incurred $51,214 in general
and administrative expense and had an operating loss of $51,823 with a net
loss of $95,127 with interest expenses of $43,304. For the three months ended
September 30, 1999, the Company had a net loss of $36,758 which was slightly
lower then the $41,453 net loss for the three months ended September 30, 1998.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
----------
27 Financial Data Schedule
(b) Reports on From 8-K.
--------------------
None
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<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Uintah Mountain Copper Company
Dated: November 19, 1999 By: /S/Pamela Kandaris-Cha, Principal
Accounting and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 135
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 135
<PP&E> 8,520
<DEPRECIATION> (8,035)
<TOTAL-ASSETS> 81,417
<CURRENT-LIABILITIES> 766,667
<BONDS> 0
0
0
<COMMON> 1,465,116
<OTHER-SE> (2,393,384)
<TOTAL-LIABILITY-AND-EQUITY> 81,417
<SALES> 0
<TOTAL-REVENUES> 1
<CGS> 0
<TOTAL-COSTS> 22,493
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (14,266)
<INCOME-PRETAX> (36,758)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,758)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
