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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE COMMISSION ACT OF 1934
For the period ended February 28, 1998
Commission File Number: 001-05970
SILVER BUTTE MINING COMPANY
(Exact name of registrant as specified in its charter)
IDAHO 84-0263301
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
2501 E. SHERMAN AVENUE, #215, COEUR D'ALENE, ID 83814
(Address of Principal Executive Offices) (Zip Code)
(208) 664-0880
Registrant's telephone number, including area code
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 ( ) No (X)
The number of shares of Common Stock, $.05 par value, outstanding as of
February 28, 1998, was 7,828,748.
*****************************************************************************
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-QSB ANNUAL REPORT
February 28, 1998
INDEX
Page
Number
Part I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Balance Sheets, February 28, 1998,
and August 31, 1997 3
Condensed Income Statements for the three and six
month periods ended February 28, 1998, and 1997 4
Condensed Statements of Cash Flows for the six months
ended February 28, 1998, and 1997 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 -8
Signature Page 8
2
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED BALANCE SHEETS
February 28, 1998 and August 31, 1997
<TABLE>
February 28, August 31,
1998 1997
____________ ____________
<C> <S> <S>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,347 $ 84,297
Certificate of deposit for State lease 5,000 5,000
Marketable securities 73,552 -
Accounts receivable 1,086 1,092
Prepaid expenses 1,379 -
____________ ____________
Total current assets 82,364 90,389
PROPERTY, PLANT & EQUIPMENT
Properties 3,000 3,000
Equipment and machinery 19,704 19,704
Accumulated depreciation (19,704) (19,704)
____________ ____________
3,000 3,000
____________ ____________
TOTAL ASSETS $ 85,364 $ 93,389
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 6,470 $ 7,910
____________ ____________
Total current liabilities 6,470 7,910
____________ ____________
STOCKHOLDERS' EQUITY
Common stock, $.05 par value
authorized 10,000,000 shares,
issued and outstanding,
7,828,748 shares 391,437 391,437
Additional paid-in capital 392,953 392,953
Accumulated deficit (705,496) (698,911)
____________ ____________
Total shareholders' equity 78,894 85,479
____________ ____________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 85,364 $ 93,389
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED INCOME STATEMENTS
For the Three and Six Months Ended February 28, 1998 and 1997
<TABLE>
Three Months Ended Six Months Ended
__________________________ __________________________
February 28, February 28, February 28, February 28,
1998 1997 1998 1997
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
REVENUES
Dividend income $ 522 $ - $ 522 $ -
Interest income 95 1,126 945 2,349
Rock sales - - 780 1,077
Misc. other income (31) 399 - 399
____________ ____________ ____________ ____________
Total Revenues 616 1,525 2,277 3,825
____________ ____________ ____________ ____________
EXPENSES
Wages and other
Compensation 1,875 225 4,710 1,510
Professional
Services 320 80 2,404 1,822
Rent & royalties 200 200 390 200
Office expense 227 89 349 277
Dues, taxes and
Licenses 680 364 680 364
Miscellaneous 231 5 329 116
____________ ____________ ____________ ____________
Total Expenses 3,533 963 8,862 4,289
____________ ____________ ____________ ____________
INCOME (LOSS) BEFORE (2,917) 562 (6,585) (464)
INCOME TAXES
INCOME TAXES - - - -
____________ ____________ ____________ ____________
NET INCOME (LOSS) $ (2,917) $ 562 $ (6,585) $ (464)
============ ============ ============ ============
Income (Loss) per Share
Of Common Stock
Outstanding $ (0.0004) $ (0.0001) $ (0.0008) $ (0.0001)
============ ============ ============ ============
Weighted Average Number
Of Common Shares
Outstanding 7,828,748 7,828,748 7,828,748 7,828,748
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended February 28, 1998 and 1997
<TABLE>
Six Months Ended
______________________________
February 28, August 31,
1998 1997
____________ ____________
<C> <S> <S>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (6,585) $ (464)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Increase (decrease) in payables (1,440) 984
Decrease (increase) prepaid expenses (1,379) 2,240
Decrease (increase) receivables 6 (1,039)
____________ ____________
Net cash provided by (used in)
operating activities (9,398) 1,721
____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in marketable securities (73,552) -
____________ ____________
Net cash used in investing
activities (73,552) -
____________ ____________
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (82,950) 1,721
Cash and Cash Equivalents at Beginning
of Period 89,297 86,090
____________ ____________
Cash and Cash Equivalents at End of Period $ 6,347 $ 87,811
============ ============
Interest expense paid $ - $ -
============ ============
Income taxes paid $ - $ -
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SILVER BUTTE MINING COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Presentation of Interim Information
The accompanying unaudited condensed financial statements have been prepared
by Silver Butte Mining Company's management. In management's opinion, these
condensed financial statements include all normal adjustments considered
necessary to present fairly the financial position as of February 28, 1998,
and the results of operations for the three and six months ended February 28,
1998 and 1997, and cash flows for the six months ended February 28, 1998 and
1997. Interim results are not necessarily indicative of results for a full
year. The Company's sales of rock are seasonal in nature, and the Company
does not expect that it will realize any additional sales before the quarter
ending August 31, 1998.
The condensed financial statements and notes are presented as permitted by
Form 10-QSB, and do not contain certain information that is included in the
Company's annual financial statements.
Note 2. Marketable Securities
The Company has invested in certain money market fund equity securities
which it considers as available for sale according to Statement of Financial
Accounting Standards (SFAS) 115. Unrealized holdings gains and losses on
such securities are not expected, but will be excluded from earnings and
reported as a separate component of shareholders' equity, if gains or losses
occur. The cost of these marketable equity securities, when sold, will be
determined by the specific identification method.
The fair value of these securities, in accordance with SFAS 107, is
considered to be the same as their cost, based on quoted market prices.
Note 3. Commitments and Contingencies
The Company sold a seven-acre parcel of land in the fiscal year ended
August 31, 1996 that contained mine waste rock and mill tailings. The
Company believes there is a remote possibility that this property may
require some cleanup, and an even more remote possibility that the Company
may be required to participate in the cost of such a cleanup, which the
Company estimates would be less than $10,000.
6
<PAGE>
SILVER BUTTE MINING COMPANY
Form 10-QSB QUARTERLY REPORT
February 28, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The Company was a mining company engaged in exploration activities from
its inception in 1965 through 1994. In 1994, the Company abandoned all
exploration activities, and is now seeking other business opportunities
in mining or other industries. The Company continues to hold and
maintain the properties on which it performed its exploration efforts.
The Company's fiscal year ends on August 31.
OVERVIEW
The Company's management determined in 1994 that the Company did not have
the financial resources to continue to explore for commercial ore deposits
after many years of unsuccessful efforts. The Company has performed some
reclamation work on its mining properties since 1994, and is soliciting
buyers for its remaining real estate and mining equipment. The Company's
management believes that its status as a public company may be of some
value, and management will entertain proposals from others who have business
operations that may be interested in combining with a public company.
RESULTS OF OPERATIONS
REVENUES. The Company has had no meaningful sales activities in the last
18 months. The Company's interest income decreased by $1,031 to $95 for the
second fiscal quarter ended February, 1998, compared to the second quarter of
fiscal 1997. This was the result of the Company maintaining its funds in a
lower yielding bank account upon the maturing of its certificates of deposit
prior to investing a significant portion of the funds in money market equity
securities. The Company realized $552 of dividend income from its money
market accounts during the second quarter of fiscal 1998, compared to no
dividend income for the second quarter of fiscal 1997. Dividend income
should increase in subsequent quarters of fiscal 1998, as the funds will
remain invested during all days of future quarters.
The Company's interest income decreased by $1,404 to $945 during the six
months ended February 28, 1998, compared to the six months ended February
28, 1997, for the reasons discussed above. The changes in dividend income
and the reasons for the changes are the same for the six month period as
for the second quarter of fiscal 1998, discussed above. The Company's rock
sales decreased by $297 from the first half of fiscal 1997, compared to the
first half of fiscal 1998. However, the 1996 reported sales included some
sales from earlier periods which had inadvertently been previously unrecorded.
It is unlikely that the Company will realize any additional rock sales before
the three month period ending August 31, 1998, because of the seasonal nature
of such sales.
EXPENSES. Wages and other compensation, professional services, and
dues, taxes and licenses were all significantly higher in the first quarter
of fiscal 1998 when compared to the first quarter of fiscal 1997. This was
the result of the Company's efforts to renew its reporting requirements.
The Company's management believes that these expenses will decrease
throughout the balance of the fiscal year. Other expenses were not
significant during the first fiscal quarters.
7
<PAGE>
SILVER BUTTE MINING COMPANY
Form 10-QSB QUARTERLY REPORT
February 28, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION (CONTINUED)
EXPENSES (Continued). The aforementioned expenses were significantly
higher in the first half of fiscal 1998, than in the first half of fiscal
1997, for the reasons discussed above. Other expenses were not significant
during the first six months of fiscal years 1998 and 1997.
FINANCIAL CONDITION
LIQUIDITY. Cash and cash equivalents decreased by $82,950 and
marketable securities increased by $73,552 during the first half of the
fiscal year 1998. The marketable securities are money market funds that
allow the Company immediate access to funds when the Company needs
additional cash. The Company has prepaid $500 in production royalties
as a requirement for the renewal of its lease with the State of Idaho,
and the Company has prepaid $879 of industrial insurance.
CAPITAL REQUIREMENTS. The Company has no plans that will require significant
cash outlays during the foreseeable future other than normal operating costs.
The Company expects that it will draw down its marketable securities by about
$7,000 during the balance of the fiscal year as it pays down its accounts
payable, and pays operating expenses. The Company also expects that it will
sell or abandon a significant portion of its equipment and machinery during
the balance of the fiscal year. This will not have a material effect on the
Company's financial condition because the machinery and equipment are fully
depreciated, and the amount of cash that may be generated from such sales is
not expected to be significant.
****************************************************************************
SIGNATURES
****************************************************************************
In accordance with section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SILVER BUTTE MINING COMPANY
(Registrant)
/s/ R. Richard Rice
_________________________ Date: April 10, 1998
R. Richard Rice
Title: President
(Principle Executive Officer and
Principle Accounting Officer)
8
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements at February 28, 1998 (Unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 1,347
<SECURITIES> 73,552
<RECEIVABLES> 1,086
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 82,364
<PP&E> 22,704
<DEPRECIATION> 19,704
<TOTAL-ASSETS> 85,364
<CURRENT-LIABILITIES> 6,470
<BONDS> 0
0
0
<COMMON> 391,437
<OTHER-SE> (312,543)
<TOTAL-LIABILITY-AND-EQUITY> 85,364
<SALES> 0
<TOTAL-REVENUES> 2,277
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,862
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,585)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,585)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,585)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> (.001)
</TABLE>
