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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE
EXCHANGE ACT
For the transition period from ____________ to ___________
Commission file number 000-21623
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SHOSHONE SILVER MINING COMPANY, INC.
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(Exact name of small business issuer as specified in its charter)
Idaho 82-0304993
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4903 Industrial Ave. West
Coeur d'Alene, Idaho 83814
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(Address of principal executive offices) (Zip Code)
503-632-0032
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has 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 period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days. Yes . No XX .
---- ----
As of June 30, 2002, 9,979,329 shares of the issuer's common stock were
outstanding.
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Shoshone Silver Mining Company, Inc.
Form 10-Q
For the Quarter Ended June 30, 2002
Table of Contents
Page
PART I. - FINANCIAL INFORMATION
Item l - Financial Statements (Unaudited)
Balance Sheets
Statements of Operations
Statement of Changes in Stockholders' Equity
Statement of Cash Flow
Notes to Financial Statements
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of
Security Holders
Item 6 - Exhibits and Reports on Form 8-K
SIGNATURES
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Part I - FINANCIAL INFORMATION
Shoshone Silver Mining Company, Inc.
Balance Sheets (Unaudited)
Unaudited Audited
June 30, 2002 December 31, 2001
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Current Assets
Cash - Checking $ 9,613 $ 10,965
Trading Securities 9,906 226,350
Prepaid Expenses - - 720
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Total Current Assets 19,519 238,035
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Property, Plant and Equipment, at cost
Property, Plant and Equipment 1,634,861 1,634,861
Accumulated Depreciation (1,001,900) (982,640)
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Total Property, Plant and Equipment 632,961 652,221
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Other Assets
Depletable Assets and Mine Investments 1,170,500 1,170,500
Other Long-term Investments 20,000 20,000
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Total Other Assets 1,190,500 1,190,500
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Total Assets $ 1,842,981 $ 2,080,756
============= =============
Current Liabilities
Accounts Payable $ - - $ 8,027
Margin Account Short-term Loan 2,745 106,660
Short-term Loan 10,000 - -
Minority Positions 1,630 1,630
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Total Current Liabilities 14,375 116,317
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Long-term Liabilities
Long-Term Debt - - - -
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Total Liabilities 14,375 116,317
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Stockholders' Equity
Common Stock, Par Value $0.10 per share 997,933 997,933
Authorized - 20,000,000 shares
Issued and outstanding - 9,979,329 shares
Paid in Capital in excess of par 2,636,425 2,636,425
Treasury Stock (65,733) (65,733)
Stock Options 12,221 12,221
Retained Earnings (Deficit) (1,752,240) (1,616,407)
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Total Stockholders' Equity 1,828,606 1,964,439
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Total Liabilities and Stockholders' Equity $ 1,842,981 $ 2,080,756
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The accompanying notes are an integral part of the financial statements.
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Shoshone Silver Mining Company, Inc.
Statements of Operations (Unaudited)
For the three months and six months ended June 30, 2002 and 2001
Three Months Ended Six Months Ended
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June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
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Sales $ 12,600 $ 16,800 $ 22,024 $ 78,769
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Total Costs of Sales 4,750 8,570 47,296 108,817
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Gross Profit (Loss) 7,850 8,230 (25,272) (30,048)
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Operating Expenses:
General and Administrative Expenses 4,315 2,245 393 12,040
Depreciation 9,630 19,260 8,962 17,925
----------- ----------- ----------- -----------
Total Operating Expenses 13,945 21,504 9,356 29,965
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Net Loss from Operations (6,095) (13,274) (34,628) (60,013)
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Other Income (Expenses):
Net Gain (Loss) on Sale of Investments (243,904) (367,783) (4,455) (11,048)
Unrealized Gain (Loss) on securities 198,933 247,102 (2,033) (98,791)
Option Proceeds - - - - - - 524
Transfer Fees and Misc. Income - - - - 1,000 2,250
Dividend Income 4 339 374 730
Interest Income - - - - 8 8
Margin Fees and Wire Costs (517) (2,186) (1,166) (1,587)
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Total Other Income (45,485) (122,529) (6,272) (107,914)
----------- ----------- ----------- -----------
Net Loss Before Income Taxes (51,579) (135,803) (40,900) (167,927)
Income Taxes - - 30 - - - -
----------- ----------- ----------- -----------
Net Loss $ (51,579) $ (135,833) $ (40,900) $ (167,927)
=========== =========== =========== ===========
Income (Loss) per Common Share, Basic $ (0.0052) $ (0.0136) $ (0.0041) $ (0.0168)
=========== =========== =========== ===========
Income (Loss) per Common Share, Diluted $ (0.0052) $ (0.0136) $ (0.0041) $ (0.0168)
=========== =========== =========== ===========
Weighted average number of common shares
outstanding, basic 9,979,933 9,979,933 9,979,933 9,979,933
=========== =========== =========== ===========
Weighted average number of common shares
outstanding, diluted 9,979,933 9,979,933 9,979,933 9,979,933
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
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Shoshone Silver Mining Company, Inc.
Statement of Changes in Stockholders' Equity (Unaudited)
Number of Common Additional Accumulated Treasury Stock
Shares Amount Paid-in-Capital Deficit Stock Options Total
---------------------- --------------- ------------ ------------ ---------- -----------
Balance, December 31, 1999,
as restated 9,974,329 $ 997,433 $ 2,635,925 $ (1,176,200) $ (65,733) $ 12,221 $ 2,403,646
Issuance of stock for services
at a price of $0.20 per share 5,000 500 500 1,000
Net Loss for year ended 12/31/00 (212,048) (212,048)
Purchase of Treasury Stock - -
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Balance, December 31, 2000,
as restated 9,979,329 $ 997,933 $ 2,636,425 $ (1,388,248) $ (65,733) $ 12,221 $ 2,192,598
Net Loss for year ended 12/31/01 (228,159) (228,159)
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Balance, December 31, 2001 9,979,329 $ 997,933 $ 2,636,425 $ (1,616,407) $ (65,733) $ 12,221 $ 1,964,439
Net Loss for the period
ended 6/30/02 (135,833) (135,833)
---------- --------- ------------ ------------ ---------- --------- -----------
Balance, June 30, 2002 9,979,329 $ 997,933 $ 2,636,425 $ (1,752,240) $ (65,733) $ 12,221 $ 1,828,606
========== ========= ============ ============ ========== ========= ===========
The accompanying notes are an integral part of the financial statements.
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Shoshone Silver Mining Company, Inc.
Statement of Cash Flows
(Unaudited) (Audited)
Six Months Ended Year Ended
June 30, 2002 December 31, 2001
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Cash Flows From Operating Activities:
Net Income (Loss) $ (135,833) $ (228,159)
Adjustments to reconcile net income
(loss) to net cash used by operations:
Depreciation Expense 19,260 35,849
Loss on trading securities (247,102) 120,623
(Gain) Loss on sale of trading securities 367,783 11,144
Change in assets and liabilities:
Purchases of trading securities (188,562) (355,458)
Proceeds from sale of trading securities 284,323 318,518
Decrease (Increase) in other current assets 720 (720)
Increase (decrease) in accounts payable (8,027) (2,522)
Gain on sale of fixed assets - - (12,200)
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Net Cash Provided (Used) by
Operating Activities 92,563 (112,925)
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Cash Flows From Investing Activities:
Cash received on sale of fixed assets - - 12,200
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Net Cash Provided (Used) by
Investing Activities - - 12,200
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Cash Flows From Financing Activities:
Proceeds from short-term loans - - 106,660
Repayment of short-term loans (103,915) - -
Proceeds from shareholder loan 10,000 - -
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Net Cash Provided (Used) by
Financing Activities (93,915) 106,660
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Net increase (decrease) in cash (1,352) 5,935
Cash - Beginning of Period 10,965 5,030
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Cash - End of Period $ 9,613 $ 10,965
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The accompanying notes are an integral part of the financial statements.
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Part I - FINANCIAL INFORMATION
Shoshone Silver Mining Company, Inc.
Item 1. Financial Statements (Unaudited)
NOTES TO FINANCIAL STATEMENTS
Please refer to the Notes to the Financial Statements presented
with the audited financial statements for the year ended
December 31, 2001 as also being an integral part of the financial
statements herein presented for the six months ended June 30,
2002.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking
statements. Management cautions that forward-looking statements
are subject to risks and uncertainties that could cause the
Company's actual results to differ materially from those
projected in forward-looking statements.
Shoshone continues in a positive direction with the Company's
growth pattern. During this quarter, the Company has completed
the renegotiation of the Lakeview Mill lease and patented claims.
The lessee of the Lakeview Mill is installing a bromide leach
system to augment Shoshone's existing ball mill and carbon in
pulp plant in addition to performing repairs to the plant
foundation as needed.
The last three months have been very challenging due to delays of
the silica sales and release of the final audits for 2000 and
2001 fiscal years. Shoshone continues to direct all of their
efforts and resources to remaining on the Bulletin Board.
Shoshone has recently added Gordon Walters as Superintendent of
gold, oil, and diamond projects to aid in out pursuit of projects
for the Company. Mr. Walters is well known and experienced in
the mining field and has numerous properties, equipment, and
contacts that will benefit our Company.
A geologist, driller, and one or our Directors have also been
sent to Canada to report on samples taken on two promising
properties, one in gold and the other in diamonds.
Shoshone continues to remain in the black and debt free and looks
forward to positive third quarter progress.
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RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED JUNE 30, 2002 AND THREE MONTHS
ENDED JUNE 30, 2001.
Sales for the current three-month period have decreased $9,424,
or 43%, over the previous three-month period sales of $22,024.
There were minimal mining revenues for the current three-months
since the silica operations were sold, retaining interest in the
mining properties.
Cost of sales for the current three-month period have decreased
$42,546, or 90%, over the previous three-month cost of sales of
$47,296, primarily due to the sale of the Company's interest in
the silica operations.
General and administrative expenses for the current three-month
period have increased $3,922, or 998%, over the previous three-
month period expenses of $393. This increase is principally due
to an increase in professional fees for the year end audit and
other minor increases.
Other income for the current three-month period have decreased
$39,213, or 625%, from the previous three-month period's other
income of $(6,272) primarily due to increased realized net losses
on sale of investments ($239,449), partially offset by increase
in unrealized gains on sales of marketable securities ($200,966).
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2002 AND SIX MONTHS ENDED
JUNE 30, 2001.
Sales for the current six-month period have decreased $61,969, or
79%, over the previous six-month period sales of $78,769. There
were minimal mining revenues for the current six-months since the
silica operations were sold, retaining interest in the mining
properties.
Cost of sales for the current six-month period have decreased
$100,247, or 92%, over the previous six-month cost of sales of
$108,817, primarily due to the sale of the Company's interest in
the silica operations.
General and administrative expenses for the current six-month
period have increased $9,795, or 81%, over the previous six-month
period expenses of $12,040. This increase is principally due to
an increase in professional fees for the year end audit and other
minor increases.
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Other income for the current six-month period have decreased
$14,615, or 14%, from the previous six-month period's other
income of $(107,914) primarily due to increased realized net
losses on sale of investments ($356,735), partially offset by
increase in unrealized gains on sales of marketable securities
($345,893).
LIQUIDITY AND CAPITAL RESOURCES
Historically, Shoshone Silver Mining Company has utilized
earnings from operations and gains from the sales of marketable
securities to generate its working capital and expects that
future cash flow from operations will be sufficient to meet
future working capital requirements.
As of June 30, 2002, cash and cash equivalents totaled $9,613,
which represents a decrease of $1,352 from the December 31, 2001
balance of $10,965. This decrease was primarily attributable to
cash used by financing activities ($93,915), partially offset by
cash used for operating activities ($92,563). Cash used by
operations was comprised primarily of net loss of $135,833, a
realized loss on trading securities ($247,102), and purchases of
trading securities ($188,562), partially offset by unrealized
gains on trading securities ($367,783), proceeds from sale of
trading securities ($284,323), and depreciation expense
($19,260).
Cash provided by investing activities had no effect on cash and
cash equivalents for the six months ended June 30, 2002.
Cash used by financing activities of $93,915 consisted of
$103,915 utilized to repay short-term broker loans, partially
offset by a $10,000 short-term loan from a major shareholder.
The Company plans to continue to make investments in marketable
securities and further expansion of its operating facilities to
improve operational efficiencies and customer service. The
Company expects to meet these cash requirements through a
combination of operating cash flow and investing activities.
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Part II - OTHER INFORMATION
Shoshone Silver Mining Company, Inc.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters required submission to security holders for vote
during the three months ended June 30, 2002.
Item 6. Exhibits and Reports on Form 8-K.
No reports on Form 8-K were filed for the three months ended
June 30, 2002.
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Shoshone Silver Mining Company, Inc.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
SHOSHONE SILVER MINING COMPANY, INC.
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(Registrant)
Date: August 15, 2002 By /s/ James I. Scheller
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James I. Scheller, President