1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2001
Commission file number 0-4846-3
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CONSIL CORP.
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(Exact name of registrant as specified in its charter)
Idaho 82-0288840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83815-8788
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(Address of principal executive offices) (Zip Code)
208-769-4100
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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, and (2) has been subject to such filing
requirements for at least the past 90 days. Yes XX . No .
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding April 30, 2001
-------------------------- --------------------------
Common stock, no par value 9,449,707 shares
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CONSIL CORP.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2001
I N D E X *
Page
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PART I. - Financial Information
Item l - Consolidated Balance Sheets - March 31,
2001 and December 31, 2000 3
- Consolidated Statements of Operations -
Three Months Ended March 31, 2001 and 2000 4
- Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2001 and 2000 5
- Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. - Other Information
Item 1 - Legal Proceedings 10
Item 6 - Exhibits and Reports on Form 8-K 10
* Items omitted are not applicable
3
PART I - FINANCIAL INFORMATION
CONSIL CORP.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars)
March 31, December 31,
2001 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 414 $ 1,419
Other receivables - - 84
----------- -----------
Total current assets 414 1,503
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Total assets $ 414 $ 1,503
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ - - $ 2,096
Accounts payable - Hecla Mining Company 9,096 - -
Accrued interest payable - Hecla Mining Company 300,830 282,725
Note payable - Hecla Mining Company 725,000 725,000
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Total current liabilities 1,034,926 1,009,821
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Stockholders' deficit:
Preferred stock; $0.25 par value; authorized
10,000,000 shares; issued and outstanding, none - - - -
Common stock; no par value; authorized 100,000,000
shares; issued 9,455,689 shares 2,360,572 2,360,572
Accumulated deficit (3,391,623) (3,365,429)
Less: Common stock reacquired at cost;
2001 and 2000 - 5,982 shares (3,461) (3,461)
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Total stockholders' deficit (1,034,512) (1,008,318)
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Total liabilities and stockholders' deficit $ 414 $ 1,503
=========== ===========
The accompanying notes are an integral part
of the consolidated financial statements.
4
PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Consolidated Statements of Operations(Unaudited)
(U.S. dollars)
Three Months Ended
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March 31, March 31,
2001 2000
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Revenue:
Interest $ - - $ - -
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- - - -
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Expenses:
Interest expense on note payable
to Hecla Mining company 18,105 17,887
General and administrative 8,043 6,317
Foreign exchange loss 46 294
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26,194 24,498
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Loss before income taxes (26,194) (24,498)
Income tax provision - - - -
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Net loss $ (26,194) $ (24,498)
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Basic and diluted loss per common
share $ nil $ nil
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Weighted average number of
common shares outstanding 9,449,707 9,449,707
============ =============
The accompanying notes are an integral part
of the consolidated financial statements.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Consolidated Statements of Cash Flows (Unaudited)
(U.S. dollars)
Three Months Ended
-------------------------
March 31, March 31,
2001 2000
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Operating activities:
Net loss $ (26,194) $ (24,498)
Change in:
Accounts and other receivables 84 178
Accounts payable and accrued
liabilities 7,000 (2,701)
Accrued interest payable on note to
Hecla Mining Company 18,105 17,887
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Net cash used by operating activities (1,005) (9,134)
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Financing activities:
Proceeds from note payable to
Hecla Mining Company - - 14,000
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Net cash provided by financing
activities - - 14,000
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Net increase (decrease) in cash
and cash equivalents (1,005) 4,866
Cash and cash equivalents at
beginning of period 1,419 11,209
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Cash and cash equivalents at
end of period $ 414 $ 16,075
========== ===========
The accompanying notes are an integral part of
the consolidated financial statements.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The notes to the consolidated financial statements as of December
31, 2000, as set forth in ConSil Corp.'s (ConSil) 2000 Annual Report
on Form 10-K, substantially apply to these interim consolidated
financial statements and are not repeated here. All amounts are in
U.S. dollars unless otherwise indicated.
Note 2. The financial information given in the accompanying unaudited
interim financial statements reflects all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim periods reported. All such adjustments are of
a normal recurring nature. All financial statements presented herein
are unaudited. However, the balance sheet as of December 31, 2000,
was derived from the audited consolidated balance sheet described in
Note 1 above.
Note 3. At March 31, 2001, ConSil had 9,449,707 common shares outstanding
of which Hecla Mining Company (Hecla), the majority stockholder of
ConSil, owned 7,418,300 shares or 78.503% of the outstanding shares.
The financial statements have been prepared on a going
concern basis which assumes realization of assets and liquidation of
liabilities in the normal course of business. At March 31, 2001,
ConSil had negative working capital of $1,034,512 and a stockholders'
deficit of $1,034,512. Included in current liabilities are a $725,000
note payable and the related accrued interest due to Hecla, which are
due upon demand by authorized representatives of Hecla, but in no
event later than March 31, 2002. The Company does not have the
ability or sources of financing to repay this debt. These factors
raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Note 4. On June 28, 1996, ConSil and Hecla entered into a loan agreement
whereby Hecla agreed to make available to ConSil a loan not to exceed
$500,000, due in its entirety on or before December 31, 1996. This
loan agreement was subsequently amended on eight separate occasions,
increasing the amount available to borrow to $725,000 and extending
the repayment date to March 31, 2002. At March 31, 2001, there was
$725,000 outstanding under the loan agreement with Hecla, having an
interest rate of 9.5%, and accrued interest due to Hecla totaling
$300,830.
Note 5. ConSil prepares its consolidated financial statements in
accordance with generally accepted accounting principles (GAAP) as
practiced in the United States of America. ConSil also has regulatory
reporting requirements in Canada. There are no differences between
U.S. GAAP and Canadian GAAP with respect to stockholders' deficit or
net loss at March 31, 2001 or 2000 and the three months then ended.
Item 2. Management's Discussion and Analysis of Financial
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Condition and Results of Operations
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Introduction
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Except for the historical information contained herein, the
matters discussed that are forward-looking statements involve risks
and uncertainties, including the timely development of future
projects, the impact of metals prices, changing market conditions and
regulatory environment, and other risks detailed from time to time in
ConSil's Form 10-K and Form 10-Qs filed with the United States
Securities and Exchange Commission. Actual results may differ
materially from those projected or implied. Forward-looking
statements included herein represent ConSil's judgment as of the date
of this filing. ConSil disclaims, however, any intent or obligation
to update these forward-looking statements.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
Following the sale of ConSil's Silver Summit mine in 1995,
ConSil was actively involved in exploration and acquisition
activities, primarily in Mexico. ConSil was unsuccessful in its
exploration and acquisition activities, and since the fourth quarter
of 1997, ConSil has been inactive.
Results of Operations
---------------------
ConSil reported a net loss of $26,194, or nil per share, for
the first quarter of 2001 compared to a net loss of $24,498, or nil
per share, in the first quarter of 2000. The increase in the net loss
was due primarily to an increase in general and administrative
expenses and an increase in interest expense on the note payable to
Hecla (see Note 4 of Notes to Consolidated Financial Statements).
Financial Condition and Liquidity
---------------------------------
At March 31, 2001, assets totaled $414 and stockholders'
deficit totaled $1,034,512. Cash and cash equivalents decreased by
$1,005 to $414 at March 31, 2001 from $1,419 at December 31, 2000.
The primary use of cash was to pay general and administrative
expenses.
Working capital decreased $26,194 during the first quarter
of 2001, from a negative $1,008,318 at December 31, 2000 to a
negative $1,034,512 at March 31, 2001. The decrease in working
capital was the result of funding general and administrative costs
and increased accrued interest and accounts payable due to Hecla.
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PART I - FINANCIAL INFORMATION (Continued)
CONSIL CORP.
ConSil's planned 2001 expenditures include the necessary
expenditures to maintain the current inactive status of ConSil.
ConSil intends to finance planned expenditures through existing cash
and possible funding from Hecla, although there can be no assurance
that Hecla will provide ConSil with any funding. Any further
exploration projects, potential acquisitions or even limited
operations are subject to ConSil being able to raise funds from
external sources.
The financial statements have been prepared on a going
concern basis which assumes realization of assets and liquidation of
liabilities in the normal course of business. At March 31, 2001,
ConSil had negative working capital of $1,034,512 and a stockholders'
deficit of $1,034,512. Included in current liabilities are the
$725,000 note payable and the related accrued interest due to Hecla,
which are due upon demand by authorized representatives of Hecla, but
in no event later than March 31, 2002. The Company does not have the
ability or sources of financing to repay this debt. These factors
raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Quantitative and Qualitative Disclosures about Market
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Risk
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At March 31, 2001, ConSil's note payable to Hecla (refer to
Note 4 of Notes to Consolidated Financial Statements) was subject to
changes in market interest rates. However, due to the short-term
nature of the debt, ConSil's management does not believe it is at
material risk with respect to changes in market interest rates.
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PART II - OTHER INFORMATION
CONSIL CORP.
Item 1. Legal Proceedings
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There are no pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
None.
(b) Reports on Form 8-K
None.
Items 2, 3, 4 and 5 of Part II are omitted from this report as inapplicable.
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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.
CONSIL CORP.
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(Registrant)
Date: May 14, 2001 By: /s/ Michael B. White
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Michael B. White
President and Director
Date: May 14, 2001 By: /s/ David F. Wolfe
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David F. Wolfe
Treasurer(principal
accounting and
financial officer)