10QSB 1 mont10qsb.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2003. [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . ------------ -------------- Commission file number: 000-29321 --------- MONTANA MINING CORP. (Formerly known as "Aswan Investments, Inc..") ---------------------------------------------- (Exact name of small business issuer as specified in its charter) NEVADA 87-0643635 ------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1403 East 900 South, Salt Lake City, Utah 84105 ----------------------------------------------- (Address of principal executive office) (Zip Code) (801) 582-9609 (Registrant's telephone number) Check whether the registrant: (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 The number of outstanding shares of the registrant's common stock, $0.001 par value (the only class of voting stock), as of July 14, 2003 was 6,312,900. 1 TABLE OF CONTENTS PART I
ITEM 1. FINANCIAL STATEMENTS ......................................................................3 Unaudited Balance Sheet as of June 30, 2003.......................................................................4 Unaudited Statement of Operations for the three and six months ended June 30, 2003 and 2002 and the period since Date of Inception to June 30, 2003..................................................5 Unaudited Statement of Cash Flows for the six months ended June 30, 2003 and 2002 and the period since Date of Inception to June 30, 2003..................................................6 Notes to Unaudited Financial Statements...........................................................................7 ITEM 2. MANAGEMENT'S PLAN OF OPERATION...........................................................................8 ITEM 3. CONTROLS AND PROCEDURES.................................................................................10 PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................................................................10 SIGNATURES.......................................................................................................11 INDEX TO EXHIBITS................................................................................................13 2 PART I ITEM 1. FINANCIAL STATEMENTS As used herein, the term "Company" refers to Montana Mining Corp. (formerly known as "Aswan Investments, Inc.), a Nevada corporation, unless otherwise indicated. In the opinion of management, the accompanying unaudited financial statements included in this Form 10-QSB reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. MONTANA MINING CORP. (A Development Stage Company) UNAUDITED BALANCE SHEET June 30, 2003 ASSETS Current assets - cash $ 75,901 ----------------- Total current assets $ 75,901 ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,569 Related party payable 2,500 ----------------- Total current liabilities 8,069 ----------------- Commitments - Stockholders' equity: Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued and outstanding - Common stock, $.001 par value, 45,000,000 shares authorized, 6,312,900 shares issued and outstanding 6,313 Additional paid-in capital 103,069 Deficit accumulated during the exploration stage (41,550) ----------------- Total stockholders' equity 67,832 ----------------- Total liabilities and stockholders' equity $ 75,901 ================= The accompanying notes are an integral part of these financial statements 4 MONTANA MINING CORP. (A Development Stage Company) UNAUDITED STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended June 30, June 30, Cumulative ------------------------------ -------------------------- 2003 2002 2003 2002 Amounts ----------------- ------------ ----------- ------------ ------------------ Revenue $ - - - - - General and administrative costs 1,208 460 4,733 3,018 41,550 ----------------- ------------ ----------- ------------ ------------------ Loss before income taxes (1,208) (460) (4,733) (3,018) (41,550) Provision for income taxes - - - - - ----------------- ------------ ----------- ------------ ------------------ Net Loss $ (1,208) (460) (4,733) (3,018) (41,550) ================= ============ =========== ============ ================== Loss per common share - basic and diluted $ - - - - ================= ============ =========== ============ Weighted average common shares - basic and diluted 6,313,000 1,313,000 6,313,000 1,313,000 ================= ============ =========== ============ The accompanying notes are an integral part of these financial statements 5 MONTANA MINING CORP. (A Development Stage Company) UNAUDITED STATEMENTS OF CASH FLOWS Six Months Ended June 30, Cumulative ------------------------------------ 2003 2002 Amounts ----------------- ----------------- ------------------ Cash flows from operating activities: Net loss $ (4,733) (3,018) (41,550) Adjustments to reconcile net loss to net cash used in operating activities: Stock compensation expense - - 5,007 Increase (decrease) in accounts payable 1,400 2,988 5,569 ----------------- ----------------- ------------------ Net cash used in operating activities (3,333) (30) (30,974) ----------------- ----------------- ------------------ Cash flows from investing activities: - - - ------------------------------------- ----------------- ----------------- ------------------ Cash flows from financing activities: Increase in related party payable - - 2,500 Decrease in stock subscription receivable - - 465 Increase in common stock - - 103,910 ----------------- ----------------- ------------------ Net cash provided by financing activities - - 106,875 ----------------- ----------------- ------------------ Net increase (decrease) in cash (3,333) (30) 75,901 Cash, beginning of period 79,234 65 - ----------------- ----------------- ------------------ Cash, end of period $ 75,901 35 75,901 ================= ================= ================== The accompanying notes are an integral part of these financial statements 6 MONTANA MINING CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS June 30, 2003 Note 1 - Basis of Presentation The accompanying unaudited condensed financial statements have been prepared by management in accordance with the instructions in Form 10-QSB and, therefore, do not include all information and footnotes required by generally accepted accounting principles and should, therefore, be read in conjunction with the Company's Form 10-KSB for the year ended December 31, 2002, filed with the Securities and Exchange Commission. These statements do include all normal recurring adjustments which the Company believes necessary for a fair presentation of the statements. The interim operations are not necessarily indicative of the results to be expected for the full year ended December 31, 2003. Note 2 - Additional Footnotes Included By Reference Except as indicated in Notes above, there have been no other material changes in the information disclosed in the notes to the financial statements included in the Company's Form 10-KSB for the year ended December 31, 2002, filed with the Securities and Exchange Commission. Therefore, those footnotes are included herein by reference. 7 ITEM 2. MANAGEMENT'S PLAN OF OPERATION When used in this discussion, the words "believes", "anticipates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, that speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company that attempt to advise interested parties of the factors which affect the Company's business, in this report, as well as the Company's periodic reports on Forms 10-KSB, 10-QSB and 8-K filed with the Securities and Exchange Commission. General The Company holds an option to explore, identify and develop a gold, silver and other precious metals property located in the vicinity of the city of Helena, Montana, known as the Dobler Mine property. The Dobler Mine property has a history of bulk tonnage sampling of precious metals. Based upon the information available from prior exploration of the area, we believe the possibility of exploring and identifying mineralization on the Dobler Mine property exists. On July 19, 2002, the Company entered into an option purchase agreement with Monument Resources, Inc. The option purchase agreement grants to the Company the exclusive right to acquire a 100% fee simple interest in Dobler Mine property and mineral rights on surrounding property subject to a net smelter royalty of 3% in consideration of certain option payments, exploration expenditures and a purchase payment to be satisfied over the next two years. The Company satisfied the initial option payment of $15,000 on September 1, 2002. The option payments, the determined amount of exploration expenses with the respective performance dates and the purchase payment are as follows: Option Payments Amount Due Date First Option $15,000 September 1, 2002 Second Option $5,000 September 1, 2003 Exploration Expenditures Amount Due Date Initial Exploration $30,000 September 1, 2003 Secondary Exploration $30,000 September 1, 2004 Purchase Payment Amount Due Date Purchase Payment $200,000 September 1, 2004 Should the Company's exploration expenditures in any given period exceed that minimum amount required by the option purchase agreement, then that amount in excess is to be credited 8 to the following period. The Company is to manage all exploration work to be carried out on the Dobler Mine property. Operational Milestones The Company intends to embark on a three phase exploration program in an attempt to determine the economic feasibility of developing the Dobler Mine property for the extraction of precious metals. The Company must explore the Dobler Mine property to determine the presence of minerals, if any, that exist on the property. Should the Company's exploration efforts determine mineralization, we must then determine whether these metals exist in sufficient quantity to economically justify future extraction and processing. The Company makes no claim at this time that any precious metals exist on the Dobler Mine property. The Company does not expect to receive revenues within its first 12 months of operation or ever, should exploration efforts fail to identify precious metals in an amount economically favorable to extract. However, should we discover precious metals that could be favorably extracted under economically attractive terms, the Company would still not expect revenues until after the completion of its three phase exploration program. Losses For the three month period from April 1, 2003 to June 30, 2003, the Company recorded an operating loss of $1,208. For the six months ended June 30, 2003, the Company recorded an operating loss of $4,733. This lack of profitability is attributable to expenses associated with accounting and administration. The Company did not generate any revenues during this period. The Company expects to continue to operate at a loss through fiscal 2003 and due to the nature of the Company's business, cannot determine whether it will ever generate revenues from operations. Capital Expenditures The Company expended no funds on capital expenditures during the six month period ending June 30, 2003. Capital Resources and Liquidity The Company had current assets of $75,901 and total assets of $75,901 as of the quarter ended June 30, 2003. These assets consist of cash on hand of $75,901. Net stockholders' equity in the Company was $67,832 at June 30, 2003. Cash flow used in operating activities was $3,333 for the six months ending June 30, 2003. Cash was used during the first six months on accounting and administrative costs. The Company has no current commitments or arrangements with respect to, or immediate sources of, additional financing and it is not anticipated that any existing stockholders will provide any portion of future financing. Further, no assurances can be given that any additional financing, when needed, will be available or available on acceptable terms. The inability to obtain additional financing when required would have a material adverse effect on the 9 Company's operations, including requiring it to curtail its plans to explore the Dobler Mine property ITEM 3. CONTROLS AND PROCEDURES The Company's president acts both as the Company's chief executive officer and chief financial officer ("Certifying Officer") and is responsible for establishing and maintaining disclosure controls and procedures for the Company. The Certifying Officer has concluded (based on his evaluation of these controls and procedures as of a date within 90 days of the filing of this report) that the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) are effective. No significant changes were made in the Company's internal controls or in other factors that could significantly affect those controls subsequent to the date of the evaluation, including any corrective actions with regard to slight deficiencies and material weaknesses. Due to the Certifying Officer's dual role as chief executive officer and chief financial officer, the Company has no segregation of duties related to internal controls. PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibits required to be attached by Item 601 o -------- Regulation S-B are listed in the Index to Exhibits on page 13 of this Form 10-QSB, and are incorporated herein by this reference. (b) Reports on Form 8-K. No reports on Form 8-K were filed ------------------- during the period covered by this Form 10-QSB. 10 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, this 15th day of July, 2003. MONTANA MINING CORP. /s/ Ruairidh Campbell Ruairidh Campbell Chief Executive Officer, Chief Financial Officer and Director 11 CERTIFICATION PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES- OXLEY ACT OF 2002 I, Ruairidh Campbell, chief executive officer and chief financial officer of Montana Mining Corp. certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Montana Mining Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 15, 2003 /s/ Ruairidh Campbell Ruairidh Campbell, Chief Executive Officer and Chief Financial Officer 12 INDEX TO EXHIBITS Exhibit Page No. No. Description 3(i)(a) * Articles of Incorporation of the Company, formally known as Aswan Investments, Inc. (incorporated herein by reference from Exhibit No. 3(i) of the Company's Form 10-SB as filed with the SEC on February 3, 2000). 3(i)(b) * Amendment to Articles of Incorporation filed with the State of Nevada on August 5, 2002 (incorporated herein by reference from Exhibit No. 3(i)(b) of the Company's Form 8-K as filed with the SEC on August 15, 2002). 3(ii) * By-laws of the Company adopted on December 10, 1999 formally known as Aswan Investments, Inc. (incorporated herein by reference from Exhibit No. 3(i) of the Company's Form 10-SB as filed with the SEC on February 3, 2000). 10(i) * Option Purchase Agreement between the Company and Monument Resources, Inc. dated July 19, 2002 (incorporated herein by reference from Exhibit No. 10(i) of the Company' Form 10-QSB/A filed with the SEC on November 8, 2002). 99.1 14 Certification Pursuant to 18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002 * Incorporated by reference from previous filings of the Company. 13 EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of the Company on Form 10-QSB for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof, I, Ruairidh Campbell, sole executive officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) This quarterly report complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The financial information contained in this quarterly report fairly represents, in all material respects, the financial condition and result of operations of the Company. /s/ Ruairidh Campbell Ruairidh Campbell Chief Executive Officer and Chief Financial Officer July 15, 2003 14