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 September 30, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
Commission file number: 000-53662
BUTTE HIGHLANDS MINING COMPANY
(Exact name of registrant as specified in its charter)
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Delaware |
| 81-0409475 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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P.O. Box 99, Liberty Lake, WA |
| 99019 |
(Address of principal executive offices) |
| (Zip Code) |
509) 979-3053
(Issuer's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Sections 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 filings for the past 90 days.
YESx NO ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
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Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨(Do not check if a smaller reporting company) | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes¨ Nox
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: At November 13, 2009, there were 1,317,948 shares of Class A Common Stock and 1,663,941 shares of Class B Common Stock issued and outstanding.
1
BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets – September 30, 2009 (unaudited) and December 31, 2008
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Statements of Operations – For the Three Months Ended September 30 and 2008 (unaudited)
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Statements of Cash Flows - For the Nine Months ended September 30, 2009 and 2008, (unaudited)
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Notes to Financial Statements
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. CONTROLS AND PROCEDURES
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BUTTE HIGHLANDS MINING COMPANY |
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(A Development Stage Company) |
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BALANCE SHEETS |
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| September 30, |
| December 31, |
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| 2009 |
| 2008 |
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ASSETS |
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| CURRENT ASSETS |
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| Cash and cash equivalents | $ | 195,745 | $ | 237,043 | ||
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| Prepaid expense |
| 1,000 |
| 1,000 | ||
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| Total Current Assets |
| 196,745 |
| 238,043 |
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| PROPERTY AND EQUIPMENT |
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| Equipment |
| 4,338 |
| 4,338 | ||
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| Less: accumulated depreciation |
| (4,109) |
| (3,777) | ||
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| Total Property and Equipment |
| 229 |
| 561 |
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| OTHER ASSETS |
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| Investments |
| 78,840 |
| 50,760 | ||
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| Total Other Assets |
| 78,840 |
| 50,760 |
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| TOTAL ASSETS | $ | 275,814 | $ | 289,364 | |||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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| CURRENT LIABILITIES |
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| Accounts payable | $ | 677 | $ | 4,512 | ||
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| Total Current Liabilities |
| 677 |
| 4,512 |
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| COMMITMENTS AND CONTINGENCIES |
| - |
| - | |||
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| STOCKHOLDERS' EQUITY |
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| Common stock, Class A, $0.01 par value |
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| 23,292,907 shares authorized; 1,317,948 |
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| shares issued and outstanding, respectively |
| 13,179 |
| 13,179 | |
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| Common stock, Class B, $0.01 par value |
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| 1,707,093 shares authorized; 1,663,941 |
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| shares issued and outstanding, respectively |
| 16,640 |
| 16,640 | |
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| Additional paid-in capital |
| 242,632 |
| 242,632 | ||
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| Retained earnings prior to development stage |
| 476,706 |
| 476,706 | ||
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| Accumulated deficit during development stage |
| (502,100) |
| (464,305) | ||
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| Other comprehensive income |
| 28,080 |
| - | ||
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| Total Stockholders' Equity |
| 275,137 |
| 284,852 | |
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| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 275,814 | $ | 289,364 | |||
The accompanying condensed notes are an integral part of these interim financial statements.
3
BUTTE HIGHLANDS MINING COMPANY |
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(A Development Stage Company) |
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STATEMENTS OF OPERATION |
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| Period from |
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| May 18, 2007 |
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| Three Months Ended |
| Nine Months Ended |
| Development Stage) | ||||
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| September 30, |
| September 30, |
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| 2009 |
| 2008 |
| 2009 |
| 2008 |
| 2009 |
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| (unaudited) |
| (unaudited) |
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REVENUES | $ | - | $ | - | $ | - | $ | - | $ | - | ||
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OPERATING EXPENSES |
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| Professional fees |
| 7,307 |
| 18,303 |
| 36,085 |
| 24,787 |
| 95,541 | |
| Depreciation |
| 129 |
| 94 |
| 333 |
| 280 |
| 1,067 | |
| Officers & directors fees |
| - |
| - |
| - |
| - |
| 2,000 | |
| General and administrative |
| 355 |
| 11,081 |
| 2,211 |
| 12,944 |
| 20,356 | |
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| TOTAL OPERATING EXPENSES |
| 7,791 |
| 29,478 |
| 38,629 |
| 38,011 |
| 118,964 |
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INCOME (LOSS) FROM OPERATIONS |
| (7,791) |
| (29,478) |
| (38,629) |
| (38,011) |
| (118,964) | ||
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OTHER INCOME (EXPENSES) |
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| Interest income |
| 34 |
| 75 |
| 834 |
| 292 |
| 6,600 | |
| Reimbursement of legal fees |
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| Interest expense |
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| (553) |
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| (553) |
| (553) | |
| Other than temporary impairment of investment |
| - |
| - |
| - |
| - |
| (165,240) | |
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| TOTAL OTHER INCOME (EXPENSES) |
| 34 |
| (478) |
| 834 |
| (261) |
| (159,193) |
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LOSS BEFORE TAXES |
| (7,757) |
| (29,956) |
| (37,795) |
| (38,272) |
| (278,157) | ||
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INCOME TAXES |
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| Income tax benefit |
| - |
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| - |
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| (50,830) | |
| Tax expense |
| - |
| - |
| - |
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| (173,113) | |
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| - |
| - |
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| (223,943) |
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NET LOSS | $ | (7,757) | $ | (29,956) | $ | (37,795) | $ | (38,272) | $ | (502,100) | ||
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OTHER COMPREHENSIVE INCOME (LOSS) |
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| Unrealized gain (loss) on available for sale securities |
| 41,040 |
| (139,320) |
| 28,080 |
| (264,600) |
| 28,080 | |
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COMPREHENSIVE INCOME (LOSS) |
| 33,283 |
| (169,276) |
| (9,715) |
| (302,872) |
| (474,020) | ||
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| NET LOSS PER COMMON SHARE, |
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| BASIC AND DILUTED | $ | nil | $ | 0.01 | $ | 0.01 | $ | 0.01 |
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| WEIGHTED AVERAGE NUMBER OF |
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| COMMON STOCK SHARES |
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| OUTSTANDING, BASIC AND DILUTED |
| 2,981,889 |
| 2,981,889 |
| 2,981,889 |
| 2,981,889 |
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The accompanying condensed notes are an integral part of these interim financial statements.
4
BUTTE HIGHLANDS MINING COMPANY |
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(A Development Stage Company) |
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STATEMENTS OF CASH FLOWS |
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| Period from |
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| May 18, 2007 |
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| Nine Months Ended |
| Development Stage) | |||
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| September 30, |
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| 2009 |
| 2008 |
| 2009 | ||
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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| Net income (loss) | $ | (37,795) |
| $ | (38,272) |
| (502,100) | ||
| Adjustments to reconcile net income (loss) to net cash |
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| provided (used) by operating activities: |
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| Depreciation |
| 332 |
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| 280 |
| 1,065 | |
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| Other than temporary impairment of investment |
| - |
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| 165,240 | |
| Changes in assets and liabilities: |
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| Decrease (increase) in prepaid expense |
| - |
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| (1,000) |
| (39) | |
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| Decrease (increase) in deferred tax asset |
| - |
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| 50,830 | |
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| Increase (decrease) in accounts payable |
| (3,835) |
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| 5,402 |
| 678 | |
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| Increase (decrease) in income taxes payable |
| - |
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| (60,951) |
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| Net cash used by operating activities |
| (41,298) |
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| (94,541) |
| (284,326) | |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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| Cash paid for equipment purchased |
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| (543) | ||
| Cash received for mining claims |
| - |
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| 405,000 | ||
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| Net cash provided by investing activities |
| - |
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| 404,457 | |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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| Cash received from sale of common stock |
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| 35,000 | ||
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| Net cash provided by financing activities |
| - |
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| 35,000 | |
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (41,298) |
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| 155,131 | ||||
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Cash, beginning of period |
| 237,043 |
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| 340,698 |
| 40,614 | |||
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Cash, end of period | $ | 195,745 |
| $ | 246,157 |
| 195,745 | |||
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SUPPLEMENTAL CASH FLOW INFORMATION: |
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Interest paid |
| $ | - |
| $ | - |
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Income taxes paid | $ | - |
| $ | - |
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NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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Investment received for mining claims | $ | - |
| $ | - | $ | 216,000 | |||
The accompanying condensed notes are an integral part of these interim financial statements.
5
BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
CONDENSED NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2009
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Butte Highlands Mining Company (hereinafter “Butte” or “the Company”) was incorporated in May 1929 under the laws of the State of Delaware for the purpose of exploring and mining the Butte Highland’s (Only Chance) Mine, south of Butte, Montana. The Company was reorganized in October 1996 for the purpose of acquiring and developing mineral properties. As of the date of reorganization, stockholders representing approximately 76% of the outstanding capital stock could not be located. In order to obtain the quorum necessary for the special meetings, the Company obtained an order from the Superior Court of Spokane County, Washington appointing a trustee for the benefit of those stockholders which could not be located.
As of May 17, 2007 the Company had disposed of all of its historical mineral properties or claims, and has reentered the development stage. The Board of Directors intends to seek out an appropriate business opportunity and has not limited its search to any particular industry. Management believes it can identify opportunities in several sectors and will proceed with the appropriate diligence to create value for the shareholders. Operations are primarily conducted from the Company headquarters in Spokane, Washington.
The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2008. In the opinion of management, the unaudited interim financial statements furnished herein includes all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Operating results for the nine month period ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending Decem ber 31, 2009.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Butte Highlands Mining Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.
Recent Accounting Pronouncements
In September 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2009-12,Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This Update provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this Update are effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial statements for earlier interim and annual periods that have not been issued. The adoption of this Update will have no material effect on the Company’s financial condition or results of operations.
6
BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
CONDENSED NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2009
In August 2009, the FASB issued Accounting Standards Update 2009-05,Fair Value Measurements and Disclosures (Topic 820): Measuring Liabilities at Fair Value. This update provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. The guidance provided in this Update is effective for the first reporting period beginning after issuance. The adoption of this statement will have no material effect on the Company’s financial condition or results of operations
In June 2009, the FASB issued SFAS No. 168,The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162, which is codified in FASB ASC 105,Generally Accepted Accounting Principles (“ASC 105”). ASC 105 establishes the Codification as the source of authoritative GAAP in the United States (the “GAAP hierarchy”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Once the Codification is in effect, all of its content will carry the same level of authority and the GAAP hierarchy will be modified to include only two levels of GAAP, authoritative and non-authoritative. ASC 105 is effective for fi nancial statements issued for interim and annual periods ending after September 15, 2009. We adopted the requirements of ASC 105 in the third quarter of 2009; the adoption had no material effect on the Company’s financial condition or results of operation.
In June 2009, the FASB issued SFAS No. 167,Amendments to FASB Interpretation No. 46(R) (“SFAS No. 167”), which amends the consolidation guidance applicable to variable interest entities. The amendments will significantly affect the overall consolidation analysis under FASB ASC 810,Consolidation and requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity.
SFAS No. 167 has not yet been codified and in accordance with ASC 105, remains authoritative guidance until such time that it is integrated in the FASB ASC. SFAS No. 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009, early adoption is prohibited. The adoption of this Update will have no material effect on the Company’s financial condition or results of operations.
In June, 2009, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No 166,Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). This Statement removes the concept of a qualifying special-purpose entity Statement 140 and removes the exception from applying Interpretation No. 46 (revised December 2003),Consolidation of Variable Interest Entities,to qualifying special-purpose entities.
SFAS No. 166 has not yet been codified and in accordance with ASC 105, remains authoritative guidance until such time that it is integrated in the FASB ASC. SFAS No. 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009 and early adoption is prohibited. The adoption of this statement will have no material affect on the financial statements. The adoption of this statement will have no material effect on the Company’s financial condition or results of operations.
In May, 2009, FASB issued ASC 855Subsequent Eventswhich establishes principles and requirements for subsequent events. In accordance with the provisions of ASC 855, the Company currently evaluates subsequent events through the date the financial statements are available to be issued.
7
BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
CONDENSED NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2009
Marketable Securities
The Company accounts for marketable securities as required by ASC 320Investments – Debt & Equity Topic of the FASB Accounting Standards Codification. At acquisition, an entity shall classify debt securities and equity securities into one of the following three categories
Held to Maturity – the positive intent and ability to hold to maturity. Amounts are reported at amortized cost, adjusted for amortization of premiums and accretion of discounts.
Trading Securities – bought principally for purpose of selling them in the near term. Amounts are reported at fair value, with unrealized gains and losses included in earnings.
Available for Sale – not classified in one of the above categories. Amounts are reported at fair value, with unrealized gains and losses excluded from earnings and reported separately as a component of stockholders’ equity.
At this time, the Company holds securities classified as available for sale. See “Note 3, Investments” for further details.
Property and Equipment
Fixed assets are recorded at cost. Depreciation is provided using the straight line method over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments are capitalized. When items of property and equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Depreciation expense for the periods ended June 30, 2009 and 2008 was $203 and $186, respectively.
Fair Value of Financial Instruments
The Company's financial instruments as defined by FASB ASC 825-10-50, include cash, receivables, accounts payable and accrued expenses. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2009.
FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
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Level 1. Observable inputs such as quoted prices in active markets;
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Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
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Level 3. Unobservable inputs in which there is little of no market data, which require the reporting entity to develop its own assumptions.
The Company measures its investments at fair value on a recurring basis. See Note 3.
8
BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
CONDENSED NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2009
The following table represents our assets by level measured at fair value on a recurring basis at September 30, 2009.
Description |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Assets |
|
|
|
|
|
|
|
|
| |||
Investments |
| $ | 78,840 |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Taxes
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25Income Taxes – Recognition. Under the approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5 to allow recognition of such an asset. See Note 5.
NOTE 3 - INVESTMENTS
The Company holds securities classified as available for sale. Amounts are reported at fair value, with unrealized gains and losses excluded from earnings and reported separately as a component of stockholders’ equity. The cost of securities sold is based on the specific identification method; realized gains and losses resulting from such sales are included in investment income.
Investment securities are reviewed for impairment in accordance with ASC 320-10 Investments - Debt and Equity Securities. We periodically review our investments for indications of other than temporary impairment considering many factors, including the extent and duration to which a security's fair value has been less than its cost, overall economic and market conditions, and the financial condition and specific prospects for the issuer. Impairment of investment securities results in a charge to income when a market decline below cost is other than temporary.
Unrealized gains and losses are recorded on the income statement as other comprehensive income (loss) and also on the balance sheet as other comprehensive income. The Company recognized an unrealized gain for the period ended September 30, 2009 of $28,080 and an unrealized loss for the period ended September 30, 2008 of $264,600.
The following summarizes the securities available for sale at September 30, 2009.
|
| # of |
|
|
|
|
| Market |
|
Security |
| Shares |
|
| Cost |
|
| Value |
|
Timberline Resources |
| 108,000 |
| $ | 50,760 |
| $ | 78,840 |
|
The fair value of securities is determined by quoted market prices.
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BUTTE HIGHLANDS MINING COMPANY
(A Development Stage Company)
CONDENSED NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2009
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company utilized office facilities provided by its president. The value of the office facilities provided by the Company’s president is nominal and immaterial to the financial statements.
NOTE 5 – INCOME TAXES
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes.
Significant components of the deferred tax assets for the periods ended September 30, 2009 and December 31, 2008 are as follows:
| September 30, 2009 |
| December 31, 2008 |
Net operating loss carryforwards | 53,700 |
| 10,000 |
Capital loss carryforwards | - |
| - |
Deferred tax asset | 53,700 |
| 10,000 |
Valuation allowance for deferred asset | (53,700) |
| (10,000) |
Net deferred tax asset | - |
| - |
At September 30, 2009, the Company has net operating loss carryforwards of approximately $249,700, which begin to expire in the year 2028. The change in the allowance account from December 31, 2008 to September 30, 2009 was $43,700.
NOTE 5 – SUBSEQUENT EVENTS
For the period ended September 30, 2009, there were no recognizable or non recognizable subsequent events.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement
Some sections of this management’s discussion and analysis of our financial condition and results of operations may contain forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions that are not statements of historical facts. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words “believe,” “expect,” “anticipate,” “intends,” “estimates,” “forecast,” “project” and similar expressions identify forward-looking statements. The forward-looking statements in this document are based upon various assumptions, and although we believe that these assumptions were reasonable when made , these statements are not guarantees of future performance and are subject to certain risks and uncertainties, some of which are beyond our control, and are difficult to predict. Actual results could differ materially from those expressed in forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect management’s view only as of the date of this report.
Business of Butte Highlands Mining Company
Butte Highlands Mining Company (hereinafter “Butte” or “the Company”) was incorporated in May 1929 under the laws of the State of Delaware for the purpose of exploring and mining the Butte Highland’s (Only Chance) Mine, south of Butte, Montana. The Company is inactive, having sold the last of its mining claims in 2007.
We intend to acquire an interest in a business seeking the perceived advantages of a publicly registered corporation. We will not restrict our search to any specific business or industry, and the Company may participate in a business venture of virtually any kind or nature. The Company may seek a business opportunity with an entity which has recently commenced operations, wishes to utilize the public marketplace in order to raise additional capital to expand into new products or markets, develop a new product or service, or for other corporate purposes. The Company may acquire assets and/or establish subsidiaries in various businesses, or acquire existing businesses as subsidiaries. Business opportunities may be available in many different industries at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
Management of the Company, while not experienced in matters relating to the new direction of the Company, will rely primarily upon their own efforts to accomplish the business purposes. The Company does not anticipate a significant change in the number of employees during the next 12 months. It is not anticipated that any outside consultants or advisors, other than the Company's legal counsel, will be utilized to effectuate its business purposes described herein. During the next twelve months, the Company expects to be able to satisfy its cash requirements, and does not foresee the need to raise additional capital during this period.
Effective July 6, 2009 the Company voluntarily registered its common stock under the Securities Exchange Act of 1934. It is the Company’s intention to obtain a listing on the NASDAQ Supervised
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OTC Bulletin Board. The Company believes that listing on the OTCBB will facilitate the Company’s efforts to obtain additional equity financing.
Result of Operations for period ended September 30, 2009 compared to the period ended September 30, 2008
During the three and nine month periods ended September 30, 2009, the Company had a net loss of $7,757 and $37,975 respectively compared to a net loss of $29,956 and 38,272 during the three month and nine month periods ended September 30, 2008. This represents a decreased net loss of $ 22,199 during the three month period ended September 30, 2008. The decrease in net loss is attributable to decreased professional fees and general and administrative expenses over the respective three month period ended September 30, 2008.
Total operating expenses decreased to $7,791 during the three month period ended September 30, 2009 from $29,478 for the comparable period ended September 30, 2008. The decrease is primarily attributable to decreased professional fees and general and administrative expenses over the respective three month period ended September 30, 2008.
Liquidity and Capital Resources
The Company’s working capital at September 30, 2009 was $196,068 compared to working capital of $233,531 at December 31, 2008. Working capital decreased primarily due to the current year expenses related to the Company’s Registration Statement on Form 10 and the fact that the Company had no income from operations.
Net cash used in operating activities was $41,298 during the nine month period ended September 30, 2009 compared with $94,541 during the nine month period ended September 30, 2008.
Cash flow from investing activities was $0 during the nine month period ended September 30, 2009 compared to $0 during the nine month period ended September 30, 2008.
Cash flow from financing activities was $0 during the nine month period ended September 30, 2009 compared with $0 during the nine month period ended September 30, 2009.
As a result, cash decreased by $41,298 during the nine month period ended September 30, 2009. The Company had cash of $195,755 as of September 30, 2009. It will not be necessary for the Company to raise additional capital to continue its business activities in 2009.
Off-Balance Sheet Arrangements
There are no preliminary agreements or understandings between the Company and its officers and directors or affiliates or lending institutions with respect to any loan agreements.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide this information.
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ITEM 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures designed to ensure that information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
The Company evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report and concluded that the Company’s disclosure controls and procedures were effective.
There has been no change in the Company’s internal controls over financial reporting, during the most recent fiscal quarter, that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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 (filed with this report)
Exhibit 31.1 - Certification required by Rule 13a-14(a) or Rule 15d-14(a)
Exhibit 31.2 - Certification required by Rule 13a-14(a) or Rule 15d-14(a)
Exhibit 32.1 - Certification required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
Exhibit 32.2 - Certification required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BUTTE HIGHLANDS MINING COMPANY
By: /s/ Paul Hatfield
Paul Hatfield, President and Director
Date: November 16, 2009
By /s/Paul Hatfield
Paul Hatfield, Principal Accounting Officer
Date: November 16, 2009
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