UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR l5 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003.
¨ 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 _____________
BEARTOOTH PLATINUM CORPORATION
(Exact name of small business issuer as specified in its charter)
| Yukon Territory, Canada | 82-0465571 |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification Number) |
910 – 885 Dunsmuir Street
Vancouver, B.C.
V6C 1N5
(Address of principal executive offices) (Zip Code)
(604) 484-2191
(Issuer’s telephone number, including area code)
________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer: (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 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 shares of the issuer's Common Stock outstanding at September 30, 2003 was 46,732,580 common shares.
Transitional Small Business Disclosure Format: Yes ¨ No x
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TABLE OF CONTENTS
| Page | |||
| PART I – BUSINESS AND PROPERTY | 3 | ||
| PART II -- OTHER INFORMATION | 3 | ||
| Item 1. | Legal Proceedings | 3 | |
| Item 2. | Changes in Securities and Use of Proceeds | 3 | |
| Item 3. | Defaults Upon Senior Securities | 5 | |
| Item 4. | Submission of Matters to a Vote of Security Holders | 5 | |
| Item 5. | Other Information | 6 | |
| Item 6. | Exhibits and Reports on Form 8-K | 6 | |
| Signatures | 6 | ||
| Certifications | |||
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PART I
The Company is not required to file this part pursuant to Rule 13a-13(c)(2) of the Securities Exchange Act of 1934.
PART II
Item 1. Legal Proceedings
On July 11, 2002 we commenced an action in the British Columbia Supreme Court against First Choice Industries Ltd. ("First Choice") under No. S023888, Vancouver Registry, by filing a Writ and Statement of Claim. These documents have been served on First Choice. The Statement of Claim references the Stillwater West PGM Agreement (the "Agreement") of November 1, 2001 between us and First Choice and the notice of termination of the Agreement provided by First Choice to us on June 3, 2002. The Statement of Claim does not contest the termination of the Agreement but does seek the specific performance of obligations owed to us by First Choice, which accrued prior to any termination and remain outstanding pursuant to the terms of the Agreement. Specifically we seek an order that First Choice pay to us $137,000 (U.S.) and issue 200,000 shares of First Choice's unrestricted, registered common stock to us in substitution for the shares provided to date, or, in the alternative, damages in lieu of specific performance and interest and costs. Beartooth Platinum continues to assess its position on this action.
Item 2. Changes in Securities and Use of Proceeds
Sales of Unregistered Securities
Options Granted
The following stock options were granted during the quarter ended September 30, 2003.
| Optionee | Grant Date | Expiry Date | Exercise Price ($CDN) | Number of Shares |
| Directors: | ||||
| John Andrews | September 8, 2003 | September 7, 2008 | $0.10 | 50,000 |
| Jim Clucas | September 8, 2003 | September 7, 2008 | $0.10 | 50,000 |
| Reid Keays | September 8, 2003 | September 7, 2008 | $0.10 | 50,000 |
| Delbert Steiner | September 8, 2003 | September 7, 2008 | $0.10 | 50,000 |
| Ted Tomasovich | September 8, 2003 | September 7, 2008 | $0.10 | 50,000 |
| Officers: | ||||
| Craig Smith | September 8, 2003 | September 7, 2008 | $0.10 | 100,000 |
| Total | 350,000 |
All options granted above will vest over an 18 month period as follows:
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| a) | 25% of the initial aggregate number of common shares vest on allocation; | |
| b) | 25% of the initial aggregate number of common shares vest on the date which is 6 calendar months after the date of grant; | |
| c) | 25% of the initial aggregate number of common shares vest on the date which is 12 calendar months after the date of grant; and | |
| d) | 25% of the initial aggregate number of common shares vest on the date which is 18 calendar months after the date of grant. |
Other sales
In connection with a private placement completed in the quarter ended March 31, 2002, the Company also issued a convertible debenture payable in the amount of $1,000,000 (C$1,587,000). The debenture bears interest at 6% per annum. The debenture is convertible, at the option of the holder, into units of the Company’s common shares at C$0.35 per unit for a maximum number of units of 4,535,149 until February 7, 2004. Each unit consists of one common share and one-half of a common share purchase warrant. The holder can acquire one additional common share for one full warrant and C$0.70 per share for two years from the date of conversion. The holder of the debenture is a related party. The issuance of these common shares will be exempt from registration by virtue of Section 4(2) of the Securities Act.
On January 6, 2003 the holder converted $450,000 of this debenture into 2,021,150 common shares of the Company. During the quarter ended September 30, 2003 draws in the amount of $235,000 on the convertible debenture were made and the Company expects to draw down the remaining $55,000. As at September 30, 2003, the Company has received cumulative advances of $945,000 of the maximum amount under the debenture of $1,000,000.
On May 1, 2003, the Company announced the termination of the Platinum Fox property joint venture agreement. In order to terminate the agreement the Company made a payment of $4,300, issued 100,000 common shares and quit claimed 65 claims from the “area of interest” to the other parties to the joint venture. These costs along with other estimated termination costs and the capitalized resource property costs were written-off in the year ended December 31, 2002 in the amount of $546,893. The Platinum Fox property was dropped as a result of an analysis by the Company of its exploration priorities within the overall Montana property area. On the basis of that analysis, it was determined that the potential of the Platinum Fox did not justify the future costs associated with maintaining the property.
Exemption Relied Upon
With respect to all of the foregoing stock and option issuances without registration under the Securities Act of 1933, as amended (“Securities Act”), the Company relied upon exemptions from the registration requirement of the Securities Act contained in Section 4(2), Regulation D or Regulation S. In each instance, the securities were taken by the investor for investment and not with a view to subsequent resale or distribution, the securities were issued with appropriate restrictions on transfer and the certificates contained restrictive legends required by the appropriate exemption.
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Working Capital Restrictions
The Company has had negative cash flows from operating activities since inception, and expects that negative cash flows from operating activities will continue, which will have a material negative impact on liquidity.
The Company is dependent on the proceeds of debt and equity financings such as private placements, issuances of convertible securities, the exercise of stock options or warrants, and optioning or selling its properties or other assets to fund its general and administrative expenditures and its mineral exploration and development costs. Without such proceeds, the Company may not continue as a going concern. The Company will need funding to continue its operations and there can be no assurance that such funding will be available.
Limits on Dividends
The Company has never paid any dividends on its common stock and the Company does not expect to pay dividends on its common stock in the foreseeable future.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the quarter ended September 30, 2003.
Item 5. Other Information
On July 3, 2003, the Company announced that it had appointed a new Chief Financial Officer, Craig C. Smith, C.A. and moved its office location to Vancouver, B.C.
On July 9, 2003, the Company announced that it had once again extended its precious metals focus to include gold. The management of Beartooth stated that it had re-evaluated its existing gold properties given the increase in gold prices over the past eighteen months and believed that these assets provide an excellent opportunity to create value for its shareholders. The Company intends to raise capital for the advancement of both its PGM and Gold properties and/or seek qualified joint-venture partners.
On September 2, 2003, it was announced that Mr. Theodore Tomasovich was appointed as interim President and CEO of the Company. Mr. Tomasovich replaced Mr. John Andrews who will continue as a director and as a consultant to the Company.
Item 6. Exhibits And Reports On Form 8-K [SB 601]
(a) Exhibits
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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(b) Reports filed during the quarter ended September 30, 2003 on Form 8-K.
None.
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.
| BEARTOOTH PLATINUM CORPORATION | ||
| Date November 19, 2003 | By | “Theodore Tomasovich” |
| Theodore Tomasovich | ||
| President and Chief | ||
| Executive Officer | ||
| Date November 19, 2003 | By | “Craig C. Smith” |
| Craig C. Smith | ||
| Chief Financial Officer | ||
| & Corporate Secretary | ||
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