| OMB APPROVAL |
OMB Number: 3235-0416 Expires: April 30, 2009 Estimated average burden hours per response 136.00 |
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 May 31, 2008
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: 001-05970
Silver Butte Co., Inc.
(Exact name of registrant as specified in its charter)
| Nevada | | 82-0263301 |
| (State of other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | |
| 520 Cedar Street, Sandpoint, ID | | 83864 |
| (Address of principal executive offices) | | (Zip Code) |
(208) 263-5154
(Issuer's telephone number, including area code)
Check whether the issuer (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 at least the past 90 days.
[ X ] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.) [ X ] Yes [ ] No
State the number of shares outstanding of common stock, as of the latest practicable date: At June 20, 2008, 18,710,412 shares of the Company’s common stock were outstanding.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| [ ] Large accelerated filer | [ ] Accelerated filer | [ ] Non-accelerated filer | [ X ] Smaller reporting company |
SILVER BUTTE CO., INC.
TABLE OF CONTENTS
| PART I. | |
| | |
| 3 |
| 3 |
| 4 |
| 5 |
| 6 |
| | |
| 7 |
| | |
| 8 |
| | |
| 8 |
| | |
| PART II. | |
| | |
| 8 |
| | |
| 8 |
| | |
| 8 |
| | |
| 8 |
| | |
| 8 |
| | |
| 9 |
PART I.
Silver Butte Co., Inc.
Balance Sheets
| | | May 31, 2008 (unaudited) | | | August 31, 2007 | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
Cash and cash equivalents | | $ | 40,768 | | | $ | 14,562 | |
| | | | | | | | | |
Total assets | | $ | 40,768 | | | $ | 14,562 | |
| | | | | | | | | |
| LIABILITES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
Accounts payable | | $ | 14 | | | $ | 3,175 | |
Total current liabilities | | | 14 | | | | 3,175 | |
| | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding | | | - | | | | - | |
Common stock, $0.001 par value; 300,000,000 shares authorized, 18,710,412 and 17,743,746 shares issued and outstanding at May 31, 2008, and August 31, 2007, respectively | | | 18,710 | | | | 17,744 | |
Additional paid-in capital | | | 967,559 | | | | 910,525 | |
Accumulated deficit | | | (945,515 | ) | | | (916,882 | ) |
Total stockholders’ equity | | | 40,754 | | | | 11,387 | |
| | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 40,768 | | | $ | 14,562 | |
The accompanying condensed notes are an integral part of these financial statements.
Statements of Operations
| | | Three Months Ended | | | Nine Months Ended | |
| | | 5/31/2008 | | | 5/31/2007 | | | 5/31/2008 | | | 5/31/2007 | |
| | | (unaudited) | | | (unaudited) | |
| Operating expenses: | | | | | | | | | | | | |
Professional service fees | | $ | (3,193 | ) | | $ | (3,674 | ) | | $ | (24,756 | ) | | $ | (17,458 | ) |
Other general and administrative | | | (897 | ) | | | (904 | ) | | | (3,889 | ) | | | (966 | ) |
| | | | | | | | | | | | | | | | | |
Total operating expenses | | | (4,090 | ) | | | (4,578 | ) | | | (28,645 | ) | | | (18,424 | ) |
| | | | | | | | | | | | | | | | | |
| Other income: | | | | | | | | | | | | | | | | |
Interest income | | | - | | | | 106 | | | | 12 | | | | 223 | |
Total other income | | | - | | | | 106 | | | | 12 | | | | 223 | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (4,090 | ) | | $ | (4,472 | ) | | $ | (28,633 | ) | | $ | (18,201 | ) |
| Loss per common share – basic | | Nil | | | Nil | | | Nil | | | Nil | |
| | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding – basic | | | 18,606,065 | | | | 17,743,746 | | | | 18,166,640 | | | | 17,699,271 | |
The accompanying condensed notes are an integral part of these financial statements.
Statements of Cash Flows
| | | Nine Months Ended | |
| | | May 31, | | | May 31, | |
| | | 2008 | | | 2007 | |
| | | (unaudited) | |
| | | | | | | |
| Cash flows from operating activities: | | | | | | |
Net loss | | $ | (28,633 | ) | | $ | (18,201 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
Change in: | | | | | | | | |
Accounts payable | | | (3,161 | ) | | | 202 | |
Net cash used by operating activities | | | (31,794 | ) | | | (17,999 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
Proceeds from sale of common stock | | | 58,000 | | | | 28,000 | |
Net cash provided by financing activities | | | 58,000 | | | | 28,000 | |
| | | | | | | | | |
| Net increase in cash and cash equivalents | | | 26,206 | | | | 10,001 | |
| Cash and cash equivalents, beginning of period | | | 14,562 | | | | 15,078 | |
| | | | | | | | | |
| Cash and cash equivalents, end of period | | $ | 40,768 | | | $ | 25,079 | |
The accompanying condensed notes are an integral part of these financial statements.
Condensed Notes to Financial Statements-May 31, 2008
1. Basis of Presentation
These unaudited financial statements of Silver Butte Co., Inc. (“the Company”) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes thereto for the fiscal year ended August 31, 2007, included in the Company’s Form 10-KSB.
The financial statements included herein reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year ended August 31, 2008.
2. Description of Business
Silver Butte Co., Inc. was incorporated in the state of Nevada on March 4, 2004, and is the successor of Silver Butte Mining Company, which was incorporated in Idaho in 1965.
The Company was originally organized to explore, acquire and develop mineral properties and rights. However, the Company’s exploration activities never developed any commercial ore deposits, and the Company decided to abandon, or sell, its mineral properties and rights, and favorably position itself to seek other profitable business opportunities.
3. Description of Property
The Company holds the mineral rights to one claim in Bonner County, Idaho. The claim is Cleveland Lode in Section 6, Township 55 North, Range 2 West.
4. Stockholders’ Equity
Private Placements
In October 2007, the Company offered 700,000 (amended to 966,666) common shares for sale in a private placement at a price of $0.06 per share. At May 31, 2008, 966,666 shares had been sold for total proceeds of $58,000. No warrants were granted in connection with this offering, and proceeds will be used to finance ongoing operations.
5. Subsequent Event
On June 23, 2008, the Company entered into a Letter of Intent for a share exchange with Blue Arch Coal Company (“Blue Arch”), a Wyoming corporation. Blue Arch’s assets consist primarily of options to acquire four state coal leases in the Powder River Basin of Wyoming. Under the terms of the proposed share exchange, shares of the Company’s common stock will be exchanged for the approximately 220,500,000 outstanding shares of Blue Arch, on a share for share basis. (Blue Arch shareholders will receive one share of Silver Butte common stock for each share of Blue Arch they own). Closing of the transaction is contingent upon completion of due diligence by each corporation and negotiation of a definitive Share Exchange Agreement, which must be approved by the Board of Directors of the Company and Blue Arch, and by the majority of the shareholders of Blue Arch. The Share Exchange Agreement will contain, among other conditions, a requirement that prior to closing Blue Arch shall have obtained equity financing in the minimum amount of $3 million. After closing of the transaction, it is anticipated that there will be a 1:5 reverse split of the Company’s common stock and that the Company will change the name of the Corporation to Blue Arch Energy, Inc.
General
This Form 10-QSB contains 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, many of which are based on management’s discussion and analysis or plan of operations and elsewhere in this report. 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.
Plan of Operation
The Company’s purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who desire to seek the perceived advantages of a publicly registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature.
The Company may seek a business opportunity with entities which have recently commenced operations, or wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. The Company may acquire assets and establish wholly-owned subsidiaries in various businesses, or acquire existing businesses as subsidiaries. Business opportunities may be available in many different industries and 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 especially experienced in matters relating to the new business of the Company, will rely primarily upon their own efforts to accomplish the business purposes of the Company. It is not anticipated that any outside consultants or advisors, other than the Company's legal counsel, will be utilized by the Company to effectuate its business purposes described herein.
During the nine months ended May 31, 2008, the Company sold 966,666 common shares in a private placement offering at a price of $0.06 per share for total proceeds of $58,000. No warrants were granted in connection with this offering. Proceeds from this offering will be used to finance ongoing operations, which should meet the Company’s cash requirements for the next twelve months.
Not required for smaller reporting companies.
An evaluation was performed of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures by the Registrant’s President and the Secretary/Treasurer. Based on that evaluation, they concluded that disclosure controls and procedures were effective as of February 29, 2008, in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion.
There has been no change in our internal control over financial reporting during the three month period ended May 31, 2008, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the quarter ended May 31, 2008, the Company sold 200,000 common shares in a private placement offering for total proceeds of $12,000. Proceeds will be used to finance ongoing operations. No warrants were granted in connection with this offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
ITEM 5. OTHER INFORMATION
NONE.
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.
SILVER BUTTE CO., INC.
(Registrant)
By: /s/ Terry McConnaughey
Terry McConnaughey, President and Director
Date: July 15, 2008
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.
By: /s/ Robert J. Evans
Robert J. Evans, Secretary/Treasurer and Director
Date: July 15, 2008
10
