UNITED STATES
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 (FEE REQUIRED)
For The Quarter Ended: June 30, 2001
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934.
(NO FEE REQUIRED)
For the Transition Period from ______________ to _______________.
Commission File Number: 0-16468
MOTHER LODE GOLD MINES CONSOLIDATED
(Exact name of Company as specified in its charter)
CALIFORNIA 94-2236016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1440 CONCANNON BOULEVARD
LIVERMORE, CA 94550
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (925) 455-0802
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: Common Stock, No
Par Value
Documents incorporated by reference: Not Applicable
Indicate by check mark whether the Company (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the Company was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding
Common Stock, 5,828,518
without par value as of June 30, 2001
Total Pages: 13
Exhibit Index on Page: 11
PART I - FINANCIAL INFORMATION
Item 1. Financial information required by Item 310(b) of Regulation S-B and by
Rule 10.01 of Regulation SX, for the Company's fiscal quarter ended June 30,
2001. The Company has prepared this information without independent audit.
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
TABLE OF CONTENTS
Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000 3
Consolidated Statement of Operations for the 6-month period ending
June 30, 2001. 4
Consolidated Statement of Cash Flows for the 6-month period ending
June 30, 2001 5
Consolidated Statements of Stockholder's Equity from inception on February 8,
1974 to June 30, 2001. 6
Notes to Consolidated Statements 7
(The balance of this page is intentionally left blank)
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
BALANCE SHEETS
(1990 through 2001 Unaudited)
ASSETS
June 30 December 31
2001 2000
(Unaudited) (Unaudited)
Current Assets
Cash $190 $10
Total current assets 190 10
Other Assets
Property rights 618,332 618,332
Note receivable from
Amador United Gold Mines 88,039 49,418
Deposits 0 1,969
Total other assets 706,371 669,719
$706,561 $669,729
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts payable $21,670 $16,596
California income tax 11,231 12,607
Total current liabilities 32,901 29,203
Non-current liabilities
Notes payable 5,153 381,381
Deferred fees payable 58,303 175,627
Deferred officer's salary 182 182
Total non-current liabilities 63,639 557,191
Minority interest in equity of subsidiaries 8 238,670
Stockholder's equity
Common stock, without par value,
Authorized, 7,500,000 shares:
Issued and outstanding, June 30
2001: 5,828,518
2000: 4,066,512 6,340,383 5,479,502
Paid-in capital representing rights to
acquire a maximum of 1,273,808 shares
(See Note 3) 1,024,581 1,132,066
Deficit accumulated during development stage (6,754,951) (6,766,903)
Net stockholder's equity 610,014 (155,335)
$706,561 $669,729
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(1990 through 2001 Unaudited)
Three Months Ended Six Months Ended
Jun 30 Jun 30 Jun 30 Jun 30
2001 2000 2001 2000
Pre-operating revenues:
Payments received under
joint venture agreements: $0 $0 $0 $0
Interest Income 1,091 725 2,788 1,441
Sub-total 1,091 725 2,788 1,441
Pre-operating Expenses
Lease and non-creditable option
payments on mining properties 0 0 0 0
Evaluation of mining properties 13,833 (2,000) 15,218 (2,000)
Legal and accounting 0 0 0
Interest expense 2,138 7,131 4,230 14,186
Administrative compensation 0 0 0 (79,433)
Other administrative expense 1,080 528 4,485 1,481
Depreciation/Amortization 0 27 0 55
California Franchise tax 0 75 0 75
Other expenses 200,050 45 200,050 45
Sub-total 217,100 5,805 223,982 (65,591)
Net operating income (216,009) (5,081) (221,194) 67,032
Minority interest in loss of
subsidiaries 233,137 0 233,145 0
Net gain/(loss) $17,128 ($5,081) $11,952 $67,032
Primary gain/(loss) per share $0.003 ($0.001) $0.003 $0.017
Fully diluted gain/(loss) per share $0.003 ($0.001) $0.002 $0.014
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(1990 through 2001 Unaudited)
Six Months Ended
Jun 30 Jun 30
2001 2001
Cash flows from operating activities: $11,952 $67,032
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 0
Salaries and fees 0 0
(Increase) Decrease in deposits 1,969 0
(Increase) Decrease in pre-paid expenses 0 0
(Increase) Decrease in loans receivables (38,621) (1,441)
Increase (Decrease) in accounts payables 5,074 (17,908)
Increase (Decrease) in long term loans (117,324) 0
Incr (Decr) in deferred officer salaries 0 0
Incr (Decr) in income taxes payable (1,376) 75
Incr (Decr) Minority Interest due to Dissolution (238,760) 0
Incr (Decr) in property loss from abandonment 0 0
Gross cash used in operating activities (376,997) (19,273)
Cash flow from investing activities:
Minority investment 8 34
Purchase of mining property 0 0
Net cash provided by (used in) investing 8 34
Cash flows from financing activities:
Issuance of Series B Stock 0 0
(Inc)Dec Conversion Series A to Common (107,485) 0
Proceeds from sale of company stock 860,881 0
Increase (Decrease) in expiration of:
Series A Preferred Stock 0 0
1984 Option Plan 0 (79,433)
Net borrowing from notes payable (376,228) 29,682
Net cash provided by financing activities 377,168 (49,751)
Net increase (decrease) in cash $179 ($1,958)
Cash, beginning of period 10 2,062
Cash, end of period $189 $104
A. Supplemental disclosures of cash flow information for the 326 month since
inception to June 30, 2001
Cash paid for: Interest $719,084
Income taxes $37,755
B. Supplemental schedule of non-cash investing and financing activities for the
326 months from inception to June 30, 2001:
The Company has satisfied various liabilities (Note 3) by issuance of stock or
options (Exercise price: $0.0001 per share) to acquire common stock:
Stock Options Stock
Salaries $1,030,750
Equipment _ 0 $5,000
Total $1,030,750 $5,000
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(1990 through 2001 Unaudited)
Deficit Accumulated
Issued and Outstanding Paid-in Since Inception
Shares Amount Capital February 1974
From Inception, February 24, 1974 thru December 31, 1997
3,878,780 $4,982,795 $1,702,893 ($6,734,968)
No shares were sold from Jan thru Dec 1998
Paid-in capital representing options to acquire
a cumulative maximum of 1,531,294 common shares 23,495
December 31, 1998
pre-operating net loss 0 0 0 (70,291)
As of December 31, 1998 3,878,780 4,982,795 1,726,338 (6,805,299)
No shares were sold from Jan thru Dec 1999
Series A Preferred shares converted
to common shares 153,390 278,313 (278,313)
Series A Preferred share options expired (9,310)
1984 Stock option Plan Deferred Compensation
Expiration of Options (79,433)
Paid-in capital representing options to acquire
a cumulative maximum of 1,442,544 common shares 0
December 31, 1999
pre-operating net gain 0 0 0 56,758
As of December 31, 1999 4,034,170 $5,261,108 $1,359,282 ($6,748,541)
No shares were sold from Jan thru December 2000
Series A Preferred shares converted
to common shares 143,275 218,394 (218,394)
Series A Preferred options expired (8,821)
Paid-in capital representing options
to acquire a cumulative maximum of
1,402,120 common shares 0
December 31, 2000
pre-operating net loss 0 0 0 (18,362)
As of December 31, 2000 4,177,445 $5,479,502 $1,132,066 ($6,766,903)
No shares were sold from Jan thru Jun 2001
Shares issued to satisfy
long-term loans 761,171 380,585
long-term obligations 232,006 116,003
AUGM debt guaranteed
by MLGM 98,130 49,065
Series A Preferred shares converted
to common shares 144,280 107,486 (107,486)
Northern Mines Inc. Dissolution
and issuance of MLGM stock at
$0.50 per share 415,486 207,743
Paid-in capital representing options to acquire
a cumulative maximum of 1,273,808 common shares 0
June 30, 2001 pre-operating
net gain (loss) 0 0 0 11,952
As of June 30, 2001 5,828,518 $6,340,383 $1,024,581 ($6,754,951)
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
by the Company in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
Operating results for the three-month period ended JUNE 30, 2001 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2001. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Form 10KSB for the
year ended December 31, 2000.
Effective January 1, 2001, the company has ceased to be a development company
since the sole activity is identification and exploration of properties that
the Company believes have the potential for economic recovery of minerals,
especially gold. In order to develop the property into an economic mining
operation, the Company will form a joint venture for that specific property.
2. POTENTIAL MINING PROPERTIES
a. Big Canyon Mining and Cattle Corporation Property. The lease, with an
option to purchase for surface and mineral rights on 584.07 acres, made
effective July 1, 1996 was amended on January 1, 2001.
b. Fort Yuma Claims: Two unpatented lode claims, directly owned by the
Company, totaling about 20 acres, are located in an area open to mineral entry
under the General Mining Law of 1972.
c. Minimum Annual Land Lease Payments
Assuming these properties are retained, and the payment schedule agreed to for
the Big Canyon property is unchanged, the minimum payments are as follows:
Year Amount
2001(9 months) $600
2002 $1,200
2003 $1,200
3. STOCK OPTION PLANS
The Company has two active stock option plans (1995 Stock Option Plan and
Directors' Stock Option Plan). Northern Mines did "Wind up and Dissolve"
effective June 30, 2001; all option plans had expired March 1, 2000.
The Company options are valued at the amount of the salary or other amounts
owed, and are recorded in these amounts as paid-in capital, with offsets to
expense, or accounts payable as appropriate. As of the date of this Form 10-
QSB, they are summarized as follows:
A. Option plans for employees, directors and consultants:
Plan Expiration Exercise Common Shares Reserved for
Date Price Under Option Future Grant
1. Mother Lode Gold Mines Consolidated, unissued shares of common stock:
1995 Plan Jun 2005 $2.00 100,000 0
Director's Jun 2005 $2.00 40,000 60,000
Total 140,000 60,000
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
The exercise prices of the foregoing incentive options were above market
prices at the date of grant, so no compensation expense, or capital credit has
been accounted for in connection with these options.
B. Compensatory options issued for services and/or in satisfaction of Company
indebtedness.
1. Mother Lode Gold Mines Consolidated:
a. Options on Series A preferred stock, callable at $10 per share, $.0001
exercise price, each convertible to common stock for a minimum of 2.1316
shares, increasing at a rate of 10% per annum to a maximum of 3.3368 shares
after five years, and if the common stock has not been registered under the
Securities Act of 1933, then increasing at 10% per annum to a maximum of 5.4901
shares, until final expiration at the end of an additional five years.
Through JUNE 30, 2001, a total of 261,586 options for preferred shares were
issued and outstanding for salaries and fees to officers and others, at prices
ranging from $10.00 to $1.53/share of preferred stock
Shares on Exercise Common Shares Amount of Expense
Conversion Price/Share Under Option or Debt
Relief
Minimum: 557,597
Maximum, 5 years class: .0001 139,720
Maximum, 10 years class: .0001 1,134,088
1,273,808 $977,000
b. Options on Series B preferred stock, callable at $10 per share, $.0001
exercise price, each convertible to common stock for a minimum of 5.00 shares,
increasing at a rate of 0.05 shares per annum to a maximum of 5.20 shares after
four years, and if the common stock has not been registered under the
Securities Act of 1933, at a rate of 5.25 shares from the fifth anniversary,
until final expiration at the end of an additional five years.
Through JUNE 30, 2001 a total of 4,775 options for preferred shares were issued
for lease payments due to third parties at $10.00/share of preferred stock.
Shares on Exercise Common Shares Amount of Expense
Conversion Price/Share Under Option or Debt
Relief
Minimum: 4,775
Maximum, 5 year Class .0001 24,830 $ 47,748
Total amount of expense relief (Series A and Series B) $1,024,748
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
c. A changes in options outstanding, as of June 30, 2001 follows:
Compensatory Options, Maximum Shares of common stock:
January 1, 2001
Series B Preferred 24,830
Series A Preferred, 5-year expiration class 202,938
Series A Preferred, 10-year expiration class 1,174,352
Total 1,402,120
Net Changes, 2001
Series A Preferred, 5-year expiration class (63,218)
Series A Preferred, 10-year expiration class (40,264)
Balance, JUNE 30, 2001 1,298,638
4. OFFICE LEASE
The Company shares 1,400 square feet of office space in a Class A low rise
building in a garden office park in Livermore, California. The Company's share
of the monthly lease payment is $510, plus annual operating and tax
escalations.
(The balance of this page intentionally left blank)
Part I - Financial Information (continued)
Item 2. Management's Discussion an Analysis of Financial Condition and Results
of Operations.
Summary of Financial Results. Mother Lode Gold Mines Consolidated and its
consolidated subsidiaries (the "Company")showed a Second Quarter 2001 gain of
$17,128. The Company has no cash income from the properties in which the
Company has an interest. Sources of cash flow to the Company have historically
been derived from: (1) mining contracts with other mining companies, (2)
securities offerings and (3) drilling programs.
As of June 30, 2001, the Company had outstanding advances for land and
administrative services to subsidiary corporations as follows: Amador United
Gold Mines - $101,190; Pacific FarEast Minerals, Inc. - $4,724.
During the First Quarter, the Company exchanged common stock shares
arbitrarily valued at $0.50 per share for outstanding loans and professional
fees. In addition, a holder of a note from Amador United Gold Mines, a 48.37%
owned subsidiary of MLGM, which had been guaranteed by MLGM called the loan and
agreed to accept shares of MLGM common stock at $0.50 per share. The dollar
value of these several transactions was $545,653 and the total shares issued
were 1,091,307.
During the Second Quarter, Northern Mines Inc. did "Wind-up and
Dissolve". Mother Lode issued 415,486 shares of common stock of Mother Lode
Gold Mines Consolidated, valued at $0.50 per share, to the 56 shareholders of
Northern Mines Inc. The dollar value of this issuance was $207,743.
The total number of common shares of the Company as of June 30, 2001 is
5,828,518.
Cash payments for officer's compensation were suspended effective October 1,
1988, and remain in effect through JUNE 30, 2001 and are in effect as of the
date of this report. To date, 350,000 shares have been authorized and options
for 261,586 shares of Series A Preferred Stock that have been granted remain
active.
Preparation of Financial Statements. The consolidated financial
statements of June 30, 2001, and for the three-month period then ended, were
prepared by the Company and have not been reviewed by independent auditors
prior to filing.
Amador United Gold Mines ("AUGM"). There was no activity by this
corporation during the First Quarter 2001. The Company owns 48.37 % of the
common stock (the only outstanding security) of AUGM.
Northern Mines Inc. ("NMI"). The Board of Directors of Northern Mines
Inc. voted to "Wind-up and Dissolve" this corporation effective June 30, 2001.
There has been no activity for over three years. Mother Lode Gold Mines, which
held 86.71% of the issued and outstanding common stock voted in favor of the
action. In recognition of property transfers that had been made to MLGM, MLGM
issued one share of the MLGM common stock, valued at $0.50 per share, for each
share of Northern Mines Inc. common stock held by the 56 Northern Mines Inc.
shareholders. A total of 415,486 shares of MLGM common stock were issued,
valued at $207, 743.
Pacific FarEast Minerals, Inc. ("PFEM") During the First Quarter
2001, PFEM continued its responsibilities under the two joint ventures in the
People's Republic of China The Company owns 31.7% of the common stock of PFEM.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not aware of any material legal proceedings to which the Company
or any subsidiary is a party or of which any of their properties is subject,
nor does the Company know of any such proceedings currently contemplated by any
governmental agency.
Item 2. Changes in Security: Not Applicable.
Item 3. Default Upon Senior Securities: Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders: Not applicable.
Item 5. Other Information: Not applicable.
Item 6. Exhibits and Reports on Form 8-K. Not Applicable.
Exhibit 11, Statement re Computation of Per Share Earnings which Exhibit begins
at Sequential Page 12.
No reports on Form 8-K were filed during the period of this Form 10-QSB.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOTHER LODE GOLD MINES CONSOLIDATED
By:
o/s Frank M. Orrell o/s Byron S. James
Frank M. Orrell, Byron S. James,
Chairman, CEO Chief Financial Officer
Date: September 20, 2001 Date: September 20, 2001
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDARIES
EARNINGS PER SHARE
(FULLY DILUTED)
CUMULATIVE 329 MO TO 3 MO TO 3 MO TO 6 MO TO 6 MO TO 12 MO TO
DATE SHARES SHARES MONTHS 6/30/01 6/30/01 6/30/00
6/30/01 6/30/00 12/31/00
For the period 02/08/74 thru 12/31/97 (A,B,C)
287 869,032,139
01/01/98 (C) 32,326 4,595,852 3 13,787,556
03/31/98 (C) 11,713 4,607,565 3 13,822,695
06/30/98 (C) 11,713 4,619,278 3 13,857,834
09/30/98 (C) 16,366 4,635,644 3 13,906,932
12/31/98 (C) 16,366 4,652,010 3 13,956,030
03/31/99 (C) 0 4,652,010 3 13,956,030
06/30/99 (C) 95,037 4,747,047 3 14,241,411
09/30/99 (C) 28,713 4,775,760 3 14,327,280
12/31/99 (C) 31,640 4,807,400 3 14,422,200 14,422,200 14,422,200
03/31/00 (C) 32,342 4,839,742 3 14,519,226 14,519,226 14,519,226 14,519,226
06/30/00 (C) 32,342 4,872,084 3 14,616,252 14,616,252
09/30/00 (C) 36,141 4,908,225 3 14,724,675 14,724,675
12/31/00 (C) 42,450 4,950,675 3 14,852,025 14,852,025
03/31/01 (C) 1,163,447 6,114,122 3 18,342,366 18,342,366 18,342,366
06/30/01 (C) 487,626 6,114,122 0 0 0 0 0 0 0
329 1,072,364,381 18,342,366 14,519,226 33,194,391 28,941,426 58,282,3530
MONTHS 329 3 3 6 6 12
WEIGHTED AVERAGE SHARES 3,259,466 6,114,122 4,839,742 5,532,399
4,823,571 4,856,863
NET INCOME/(LOSS) ($6,754,951) $17,128 ($5,081) $11,952 $67,032 ($18,362)
EARNINGS/(LOSS) PER SHARE
FULLY DILUTED ($2.072) $0.003 ($0.001) $0.002 $0.014 ($0.004)
NOTES:
(A) Share amounts have been restated for the following: 5:1 stock split - 1977;
15:1 stock split - 1978; 10% stock dividend - 1984.
(B) Includes February 1992 cancellation of shares held by Northern Mines, Inc.,
an 82% owned subsidiary of Mother Lode Gold Mines Consolidated.
(D Assumes the exercise and conversion of Series A preferred shares
previously issued were converted on this date.
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDARIES
EARNINGS PER SHARE
(PRIMARY
CUMULATIVE 329 MO TO 3 MO TO 3 MO TO 6 MO TO 6 MO TO 12 MO TO
DATE SHARES SHARES MONTHS 6/30/01 6/30/01
6/30/00 6/30/01 6/30/00 12/31/00
For the period 02/08/74 thru 12/31/97 (A,B,C)
287 869,032,139
01/01/98 0 3,878,780 3 11,636,340
03/31/98 0 3,878,780 3 11,636,340
06/30/98 0 3,878,780 3 11,636,340
09/30/98 0 3,878,780 3 11,636,340
12/31/98 0 3,878,780 3 11,636,340
03/31/99 0 3,878,780 3 11,636,340
06/30/99 95,037 3,973,817 3 11,921,451
09/30/99 28,713 4,002,530 3 12,007,590
12/31/99 31,640 4,034,170 3 12,102,510 12,102,510 12,102,510
3/31/00 32,342 4,066,512 3 12,199,536 12,199,536 12,199,536 12,199,536
06/30/00 32,342 4,098,854 3 12,296,562 12,296,562
09/30/00 36,141 4,134,995 3 12,404,985 12,404,985
12/31/00 42,450 4,177,445 3 12,532,335 12,532,335
3/31/01 1,163,447 5,340,892 3 16,022,676 16,022,676 16,022,676
06/30/01 487,626 5,828,518 0 0 0 0 0 0 0
329 997,500,359 16,022,676 12,199,536 28,555,011 24,302,046 58,282,353
MONTHS 329 3 3 6 6 12
WEIGHTED AVERAGE SHARES 3,031,916 5,340,892 4,066,512 4,759,169 4,050,341
4,083,633
NET INCOME/(LOSS) ($6,754,951) $17,128 ($5,081) $11,952 $67,032 ($18,362)
EARNINGS/(LOSS) PER SHARE
FULLY DILUTED ($2.228) $0.003 ($0.001) $0.003 $0.017 ($0.004)
NOTES:
(A) Share amounts have been restated for the following: 5:1 stock split - 1977;
15:1 stock split - 1978; 10% stock dividend - 1984.
(B) Includes February 1992 cancellation of shares held by Northern Mines, Inc.,
an 82% owned subsidiary of Mother Lode Gold Mines Consolidated.
Sequential Page Number 13