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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 2
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000
COMMISSION FILE NO. 0-31159
TREND MINING COMPANY
(Exact Name of Small Business Issuer as Specified in its Charter)
MONTANA 81-0304651
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
401 FRONT AVENUE
SUITE 1, SECOND FLOOR
COEUR D'ALENE, IDAHO 83814
(Address of principal executive offices) (Zip Code)
(208) 664-8095
(Issuer's telephone number)
Check whether the issuer (1) has 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 / /
There were 18,467,320 shares of the Registrant's no par value common stock
outstanding as of January 31, 2001.
Transitional Small Business Disclosure: Yes / / No /X /
================================================================================
EXPLANATORY NOTE
This Quarterly Report on Form 10-QSB/A for the quarter ended December
31, 2000 (the "Report") is being filed solely to amend Item 1.
This Form 10-QSB/A constitutes Amendment No. 2 to the Report.
1
The Board of Directors
Trend Mining Company
(Formerly Silver Trend Mining Company)
Coeur d'Alene, Idaho
ACCOUNTANT'S REVIEW REPORT
We have reviewed the accompanying balance sheet of Trend Mining Company
(formerly Silver Trend Mining Company) (an exploration stage company) as of
December 31, 2000 and the related statements of operations and comprehensive
loss, stockholders' equity (deficit), and cash flows for the three months ended
December 31, 2000 and 1999, and for the period from October 1, 1996 (inception
of exploration stage) to December 31, 2000. All information included in these
financial statements is the representation of the management of Trend Mining
Company.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States of
America.
The financial statements for the year ended September 30, 2000 were audited by
us and we expressed an unqualified opinion on them in our report originally
dated December 15, 2000. Except for procedures concerning corrections as
discussed in Notes 14 and 15, we have not performed any auditing procedures
since that date.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's significant operating losses raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding the resolution of this issue are also discussed in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
As discussed in Notes 14 and 15 to the financial statements, certain errors in
the valuing of stock transactions and other matters have been corrected by
management of the Company during the current year. The effect of these errors is
summarized in Note 15 and resulted in an understatement of net losses for the
years ended September 30, 2000 and 1999 of $339,282 and $301,715, respectively.
The effect of these corrections for the quarter ending December 31, 2000 was an
understatement of net loss by $65,195. Accordingly, an adjustment has been made
to accumulated deficit to correct for these errors.
Williams & Webster, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
Spokane, Washington
February 16, 2001 (Except for Notes 14 and 15, as to which the date is May 17,
2001.)
2
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
December 31,
2000 September 30,
(Unaudited) 2000
(Restated) (Restated)
--------------- --------------
ASSETS
CURRENT ASSETS
Cash $ 34,094 $ 102,155
Prepaid expenses 3,424 1,725
Equipment held for resale 4,000 4,000
--------------- --------------
Total Current Assets 41,518 107,880
--------------- --------------
MINERAL PROPERTIES - -
--------------- --------------
PROPERTY AND EQUIPMENT, net of depreciation 35,690 40,177
--------------- --------------
OTHER ASSETS
Investments 98,820 107,250
--------------- --------------
TOTAL ASSETS $ 176,028 $ 255,307
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 474,871 $ 323,228
Accounts payable to directors and officers 30,795 11,100
Accrued expenses 7,639 19,447
Note payable to stockholder 285,000 -
Current portion of long-term debt 3,166 2,992
--------------- --------------
Total Current Liabilities 801,471 356,767
--------------- --------------
LONG-TERM DEBT, net of current portion 9,471 10,389
--------------- --------------
COMMITMENTS AND CONTINGENCIES - -
--------------- --------------
STOCKHOLDERS' EQUITY(DEFICIT)
Common stock, no par value, 30,000,000 shares authorized;
18,381,309 and 18,232,776 shares issued and outstanding,
respectively 183,812 182,327
Additional paid-in capital 3,425,863 3,296,898
Stock options and warrants 286,371 118,920
Pre-exploration stage accumulated deficit (558,504) (558,504)
Accumulated deficit during exploration stage (3,961,768) (3,151,077)
Accumulated other comprehensive income (10,688) (413)
--------------- --------------
TOTAL STOCKHOLDERS' EQUITY(DEFICIT) (634,914) (111,849)
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT) $ 176,028 $ 255,307
=============== ==============
See accompanying notes and accountant's review report
3
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the
Period From
October 1,
1996
(Inception
For the Three Months Ended of
---------------------------------- Exploration
December 31, December 31, Stage) to
2000 1999 December 31, 2000
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated) (Restated)
--------------- -------------- --------------
REVENUES $ - $ - $ -
--------------- -------------- --------------
EXPENSES
Mineral property expense 104,044 60,033 1,583,858
General and administrative 466,115 89,464 1,099,514
Officers and directors compensation 73,020 35,634 469,078
Legal and professional 157,675 6,316 542,355
Depreciation 4,487 100 15,598
--------------- -------------- --------------
Total Expenses 805,341 191,547 3,710,403
--------------- -------------- --------------
OPERATING LOSS (805,341) (191,547) (3,710,403)
--------------- -------------- --------------
OTHER INCOME (EXPENSE)
Dividend and interest income 108 25 6,447
Loss on disposition and impairment of assets - - (188,226)
Gain (loss) on investment sales (3,500) 5,420 (2,191)
Financing expense - - (70,364)
Interest expense (1,958) - (3,609)
Miscellaneous income - 100 6,578
--------------- -------------- --------------
Total Other Income (Expense) (5,350) 5,545 (251,365)
--------------- -------------- --------------
LOSS BEFORE INCOME TAXES (810,691) (186,002) (3,961,768)
INCOME TAXES - - -
-------------- --------------- --------------
NET LOSS (810,691) (186,002) (3,961,768)
-------------- --------------- --------------
OTHER COMPREHENSIVE LOSS
Change in market value of investments (10,275) (16,064) (87,768)
--------------- -------------- --------------
NET COMPREHENSIVE LOSS $ (820,966) $ (202,066) $(4,049,536)
=============== ============== ==============
BASIC AND DILUTED NET LOSS PER SHARE $ (0.04) $ (0.03) $ (0.48)
=============== ============== ==============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 18,288,419 5,496,290 8,267,529
=============== ============== ==============
See accompanying notes and accountant's review report
4
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
RESTATED
Common Stock Stock
--------------------- Additional Options Other
Number of Paid-In and Accumulated Comprehensive
Shares Amount Capital Warrants Deficit Income Total
----------------------- ---------- ------------ ------------ ------------ ---------------
Balance, October 1, 1996
1,754,242 $ 17,542 $ 663,218 $ - $ (558,504) $ - $ 122,256
Common stock issuances as follows:
- for cash at $0.50 per share 200,000 2,000 98,000 - - - 100,000
- for payment of liabilities and
expenses at $0.50 per share 45,511 455 22,301 - - - 22,756
Net loss for the year ended
September 30, 1997 - - - - (128,614) - (128,614)
--------- -------- --------- ---------- ----------- --------- ------------
Balance, September 30, 1997 1,999,753 19,997 783,519 - (687,118) - 116,398
Common stock issuances as follows:
- for mineral property at $0.50
per share 150,000 1,500 73,500 - - - 75,000
- for lease termination at $0.50
per share 12,000 120 5,880 - - - 6,000
- for debt at $0.50 per share 80,000 800 39,200 - - - 40,000
- for cash at $0.20 per share 7,500 75 1,425 - - - 1,500
- for compensation at $0.50 per
share 9,000 90 4,410 - - - 4,500
Issuance of stock options for
financing activities - - - 2,659 - - 2,659
Net loss for the year ended
September 30, 1998 - - - - (119,163) - (119,163)
Other comprehensive income - - - - - 117,080 117,080
--------- -------- --------- ---------- ----------- --------- ------------
Balance, September 30, 1998 2,258,253 22,582 907,934 2,659 (806,281) 117,080 243,974
Common stock issuances as follows:
- for cash at an average of
$0.07 per share 555,000 5,550 35,450 - - - 41,000
- for prepaid expenses at $0.33
per share 50,000 500 16,000 - - - 16,500
- for consulting services at an
average of $0.20 per share 839,122 8,391 158,761 - - - 167,152
- for mineral property option
at $0.13 per share 715,996 7,160 82,471 - - - 89,631
- for officers' compensation at
an average of $0.24 per share 300,430 3,004 70,522 - - - 73,526
- for debt, investment and
expenses at $0.30 per share 9,210 92 2,671 - - - 2,763
- for directors' compensation at
an average of $0.25 per share 16,500 165 3,960 - - - 4,125
- for rent at $0.25 per share 1,000 10 240 - - - 250
- for equipment at $0.30 per
share 600,000 6,000 174,000 - - - 180,000
Net loss for the year ended
September 30, 1999 - - - - (716,759) - (716,759)
Other comprehensive loss - - - - - (79,179) (79,179)
--------- -------- --------- ---------- ----------- --------- ------------
Balance, September 30, 1999 5,345,511 $ 53,454 $ 1,452,009 $ 2,659 $ (1,523,040) $ 37,901 $ 22,983
--------- -------- --------- ---------- ----------- --------- ------------
See Note 4 for information regarding individual stock, option and warrant
issuances during the exploration stage in accordance with SFAS No. 7.
See accompanying notes and accountant's review report
5
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
RESTATED
Common Stock
------------------------- Additional Stock Other
Number of Paid-In Options and Accumulated Comprehensive
Shares Amount Capital Warrants Deficit Income Total
----------- ---------- --------- ---------- ---------- ----------- ----------
Balance, October 1, 1999 5,345,511 $ 53,454 $ 1,452,009 $ 2,659 $ (1,523,040) $ 37,901 $ 22,983
Common stock and option issuances as
follows:
- for employee, officer and director
compensation at an average of
$0.61 per share 231,361 2,314 140,446 15,820 - - 158,580
- for officers' and directors'
compensation at an average
of $1.19 per share 11,500 115 13,615 - - - 13,730
- for consulting services at an
average of $0.47 per share 530,177 5302 246,333 - - - 251,635
- for mineral property at $0.89 per
share 100,000 1,000 88,000 - - - 89,000
- for investments at $0.33 per share 200,000 2,000 64,000 - - - 66,000
- for cash at $0.07 per share 456,247 4,562 28,969 - - 33,531
- for cash, options and warrants
at $0.01 per share 1,000,000 10,000 2,414 87,586 - - 100,000
- for incentive fees at $0.33 per
share 65,285 653 20,891 - - - 21,544
- for deferred mineral property
option costs at $0.13 per share 129,938 1,299 14,943 - - - 16,242
- for modification of stockholder
agreement at $0.60 per share 200,000 2,000 118,000 30,000 - - 150,000
- for modification of stockholder
agreement - 4,262 10,379 - - 14,641
- from exercise of options at $0.12
per share 9,962,762 99,628 1,103,016 (37,524) - - 1,165,120
Cash received for the issuance of common stock
warrants for 7,979,761 shares of
stock - - - 10,000 - - 10,000
Miscellaneous common stock adjustments (5) - - - - - -
Net loss for the year ended September
30, 2000 - - - - (2,186,541) - (2,186,541)
Other comprehensive loss - - - - - (38,314) (38,314)
----------- ---------- --------- ---------- ---------- --------- -----------
Balance, September 30, 2000 18,232,776 $ 182,327 $ 3,296,898 $ 118,920 $ (3,709,581) $ (413) $ (111,849)
----------- ---------- --------- ---------- ---------- --------- -----------
Common stock and option issuances as
follows:
- for cash of $1.00 per share 100,000 1,000 99,000 - - - 100,000
- for cash and consulting services
from options for $0.39 per share 33,333 333 12,737 (3,070) - - 10,000
- for consulting services at $1.15
per share 10,000 100 11,400 - - - 11,500
- for officer and employee
compensation at $1.13 per share 5,200 52 5,828 - - - 5,880
Warrants issued for consulting services - - - 170,521 - - 170,521
Net loss for the period ended
December 31, 2000 (unaudited) - - - - (810,691) (810,691)
Other comprehensive loss - - - - - (10,275) (10,275)
----------- ---------- --------- ---------- ---------- --------- -----------
Balance, December 31, 2000 (unaudited) 18,381,309 $ 183,812 $ 3,425,863 $ 286,371 $ (4,520,272) $ (10,688) $ (634,914)
=========== ========== ========= ========== ========== ========= ===========
See Note 4 for information regarding individual stock, option and warrant
issuances during the exploration stage in accordance with SFAS No. 7.
See accompanying notes and accountant's review report
6
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the
Period From
October 1,
1996
(Inception of
For the Three Months Ended Exploration
---------------------------------- Stage)
December 31, December 31, to December
2000 1999 31, 2000
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated) (Restated)
-------------- --------------- ---------------
Cash flows from operating activities:
Net loss $ (810,691) $ (186,002) $ (3,961,768)
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Depreciation 4,487 100 15,598
Loss (gain) on investment sales 3,500 - 7,347
Loss on disposition and impairment of
assets - - 188,226
Common stock issued for services and
expenses 11,500 101,272 495,714
Common stock and options issued as
compensation 5,880 - 260,341
Stock options issued for financing
activities - - 17,300
Common stock and warrants issued to
acquire mineral
property options - - 344,873
Warrants issued for consulting fees 170,521 - 170,521
Common stock issued for incentive fees - - 21,544
Changes in assets and liabilities:
Accounts receivable - 1,000 -
Related party receivable - (4,784) -
Inventory - - 3,805
Prepaid expenses (1,699) - (3,424)
Accounts payable 163,001 22,860 487,066
Accrued expenses (11,808) 4,434 7,639
-------------- --------------- ---------------
Net cash used in operating activities (465,309) (61,120) (1,945,218)
-------------- --------------- ---------------
Cash flows from investing activities:
Payment of deposit - - (1,000)
Return of deposit - - 1,000
Proceeds from sale of equipment - - 33,926
Proceeds from sale of mineral property - - 20,000
Purchase of furniture & equipment - - (37,195)
Proceeds of investments sold 2,992 36,685 74,279
-------------- --------------- ---------------
Net cash provided by investing activities 2,992 26,685 91,010
-------------- --------------- ---------------
Cash flows from financing activities:
Payments on notes payable, options, warrants
and short term borrowings (744) - (3,456)
Sale of warrants for common stock - - 10,000
Proceeds from short-term borrowings 285,000 2,000 327,000
Sale of common stock, options, warrants,
subscriptions and exercise of options 110,000 105,000 1,551,151
-------------- --------------- ---------------
Net cash provided by financing activities 394,256 107,000 1,884,695
-------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH (68,061) 72,565 30,487
CASH, BEGINNING OF PERIOD 102,155 8,998 3,607
-------------- --------------- ---------------
CASH, END OF PERIOD $ 34,094 $ 81,563 $ 34,094
============== =============== ===============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 369 $ -- $ 2,020
Taxes paid $ -- $ -- $ --
NON-CASH FINANCING ACTIVITIES:
Common stock and warrants issued to acquire
mineral property options $ -- $ -- $ 344,873
Common stock issued to acquire mineral
property $ -- $ -- $ 75,000
Common stock issued for acquisition of mining
equipment $ -- $ -- $ 180,000
Common stock issued for services and expenses $ 11,500 $ 101,272 $ 495,714
Common stock issued for investment $ -- $ -- $ 67,000
Common stock issued for debt $ -- $ -- $ 40,842
Deferred acquisition costs on mining property $ -- $ -- $ 46,242
Stock options and warrants issued for
financing activities $ -- $ -- $ 17,300
Warrants issued for consulting fees $ 170,521 $ -- $ 170,521
Common stock issued for incentive fees $ -- $ -- $ 21,544
Common stock and options issued as
compensation $ 5,880 $ -- $ 260,341
Purchase of equipment with financing agreement -- -- 14,093
Investments received for mineral property $ -- $ -- $ 5,000
See accompanying notes and accountant's review report
7
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Trend Mining Company (formerly Silver Trend Mining Company) ("the Company") was
incorporated on September 7, 1968 under the laws of the State of Montana for the
purpose of acquiring, exploring and developing mining properties. From 1984 to
1997, the Company was dormant. In November 1998, the Company changed its focus
to exploration of platinum and palladium related metals. In February 1999, the
Company changed its name from Silver Trend Mining Company to Trend Mining
Company to better reflect the Company's change of focus to platinum group
metals. The Company conducts operations primarily from its offices in Coeur
d'Alene, Idaho. The Company has elected a September 30 fiscal year-end. As part
of the Company's Annual Meeting held on February 23, 2001, the stockholders
approved reincorporation of the Company as a Delaware corporation. (See Note
13.)
The Company is actively seeking additional capital and management believes that
additional stock can be sold to enable the Company to continue to fund its
property acquisition and platinum group metals exploration activities. However,
management is unable to provide assurances that it will be successful in
obtaining sufficient sources of capital.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in
understanding the Company's financial statements. The financial statements and
notes rely on the integrity and objectivity of the Company's management. These
accounting policies conform to accounting principles generally accepted in the
United States of America and have been consistently applied in the preparation
of the financial statements.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting.
BASIC AND DILUTED LOSS PER SHARE
Basic and diluted loss per share is computed by dividing the net loss by the
weighted average number of shares outstanding during the year or period. The
weighted average number of shares is calculated by taking the number of shares
outstanding and weighting them by the length of time that they were outstanding.
The Company had outstanding options and warrants representing 8,704,261 shares
and 14,688,000 shares, respectively, as of December 31, 2000 and 1999. As of
December 31, 2001, the Company also has convertible debt instruments which, if
converted, would increase outstanding common stock by 228,000 shares and
outstanding warrants by 228,000 shares. Interest accrued on these notes for the
three months ended December 31, 2000 was $1,958. All of these options, warrants
and convertible debt have been excluded from the calculation of diluted loss per
share as they would be antidilutive.
CASH AND CASH EQUIVALENTS
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
8
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
COMPENSATED ABSENCES
The Company's employees are entitled to paid vacation, paid sick days and
personal days off depending on job classification, length of service and other
factors. The Company estimates that the amount of compensation for future
absences is minimal and immaterial for the period ended December 31, 2000 and
the year ended September 30, 2000 and, accordingly, no liability has been
recorded in the financial statements. The Company's policy is to recognize the
cost of compensated absences when compensation is actually paid to employees.
COMPREHENSIVE INCOME (LOSS)
The Company reports comprehensive income (loss) in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." Accordingly, accumulated other comprehensive income or loss is included
in the stockholders' equity section of the balance sheets. Amounts are reported
net of tax and include unrealized gains or losses on available for sale
securities.
DERIVATIVE INSTRUMENTS
The Financial Accounting Standards Board issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," in June 1998 and SFAS No. 138,
"Accounting for Derivative Instruments and Certain Hedging Activities," in June
2000. These standards establish accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities on the balance sheet
and measure those instruments at fair value, at the appropriate date.
At December 31, 2000, the Company had not engaged in any transactions that would
be considered derivative instruments or hedging activities.
ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
EMPLOYEE AND NON-EMPLOYEE STOCK COMPENSATION
The Company values common stock issued to employees and other than employees for
services, property and investments at the fair market value of the common stock
which is the closing price of Company stock on the day of issuance. If no
trading occurred on that day, then the fair market value is the lower of the
closing prices on the first previous day and the first following day on which
the Company's stock was traded.
9
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTERIM FINANCIAL STATEMENTS
The interim financial statements for the period ended March 31, 2001, included
herein have not been audited. The financial statements reflect all adjustments
which are, in the opinion of management, necessary to present fairly the results
of operations for the period. All such adjustments are normal recurring
adjustments. The results of operations for the period presented are not
necessarily indicative of the results expected for the full fiscal year.
EXPLORATION COSTS
In accordance with accounting principles generally accepted in the United States
of America, the Company expenses exploration costs as incurred. Exploration
costs expensed during the period ended December 31, 2000 and 1999 were $104,044
and $60,033, respectively. As of December 31, 2000, the exploration costs
expensed during the Company's exploration stage were $1,583,858.
EXPLORATION STAGE ACTIVITIES
The Company has been in the exploration stage since October 1, 1996, when the
Company emerged from a period of dormancy, and has no revenues from operations.
The Company is primarily engaged in the acquisition and exploration of mineral
properties. Should the Company locate a commercially viable reserve, the Company
would expect to actively prepare the site for extraction. The Company's
accumulated deficit prior to the exploration stage was $558,504.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts for cash, accounts payable, notes payable and accrued
liabilities approximate their fair value.
GOING CONCERN
As shown in the accompanying financial statements, the Company has no revenues,
has incurred a net loss of $810,691 for the period ended December 31, 2000 and
has an accumulated deficit during the exploration stage of $3,961,768. These
factors indicate that the Company may be unable to continue in existence in the
absence of receiving additional funding.
The financial statements do not include any adjustments related to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
The Company's management believes that it will be able to generate sufficient
cash from public or private debt or equity financing for the Company to continue
to operate based on current expense projections.
IMPAIRED ASSET POLICY
In March 1995, the Financial Accounting Standards Board issued a statement SFAS
No. 121 titled "Accounting for Impairment of Long-lived Assets." In complying
with this standard, the Company reviews its long-lived assets quarterly to
determine if any events or changes in circumstances have transpired which
indicate that the carrying value of its assets may not be recoverable. The
Company determines impairment by comparing the undiscounted future cash flows
estimated to be generated by its assets to their respective carrying amounts
whenever events or changes in circumstances indicate that an
10
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
asset may not be recoverable. Properties are acquired and recorded at fair
values negotiated in arm's length transactions. Although the Company expenses as
costs the exploration and maintenance of its properties and claims, if results
of exploration warrant an assessment of the carrying value of a mineral
property's acquisition cost, or if the Company has an indication that the
recorded fair value has declined, such costs will be reviewed and any impairment
will be recognized at that time.
INTERIM FINANCIAL STATEMENTS
The interim financial statements for the period ended December 31, 2000,
included herein have not been audited. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to present fairly
the results of operations for the period. All such adjustments are normal
recurring adjustments. The results of operations for the period presented are
not necessarily indicative of the results expected for the full fiscal year.
INVESTMENT POLICIES
The Company uses the average cost method to determine the gain or loss on
investment securities held as available-for-sale based upon the accumulated cost
bases of specific investment accounts.
MINERAL PROPERTIES
The Company capitalizes only amounts paid in cash or stock as consideration for
the acquisition of real property (see Note 3). Properties are acquired and
recorded at fair values negotiated in arm's length transactions. Costs and fees
paid to locate and maintain mining claims, to acquire options to purchase claims
or properties, and to maintain the mineral rights and leases, are expensed as
incurred. When a property reaches the production stage, the related capitalized
costs will be amortized, using the units of production method on the basis of
periodic estimates of ore reserves.
Mineral properties are periodically assessed for impairment of value and any
diminution in value is charged to operations at the time of impairment. Should a
property be abandoned, its unamortized capitalized costs are charged to
operations. The Company charges to operations the allocable portion of
capitalized costs attributable to properties sold. Capitalized costs are
allocated to properties abandoned or sold based on the proportion of claims
abandoned or sold to the claims remaining within the project area.
OPTION AND WARRANT FAIR VALUE CALCULATIONS The Company utilizes the
Black-Scholes valuation model to calculate the fair value of options and
warrants issued for financing, acquisition, compensation and payment for
services purposes. The parameters used in such valuations include a risk free
rate of 5.5%, the assumption that no dividends are paid, exercise periods
ranging from one week to 5.5 years, depending upon the terms of the
instrument issued, and a volatility factor calculated annually based on
estimates of expected volatility, as per SFAS No. 123. The Company used its
historic volatility data to develop the 1998 estimate of 30%, consistent with
its limited public trading in that period. The volatility estimates for 1999,
2000 and 2001 reflect an average of Company data and volatility factors
reported by two other mining companies at comparable stages in their
respective public trading histories, resulting in expected volatilities of
55.12% in 1999, 48.05% in 2000 and 46.40% in 2001.
11
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATIONS
Certain amounts from prior periods have been reclassified to conform to the
current period presentation. This reclassification has resulted in no changes to
the Company's total accumulated deficit or net losses presented.
REVERSE STOCK SPLIT
The Company's board of directors authorized a 1 for 10 reverse stock split of
its no par value common stock. (See Note 4.) All references in the accompanying
financial statements to the number of common shares outstanding and per share
amounts have been restated to reflect the reverse stock split.
SEGMENT REPORTING
The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," in the fiscal year ended September 30, 1999. SFAS No.
131 requires disclosures about products and services, geographic areas and major
customers. The adoption of SFAS No. 131 did not affect the Company's results of
operations or financial position. The Company's mining properties were not
engaged in any business activity. The Company had no segments engaged in
business activities at December 31, 2000 and, therefore, no segment reporting is
required.
NOTE 3 - MINERAL PROPERTIES
The following describes the Company's significant mineral properties:
WYOMING PROPERTIES
During the year ended September 30, 1999, the Company entered into an option
agreement with General Minerals Corporation (GMC) to acquire the Lake Owen
Project located in Albany County, Wyoming. The agreement with GMC entitled the
Company to receive 104 unpatented mining claims in exchange for 715,996 shares
of common stock, $40,000 in cash to be paid in four quarterly payments of
$10,000 and $750,000 in exploration expenditure commitments to be incurred over
a three-year option period. In May 2000, the Company issued an additional
129,938 shares of common stock under this agreement for the acquisition of the
Lake Owen Project.
The Company and GMC subsequently entered into an amendment to the agreement
under which (i) the Company issued 416,961 shares of common stock to GMC upon
GMC's exercise of preemptive rights, (ii) the Company agreed to perform an
additional $15,000 of geophysical work on the Lake Owen Project prior to
December 31, 2000, (iii) the Company issued 200,000 additional shares and
warrants exercisable until June 2002 to purchase 200,000 shares at $0.70 per
share, and (iv) GMC agreed to terminate its antidilution and preemptive rights
as provided in the original agreement. The Company has expensed $295,873 for
cash paid and common stock issued to acquire this Project.
The Company has located an additional 509 unpatented mining claims in an agreed
area of interest near the Lake Owen Project.
12
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
The Company also staked and claimed six claims known as the Albany Project
during the year ended September 30, 1999. These claims are located in Albany
County, Wyoming.
The Company also staked and claimed 42 unpatented mining claims known as the
Spruce Mountain claims and 179 unpatented mining claims known as the Centennial
West claims. These claims are also located in Albany County, Wyoming.
During the period ended December 31, 2000, the Company located and staked 155
unpatented mining claims in Albany County, Wyoming, including 34 and 121 claims,
which were staked at the Douglas Creek and Keystone properties, respectively.
MONTANA PROPERTIES
In March 200, the Company entered into a three year lease and option agreement
under which it has the right to acquire a 100% interest in the Intrepid claims.
Upon entering into the agreement, the Company paid the claim owners $5,800 in
cash and 100,000 shares of common stock. In the Company's acquisition of this
option, it has expensed $94,800 for cash paid and common stock issued.
Under the agreement, the Company is obligated to incur exploration expenditures
of not less than $10,000 by September 30, 2001, by $15,000 by March 4, 2002 and
$15,000 by March 4, 2003. In addition, the Company must make advance royalty
payments of $10,000 by March 4, 2001, $25,000 by March 4, 2002 and $35,000 each
year thereafter. In March 2001, the Company and the claim holders agreed to
replace the March $10,000 advance royalty payment with a $9,000 payment due May
11, 2001. In connection with this agreement, the Company issued to the holders
3,000 shares of common stock with an aggregate value of $2,340. The May 11
payment has not been made and the Company has requested an extension.
During the option period, the Intrepid claims are subject to a net smelter
royalty of 3% of all ores produced and sold from the Intrepid claims. The
Company has the right to exercise the purchase option at any time for a total
purchase price of $320,000, with any advance royalty payments credited against
the purchase price, and the claim holders retaining a 0.5% net smelter royalty.
The Company has agreed to issue and additional 100,000 shares to the claim
holders if the Company has not terminated the agreement by November 2001.
Also in Montana during 2000, the Company staked 121 claims for the Vanguard
Project. The Company explored and staked 36 claims known as the McCormick Creek
Project in Missoula County. Furthermore, the Company located and staked 433
claims in Stillwater County prior to December 31, 2000.
During the year ended September 30, 2000, the Company located and staked 211
claims in Stillwater County Montana. In the period ended December 31, 2000, an
additional 222 claims were staked and added, and 38 claims were abandoned,
leaving a total of 395 claims.
OREGON PROPERTY
During the year ended September 30, 1999, the Company entered into an agreement
in which it would explore and stake five claims located in Jackson County,
Oregon known as the Shamrock property. All transactions have been completed and
the Company has acquired title to these claims.
13
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
NEVADA PROPERTIES
During the year ended September 30, 1999, the Company entered into an agreement
whereby Mountain Gold Exploration would explore and stake claims, transferring
title to the Company upon completion thereof. Transactions were finalized for 13
claims known as the Hardrock Johnson Property located in Clark County, Nevada.
During the period ended December 31, 2000, the Company located and staked 31
unpatented claims known as the Willow Springs Claims. These claims are located
in Nye County, Nevada.
CALIFORNIA PROPERTIES
In mid-2000, the Company located 79 unpatented mining claims, known as the Pole
Corral property, in Tehema County, California. In September 2000, the Company
located 33 unpatented mining claims known as the Cisco Butte property in Placer
County, California.
CANADIAN PROPERTY
In August 2000, the Company entered into an agreement whereby Spectra Management
Corporation would explore and stake five claims representing about 67,000 acres
for the Company in northern Saskatchewan. This property is now known as the
Peter Lake Claims.
The following property is scheduled for disposal pursuant to the Company's new
focus on platinum and palladium related metals exploration:
NEVADA PROPERTY
In 1979, the Company acquired the Pyramid Mine, which consists of five
unpatented lode mining claims near Fallon, Nevada. The claims are within the
Walker Indian Reservation and located on the site of a U.S. Department of
Defense bombing range. As of the date of these financial statements, no clean up
has commenced on these claims. The Company is not aware of any pending
requirements for clean up of hazardous materials. Pursuant to an impairment
analysis performed by the Company, the Company wrote off the $70,333 book value
of cash paid and common stock issued to acquire the Pyramid Mine, effective
prior to the inception of the Exploration Stage. This write-off resulted in a
corresponding increase in accumulated deficit prior to the Exploration Stage.
The following property was disposed of during the last year:
IDAHO PROPERTY
In July 2000, the Company entered into an agreement with New Jersey Mining
Company (New Jersey) whereby the Company received 50,000 shares of New Jersey's
restricted common stock in exchange for New Jersey's opportunity to earn a 100%
interest less a net smelter royalty in the Company's unpatented claims in
Kootenai County, Idaho. This agreement, concerning the claims known as the
Silver Strand Mine, which was part of the Company's prior silver mining
activities, will require a three-year work commitment by New Jersey totaling
$200,000. If the work commitment is not met, the Company will receive additional
common stock of New Jersey. The Company will retain a 1.5% net smelter return
until an aggregate of $50,000 in net smelter royalties have been received.
Thereafter, the Company's net smelter return will decrease to 0.5%. Pursuant to
an impairment analysis performed by the Company, the
14
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
Company wrote off the $104,753 book value of the property, effective prior to
the inception of the Exploration Stage. This write-off resulted in a
corresponding increase in accumulated deficit prior to the Exploration Stage.
The Company also expensed $19,000 in previously capitalized costs as mineral
property expenses in 1997. The value of the securities received upon disposition
of the property was $5,000, which the Company recognized as a gain on
disposition in the year ended September 30, 2000.
NOTE 4 - COMMON STOCK
On March 28, 2001, the Company completed its reincorporation in Delaware. As a
result of the reincorporation, each share of the Company's common stock, no par
value per share, was changed and converted into one fully paid and nonassessable
share of common stock, par value $0.01 per share. All references in the
accompanying financial statements to stock values have been restated to reflect
this recapitalization and conversion to ensure consistency and comparability
with financial statements for subsequent periods.
On February 16, 1999, the Company's board of directors authorized a 1 for 10
reverse stock split of the Company's no par value common stock. As a result of
the split, 26,356,430 shares were retired. All references in the accompanying
financial statements to the number of common shares and per-share amounts for
the period ended December 31, 2000 and the year ended September 30, 2000 have
been restated to reflect the reverse stock split.
The Company from time to time issues common stock in exchange for services, as
compensation or for the acquisition of assets. Such stock is recorded at the
fair market value on, or as near as possible to, the date of the transaction.
During the year ended September 30, 2000, the Company issued 226,194 shares of
common stock, valued at $145,490 to officers and directors, as compensation;
530,177 shares of common stock valued at $251,635 for services provided to the
Company; 100,000 shares of common stock valued at $89,000 in exchange for the
option to acquire a mineral property; 200,000 shares of common stock valued at
$66,000 for New Jersey Mining Company common stock; 65,285 shares of common
stock valued at $21,544 as incentive fees and 11,419,009 shares of common stock,
options and warrants for cash of $1,298,651. The Company issued 16,667 shares of
common stock valued at $11,000 to an employee as part of his employment
agreement. The Company also issued to General Minerals Corporation (GMC) an
additional 129,938 shares valued at $16,242 as part of the deferred cost of
acquiring the Lake Owen option. In addition, the Company issued 200,000 shares
of common stock valued at $120,000 as partial consideration for the termination
of certain preemptive rights held by GMC.
During the three month period ended December 31, 2000, the Company issued 10,000
shares of common stock valued at $11,500 for services, 5,200 shares of common
stock valued at $5,880 as compensation, 33,333 shares of common stock from
options exercised by an employee for cash of $10,000, and 100,000 shares of
common stock sold for $100,000 cash as a private placement.
See Note 6 regarding future loan repayments in units of Trend securities.
15
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 4 - COMMON STOCK (CONTINUED)
The following table discloses the Company's stock and equity transactions during
the Exploration Stage. This information meets the disclosure requirements of
SFAS No. 7 for development and exploration stage disclosures. The following
abbreviations are used in the table: CS for Common Stock; OPT for Options; and
WAR for warrants.
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON ADDITIONAL NUMBER VALUE OF
NUMBER OF PRICE PER STOCK PAID-IN TOTAL NUMBER OF OF OPTIONS/
ISSUE DATE SHARES SHARE AMOUNT CAPITAL AMOUNT OPTIONS WARRANTS WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE, OCTOBER 1, 1996 1,754,242 $ 17,542 $ 663,218 $ 680,760
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, OPTIONS AND
WARRANTS ACTIVITY AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 03/25/1997 200,000 $ 0.50 2,000 98,000 100,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Payment of liabilities 09/30/1997 45,511 0.50 455 22,301 22,756
and expenses
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE SEPTEMBER 30, 1997 1,999,753 $ 19,998 $ 783,518 $ 803,516 -
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, OPTIONS AND
WARRANTS ACTIVITY AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Mineral property 07/23/1998 150,000 $ 0.50 1,500 73,500 75,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 07/23/1998 7,500 0.20 75 1,425 1,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Lease termination 07/23/1998 12,000 0.50 120 5,880 6,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Debt 07/23/1998 80,000 0.50 800 39,200 40,000
- ------------------------------------------------------------------------------------------------------------------------------------
OPT for Financing 09/24/1998 180,000 2,659
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Compensation 09/30/1998 9,000 0.50 90 4,410 4,500
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE SEPTEMBER 30, 1998 2,258,253 $ 22,583 $ 907,933 $ 930,516 180,000 - $2,659
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, OPTIONS AND
WARRANTS ACTIVITY AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Debt, investment and 10/12/1998 9,210 $ 0.30 92 2,671 2,763
expenses
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Equipment 10/30/1998 600,000 0.30 6,000 174,000 180,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 11/28/1998 5,000 0.20 50 950 1,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 12/31/1998 30,858 0.44 309 13,191 13,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Directors' compensation 01/25/1999 16,500 0.25 165 3,960 4,125
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 01/31/1999 8,572 0.35 86 2,914 3,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 03/31/1999 24,000 0.25 240 5,760 6,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 03/31/1999 6,000 0.25 60 1,440 1,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 04/30/1999 32,000 0.28 320 8,640 8,960
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 04/30/1999 12,000 0.28 120 3,240 3,360
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 05/31/1999 73,333 0.25 733 17,600 18,333
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 06/30/1999 34,353 0.25 344 8,244 8,588
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 06/30/1999 50,000 0.16 500 7,500 8,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 06/30/1999 95,833 0.16 958 14,375 15,333
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 07/06/1999 5,000 0.25 50 1,200 1,250
- ------------------------------------------------------------------------------------------------------------------------------------
OPT for Financing activities 07/22/1999 50,000 -
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Mineral property option 07/27/1999 715,996 0.13 7,160 82,471 89,631
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 07/29/1999 33,333 0.15 333 4,667 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 07/30/1999 146,603 0.12 1,466 16,126 17,592
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 07/31/1999 133,697 0.12 1,337 14,707 16,044
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 07/31/1999 41,667 0.12 417 4,583 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 08/04/1999 16,667 0.15 167 2,333 2,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Rent 08/09/1999 1,000 0.25 10 240 250
- ------------------------------------------------------------------------------------------------------------------------------------
OPT for Financing activities 08/13/1999 100,000 -
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 08/15/1999 50,000 0.05 500 2,000 2,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 08/17/1999 5,000 0.25 50 1,200 1,250
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 08/17/1999 100,000 0.05 1,000 4,000 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 08/26/1999 100,000 0.10 1,000 9,000 10,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 08/31/1999 159,750 0.25 1,598 38,341 39,938
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Prepaid expenses 09/10/1999 50,000 0.33 500 16,000 16,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 09/10/1999 50,000 0.10 500 4,500 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 09/13/1999 200,000 0.05 2,000 8,000 10,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 09/30/1999 80,053 0.26 801 20,013 20,814
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 09/30/1999 133,333 0.26 1,333 33,334 34,667
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 09/30/1999 67,500 0.26 675 16,875 17,550
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
16
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 4 - COMMON STOCK (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
ISSUE DATE NUMBER OF PRICE PER COMMON ADDITIONAL TOTAL NUMBER OF NUMBER VALUE OF
STOCK PAID-IN OF OPTIONS/
SHARES SHARE AMOUNT CAPITAL AMOUNT OPTIONS WARRANTS WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE SEPTEMBER 30, 1999 5,345,511 $53,455 $1,452,009 $1,505,464 330,000 - $2,659
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, OPTIONS AND
WARRANTS ACTIVITY AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 10/04/1999 50,000 $ 0.26 500 12,500 13,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 10/22/1999 25,000 0.20 250 4,750 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 10/31/1999 273,675 0.31 2,737 82,103 84,840
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 11/30/1999 52,694 0.31 527 15,807 16,334
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 11/30/1999 4,327 0.31 43 1,298 1,341
- ------------------------------------------------------------------------------------------------------------------------------------
CS, OPT & WAR for Cash 12/31/1999 1,000,000 0.012 10,000 2,414 12,414 8,108,000 6,250,000 87,586
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 12/31/1999 1,200 0.35 12 408 420
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 01/04/2000 15,000 0.28 150 4,050 4,200
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Investments 01/15/2000 200,000 0.33 2,000 64,000 66,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Incentive fees 01/17/2000 65,285 0.33 653 20,891 21,544
- ------------------------------------------------------------------------------------------------------------------------------------
OPT Expiration 01/22/2000 (50,000) -
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 01/25/2000 14,286 0.35 143 4,857 5,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 02/22/2000 1,000,000 0.142 10,000 131,900 141,900 (1,000,000) (1,900)
- ------------------------------------------------------------------------------------------------------------------------------------
CS & OPT for Employees' 02/25/2000 16,667 0.66 167 10,833 11,000 33,333 3,070
compensation
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 02/29/2000 10,000 0.72 100 7,100 7,200
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Mineral property 03/24/2000 50,000 1.03 500 51,000 51,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 03/27/2000 2,500,000 0.142 25,000 329,750 354,750 (2,500,000) (4,750)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 03/31/2000 75,000 0.81 750 60,000 60,750
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 03/31/2000 3,000 0.81 30 2,400 2,430
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Mineral property 04/04/2000 50,000 0.75 500 37,000 37,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS & OPT for Directors' 04/11/2000 150,000 0.70 1,500 103,500 105,000 67,000 12,750
compensation
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Deferred mineral 05/08/2000 129,938 0.125 1,299 14,943 16,242
property acquisition costs
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 05/15/2000 9,975 0.63 100 6,184 6,284
- ------------------------------------------------------------------------------------------------------------------------------------
Cash for Warrants 06/08/2000 10,000
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 06/26/2000 416,961 0.056 4,170 19,361 23,531
- ------------------------------------------------------------------------------------------------------------------------------------
CS & WAR for Modification of 06/26/2000 200,000 0.60 2,000 118,000 120,000 200,000 30,000
stockholder agreement
- ------------------------------------------------------------------------------------------------------------------------------------
OPT & WAR for Modification of
stockholder agreement 06/27/2000 1,729,762 1,729,761 14,641
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 06/29/2000 1,597,588 0.064 15,976 86,740 102,716 (1,597,588) (2,716)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 06/30/2000 9,000 0.81 90 7,185 7,275
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 06/30/2000 1,000 0.70 10 690 700
- ------------------------------------------------------------------------------------------------------------------------------------
OPT Agreement Modification 07/07/2000 (127,500) -
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 07/14/2000 10,000 0.30 100 2,900 3,000 (10,000)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 07/21/2000 1,800,000 0.122 18,000 201,060 219,060 (1,800,000) (12,060)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 07/26/2000 650,000 0.122 6,500 72,605 79,105 (650,000) (4,355)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 07/31/2000 3,000 1.24 30 3,690 3,720
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 08/01/2000 50,000 0.15 500 7,000 7,500 (50,000)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 08/01/2000 50,000 0.30 500 14,500 15,000 (50,000)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 08/14/2000 90,000 0.122 900 10,053 10,953 (90,000) (603)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 08/24/2000 1,000,000 0.122 10,000 111,700 121,700 (1,000,000) (6,700)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Directors' compensation 08/25/2000 1,500 1.00 15 1,485 1,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 08/31/2000 15,000 0.30 150 4,350 4,500 (15,000)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 08/31/2000 1,000 1.13 10 1,120 1,130
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 09/22/2000 1,200,174 0.122 12,002 134,720 146,722 (1,200,174) (8,702)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 09/22/2000 90,000 1.45 900 72,000 72,900
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 09/30/2000 6,000 1.35 60 8,040 8,100
- ------------------------------------------------------------------------------------------------------------------------------------
CS Adjustment 09/30/2000 (5)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ENDING BALANCE SEPTEMBER 30,
2000 18,232,776 $ 182,328 $3,296,897 $3,479,225 127,833 8,179,761 $ 118,920
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, OPTIONS AND
WARRANTS ACTIVITY AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash from options 10/10/2000 33,333 $ 0.39 333 12,737 13,070 (33,333) (3,070)
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Consulting services 10/15/2000 10,000 1.15 100 11,400 11,500
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Officers' compensation 10/31/2000 3,000 1.30 30 3,870 3,900
- ------------------------------------------------------------------------------------------------------------------------------------
WAR for Consulting services 11/01/2000 250,000 123,775
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Employees' compensation 12/06/2000 2,200 0.90 22 1,958 1,980
- ------------------------------------------------------------------------------------------------------------------------------------
CS for Cash 12/20/2000 100,000 1.00 1,000 99,000 100,000
- ------------------------------------------------------------------------------------------------------------------------------------
WAR for Consulting services 12/31/2000 180,000 46,746
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ENDING BALANCE DECEMBER 31,
2000 18,381,309 $183,813 $3,425,862 $3,609,675 94,500 8,609,761 $ 286,371
- ------------------------------------------------------------------------------------------------------------------------------------
17
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 5 - COMMON STOCK OPTIONS AND WARRANTS
The Company had a Stock Option Plan, which was initiated to encourage and enable
qualified officers, directors and other key employees to acquire and retain a
proprietary interest in the Company by ownership of its common stock. A total of
ten percent of the currently issued and outstanding shares of the Company's
common stock may be subject to, or issued pursuant to the terms of the plan. No
options had been issued under the plan as of December 31, 2000, and the Plan has
been terminated. At the Company's Annual Meeting on February 23, 2001, the
Company's shareholders approved the adoption of the 2000 Equity Incentive Plan.
(See Note 13.)
None of the options described in this note were issued pursuant to a stock
option plan.
In the Black-Scholes Option Price Calculations below, the Company used the
following assumptions to estimate fair value: the risk-free interest rate was
5.5%, volatility was 30.00% in 1998, 55.12% in 1999, 48.05% in 2000 and
46.40% in 2001, and the expected life of the options varied from one week to
five years. The Company also assumed that no dividends would be paid on
common stock.
During 1999, the Company granted various stockholders options to acquire 150,000
shares of common stock at prices varying from $0.15 to $0.35 per share as
additional incentives for various stock purchases. At the respective grant
dates, these options were each determined to have no appreciable fair value
using the Black-Scholes Option Price Calculation.
In February 2000, the Company granted an employee options until February 25,
2002 to acquire 33,333 shares of common stock at an exercise price of $0.30 per
share as compensation. The fair value of these options estimated on the grant
date using the Black-Scholes Option Price Calculation was $3,070. The employee
exercised these options in October 2000.
During the fiscal year ended September 30, 2000, the Company's board of
directors issued options issued to purchase 67,000 shares of its common stock at
$0.50 per share to six retired directors. The options issued to each director
were based on years of service and are exercisable from April 15, 2000 to April
15, 2003. The fair value of these options estimated on the grant date using the
Black-Scholes Option Price Calculation was $12,750.
As partial consideration for an amendment to the GMC option agreement, the
Company granted to GMC in June 2000 a warrant to purchase 200,000 shares for
$0.70 per share exercisable until June 12, 2002. The fair value of this warrant
estimated on the date of issuance using the Black-Scholes Options Price
Calculation was $30,000.
On November 17, 2000, the Company entered into a consulting agreement with R. H.
Barsom Company, Inc., under which the consultant would perform certain services
for the Company until June 30, 2001, for an advance fee of $100,000 and 180,000
shares of common stock. In early January 2001, the Company and the consultant
agreed to terminate the agreement. In connection with the termination, the
consultant surrendered the 180,000 shares of common stock and received warrants
to purchase 180,000 shares of the Company's common stock at $1.50 per share,
exercisable over approximately two years. The fair value of these warrants
estimated on the grant date using the Black-Scholes Option Price Calculation was
$46,746, which was included in consulting expenses for the quarter ended
December 31, 2000.
18
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 5 - COMMON STOCK OPTIONS AND WARRANTS (CONTINUED)
On November 8, 2000, effective November 1, 2000, the Company entered into a
24-month agreement with Eurofinance Inc. under which the entity would assist the
Company with certain investment community matters in return for a monthly fee of
$5,000, plus expenses, and warrants to purchase 820,000 shares of common stock
at $1.50 per share. The warrants were exercisable until November 1, 2005. In
early January 2001, this agreement was terminated, with the Company no longer
obligated for the remaining monthly fees, and only the warrant for 250,000
shares that vested on November 1, 2000 remains outstanding. The fair value of
this warrant estimated on the grant date using the Black-Scholes Option Price
Calculation was $123,775 which was included in consulting expenses for the
quarter ended December 31, 2000.
TIGRIS FINANCIAL GROUP LTD./ELECTRUM LLC
On December 29, 1999, the Company entered into a stock purchase agreement with
Tigris Financial Group Ltd. under which Tigris purchased 1,000,000 shares of the
Company's common stock for $100,000, was granted an option until March 28, 2000
to acquire up to an additional 3,500,000 shares of common stock for an exercise
price of $0.14 per share, (or $490,000 in the aggregate), and was granted an
option to purchase, for $10,000, warrants to buy an additional 6,250,000 shares
of the Company's common stock at an exercise price of $0.40 per share. The
Company used the Black-Scholes Option Price Calculation effective as of the
transaction date and estimated fair values to be $37,524 for the option and
$50,062 for the warrants. On March 8, 2000, Tigris assigned its rights under the
stock purchase agreement to Electrum LLC, an affiliate.
Electrum exercised its option and acquired 3,500,000 shares of the Company's
common stock in February and March 2000. Pursuant to the terms of the stock
purchase agreement, upon exercise in full of this first option, Electrum's
option until September 25, 2000 to purchase up to an additional 4,608,000 shares
of common stock at an exercise price of $0.14 per share, or $645,120 in the
aggregate, became exercisable.
On June 27, 2000, the Company and Electrum entered into an amendment to the
stock purchase agreement under which the option to purchase 4,608,000 shares was
modified. As modified, Electrum had an option until July 5, 2000 to acquire up
to an additional 1,597,588 shares at $0.062 per share or $100,000 in the
aggregate and, upon exercise in full of this option, an option became
exercisable until September 25, 2000 to acquire up to 4,740,174 shares at an
exercise price of $0.115 per share, or $545,120 in the aggregate. In addition,
the option to purchase warrants was modified and, as modified, Electrum had an
option to purchase, for $10,000, warrants to buy up to 7,979,761 shares at an
exercise price of $0.40 per share until September 20, 2003. The Company utilized
the Black-Scholes Option Price Calculation to estimate the fair value of the
modifications as of the grant date and recorded $4,262 for the options and
$10,379 for the warrants. The $14,641 total amount was charged as a financing
expense.
Electrum has exercised all of its options to purchase the Company's common stock
and its option to purchase the warrant. In connection with its acquisition of
those shares, Electrum assigned 3,530,174 shares and 500,000 warrants to third
parties. Subsequently, Electrum has assigned an additional 2,000,000 shares and
500,000 warrants.
As of December 31, 2000, Tigris and Electrum own approximately 30% of the
Company's outstanding common stock and, assuming that Electrum exercises its
warrants and that the Company has issued no other shares, would own nearly 50%
of the Company's then outstanding common stock.
19
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 5 - COMMON STOCK OPTIONS AND WARRANTS (CONTINUED)
Electrum had certain preemptive rights, which were not exercised and have been
subsequently terminated. Tigris and Electrum have the right to proportional
representation on the Company's board of directors and registration rights for
all of the Company's common stock acquired through this agreement held by them.
As of December 31, 2000 and 1999, the Company had warrants outstanding as
described representing 8,609,761 and 6,250,000 shares of common stock,
respectively.
Following is a summary of the status of the options during the year ended
September 30, 2000 and the period ended December 31, 2000:
Weighted Average
Number of Shares Exercise Price
---------------------- ---------------------
Outstanding at October 1, 1999 330,000 $ 0.32
Granted 9,938,095 0.12
Exercised (9,962,762) 0.12
Forfeited - -
Revised (127,500) 0.36
Expired (50,000) 0.35
---------------------- ---------------------
Outstanding at September 30, 2000 127,833 $ 0.51
====================== =====================
Options exercisable at September 30, 2000 127,833 $ 0.51
====================== =====================
Outstanding at October 1, 2000 127,833 $0.51
Granted - -
Exercised (33,333) 0.30
Forfeited - -
Revised - -
Expired - -
--------------------- ----------------------
Outstanding at December 31, 2000 94,500 $0.57
====================== =====================
Options exercisable at December 31, 2000 94,500 $0.57
====================== =====================
EXERCISE DATE
On or before July 19, 2001 15,000 $0.50
On or before July 19, 2002 12,500 $1.00
On or before April 14, 2003 67,000 $0.50
In the subsequent period the Company has issued additional options and
warrants. (See Note 13.)
20
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company has accrued director and officer fees in the amounts of $30,795 at
December 31, 2000, which included $11,800 owed to an officer who was paid in
January 2001 in common stock. As of December 31, 1999, the Company owed fees to
officers and directors of $11,100.
In June 2000, the Company and GMC amended the Lake Owen option agreement.
Pursuant to the amendment, the Company issued 416,961 shares at an average price
of $0.06 per share to GMC in connection with the exercise by GMC of preemptive
rights. In addition, the Company agreed to perform an additional $15,000 of
geophysical survey work on the Lake Owen project prior to December 31, 2000,
issued 200,000 additional shares of common stock to GMC and granted to GMC a
warrant to purchase 200,000 shares for $0.70 per share exercisable until June
12, 2002 in exchange for GMC's agreement to terminate its antidilution and
preemptive rights as provided in the original Lake Owen option agreement. The
geophysical survey work period has been extended beyond December 31, 2000.
RELATED PARTY LOANS
In November 2000, the Company borrowed $135,000 from Electrum. The loan bears
interest at an annual rate of 5% and is due either on December 1, 2005 or upon
the Company's completion of a public or private debt or equity financing.
In December 2000, the Company entered into an agreement with Electrum to provide
the right to borrow an additional $250,000. The funds obtained under this
agreement bear interest at 8%, and repayment is due on June 30, 2001 or upon the
Company's completion of a public or private debt or equity financing. As of
December 31, 2000, the Company had borrowed $150,000 under this agreement. The
Company borrowed an additional $50,000 under the December 2000 loan agreement in
January 2001, and no additional funds are available under the agreement.
The loan agreement provides that if these loans are not repaid by February 1,
2001, the Company is required to grant Electrum warrants to purchase 285,000
shares of the Company's common stock at $1.50 per share exercisable through
September 30, 2003. The loans were not repaid by February 1, 2001, and the
warrants have been issued. Electrum may also elect to be repaid part or all the
total principal and interest outstanding under both loans in "units" of Trend
securities, at the rate of one unit per each $1.25 owed. Each unit would consist
of one share of common stock and a warrant to purchase one share of common stock
at $1.50 per share, exercisable through September 30, 2003. Electrum has agreed
that at least $100,000 of the November 2000 loan will be repaid in units. This
conversion of debt to equity was not reflected in the financial statements as of
December 31, 2000. (See Note 13.)
EMPLOYMENT AGREEMENT
In July 2000, the Company entered into an employment agreement with John Ryan,
then the Chief Financial Officer, Secretary and Treasurer of the Company, under
which Mr. Ryan received 3,000 shares per month of Trend common stock as
compensation for his services. Mr. Ryan resigned in December 2000, and this
agreement was terminated. No amounts were owed to Mr. Ryan as of December 31,
2000.
21
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 7 - PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Major additions and improvements
are capitalized. Minor replacements, maintenance and repairs that do not
increase the useful lives of the assets are expensed as incurred. Depreciation
of property and equipment, including vehicles, is being calculated using the
straight-line method over the expected useful lives of five years of the assets.
Depreciation expense for the period ended December 31, 2000 and the year ended
September 30, 2000 was $4,487 and $10,823, respectively.
The following is a summary of property, equipment, and accumulated depreciation.
December 31, September 30,
2000 2000
------------------ -------------------
Furniture and Equipment $ 51,258 $ 51,288
Less: Accumulated Depreciation (15,568) (11,111)
------------------ -------------------
$ 35,690 $ 40,177
================== ===================
NOTE 8 - INVESTMENTS
The Company's securities investments are classified as available-for-sale
securities which are recorded at fair value in investments and other assets on
the balance sheet, with the change in fair value during the period excluded from
earnings and recorded net of tax as a component of other comprehensive income.
The Company has no securities, which are classified, as trading securities.
The Company recognized a charge for other comprehensive loss of $38,314 for the
year ended September 30, 2000, and other comprehensive loss for the change in
the market value of investments of $10,275 and $16,064 for the periods ended
December 31, 2000 and 1999, respectively.
Available-for-sale securities consist of common stock stated at fair value and
are summarized as follows:
December 31, September 30,
Investment 2000 2000
-------------------------------------------------- ------------------ --------------------
New Jersey Mining Company $ 98,820 $ 107,250
================== ====================
22
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 9 - NOTES PAYABLE
Following is a summary of long-term debt at December 31, 2000:
December 31, September 30,
2000 2000
------------ -------------
Note payable to First Security Bank, N.A.
Interest at 14.99%, secured by vehicle, payable in monthly
installments of $179 through February 28, 2003 $ 3,954 $ 4,339
Note payable to First Security Bank, N.A.
Interest at 14.99%, secured by vehicle, payable in monthly
installments of $231 through April 7, 2005 8,683 9,042
------- -------
Total notes payable 12,637 13,381
Less: Current maturities included in current liabilities (3,166) (2,942)
------- -------
$ 9,471 $10,389
======= =======
Following are the maturities of long-term debt for the current year and each of
the next four years ending on September 30:
2001 $ 2,248
2002 3,608
2003 2,884
2004 2,345
2005 1,552
------
$ 12,637
========
NOTE 10 - INCOME TAXES
At December 31, 2000, the Company has accumulated operating losses approximating
$3,000,000. These operating losses may be offset against future taxable income,
however there is no assurance that the Company will have income in the future.
Accordingly, the potential tax benefit of the net operating loss carryforward is
offset by a valuation allowance of the same amount. The Company's ability to
utilize these net operating loss carryforwards may be limited by ownership
changes.
The Company had not filed a tax return for year ended September 30, 1999, and
was considered deficient with respect to that filing. In March 2001, the Company
filed its Federal Income Tax Returns for the years ended September 30, 2000 and
1999. The above operating losses carried forward to the income tax returns, and
it is unlikely that the Internal Revenue Service will impose penalties for
underpayment of income taxes. However, the Company may be subject to failure to
timely file penalties that are considered immaterial to these financial
statements. No provision for the recoverability of tax benefits has been
reported in the financial statements of the Company, due to their uncertainty.
23
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 11 - COMMITMENTS AND CONTINGENCIES
LAKE OWEN OPTION AGREEMENT
In July 1999, the Company executed an option agreement with General Minerals
Corporation (hereinafter "GMC") wherein the Company may earn a 100% interest in
a mineral property in Albany County, Wyoming in exchange for its payment of
exploration expenditures during the three-year option period, which commenced on
July 27, 1999. Under the agreement, the Company is obligated to spend $750,000
on exploration expenditures for this project, commonly known as the Lake Owen
property, during the option period, with no less than $150,000 of such
expenditures to be made within the first year. The agreement was amended in June
2000 to include $15,000 of geophysical survey work.
In consideration for the aforementioned option, the Company paid GMC $40,000 in
cash and issued to GMC 715,996 shares in 1999 and 129,938 shares in 2000. The
Company and GMC subsequently entered into an amendment to the agreement under
which (i) the Company issued 416,961 shares of common stock to GMC upon GMC's
exercise of preemptive rights, (ii) the Company agreed to perform an additional
$15,000 of geophysical work on the Lake Owen Project prior to December 31, 2000,
(iii) the Company issued 200,000 additional shares and warrants exercisable
until June 2002 to purchase 200,000 shares at $0.70 per share, and (iv) GMC
agreed to terminate its antidilution and preemptive rights as provided in the
original agreement.
INTREPID OPTION AGREEMENT
In May 2000, the Company entered into a three year lease and option agreement
under which it has the right to acquire a 100% interest in the eight Intrepid
claims. Upon entering the agreement, the Company paid the claim owners $5,800
and 100,000 shares of common stock. The Company is obligated to make exploration
expenditures of at least $10,000 by September 30, 2001, $15,000 by March 4, 2002
and $15,000 by March 4, 2003. In addition, the Company must make advance royalty
payments of $10,000 by March 4, 2001, $25,000 by March 4, 2002 and $35,000 for
each year thereafter.
During the option period, the Intrepid claims are subject to a net smelter
royalty of 3% on all ores produced and sold from the Intrepid claims. The
Company has the right to exercise the purchase option at any time for a total
purchase price of $320,000, with any advance royalty payments to be credited
against the purchase price, and the claim holders retaining a 0.5% net smelter
royalty. The Company has agreed to issue an additional 100,000 shares to the
claim holders if it has not terminated the agreement by November 2001.
In March 2001, the Company and the claim holders agreed to replace the March
$10,000 advance royalty payment with a $9,000 payment due May 11, 2001. In
connection with this agreement, the Company issued to the claim holders 3,000
shares of common stock on March 11, 2001 with an aggregate value of $2,340. The
May 11 payment has not been made and the Company has requested an extension.
LEASE AGREEMENTS
Through the year ended September 30, 2000, the Company rented office facilities
in Coeur d'Alene, Idaho on a month-to-month basis. Total rents paid during the
year ended September 30, 2000 were $5,530.
24
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 11 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
During the period ended December 31, 2000, the Company entered into a lease for
its executive offices in Coeur d'Alene. The lease has a three-year term with
monthly rent of $2,656 in addition to a $2,656 security deposit. The Company has
the option to extend the lease for an additional two years at a monthly rent of
$2,921. The Company's rent expense reflects a reduction in payments for
improvements that were considered to be in lieu of lease expense. Total rents
expensed during the period ended December 31, 2000 were $8,001.
In July 2000, the Company entered into a new lease agreement for additional
office facilities in Reno, Nevada. The agreement is a two year lease and calls
for monthly payments of $1,725 during the first year and $1,775 during the
second year in addition to a $350 security deposit. Prior to the signing of this
lease, the Company had occupied the facilities on a month-to-month basis for
$1,714 per month. Total rents during the period ended December 31, 2000 and the
year ended September 30, 2000 were $5,245 and $3,438, respectively.
The minimum lease payments as of December 31, 2000, for the nine months ending
September 30, 2001 and for fiscal years 2002 and 2003, are as follows:
2001 $ 39,429
2002 47,397
2003 31,872
----------
Total $ 118,698
==========
CONSULTING AGREEMENTS
On November 17, 2000, the Company entered into a consulting agreement with R. H.
Barsom Company, Inc., under which the consultant would perform certain services
for the Company until June 30, 2001, for an advance fee of $100,000 and 180,000
shares of common stock. In early January 2001, the Company and the consultant
agreed to terminate the agreement. In connection with the termination, the
consultant surrendered the 180,000 shares of common stock and received warrants
to purchase 180,000 shares of the Company's common stock at $1.50 per share,
exercisable until January 2003.
On November 8, 2000, effective November 1, 2000, the Company entered into a
24-month agreement with Eurofinance Inc. under which the entity would assist the
Company with certain investment community matters in return for a monthly fee of
$5,000, plus expenses, and warrants to purchase 820,000 shares of common stock
at $1.50 per share. The warrants were exercisable until November 1, 2005. In
early January 2001, this agreement was terminated, with the Company no longer
obligated for the remaining monthly fees, and only the warrant for 250,000
shares that vested on November 1, 2000 remains outstanding.
On October 31, 2000, the Company entered into a consulting agreement with Brian
Miller under which Mr. Miller performs certain services for the Company. Under
this agreement, Mr. Miller has received cash for his services and was granted
10,000 shares of common stock effective January 2, 2001.
25
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 12 - DISPOSAL AND IMPAIRMENT OF ASSETS
In late 1998, the Company acquired mining equipment valued at $180,000 in
exchange for 600,000 shares of common stock with a value of $0.30 per share.
Most of this equipment was sold during the year ending September 30, 1999 for
$32,300, resulting in a realized loss of $129,700. In addition, an impairment of
$14,000, representing the excess of the $18,000 carrying value of the remaining
equipment over its fair value of $4,000, was included in the loss on disposition
and impairment of assets charged to operations in the year ended September 30,
1999. The Company also recognized a loss of $55,000 on the sale of the Rae
Wallace Mine, which had been acquired during 1998 for $75,000 in common stock
and was sold in 1999 for $20,000. In addition, the Company sold miscellaneous
equipment in 1999, recognizing $7,026 in additional gains. (See Note 3.)
During the year ended September 30, 2000, the Company recognized a gain of
$5,000 on the sale of the Silver Strand Mine, for which it received New Jersey
Mining Company stock valued at $5,000 and retained a royalty. The mine had been
acquired for common stock in 1984. (See Note 3.)
NOTE 13 - SUBSEQUENT EVENTS
RELATED PARTY LOANS
In connection with the loan agreements with Electrum, in February 2001, the
Company granted to Electrum warrants to purchase 285,000 shares of its common
stock at $1.50 per share, exercisable through September 30, 2003. On March 12,
2001, the Company entered into an agreement with Electrum under which the
Company borrowed an additional $50,000 to fund its operating costs, on the same
interest and repayment terms as the loans under the December 2000 loan
agreement. Under this agreement, in March 2001, the Company granted to Electrum
warrants to purchase an additional 50,000 shares of its common stock at $1.50
per share, exercisable through September 30, 2006. The Company also agreed to
extend through September 30, 2006, the expiration dates of the warrants to
acquire 7,979,761 shares issued under the stock purchase agreement and the
warrants to acquire 285,000 shares issued under the December 2000 agreement.
In the quarter ended March 31, 2001, the Company recorded a financing charge of
$608,058 related to the extension of the 7,979,761 warrants granted under the
stock purchase agreement and recorded a financing charge totaling $89,981 for
the grant and extension of the 285,000 warrants issued under the December 2000
loan agreement and the grant of the 50,000 warrants issued under the March 2001
loan agreement. These financing costs represent the fair value of the equity
issuances under the Company's Black-Scholes Option Price Calculation.
On April 11, 2001, the Company entered into an agreement with Electrum under
which the Company may borrow additional funds from Electrum under the terms of
December 2000 loan agreement to fund its operating costs if Electrum elects, in
its sole discretion, to lend such funds. The funds borrowed under this agreement
bear interest at 8%, and repayment is due on the earlier of June 30, 2001 or
completion of any private placement of the Company's shares. As of May 15, 2001,
$100,000 has been borrowed under this agreement. At Electrum's option, the
Company may repay part or all of the principal and interest outstanding under
the loan in units as described above.
26
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 13 - SUBSEQUENT EVENTS (CONTINUED)
REINCORPORATION AND EQUITY INCENTIVE PLAN
On February 23, 2001, the Annual Meeting of the Shareholders was held and the
following matters were approved:
REORGANIZATION AND REINCORPORATION
The Shareholders approved the reincorporation of the Company as a Delaware
corporation pursuant to an agreement and plan of merger dated January 26, 2001,
and the reincorporation was completed on March 28, 2001. Under its amended
certificate of incorporation, Trend has 100,000,000 shares of authorized common
stock with a par value of $0.01 per share, and 20,000,000 shares of authorized
preferred stock with a par value of $0.01, with rights and preferences to be
determined by the Company's Board of Directors. One share of Series A preferred
stock has been created and issued to Thomas S. Kaplan and requires the holder's
approval of all stock and equity issuances until such time as none of Mr.
Kaplan, Electrum LLC or Asher B. Edelman beneficially owns more than twenty
percent of the Company's outstanding stock. Holders of the Company's common
stock will vote on the continued existence of the Series A preferred stock at
each subsequent annual meeting. If the Series A preferred stock is not
continued, the outstanding share of Series A preferred stock will convert to one
share of common stock.
2000 EQUITY INCENTIVE PLAN
The Shareholders approved the adoption of the 2000 Equity Incentive Plan and the
reservation of 5,000,000 shares of Common Stock for distribution under the plan.
These shares and options to acquire those shares may be granted to the Company's
employees (including officers), directors and consultants. The plan will
terminate on January 4, 2011. The exercise price of options granted under this
plan will not be less than the fair market price on the date of grant and in
some cases not less than 110% of the fair market price. The term, vesting
schedule, transfer restrictions and termination are to be determined by the
Company's Board of Directors.
On February 23, 2001, the Company issued under the plan to its five non-employee
directors an aggregate of 75,000 shares of common stock and options to acquire
75,000 shares with an exercise price of $0.80 per share exercisable until
February 23, 2004. The Company also issued under the plan to its employees
(including officers) options to acquire 1,125,000 shares with an exercise price
of $0.80 per share exercisable until February 23, 2004.
INTREPID CLAIMS
In March 2001, the Company and the holders of the Intrepid claims agreed to
replace the March $10,000 advance royalty payment with a $9,000 payment due May
11, 2001. In connection with this agreement, the Company issued to the holders
3,000 shares of common stock with an aggregate value of $2,400. The May 11
payment has not been made and the Company has requested an extension.
27
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 14 - CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company has made corrections to its financial statements for changes in
accounting estimates and policies which are being treated as corrections of
errors and estimates, as set forth in the following table.
1998 FORM 10-SB,
---- AMENDMENT
NOS. 1 AND AMENDMENT AMENDMENT AMENDMENT
2 NO. 3 NO. 4 NO. 5
------------ ------------ -------------- ---------------
Net Loss $ (80,484) $ (116,504) $ (116,504) $ (119,163)
------------ ------------ -------------- ===============
Adjustments to Net Loss:
Organizational Costs Reclassification (31,520) - -
Stock Recording Omission (4,500) - -
Option Costs (Recorded in Correct Year) - - (2,659)
------------ ------------ --------------
Total Corrections of Errors (36,020) - (2,659)
------------ ------------ --------------
REVISED NET LOSS $ (116,504) $ (116,504) $ (119,163)
============ ============ ==============
1999
----
Net Loss $ (415,044) $ (434,199) $ (573,545) $ (716,759)
------------ ------------ -------------- ===============
Adjustments to Net Loss:
Mineral Property Expense (14,529) - -
Accrued Expenses Increase (14,470) - -
Common Stock Issuance Duplication 11,503 - -
Option Issuance Fair Value Calculation (2,659) - 2,659
Miscellaneous Income 1,000 - -
Lake Owen Option Expenses - - (145,873)
------------ ------------ --------------
Total Corrections of Errors (19,155) - (143,214)
------------ ------------ --------------
Total Corrections of Estimates - FMV
Adjustments - (139,346) -
------------ ------------ --------------
REVISED NET LOSS $ (434,199) $ (573,545) $ (716,759)
============ ============ ==============
LOSS PER SHARE AS PREVIOUSLY REPORTED $ (0.13)
CORRECTIONS TO LOSS PER SHARE (0.10)
---------------
REVISED LOSS PER SHARE $ (0.23)
===============
28
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 14 - CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
(CONTINUED)
AMENDMENT
AMENDMENT NO. 5,
NO. 4, FORM 10-KSB/
FORM 10-KSB/A1 A2 AND
AND FORM 10-QSB/
FORM 10-KSB FORM 10-QSB/A1 A2
------------ --------------- ---------------
2000
------
Net Loss $ (1,847,259) $ (2,184,439) $ (2,186,541)
------------ --------------- ===============
Adjustments to Net Loss:
Intrepid Claims Expense (Original Value) - (35,800)
Financing Expense - Modification of Stock Purchase Agreement - (14,641)
Silver Strand - Prior Period Expense & Writeoff - 123,753
------------ ---------------
Total Corrections of Errors - 73,312
------------ ---------------
FMV adjustments - Stock Issuances (337,180) (59,000)
Compensation Expense - Options - (4,414)
Mineral Property Expense - Warrants
- (12,000)
------------ ---------------
Total Corrections of Estimates (337,180) (75,414)
------------ ---------------
REVISED NET LOSS $ (2,184,439) $ (2,186,541)
============ ===============
LOSS PER SHARE AS PREVIOUSLY REPORTED $ (0.18)
CORRECTIONS TO LOSS PER SHARE (0.03)
---------------
REVISED LOSS PER SHARE $ (0.21)
===============
PRIOR TO EXPLORATION STAGE (1996)
The Company performed impairment evaluations on the recorded asset values of its
Pyramid and Silver Strand gold and silver properties, consistent with SFAS No.
121 requirements. The Company determined that recognition of impairments of the
value of each property was appropriate. At September 30, 1996, the amounts of
the impairments were $70,333 for the Pyramid property and $104,753 for the
Silver Strand property. Consequently, the accumulated deficit prior to the
Exploration Stage was increased by $175,086 and mineral properties were reduced
by a corresponding amount.
FISCAL YEAR ENDED SEPTEMBER 30, 1997
The Company had previously capitalized certain exploration expenses incurred at
the Silver Strand Mine in 1997. As a result of the determination of an
impairment related to the property, the Company now believes that the costs
should have been treated as period expenses. Consequently, the correction served
to increase the net loss (and accumulated deficit during the Exploration Stage)
by $19,000 and reduced mineral properties by a similar amount.
FISCAL YEAR ENDED SEPTEMBER 30, 1998
1. Under the Company's previous accounting policy organizational costs were
capitalized and charged directly to stockholders' equity without being
expensed in the Statement of Operations. The correction entails a reversal
of the direct charge and recognition of an expense item in 1998, increasing
the net loss by $31,520, but having no net effect on total stockholders'
equity.
29
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 14 - CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
(CONTINUED)
2. The Company corrected its stock records by increasing the value of common
stock by $4,500 and recognizing a charge of $4,500 to reflect the issuance
of 9,000 shares of common stock as directors' and officers' compensation.
3. The Company omitted calculating the fair market value of certain options
issued to a third party at the time of issuance. Under the Company's
accounting policy, the options were valued according to the Black-Scholes
Option Price Calculation and were deemed to have a value of $2,659, which
was recognized as a financing expense in the Statement of Operations and
reflected as an increase in the value of options and warrants. In a prior
filing, the expense was incorrectly included in the 1999 financial
statements.
Total increase in fiscal year 1998 net loss (and accumulated deficit): $38,679
FISCAL YEAR ENDED SEPTEMBER 30, 1999
1. The Company incorrectly capitalized certain exploration costs, which should
have been expensed under generally accepted accounting polices.
Accordingly, the Company recognized $14,529 in additional mineral property
costs to correct for the error.
2. The costs of acquiring certain mineral property claims were not recorded in
the proper period, and, as a result, the Company was required to record an
expense of $14,470 in 1999.
3. The Company determined that it had recorded a duplicate charge of $11,503
for stock issuance costs related to certain consulting service expenses,
and has reduced operating expenses and common stock accordingly.
4. The Company corrected its records to reflect that $1,000 in proceeds was
income rather than a stock purchase by a third party. The Company recorded
miscellaneous income of $1,000 and reduced common stock by $1,000.
5. As mentioned above, the fair market value of certain options was not
originally calculated. Initially, the financing expense was recorded as
applicable to 1999 operations, but later determined to be a 1998 expense
item.
6. Under the Company's previous accounting policy, the costs to acquire
options on unpatented mining claims were capitalized. The Company now
expenses such costs, and the $145,873 in cash outlays and stock issuances
to acquire the Lake Owen option have been charged to operations as mineral
property expenses.
Net increase in fiscal year 1999 net loss (and accumulated deficit): $162,639
The Company also corrected a balance sheet error of $30,000 to properly reflect
payment commitments related to the Lake Owen agreement as deferred property
expenses rather than as a note payable.
30
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 14 - CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
(CONTINUED)
In previous filings, the Company considered certain silver and gold operations
as discontinued, but after further review, determined that since these
operations did not represent a distinct segment, they should not be viewed as
discontinued operations. The financial statements at one point reflected a loss
from discontinued operations of $63,662, reflecting a realized loss on
disposition of $55,000 and certain mineral property expenses of $8,662. The
realized loss is now shown as an other income/expense item and the mineral
property expenses are reflected in operating expenses.
FISCAL YEAR ENDED SEPTEMBER 30, 2000
1. Under the Company's previous accounting policy, the original $35,800 in
cash paid and stock issued to acquire the option on the Intrepid claims was
capitalized. The new policy requires that such costs be charged to
operations as mineral property expenses, with an offsetting reduction in
the value of mineral properties.
2. The Company has reviewed the carrying value of the Silver Strand property
and determined that an impairment charge of $104,753 should have been
recorded prior to the inception of the Exploration Stage and that
capitalized expenses of $19,000 recorded in 1997 should have been charged
as period costs. Consequently, the book value of the property was reduced
to zero, the Pre-Exploration Stage accumulated deficit increased by
$104,753 and mineral property expenses during the Exploration Stage
increased by $19,000. Since there should have been zero book value at
disposition, the $118,753 loss originally recorded in 2000 has been
replaced by a gain of $5,000, reflecting the proceeds from the sale.
3. The Company reviewed the modifications made to its stock purchase agreement
with its largest shareholder and determined, according to the Black-Scholes
Option Pricing Calculation, that the fair market value of the revisions
made to previously issued options and warrants totaled $14,641. The amount
is now reflected as an increase in options and warrants and charged as a
financing expense in the statement of operations.
Net decrease in fiscal year 2000 net loss (and accumulated deficit): $73,312
The Company also reclassified the $138,000 in stock and warrant issuance costs
related to the modification of the Lake Owen agreement from financing costs to
mineral property expenses.
The Company has made all of the appropriate changes and corrections for the
above items. The financial statements and notes have been amended to reflect the
net increase in accumulated deficit.
The Company has elected to comply with the disclosure standards of SFAS No. 7,
which requires specific information about all equity transactions during the
exploration stage, by including this information in Note 4.
31
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
NOTE 15 - CORRECTIONS OF ESTIMATES IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company changed its method of determining the fair market value of certain
stock issuances. The change in the fair market value of option and warrant
issuances largely results from a change in certain Black-Scholes parameters
utilized in calculating option values. The effect of these changes on the years
ended September 30, 2000 and 1999 were as follows:
FOR YEAR ENDED SEPT. 30
-----------------------
2000 1999
---- ----
Value of stock issued:
Services and associated expenses $ 255,660 $104,820
Compensation 63,520 34,526
Mineral property expense 59,000 -
Investments correction in value 40,000 -
----------- ---------------
Change in valuation of common stock issued $ 418,180 $139,346
----------- ---------------
Value of options and warrants issued:
Value of options issued as compensation $ 4,414 $ -
Value of warrants issued for modification
of terms of agreement
(Mineral property expense) 30,000 -
--------- --------------
Change in fair value of options and warrants $ 34,414 $ -
-------- -------------
Total corrections in value $452,594 $139,346
Less: Correction in investment 40,000 -
--------- --------------
Increase in net loss and accumulated deficit
from the Exploration Stage $412,594 $139,346
======== ========
The information below summarizes the effect on net loss and loss per share as a
result of the corrections of errors (Note 14) and corrections of estimates (Note
15).
Net loss as previously reported $ (1,847,259) $ (415,044)
Correction of errors 73,312 (162,369)
Correction of estimates ( 412,594) (139,346)
----------- ---------
Net loss as corrected $ (2,186,541) $ (716,759)
============= ===========
Loss per share as previously reported $ (0.18) $ (0.13)
Corrections (0.03) (0.10)
-------- --------
Loss per share as corrected $ (0.21) $ (0.23)
======== ========
32
TREND MINING COMPANY
(FORMERLY SILVER TREND MINING COMPANY)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2000
For the quarters ended December 31, 2000 and December 31, 1999, the subsequent
changes in estimates of the fair market value for common stock and warrant
issuances resulted in the following changes.
2000 1999
-------------- ----------------
Services $ 64,321 $ 73,588
Compensation 874 2,634
-------------- ----------------
Change in common stock and accumulated deficit $ 65,195 $ 76,222
============== ================
The financial statement disclosures and the notes thereto have been corrected to
show an increase in accumulated deficit from the exploration stage and net loss
of $65,195 and $76,222, respectively, for the quarters ended December 31, 2000
and 1999. These changes result in no appreciable change to loss per share for
the quarter ended December 31, 2000, and an increase from $0.02 to $0.03 in the
loss per share for the quarter ended December 31, 1999.
33
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
The following Exhibit is filed herewith.
EXHIBIT
NO. DESCRIPTION OF EXHIBITS
- ------ -----------------------
23.1 Consent of Williams & Webster, P.S., dated May 21, 2001.
- --------------
(b) Reports on Form 8-K.
We did not file any reports on Form 8-K during the quarter ended
December 31, 2000.
34
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TREND MINING COMPANY
Dated: May 23, 2001 By: /s/ KURT J. HOFFMAN
--------------------------------------
Kurt J. Hoffman
President and Chief Executive Officer
(PRINCIPAL EXECUTIVE OFFICER)
35
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- --------------
23.1 Consent of Williams & Webster, P.S., dated May 21,
2001.