UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
Commission file number: 1-1701
PARK-PREMIER MINING COMPANY
(Exact name of small business issuer as specified in its charter)
UTAH 87-6116557
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
32391 HORSESHOE DRIVE, EVERGREEN, COLORADO 80439
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 670-3885
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
2,000,000 shares of common stock, $0.25 par value as of September 30, 2002.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
Exhibit index on consecutive page 9 Page 1 of 13 Pages
<page>
PARK-PREMIER MINING COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
<table>
<caption>
September 30, December 31,
2002 2001
(Unaudited) (Note 1)
--------------- ----------------
<s>
CURRENT ASSETS
Cash $ 7,632 $ 48,768
Other current assets 550 199
--------------- ----------------
Total current assets 8,182 48,967
Land and mining claims 152,440 152,441
--------------- ----------------
Total assets $ 160,622 $ 201,408
=============== ================
LIABILITES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 1,000 $ 6,264
Accounts payable - officer 28,463 18,790
Accrued interest 41,843 49,813
Taxes payable 8,859 4,700
--------------- ----------------
Total current liabilities 80,165 79,567
Convertible notes payable (Note 4) 464,925 415,111
--------------- ----------------
Total liabilities 545,090 494,678
STOCKHOLDERS' DEFICIT
Common stock, par value $0.25, 2,000,000 shares
authorized, issued and outstanding 500,000 500,000
Discount on common stock (146,250) (146,250)
Additional paid-in capital 505,656 505,656
Accumulated deficit (1,243,874) (1,152,676)
--------------- ----------------
(384,468) (293,270)
--------------- ----------------
Total liabilities and stockholders' deficit $ 160,622 $ 201,408
=============== ================
</table>
The accompanying notes are an integral part of the consolidated
financial statements.
2
<page>
PARK-PREMIER MINING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Three
Months Months
Ended Ended
September 30, September 30,
2002 2001
----------------- -----------------
EXPENSES
General and administrative $ 5,662 $ 883
Professional fees 7,483 3,819
Property tax expense 1,302 --
----------------- -----------------
Loss from operations (14,447) (4,702)
----------------- -----------------
OTHER INCOME (EXPENSE)
Interest income 39 286
Interest expense (13,948) (12,453)
----------------- -----------------
(Loss) before income taxes (28,356) (16,869)
Provisions for income taxes -- --
----------------- -----------------
Net (loss) $ (28,356) $ (16,869)
================= =================
Net (loss) per share $ (.01) $ (.01)
================= =================
Weighted average shares outstanding 2,000,000 2,000,000
================= =================
The accompanying notes are an integral part of the consolidated
financial statements.
3
<page>
PARK-PREMIER MINING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Nine
Months Months
Ended Ended
September 30, September 30,
2002 2001
--------------- ---------------
EXPENSES
General and administrative $ 12,165 $ 6,460
Professional fees 33,755 22,619
Property tax expense 3,647 --
--------------- ---------------
Loss from operations (49,567) (29,079)
--------------- ---------------
OTHER INCOME (EXPENSE)
Interest income 214 988
Interest expense (41,844) (37,360)
--------------- ---------------
(Loss) before income taxes (91,197) (65,451)
Provisions for income taxes -- --
--------------- ---------------
Net (loss) $ (91,197) $ (65,451)
=============== ===============
Net (loss) per share $ (.05) $ (.03)
=============== ===============
Weighted average shares outstanding 2,000,000 2,000,000
=============== ===============
The accompanying notes are an integral part of the consolidated
financial statements.
4
<page>
PARK PREMIER MINING COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<table>
<caption>
Nine Nine
Months Months
Ended Ended
September 30, September 30,
2002 2001
--------------- ---------------
<s>
Cash flows from operating activities:
Net (loss) $ (91,197) $ (65,461)
Adjustments to reconcile net (loss) to net cash
used in operating activities:
Change in operating assets:
Accounts payable (1,105) (11,305)
Accrued interest payable 41,844 37,360
Accounts payable - officer 9,673 15,848
Other current assets (351) (265)
--------------- ---------------
Total adjustments 50,061 41,638
--------------- ---------------
Net cash used by operating activities (41,136) (23,823)
--------------- ---------------
Cash flows from investing activities:
Investment in land and mining claims -- (29,934)
--------------- ---------------
Net cash flow from investing activities -- (29,934)
Net (decrease) increase in cash and cash equivalents (41,136) (53,757)
Cash and cash equivalents, beginning of period 48,768 115,727
--------------- ---------------
Cash and cash equivalents, end of period $ 7,632 $ 61,970
=============== ===============
Supplemental schedule of noncash investing and financing activities:
Accrued interest expense added to notes payable $ 49,814 $ 44,476
=============== ===============
</table>
The accompanying notes are an integral part of the consolidated
financial statements.
5
<page>
PARK-PREMIER MINING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - MANAGEMENT'S STATEMENT
The consolidated financial statements included herein have been prepared by
Park-Premier Mining Company (Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted as allowed by such rules and regulations, and the Company believes that
the disclosures are adequate to make the information presented not misleading.
It is suggested that these financial statements be read in conjunction with the
December 31, 2001 audited consolidated financial statements and the accompanying
notes thereto included in the Company's Annual Report on Form 10-KSB filed May
24, 2002 with the Securities and Exchange Commission. While management believes
the procedures followed in preparing these financial statements are reasonable,
the accuracy of the amounts are in some respects dependent upon the facts that
will exist and procedures that will be accomplished by Park-Premier Mining
Company later in the year.
The management of Park-Premier Mining Company believes that the accompanying
unaudited financial statements contain all adjustments (including normal
recurring adjustments) necessary to present fairly the operations and cash flows
for the periods presented.
Amounts shown for December 31, 2001 are based upon the December 31, 2001 audited
consolidated financial statements.
NOTE 2 - BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
Park-Premier Mining Company's principal business activity since its organization
in 1907 has been the exploration of its mining properties. These properties
consist of partially explored mines and mining claims located in mineralized
areas. Current operations have diversified the direction of the Company to
include the acquisition, holdings, and sale of real property.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. The Company has not generated
revenue from operations for many years. In order to maintain the Company's
existence, a major stockholder to the Company has loaned the Company funds for
working capital. Additionally as discussed in Note 4, the Company has
convertible notes payable in the amount of $464,925, which had been rewritten on
January 1, 2002, and are due January 1, 2004. Without such funding from the
major stockholders and rewriting of the convertible notes payable to extend the
maturity date of these notes, the Company could not continue to exist. There can
be no assurance that funding from these sources will continue in the future.
Certain reclassifications have been made to previously reported statements to
conform to the Company's current financial statement format.
6
<page>
PARK-PREMIER MINING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - BASIS OF CONSOLIDATION AND MINORITY INTEREST
The consolidated financial statements include the accounts of the Company and
its 51% owned subsidiary, Park-Cummings Mining Company. All significant
intercompany transactions and account balances have been eliminated.
Park-Cummings Mining Company owed $391,711 and $330,949 to the Company at
September 30, 2002 and 2001.
No minority interest is recorded because the subsidiary is indebted to the
parent in an amount in excess of the net assets of the subsidiary. In the event
that the subsidiary realizes from sales of assets an amount in excess of the
amount due the parent, a minority interest may exist.
NOTE 4 - CONVERTIBLE NOTES PAYABLE (RELATED PARTIES)
Convertible notes payable were issued by the Company from 1987 through 1998 with
a conversion price to be determined by the Board of Directors. The conversion
price shall not be more than $.10 per share. Convertible notes payable at March
31, 2002 include $371,560 owed to the Company's president, and $88,361 owed to
other directors and related parties.
Holders of these convertible notes payable understand that an increase in the
Company's authorized stock is necessary for conversion of these notes to occur
(currently, all authorized stock in the Company is issued and outstanding).
All notes were rewritten on January 1, 2002, and interest accrued to that date
was added to principal. The notes are due January 1, 2004 and accrue interest at
an annual rate of 12%.
7
<page>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
GENERAL
Since approximately 1985, the Company essentially has had no operations. The
Company has property holdings in the East Elkhorn Mining District, Wasatch
County, Utah. Management attempted to develop or to posture the Company's
property interests for development as commercial or residential property rather
than as mineral properties.
As of September 30,2002, management has been unsuccessful in its attempts to
develop its property holdings. As of the date of this report the Company had no
source of income other than interest earned on cash deposits. The Company must
rely entirely upon loans from affiliates and its cash reserves to pay operating
expenses. As the cash reserves are depleted, there can be no assurance that
further loans from affiliates will be available. Without such funding, the
Company will not continue to exist.
PLAN OF OPERATION
As of the date of this report management is attempting to determine the best
course of action for the Company and its shareholders. If no viable development
plan exists for the Company's land interests, management may begin the process
of selling the Company's assets.
LIQUIDITY
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001
During the nine months ended September 30, 2002, the Company had a net loss of
$91,197 compared with a net loss of $65,451 for the nine months ended September
30, 2001. During the nine months ended September 30, 2002, the Company spent
$12,165 on general and administrative expenses, $33,755 on professional fees and
$3,647 on property tax expense. It also incurred $41,844 of interest expense.
The net loss for the nine months ended September 30, 2002 was significantly
higher than the nine months ended September 30, 2001 due to greater legal and
accounting fees paid related to filings made with the Securities and Exchange
Commission and increased interest expense.
LIQUIDITY AND CAPITAL RESOURCES
Since the Company currently has no source of revenue, the Company's working
capital will continue to be depleted by expenses. At September 30, 2002, the
Company had a working capital deficit of $71,983 compared with a working capital
deficit of $30,600 at December 31, 2001. The Company's cash reserves are being
depleted by operating expenses. The use of cash reserves to pay operating
expenses has been partially offset by loans from affiliates.
The loans are evidenced by convertible notes payable in the amount of $464,925.
The notes are convertible into shares of the Company's common stock at a price
to be determined by the Board of Directors. The price set by the Board of
Directors shall not be more than $0.10 per share. Currently, all of the
Company's authorized stock is issued and outstanding. In order for conversion of
these notes to occur, the Company's Articles of Incorporation must be amended to
increase the number of authorized shares.
The notes accrue interest at 12% per annum. Accrued interest at September 30,
2002 was $41,843 compared with accrued interest in the amount of $49,813 at
December 31, 2001. As of September 30, 2002 no new loans have been made to the
Company.
8
<page>
The Independent Accountant's Report and Note 1 of the Notes to Financial
Statements for the year ended December 31, 2001 included an explanatory
paragraph relating to the uncertainty of the Company's ability to continue as a
going concern. The Company's present business operations do not provide revenues
to cover its expenses, and management may be forced to begin selling the
Company's assets.
ITEM 3. CONTROLS AND PROCEDURES.
The Company has recently evaluated its internal controls. As of September 10,
2002, there were no significant corrective actions taken by us or other changes
made to these internal controls. Management of the Company does not believe
there were changes in other factors that could significantly affect these
controls subsequent to the date of the evaluation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
3.1 Articles of Incorporation of the Company as Amended N/A
on October 21, 1983 (filed as Exhibit 3 to the
Company's 1983 Form 10-KSB Report and incorporated
herein by reference)
3.2 Bylaws (filed as Exhibit 3.2 to the Company's 1987 N/A
Form 10-KSB Report and incorporated herein by
reference)
4.1 Convertible Promissory Note, dated September 22, N/A
1987 (filed as Exhibit 4.1 to the Company's 1987
Form 10-KSB Report and incorporated herein by
reference)
10.1 Letter Agreement (filed as Exhibit 10.1 to the N/A
Company's 1988 Form 10-KSB Report and incorporated
herein by reference)
9
<page>
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
10.2 Land Purchase Contract (filed as Exhibit 10.2 to N/A
the Company's 1988 Form 10-KSB Report and
incorporated herein by reference)
10.3 Subordination Agreement (filed as Exhibit 10.3 to N/A
the Company's 1988 Form 10-KSB Report and
incorporated herein by reference)
10.4 Promissory Notes issued to Affiliated Mining, Inc. N/A
dated January 1, 2002 (filed as Exhibit 10.4 to the
Company's 2001 Form 10-KSB Report and incorporated
herein by reference)
10.5 Promissory Notes issued to Robert W. Dunlap dated N/A
January 1, 2002 (filed as Exhibit 10.5 to the
Company's 2001 Form 10-KSB Report and incorporated
herein by reference)
10.6 Letter Agreement between the Company and Robert W. N/A
Dunlap and Kathy L. Dunlap dated October 12, 1990
(filed as Exhibit 10.6 to the Company's 1989 Form 10-K
Report and incorporated herein by reference)
10.7 Letter Agreement between the Company and Affiliated N/A
Mining, Inc. dated March 1, 1991 for transfer of
property in exchange for cancellation of debt (filed
as Exhibit 10.7 to the Company's 1989 Form 10-K Report
and incorporated herein by reference)
10.8 Letter Agreement between the Company and Robert W. N/A
Dunlap dated July 1, 1991 for transfer of property in
exchange for cancellation of debt (filed as Exhibit
10.8 to the Company's 1989 Form 10-K Report and
incorporated herein by reference)
10.9 Letter Agreement between the Company and Affiliated N/A
Mining, Inc. dated September 1, 1991 for transfer of
property in exchange for cancellation of debt (filed
as Exhibit 10.9 to the Company's 1989 Form 10-K Report
and incorporated herein by reference)
10.10 Promissory Note issued to Estate of Bernie Dunlap N/A
dated January 1, 2002 (filed as Exhibit 10.10 to the
Company's 2001 Form 10-KSB Report and incorporated
herein by reference)
10.11 Promissory Note issued to Lee Family dated January N/A
1, 2002 (filed as Exhibit 10.11 to the Company's
2001 Form 10-KSB Report and incorporated herein by
reference)
10.12 Promissory Note issued to Douglas K. Lee dated N/A
January 1, 2002 (filed as Exhibit 10.12 to the
Company's 2001 Form 10-KSB Report and incorporated
herein by reference)
10.13 Promissory Note issued to Janice Atkins dated N/A
January 1, 2002 (filed as Exhibit 10.13 to the
Company's 2001 Form 10-KSB Report and incorporated
herein by reference)
21 Subsidiaries of Registrant (filed as Exhibit 21 to N/A
the Company's 2001 Form 10-KSB Report and
incorporated herein by reference)
99.1 Summary - Jordanelle Dam Design Data (filed as N/A
Exhibit 28.1 to the Company's 1987 Form 10-K Report
and incorporated herein by reference)
10
<page>
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
99.2 Certification Pursuant To 18 U.S.C. Section 13
1350, As Adopted Pursuant To Section 906 Of
The Sarbanes-Oxley Act Of 2002
- ---------------------------
(b) The following reports on Form 8-K were filed during the last quarter of
the period covered by this report: NONE.
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.
PARK-PREMIER MINING COMPANY
Dated: November 18, 2002 By: /s/ ROBERT W. DUNLAP
----------------------------------------
Robert W. Dunlap, President
(Principal Financial Officer)
11
<page>
CERTIFICATION
I, Robert W. Dunlap, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Park Premier
Mining Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 18, 2002
/s/ ROBERT W. DUNLAP
-------------------------------------------
Robert W. Dunlap, President
(Principal Executive and Financial Officer)
12