UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
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(Mark one)
X
- ----- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended May 31, 2002
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the transition period from ______________ to _____________
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Commission File Number: 000-30779
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Shimoda Resources Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 75-2843787
- ------------------------ ------------------------
(State of incorporation) (IRS Employer ID Number)
1555 Flamingo Road, Suite 155, Las Vegas, Nevada 89119
(Address of principal executive offices)
203-563-9430
(Issuer's telephone number)
ElPlata Corporation (formerly El Plata Mining Corporation)
(Former name, former address and former fiscal year,
if changed since last report)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
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State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of February 28, 2002 there were
169,010 shares of Common Stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): YES NO X
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Shimoda Resources Holdings, Inc.
Form 10-QSB for the Quarter ended May 31, 2002
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis 7
Part II - Other Information
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
Signatures 10
2
Item 1 - Part 1 - Financial Statements
Shimoda Resources Holdings, Inc.
(formerly ElPlata Corporation)
(formerly El Plata Mining Corporation)
Balance Sheet
(Unaudited)
May 31,
2002
ASSETS -----------
------
Current assets
Cash $ 41,129
Note receivable, related party 50,025
-----------
Total Current Assets 91,154
-----------
Other Assets
Investments 3,056,151
-----------
Total Other Assets 3,056,151
-----------
Total Assets $ 3,147,305
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities
Current liabilities
Accounts payable - trade $ --
Total Liabilities --
Shareholders' equity Common stock - $0.001 par value
100,000,000 shares authorized,
541,108 shares issued and outstanding 5,394
Additional paid-in capital 2,505,346
Accumulated other comprehensive income 724,711
Accumulated deficit (88,146)
-----------
Total Shareholders' Equity 3,147,305
-----------
Total Liabilities and Shareholders' Equity $ 3,147,305
===========
3
Shimoda Resources Holdings, Inc.
(formerly ElPlata Corporation)
(formerly ElPlata Mining Corporation)
Statements of Operations and Comprehensive Income
(Unaudited)
Three months Three months Nine months Nine months
ended ended ended ended
May 31, May 31, May 31, May 31,
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenues $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Operating Expenses
General and administrative expenses 20,955 6,177 22,558 6,177
------------ ------------ ------------ ------------
Loss from Operations (20,955) (6,177) (22,558) (6,177)
------------ ------------ ------------ ------------
Other income (expenses)
Interest income -- 23 -- 135
Interest expense -- -- (43) --
------------ ------------ ------------ ------------
Loss before provision
for income taxes (20,955) (6,154) (22,601) (6,042)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net loss (20,955) (6,154) (22,601) (6,042)
Other comprehensive income net
of tax
Unrealized gain on investment 700,114 -- 700,114 --
Foreign currency translation
adjustment 24,597 -- 24,597 --
------------ ------------ ------------ ------------
Other comprehensive income 724,711 -- 724,711 --
------------ ------------ ------------ ------------
Total comprehensive income $ 703,756 $ (6,154) $ 702,110 $ (6,042)
------------ ------------ ------------ ------------
Loss per share of common
stock outstanding computed on net
income - basic and fully diluted $ (0.06) $ (0.04) $ (0.07) $ (0.04)
============ ============ ============ ============
Weighted-average number of shares
outstanding - basic and fully diluted 343,208 166,893 314,236 166,893
============ ============ ============ ============
4
Shimoda Resources Holdings, Inc.
(formerly ElPlata Corporation)
(formerly ElPlata Mining Corporation)
Statements of Cash Flows
Nine months ended May 31, 2002 and 2001
(Unaudited)
Nine months Nine months
ended ended
May 31, May 31,
2002 2001
----------- -----------
Operating Activities
Net (loss) for the period (22,601) (6,042)
Adjustments to reconcile net (loss)
to net cash provided by (used for) operations:
Note receivable, related party (50,025) (946)
----------- -----------
Net cash used for operating activities (72,626) (6,988)
Investing Activities
Purchase of shares in Gulf International Minerals (650,000) - 0 -
Purchase of shares in European Nickel plc (218,965) - 0 -
----------- -----------
Net Cash used for investing activities (868,965)
Financing Activities
Proceeds from issuance of capital stock, net 982,705 343
----------- -----------
Increase (Decrease) in Cash 41,114 (6,645)
Cash at beginning of period 15 7,358
----------- -----------
Cash at end of period $ 41,129 $ 713
=========== ===========
Supplemental disclosure of cash flow information:
No amounts were paid for interest or taxes.
Supplemental disclosure of non-cash investing and financing activities:
In April 2002, Shimoda issued 250,000 shares to Shimoda Resources
Limited in exchange for shares in European Nickel plc. Also in April
2002, Shimoda issued 11,000 shares to Shimoda Resources Limited in
exchange for shares in Gulf International Minerals.
In February 2002, Shimoda issued 1,421 common shares to Shimoda Capital
Advisors Limited ("SCAL") in payment for expenses in the amount of
approximately $14,210 paid on its behalf by SCAL. Also in February
2002, Shimoda issued 794 common shares to Shimoda Capital (USA), Inc.
("SCUSA") in payment for expenses in the amount of approximately $
7,940 paid on its behalf by SCUSA.
5
Shimoda Resources Holdings, Inc.
(formerly ElPlata Corporation)
(formerly ElPlata Mining Corporation)
Statements of Stockholders Equity
Accumulated
Common stock Additional other Total
------------- paid-in comprehensive Accumulated stockholders'
Shares Amount capital income deficit equity
----------- ----------- ----------- ----------- ----------- -----------
Balance at August 31, 2000 (restated
for 30:1 reverse stock split) 166,893 $ 5,000 $ 56,145 $ (54,574) $ 6,571
Capital contributions 4,415 4,415
Net loss for the year ended
August 31, 2001 (10,971) (10,971)
----------- ----------- ----------- ----------- ----------- -----------
Balance at August 31, 2001 166,893 5,000 60,560 (65,545) 15
Issuance of stock in private placement 111,000 111 963,335 963,446
net of deferred registration costs
(unaudited)
Issuance of stock for Gulf International
Minerals shares (unaudited) 11,000 11 109,989 110,000
Issuance of stock for European
Nickel plc shares (unaudited) 250,000 250 1,352,225 1,352,475
Issuance of stock in exchange for
services (unaudited) 2,215 22 19,237 19,259
Net loss for the nine months ended
May 31, 2002 (unaudited) (22,601) (22,601)
Other Comprehensive Income
Unrealized gain on investment 700,114 700,114
(unaudited)
Foreign currency translation
adjustment (unaudited) 24,597 24,597
----------- ----------- ----------- ----------- ----------- -----------
Balance at August 31, 2001 541,108 $ 5,394 $ 2,505,346 $ 724,711 $ (88,146) $ 3,147,305
=========== =========== =========== =========== =========== ===========
6
Shimoda Resources Holdings, Inc.
Notes to Financial Statements
Nine months ended May 31, 2002
(1) Summary of Significant Accounting Policies:
Interim Financial Statements:
The accompanying financial statements include all adjustments (consisting of
only normal recurring accruals), which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the periods
presented. Interim results are not necessarily indicative of the results to be
expected for a full year. The financial statements should be read in conjunction
with the financial statements included in the annual report of Shimoda Resources
Holdings, Inc. (the "Company") on Form 10-KSB for the year ended August 31,
2001.
General:
Shimoda Resources Holdings, Inc. was incorporated as El Plata Mining Corporation
under the laws of the state of Nevada on February 23, 1973 and restated its
Articles of Incorporation on September 30, 1999. The September 30, 1999
restatement changed the Company's authorized number of shares from 20,000,000 to
100,000,000 and changed the stated par value per share from $0.05 per share to
$0.001 per share and changed the Company's corporate name to ElPlata
Corporation. In anticipation of a proposed transaction, the Company changed its
corporate name to Shimoda Resources Holdings, Inc. in April 2001. The effect of
all these actions is reflected in the accompanying financial statements as of
the first day of the first period presented.
Use of 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.
Fair Value:
Unless otherwise indicated, the fair values of all reported assets and
liabilities, which represent financial instruments, none of which are held for
trading purposes, approximate the carrying values of such amounts.
Marketable Securities:
The Company accounts for investments under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Investment securities are classified
into one of three categories: held-to-maturity, available-for-sale, or trading.
Securities are considered held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity. These securities are
recorded as either short-term investments or long-term marketable securities on
the balance sheet depending upon their original contractual maturity dates.
Held-to-maturity securities are stated at amortized cost, including adjustments
for amortization of premiums and accretion of discounts. Securities are
considered trading when bought principally for the purpose of selling in the
7
near term. Trading securities are recorded as short-term investments and are
carried at market value. Unrealized holding gains and losses on trading
securities are included in operating income. Securities not classified as
held-to-maturity or as trading are considered available-for-sale.
Available-for-sale securities are recorded as either short-term investments or
long-term marketable securities and are carried at market value with unrealized
gains and losses included in other comprehensive income in stockholders' equity.
Other Comprehensive Income:
SFAS No. 130, "Reporting Comprehensive Income," established new rules for the
reporting and display of comprehensive income and its components. SFAS No. 130
requires unrealized gains or losses on the Company's available-for-sale
securities and foreign currency translation adjustments to be reported as a
separate component (comprehensive income/loss) of stockholders' equity.
(2) Investment in Equity Securities Available for Sale:
In April 2002, the Company, in exchange for shares held by Shimoda Resources
Ltd, an affiliated entity, (a) issued 250,000 common shares in exchange for (i)
201,750 ordinary (pound)0.01 shares and (ii) warrants to purchase 148,250
ordinary (pound)0.01 shares at (pound)1 per share of European Nickel PLC, (b)
paid $650,000 and issued 11,000 common shares in exchange for 3,460,166 units
and 450,000 shares, respectivelyof Gulf International Minerals Ltd. ("Gulf
International"), each unit consisting of one common share and one share purchase
warrant at CDN$0.04 per unit, and (c) in a transaction with an unaffiliated
entity sold 111,000 shares of its common shares for $999,000 in a private
placement.
The purchase of the shares of European Nickel PLC was recorded at the historical
cost basis of the transferor, Shimoda Resources Ltd, in accordance with Staff
Accounting Bulletin No. 48 ("SAB 48") of the United States Securities and
Exchange Commission, "Transfers of Non-Monetary Assets by Promoters or
Shareholders." SAB 48 requires that exchanges of non-monetary assets by
promoters or shareholders be recorded at carryover basis.
The Gulf International units were recorded at the cash consideration paid, which
exceeded the basis to Shimoda Resources Ltd. Gulf International shares are
publicly traded on the TSX (Toronto Stock Exchange's) Venture Exchange in
Toronto, Canada (formerly the Canadian Venture Exchange). The Company intends to
hold these shares long-term and during the period ended May 31, 2002 recorded an
unrealized gain in other comprehensive income. Changes in fair value of Gulf
International shares are calculated based on Canadian Dollars, and then
translated to U.S. Dollars at the balance sheet. The Company used the exchange
rate in effect at the balance sheet date when calculating the currency
translation.
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
8
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) Plan of Operation, Results of Operations, Liquidity and Capital
Resources
Shimoda's management intends to actively seek additional financing and to pursue
the acquisition of resource licenses and resource companies that are based in
Emerging Europe. (See 10-KSB For Fiscal Year 2000-2001 for further details)
The proceeds of Shimoda's April private equity financing pursuant to Regulation
S-K of the Securities Act of 1933, as amended, which amounted to $999,000, and
261,000 newly issued, but not registered, common shares of Shimoda have been
invested in two Eastern European mining companies, European Nickel plc and Gulf
International Minerals (see below).
In April 2002, Shimoda acquired interests in the two resource companies from
Shimoda Resources, Ltd. ("SRL"). SRL is a Cyprus-based investment company of
which David J. Mapley, Chief Executive Officer and President of Shimoda, is the
founder and manager. The purchases were as follows:
(a) Shimoda purchased from SRL 201,750 ordinary 1 pence shares and warrants to
purchase 148,350 ordinary 1 pence shares of European Nickel plc ("EN") at GBP1
per share.
(b) Shimoda purchased from SRL 450,000 shares and 450,000 warrants (18
months/exercise price CD 0.60 per share) of Gulf International Minerals, Ltd.
("GIM") Common Stock
(c) Also in April, Shimoda purchased from SRL entitlements to 3,460,166 units of
GIM (@CD 0.30). Each unit consists of one share of GIM and one warrant (24 month
/ exercise price CD 0.40 per share) of GIM
In exchange for a), b) and c) above, Shimoda issued 261,000 shares of Common
Stock to SRL.
Also in April 2002, Shimoda exercised the entitlements to 3,460,166 units of GIM
for US$650,000 and exercised 148,350 options in EN for US$218,965.95.
Shimoda has identified a number of additional resource licenses and
resource companies that it is interested in acquiring. Shimoda expects to use
the proceeds of this offering in a similar manner, following its proposed
operating methodology and business principles to make those acquisitions.
Our policy, under normal market circumstances, is to allocate
substantially part or all of our assets in Emerging Europe resource licenses and
resource companies, whether unlisted, or listed on a recognized securities
exchange, whether in the country where such securities were issued or elsewhere.
Shimoda may also, for cash management purposes, invest in US Dollar and
local-currency denominated instruments issued by non-US entities, such as the
obligations of national governments, their agencies, and shares of money market
funds, as well as the listed equities or fixed-income instruments of resource
companies operating in Emerging Europe. Such investments in listed equities will
be for the purpose of obtaining information or the forming of strategic
relationships that advance Shimoda's business objective.
9
Shimoda's business strategy is to focus on the acquisition of resource
licenses and resource companies, which are at or near-production, in Emerging
Europe. More specifically, its strategy entails the following elements:
o Selectively acquiring high quality, resource rich, low-cost mineral
licenses and production companies.
o Providing where necessary high quality, experienced management for
project start-up and development.
o Providing strategic financial and capital markets advice in order to
increase the valuation of its holdings.
Current Holdings
European Nickel plc - In April 2002, we acquired 350,000 shares of common stock
in European Nickel plc ("EN"), a limited liability company registered in
England. We acquired the shares for cash and in exchange for shares of our
Common Stock. In the first transaction, we exchanged a total of 250,000 shares
of our Common Stock (at a price of US$10 per share) for 201,650 shares and
148,350 options for shares of the common stock of EN at a strike price of GBP1
plus other intangible rights. Shortly thereafter, we exercised the options at a
cost of GBP148,350 (US$218,965.95). EN is engaged in nickel mining and
processing in Albania, Turkey, and the rest of the Balkan region.
Background: The Ophiolite deposits through South Eastern Europe have numerous
identified deposits of nickel laterites in countries including Turkey, Greece,
Macedonia, Albania, Bosnia and Serbia. The deposits' status range from Mineable
Resource through to Inferred Resources. The nickel laterites of South East
Europe have not been "available" for development due to the regional politics.
The nickel laterites of the region are also unique in their geological
formation, which enables them to be amenable to a heap leach process that
European Nickel has developed. This ability to turn known, developed deposits
from sub-economic to economic projects in a region with diversified political
and economic risk and to develop a large nickel production operation in the
region will have significant financial benefits. The Caldag deposit in Western
Turkey is a high-grade nickel laterite ore body that will be mined and exported
through the port of Izmir to Northern Greece. The ore will then be transported
to a ferronickel smelter in Macedonia and toll treated to a ferronickel product.
The Caldag deposit was discovered by the Turkish Government Mining and
Exploration Service, MTA (Maden Tetkik Arama). Exploration began in 1974 and was
completed in 1979. The geological resource of 56 million tones at 1.28% nickel
will be exploited, with a current market value in excess of US$8 billion.
In total, the geological resource of European Nickel is 350 million tones at
average grade 1.21% nickel, which will be exploited (over 50% greater than 1.4%
nickel).
Nickel production is set to start approximately August 2002 from Turkey.
Gulf International Minerals - In April 2002, we acquired 450,000 shares and
450,000 warrants (18 months / C$D0.60 strike price) of shares of common stock of
Gulf International Minerals ("GIM"), a Vancouver, British Colombia, Canada
listed public company, in exchange for 110,000 shares of our Common Stock (at a
price of US$10 per share). Also in April 2002, we acquired an additional
3,460,166 shares of common stock of GIM with warrants attached for 3,460,166
additional shares of common stock of GIM for C$1,038,050 (US$650,000), at a
price per share of C$0.30 (US$0.25). GIM is engaged in gold mining and
processing in Tajikistan.
Background: Gulf International Minerals signed a Joint Venture Agreement in 1993
with the State Committee of Industrial Affairs of the Republic of Tajikistan.
The agreement was negotiated to cover several known precious metal deposits in
10
Northern Tajikistan and the concentrating facility at Kansai. All the deposits
are located within the gold bearing ore fields of the Tian Shan Fold, one of the
world's most prolific gold bearing rock belts running from Kyrgystan to the
east, across Northern Tajikistan and west into Uzbekistan. Gulf's geological
research of the former Russian archives is revealing positive indications of 60
gold deposits, some of which are sizeable.
GIM is currently focusing its energies on the re-commissioning of the Aprelevka
deposit. Having just completed massive works necessary to put the pit into full
production, the Russians only had time to extract approximately 30,000 oz of
gold (after removing 9 million tons of rock overburden). This was achieved at a
grade of 6gms of gold per ton of ore. They left behind a dynamic open pit gold
deposit, which overnight became one of many Tajik businesses to close. It
remained closed until Gulf International commenced the present work to
re-commission the mine. It is calculated that with a mining cost of
approximately $123 per ounce of gold recovered, this mine will be one the lowest
cost gold producers in the world.
The Burgunda / Ikkizhilon deposits are in the company's focus in Phase II of the
Joint Venture partnership in Tajikistan. Early geological reports indicated a
very exciting opportunity to prove up many millions oz. of gold. The Karamazar
Region makes up the "Blue Sky" for Gulf International, representing a land
holding of approximately 2,000 sq kilometers.
Gold production is set to start approximately August 2002.
Prior to the current fiscal year, the Company had engaged in no significant
operations other than organizational activities, fund raising and preparation
for registration of its securities under the Securities Exchange Act of 1934, as
amended, since August 31, 1989.
For the nine months ended May 31, 2002 and 2001, respectively, the Company
incurred net operating losses as a result of expenses principally associated
with registration and compliance with reporting obligations under The Securities
Exchange Act of 1934, and other administrative expenses associated with the
maintenance of the Company's issued and outstanding stock records and the
preparation of certain documents to support the Corporation and documents that
were required to attract new investors pursuant to Regulation S of the
Securities Act of 1933, as amended. Those efforts have resulted in attracting a
new investor to the company, issuance on new unregistered stock and the
acquisition of certain mining assets, described above. The Company anticipates
that it will begin to generate revenues during the second half of the current
fiscal year. However, the Company may continue to operate at a loss, depending
on the success of its current fund raising and of its ongoing investments in
resource licenses and resource companies in Eastern Europe.
Regardless of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.
Part II - Other Information
Item 1 - Legal Proceedings
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
Item 2 - Changes in Securities
The company issued 111,000 shares of Common Stock pursuant to the private
placement exemption available in Regulation S promulgated under the Securities
Act of 1933, as amended.
11
The Company issued a further 261,000 shares of Common Stock in a like exchange
to acquire certain mining assets in April 2002 (see Part I, Item 2, Section (2)
above) pursuant to the private placement exemption available in Regulation S
promulgated under the Securities Act of 1933, as amended.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
On October 29, 2001, the Company commenced an offering of up to 12,000,000
shares of Common Stock pursuant to the private placement exemption available in
Regulation S promulgated under the Securities Act of 1933, as amended. 111,000
shares have been sold to date. The Company terminated the offering on May
31,2002.
On June 21, 2002 the Company filed a Registration Statement with the SEC to sell
5,000,000 new shares of its common stock, plus 374,215 shares of common stock
from selling shareholders, pursuant to Regulation SB of the Securities Act of
1933. The Shares will be offered on a "best-efforts" basis by the officers,
employees and directors of the Company, and may be offered by independent
referral sources and through placement agents selected by the Company who may be
registered members of the National Association of Securities Dealers, Inc.
Item 6 - Exhibits and Reports on Form 8-K
Exhibits - None
Reports on Form 8-K - None
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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.
Shimoda Resources Holdings, Inc.
June 21st, 2002 /s/ David J Mapley
----------------------------------
David J Mapley
President, Chief Executive Officer
& Director