UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2003
-------------
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period to
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Commission File Number 001-31546
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FOOTHILLS RESOURCES, INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0339560
--------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Canadiana Lodge, Wellfield Close, Coad's Green
Launceston, Cornwall, England, PL15 7LR
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(Address of principal executive offices)
01566 782 199
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Registrant's telephone number, including area code
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ ] Yes [X] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 1,366,000 shares of $0.001 par value
common stock outstanding as of April 13, 2004.
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
June 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
------------
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
June 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
------------
(Unaudited) (Audited)
June 30, December 31,
ASSETS 2003 2002
------ ---- ----
Current
Cash $ 1,375 $ 3,686
Prepaid expenses 800 200
------------ -----------
$ 2,175 $ 3,886
============ ===========
LIABILITIES
-----------
Current
Accounts payable $ 7,336 $ 3,523
Due to related party - Note 3 11,691 10,616
------------ ----------
19,027 14,139
------------ ----------
STOCKHOLDERS' DEFICIENCY
------------------------
Preferred stock, $0.001 par value
1,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
1,366,000 (2002: 1,366,000) shares outstanding 1,366 1,366
Paid-in capital 79,434 79,434
Deficit accumulated during the pre-exploration stage ( 97,652) ( 91,053)
----------- ----------
( 16,852) ( 10,253)
----------- ----------
$ 2,175 $ 3,886
=========== ==========
SEE ACCOMPANYING NOTES
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and six months ended June
30, 2003 and 2002 and for the period November 17,
2000 (Date of Incorporation) to June 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
November 17,
2000 (Date of
Incorporation)
Three months ended June 30, Six months ended June 30, To June 30,
2003 2002 2003 2002 2003
---- ---- ---- ---- ----
Expenses
Accounting, audit and
legal $ 1,633 $ 845 $ 4,237 $ 4,118 $ 55,221
Bank charges 97 115 162 221 829
Consulting fees - - - - 5,000
Management fees - 3,000 - 6,000 17,500
Office and miscellaneous 100 - 100 100 793
Resource property costs 1,500 632 1,500 2,132 13,554
Transfer agent fees 300 301 600 715 4,197
Travel - - - - 712
----------- ----------- ---------- ---------- -----------
Loss before other item ( 3,630) ( 4,893) ( 6,599) ( 13,286) ( 97,806)
Other item
Interest income - 3 - 6 154
----------- ----------- ---------- ---------- -----------
Net loss for the period $ ( 3,630) $ ( 4,890) $ ( 6,599) $ ( 13,280) $ ( 97,652)
=========== =========== ========== ========== ===========
Basic loss per share $ ( 0.00) $ ( 0.02) $ ( 0.00) $ ( 0.05)
=========== =========== ========== ==========
Weighted average number of
shares outstanding 1,366,000 250,000 1,366,000 250,000
=========== =========== ========== ===========
SEE ACCOMPANYING NOTES
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the six months ended June 30,
2003 and 2002 and for the period November 17, 2000
(Date of Incorporation) to June 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
November 17,
2000 (Date of
Incorporation)
Six months ended June 30, To June 30,
2003 2002 2003
---- ---- ----
Cash Flows from Operating Activities
Net loss for the period $ ( 6,599) $ ( 13,280) $ ( 97,652)
Changes in non-cash working capital balances
related to operations
Prepaid expenses ( 600) ( 600) ( 800)
Accounts payable 3,813 ( 10,657) 7,336
------------ ------------- ------------
( 3,386) ( 24,537) ( 91,116)
------------ ------------- ------------
Cash Flows from Financing Activities
Capital stock issued - - 80,800
Due to related parties 1,075 - 11,691
Subscriptions received - 25,600 -
------------ ------------- ------------
1,075 25,600 92,491
------------ ------------- ------------
Increase (decrease) in cash during the period ( 2,311) 1,063 1,375
Cash, beginning of the period 3,686 4,962 -
------------ ------------- ------------
Cash, end of the period $ 1,375 $ 6,025 $ 1,375
============ ============= ============
Supplemental disclosure of cash flow information Cash paid for:
Interest $ - $ - $ -
============ ============= ============
Income taxes $ - $ - $ -
============ ============= ============
SEE ACCOMPANYING NOTES
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' DEFICIENCY
for the period November 17, 2000 (Date
of Incorporation) to June 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
Deficit
Accumulated
Common Shares Additional During the
------------------ Paid-in Subscriptions Pre-Exploration
Number Par Value Capital Received Stage Total
------ -------- ------- -------- ---------------- -----
Capital stock issued for cash - at $0.10 143,000 $ 143 $ 14,157 $ - $ - $ 14,300
Net loss for the period - - - - ( 4,927) ( 4,927)
------- -------- -------- --------- --------- ----------
Balance as at December 31, 2000 143,000 143 14,157 - ( 4,927) 9,373
Capital stock issued for cash - at $0.10 107,000 107 10,593 - - 10,700
Net loss for the year ended
December 31, 2001 - - - - ( 44,243) ( 44,243)
Subscriptions received - - - 5,000 - 5,000
--------- ------- -------- --------- --------- ----------
Balance as at December 31, 2001 250,000 250 24,750 5,000 ( 49,170) ( 19,170)
Subscriptions converted - - - ( 5,000) - ( 5,000)
Capital stock issued for cash - at $0.05 1,116,000 1,116 54,684 - - 55,800
Net loss for the year ended
December 31, 2002 - - - - ( 41,883) ( 41,883)
--------- -------- -------- ---------- --------- ----------
Balance as at December 31, 2002 1,366,000 1,366 79,434 - ( 91,053) ( 10,253)
Net loss for the period - - - - ( 6,599) ( 6,599)
--------- -------- -------- --------- --------- ----------
Balance as at June 30, 2003 1,366,000 $ 1,366 $ 79,434 $ - $ ( 97,652) $ ( 16,852)
========= ======== ======== ========= ========= ==========
SEE ACCOMPANYING NOTES
FOOTHILLS RESOURCES, INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
June 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
Note 1 Interim Reporting
-----------------
While the information presented in the accompanying interim six
months financial statements is unaudited, it includes all
adjustments which are, in the opinion of management, necessary to
present fairly the financial position, results of operations and
cash flows for the interim period presented. All adjustments are
of a normal recurring nature. It is suggested that these financial
statements be read in conjunction with the company's December 31,
2002 annual financial statements.
Note 2 Continuance of Operations
-------------------------
The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. At June 30, 2003, the Company has a working
capital deficiency of $16,852 and has accumulated losses of
$97,652 since its commencement. Its ability to continue as a going
concern is dependent upon the ability of the Company to obtain the
necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when they come
due.
Note 3 Due to Related Party
--------------------
Amounts due to related party are comprised of unpaid advances to
the Company and are unsecured, non-interest bearing with no
specific terms for repayment.
Note 4 Commitment
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a) Exploration Lease
By a letter lease agreement effective March 1, 2001 and
amended February 22, 2002, September 30, 2002, December 1,
2002 and March 31, 2003 the Company was granted the exclusive
right to explore and mine the Golden Cross resource property
located in White Pine County of the State of Nevada. The term
of this lease is for 20 years, renewable for an additional 20
years so long as the conditions of the lease are met. Minimum
payments and performance commitments are as follows:
Note 4 Commitment- (cont'd)
----------
a) Exploration Lease - (cont'd)
Minimum Advance Royalty Payments:
The owner shall be paid a royalty of 3% of the net smelter
returns from all production. In respect to this royalty,
the Company is required to pay minimum advance royalty
payments of the following:
- $5,000 upon execution (paid);
- $1,500 on March 1, 2002 (paid);
- $2,000 on September 1, 2002 (paid);
- $2,000 on December 1, 2002 (paid);
- $1,500 on April 15, 2003 (paid);
- $12,000 on July 1, 2003
- $20,000 on March 1, 2004
- $50,000 on March 1, 2005 and every March 1 thereafter
The Company can reduce the net smelter return royalty to
0.5% by payment of a buy-out price of $5,000,000. Advance
royalty payments made to the date of the buy-out will be
applied to reduce the buy-out price.
Performance Commitment:
In the event that the Company terminates the lease after
June 1 of any year, it is required to pay all federal and
state mining claim maintenance fees for the next
assessment year. The Company is required to perform
reclamation work on the property as required by federal,
state and local law for disturbances resulting from the
Company's activities on the property.
b) Consulting Agreement
Pursuant to an agreement dated October 25, 2002, the Company
engaged GID Financial Solutions, Inc., a Nevada Corporation,
to assist the Company to have its stock quoted for public
trading on the OTC Bulletin Board service or some other
comparable quotation system. The Company will pay $17,500 as
follows:
- $5,000 upon execution of the agreement (paid); and
- $12,500 within five days after a Form 211 filing is deemed
cleared by the NASDR OTC Compliance examiner.
Item 2. Management's Discussion and Analysis or Plan of Operation
Forward Looking Statements
This quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this Risk Factors section and elsewhere in this quarterly report.
Plan of Operation
Our plan of operations for the twelve months following the date of this report
is to complete the recommended phase one exploration program on the TC Claims,
White Pine County, Nevada, in which we hold a leasehold interest. We anticipate
that this program will cost us $100,000. In addition, we anticipate spending
$7,500 on professional fees and $9,000 on administrative expenses in the next
twelve months.
Total expenditures over the next six months are therefore expected to be
$116,500. Our cash on hand at June 30, 2003 was $1,375. Accordingly, we will
need to raise additional funds in order to complete the recommended exploration
program on the TC Claims and meet our other expected expenses.
Results of Operations for the second quarter ended June 30, 2003
We incurred a net loss of $6,599 for the second quarter ended June 30, 2003, as
compared to a loss of $13,280 in the same period in 2002. The difference in net
loss was primarily due to a decrease in management fees. During the second
quarter ended June 30, 2003, no management fees were incurred as compared to the
$6,000 incurred in 2002. In addition, the lease agreement did not call for any
advance royalty payable in the current period ($1,500 - 2002). At the end of the
second quarter, we had cash on hand of $1,375. Our liabilities at the same
period totalled $19,027 and consisted of accounts payable of $7,336 and $11,691
due to our president for funds that he has advanced to us. These loans are
unsecured, non-interest bearing and have no fixed terms of repayment.
Item 3. Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was conducted by the sole director of the
Company, who also acts as the Company's President, the Chief Executive Officer,
and the Chief Financial Officer.
Based upon that evaluation, the Company concluded that the disclosure controls
and procedures are effective. There have been no significant changes in the
Company's internal controls or in other factors, which could significantly
affect internal controls subsequent to the date the Company carried out its
evaluation.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
There were no reports filed on Form 8-K during the second quarter-ended June 30,
2003.
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.
FOOTHILLS RESOURCES, INC.
/s/ J. Earl Terris
------------------------------------
J. Earl Terris
President, Secretary, Treasurer
Chief Executive Officer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Dated: April 13, 2004
Exhibit 31.1
CERTIFICATION
I, J. Earl Terris, President and Chief Executive Officer of Foothills Resources,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Foothills
Resources, Inc.;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of 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. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business
issuer and I have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the small
business issuer, 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) designed such internal control over financial
reporting, or caused such disclosure control and procedures to
be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such
evaluation; and
d) disclosed in this quarterly report any change in the
small business issuer's internal control over financial
reporting that occurred during the small business issuer's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of
internal controls over financial reporting, to the small business
issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies and material weaknesses
in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
small business issuer's ability to record, process, summarize
and reporting financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the small business issuer's internal control over financial
reporting.
Date: April 13, 2004
/s/ J. Earl Terris
-----------------------------
J. Earl Terris
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, J. Earl Terris, Secretary, Treasurer and Chief Financial Officer of Foothills
Resources, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Foothills
Resources, Inc.;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of 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. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal contrl over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business
issuer and I have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the small
business issuer, 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) designed such internal control over financial
reporting, or caused such disclosure control and procedures to
be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the small business
issuer's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such
evaluation; and
d) disclosed in this quarterly report any change in the
small business issuer's internal control over financial
reporting that occurred during the small business issuer's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of
internal controls over financial reporting, to the small business
issuer's auditors and the audit committee of the small business
issuer's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies and material weaknesses
in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
small business issuer's ability to record, process, summarize
and reporting financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the small business issuer's internal control over financial
reporting.
Date: April 13, 2004 /s/ J. Earl Terris
------------------------------
J. Earl Terris
Secretary, Treasurer & C.F.O.
(Principal Financial Officer and
Principal Accounting Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Foothills Resources, Inc. (the
"Company") on Form 10-QSB for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15
(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
Date: April 13, 2004
/s/ J. Earl Terris
-------------------------------
J. Earl Terris
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Foothills Resources, Inc. (the
"Company") on Form 10-QSB for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15
(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Date: April 13, 2004
/s/ J. Earl Terris
-----------------------------
J. Earl Terris
Secretary, Treasurer & C.F.O.
(Principal Financial Officer and
Principal Accounting Officer)