SEC Filing Summary: Touchstone Mining Limited (10-K)
Business Context and Reporting Period
Company: Touchstone Mining Limited (also referenced as 22Nd Century Group, Inc. in metadata, but filing identifies Touchstone Mining Limited).
Reporting Period: Fiscal year ended September 30, 2009.
Status: Development stage company; classified as a shell company and smaller reporting company.
Operations: The Company was originally formed to acquire and explore mineral deposits in Nevada. Exploration ceased in August 2007 after no commercial quantities were found. The Company currently has no active business operations, no revenues, and is seeking potential merger or acquisition ventures to enhance shareholder value.
Key Financial Metrics
| Metric | 2009 | 2008 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(55,469) | $(82,146) |
| Accumulated Deficit | $(230,970) | $(175,501) |
| Cash and Cash Equivalents | $0 | $7,591 |
| Total Assets | $4,334 | $11,921 |
| Total Liabilities | $88,802 | $40,920 |
| Working Capital | $(88,798) | $(33,329) |
| Debt (Note Payable) | $80,000 | $0 |
Note: The Company has no operating margins or profitability metrics due to zero revenue.
Material Changes vs. Prior Period
- Liquidity Deterioration: Cash reserves dropped from $7,591 in 2008 to $0 in 2009. The Company exhausted its cash during the fiscal year.
- Debt Financing: In May 2009, the Company secured an $80,000 convertible promissory note (8.25% interest) to fund operations. This represents a significant increase in liabilities compared to the prior year.
- Loss Reduction: Net loss decreased from $82,146 in 2008 to $55,469 in 2009, primarily due to reduced professional fees and administrative costs as operations remained dormant.
- Asset Composition: Total assets decreased significantly, driven by the depletion of cash. The remaining assets consist primarily of a $4,330 reclamation bond for the Nevada mineral claims.
Outlook, Risks, and Management Commentary
- Going Concern: Auditors have issued a "going concern" qualification. The Company has a history of losses, no revenue, and substantial doubt exists regarding its ability to continue operations without additional financing.
- Future Strategy: Management is seeking "ventures of merit," potentially involving mergers, acquisitions, or sales of equity/debt securities. No specific targets or timelines are provided.
- Capital Needs: The Company requires additional capital to continue operations and fund potential transactions. There is no assurance that financing will be available on satisfactory terms.
- Stock Liquidity: The common stock is quoted on the OTCBB (Symbol: THSM.OB) but has not traded since inception. The market value of securities held by non-affiliates is $0.
- Management: The Company has only one employee, Nanuk Warman, who serves as President, CEO, CFO, and Director. He is paid approximately $8,000 annually.
Investor Verification Checklist
- Going Concern Status: Verify if the Company has secured the additional financing required to avoid ceasing operations, given the $0 cash balance and $88,802 in current liabilities.
- Debt Terms: Review the specific conversion terms of the $80,000 convertible note, which were stated as "mutually determined" and not fixed at the time of filing.
- Asset Realizability: Confirm the status of the $4,330 reclamation bond and the likelihood of its recovery, as the Company has discontinued exploration on the associated property.
- Shell Company Status: Acknowledge the risks associated with investing in a shell company with no active operations and a history of operating losses.
- Stock Liquidity: Verify the current trading status, as the filing indicates the stock has never traded and has no market value.