10-Q 1 ed10q06-3.txt SECURITIES AND EXCHANGE COMMISSION Washington D. C. 20549 Form 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 2006 Commission File No. 1-3871 CALIFORNIA-ENGELS MINING COMPANY (Exact name of registrant as specified in its charter) State of California (State or other jurisdiction of incorporation or organization) 94-0357560 (I.R.S. Employer Identification Number) Address: 117 Crescent Street, P. O. Box 778, Greenville, California 95947-0778 (Address of principal executive office) (Zip Code) (530) 284-6191 (Registrant's telephone number including area code) Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No CLASS Capital Stock, par value: $0.25 per share. OUTSTANDING AT September 30, 2006: 757,226.04 shares. Filing Contains 6 pages. CALIFORNIA-ENGELS MINING COMPANY FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED September 30, 2006 PART I - FINANCIAL INFORMATION The Registrant falls within the provisions of Rule 13a - 13 (c) (2) of the Securities Exchange Act of 1934 as amended, and claims exemption thereunder from the requirement to file Part I. Item 3. Controls and Procedures As of the end of the period covered by this report, the registrant carried out an evaluation, under the supervision and with the participation of the registrant's management, including the registrant's principal executive officer and principal financial officer, of the effectiveness of the design and operation of the registrant's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the principal executive officer and principal financial officer concluded that the registrant's disclosure controls and procedures are effective in timely alerting them to material information relating to the registrant required to be included in the registrant's periodic SEC filings. During the fiscal quarter, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. PART II - OTHER INFORMATION Items deleted are not applicable. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: None (b) During the quarter for which this report is filed, California-Engels Mining Company filed a Current Report on Form 8-K dated September 18, 2006, listing under" Entry Into A Material Definitive Agreement" information pursuant to the Exploration Permit With Option To Lease and Purchase dated April 18, 2006, American Sheffield, Inc., a Nevada corporation, a wholly owned subsidiary of Sheffield Resources Ltd., a British Columbia corporation, exercised its option to enter into a Mining Lease with Option to Purchase Registrant's 36 patented lode mining claims and 162.12 acres of fee lands at Engelmine, Lights Creek Mining District, Plumas County California. SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CALIFORNIA-ENGELS MINING COMPANY Registrant October 3, 2006 By: /s/ Norman A. Lamb Norman A. Lamb, President and Chief Executive Officer October 3, 2006 By: /s/ M. Blair Ogden M. Blair Ogden, Secretary-Treasurer and Chief Financial Officer CALIFORNIA-ENGELS MINING COMPANY FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED September 30, 2006 CERTIFICATIONS I, Norman A. Lamb, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of California-Engels 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-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 registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us particularly during the period in which this quarterly report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting 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 registrant'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 report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and CALIFORNIA-ENGELS MINING COMPANY FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED September 30, 2006 CERTIFICATIONS, Continued 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant'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 registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 3, 2006 /s/ Norman A. Lamb Norman A. Lamb, President and Chief Executive Officer I, M. Blair Ogden, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of California-Engels 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-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 registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us particularly during the period in which this quarterly report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting 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; CALIFORNIA-ENGELS MINING COMPANY FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED September 30, 2006 CERTIFICATIONS, Continued (c) evaluated the effectiveness of the registrant'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 report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant'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 registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 3, 2006 /s/ M. Blair Ogden M. Blair Ogden, Secretary-Treasurer and Chief Financial Officer CERTIFICATION I, Norman A. Lamb, President of California-Engels Mining Company certify that: 1. This quarterly report on Form 10-QSB of California-Engels Mining Company 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 this quarterly report fairly presents, in all material respects, the financial condition and results of operations of California-Engels Mining Company. CALIFORNIA-ENGELS MINING COMPANY FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED September 30, 2006 Date: October 3, 2006 /s/ Norman A. Lamb Norman A. Lamb, President and Chief Executive Officer CERTIFICATION I, M. Blair Ogden, Chief Financial Officer of California-Engels Mining Company certify that: 1. This quarterly report on Form 10-QSB of California-Engels Mining Company 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 this quarterly report fairly presents, in all material respects, the financial condition and results of operations of California-Engels Mining Company. Date: October 3, 2006 /s/ M. Blair Ogden M. Blair Ogden, Secretary-Treasurer and Chief Financial Officer

September 30, December 31, 2001 2000 --------- --------- CURRENT ASSETS Cash $ 107,609 $ 39,462 Deeds of Trust - current portion 2,909 11,842 Deferred income taxes - - Reimbursements receivable - - Deposits - - Prepaid income tax - 5,874 Total Current Assets $ 110,518 $ 57,178 PROPERTY AND EQUIPMENT, NET $ 357,166 $ 397,995 OTHER ASSETS Investments available-for-sale $ 12,037 $ 12,011 Investments held-to-maturity 1,870 2,472 Deeds of trust - net of current portion 158,296 162,464 Total Other Assets $ 172,203 $ 176,947 Total Assets $ 639,887 $ 632,120

September 30, December 31, 2001 2000 --------- -------- CURRENT LIABILITIES Income taxes payable $ 442 $ - Deferred tax liabilities 19,843 19,843 Accrued expenses 33,630 40,976 Notes payable, current portion 2,072 8,014 Total Current Liabilities $ 55,987 $ 68,833 LONG TERM LIABILITIES Notes payable, net of current portion $ 106,549 $ 106,549 Total Liabilities $ 162,536 $ 175,382

September 30, December 31, 2001 2000 --------- --------- STOCKHOLDERS' EQUITY Capital stock, par value $.25: 4,000,000 shares authorized 759,315.94 shares issued and outstanding in 2001 and 760,815.94 in 2000 $ 189,829 $ 190,206 Accumulated other comprehensive income (loss) $ 308 $ 308 Reduction surplus $2,800,108 $2,800,856 Accumulated deficit (2,512,894) (2,534,632) Total Stockholders' Equity $ 477,351 $ 456,738 Total Liabilities and Stockholders' Equity $ 639,887 $ 632,120

September 30, December 31, 2001 2000 ------------ ------------ Accumulated Deficit, Beginning of Year $ (2,534,632) $ (2,613,532) Net Income (Loss) $ 21,738 $ 78,900 Accumulated Deficit, End of Year $ (2,512,894) $ (2,534,632) Accumulated Other Comprehensive Income (Loss), Beginning of Year $ 308 $ 288 Other Comprehensive Income (Loss) $ - $ 20 Accumulated Other Comprehensive Income (Loss), End of Year $ 308 $ 308

Three Months Ended September 30, 2001 2000 ---------- ---------- REVENUE Timber and rock revenue $ 98,241 $ 480 Dividend income 764 200 Interest income 4,068 2,717 Total revenue $ 103,073 $ 3,397 OPERATING AND GENERAL EXPENSES Depreciation $ 505 501 Director fees - 2,000 Insurance - - Miscellaneous 387 268 Office and storage rents 2,127 3,127 Office expenses 380 460 Professional fees 685 930 Reclamation plan expense - 12,738 Repairs and maintenance 226 - Taxes and licenses 8,965 222 Travel and per diem - 230 Vehicle expense 1.904 249 Wages and related taxes 2,437 3,334 Total Operating and General Expenses $ 17,616 $ 24,059 Income (Loss) from Operations $ 85,457 $ (20,662) OTHER INCOME and (EXPENSE) Depletion $ (6,326) $ - Gain on sale of land - 143,240 Interest (3,210) (4,752) Timber harvest expense (77,982) (4,600) Timber management expense - 9,919 Office and bookkeeping service 4,425 5,790 Total Other Income and (Expense) $ (83,093) $ 149,597 Income (Loss) Before Taxes $ 2,364 $ 128,935 Provision for income taxes $ (6,316) $ (29,824) Net Income (Loss) $ (3,952) $ 99,111 Income (Loss) Per Share $ (0.005) $ 0.130

Nine Months Ended September 30, 2001 2000 ---------- ---------- REVENUE Timber and rock revenue $ 591,798 $ 1,525 Dividend income 2,140 967 Interest income 11,733 5,706 Total revenue $ 605,671 $ 8,198 OPERATING AND GENERAL EXPENSES Depreciation $ 1,514 $ 1,503 Director fees - 2,000 Insurance 1,860 1,900 Miscellaneous 557 631 Office and storage rents 8,882 9,383 Office expenses 2,606 3,140 Professional fees 4,335 3,970 Reclamation plan expense 240 12,738 Repairs and maintenance 1,396 1,050 Taxes and licenses 13,617 3,111 Travel and per diem 405 714 Vehicle expense 2,883 945 Wages and related taxes 8,359 9,511 Total operating and general expenses $ 46,654 $ 50,596 Net income (loss) from operations $ 559,017 (42,398) OTHER INCOME and (EXPENSE) Depletion $ (39,315) $ - Gain on sale of land - 143,240 Interest (9,972) (12,679) Timber harvest expense (489,138) (4,600) Timber management expense (10,513) (1,560) Office and bookkeeping service 17,975 22,365 Total other income and(expense) $ (530,963) $ 146,766 Income (Loss) Before Taxes $ 28,054 $ 104,368 Provision for income taxes $ (6,316) $ (29,824) Net Income (Loss) $ 21,738 $ 74,544 Income (Loss) Per Share $ 0.029 $ 0.098

Three Months Ended September 30, 2001 2000 --------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net Income (loss) $ (3,952) $ 99,111 Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation and depletion 6,831 501 Amortization of GNMA discount - - (Gain) loss on sale of securities - - (Gain) loss on sale of land - (143,228) (Increase) decrease in assets Prepaid expenses 5,874 4,360 Deposits - - (Decrease) increase in liabilities Taxes payable 442 23,284 Accrued expenses (63) (5,520) Net cash provided (used) by operating activities $ 9,132 $ (21,492) CASH FLOWS FROM INVESTING ACTIVITIES Payments received on notes receivable $ 5,390 $ 2,096 Notes issued - 194 Purchases of securities and investments - - Proceeds from sale of securities - - Proceeds from sale of land - 98,248 Return of principal GNMA 201 304 Capital expenditures - - Net cash Provided (Used) by investing activities $ 5,591 $ 100,842

Three Months Ended September 30, 2001 2000 --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Purchase and retirement of treasury shares $ (75) $ - Notes payable - (17,000) Payments on notes payable (2,026) (11,703) Net cash provided (used) by financing activities $ (2,101) $ (28,703) Net increase (decrease) in cash and cash equivalents $ 12,622 $ 50,647 CASH AND CASH EQUIVALENTS, Beginning of Period $ 94,987 $ 3,820 CASH AND CASH EQUIVALENTS, End of Period $ 107,609 $ 54,467 SUPPLEMENTAL DISCLOSURE of CASH FLOW INFORMATION Cash paid during the year: Income taxes $ 5,874 $ 25,464 Interest $ 3,210 $ 4,752 SUPPLEMENTAL DISCLOSURE of NONCASH INVESTING ACTIVITIES Unrealized holding gains (losses) arising during period $ - $ - Issuance of notes receivable for sales of property $ - $ 96,800

Nine Months Ended September 30, 2001 2000 -------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ 21,738 $ 74,544 Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation and depletion 40,829 1,503 Amortization of GNMA discount - - (Gain)loss on sale of securities - - (Gain) loss on sale of land - (143,228) (Increase) decrease in assets Prepaid expenses 5,874 - Deposits - - Increase (decrease) in liabilities Taxes payable 442 18,587 Accrued expenses (7,346) (7,020) Net Cash Provided (Used) by Operating Activities $ 61,537 $ (55,614) CASH FLOWS FROM INVESTING ACTIVITIES Payments received on notes receivable $ 13,101 $ 4,683 Notes issued - (49,117) Purchases of securities and investments (26) (26) Proceeds from sale of securities - - Proceeds from sale of land - 98,248 Return of principal GNMA 602 613 Capital expenditures - (762) Net cash Provided (Used) by Investing Activities $ 13,677 $ 53,639

Nine Months Ended September 30, 2001 2000 --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Purchase and retirement of treasury shares $ (1,125) $ - Notes payable - - Payments on notes payable (5,942) (14,853) Net Cash Provided (Used) by Financing Activities $ (7,067) $ (14,853) Net Increase (Decrease) in Cash and Cash Equivalents $ 68,147 $ (16,828) CASH AND CASH EQUIVALENTS, Beginning of Period $ 39,462 $ 71,295 CASH AND CASH EQUIVALENTS, End of Period $ 107,609 $ 54,467 SUPPLEMENTAL DISCLOSURE of CASH FLOW INFORMATION Cash paid during the year: Income taxes $ 5,874 $ 29,824 Interest $ 9,972 $ 12,679 SUPPLEMENTAL DISCLOSURE of NONCASH INVESTING ACTIVITIES Unrealized holding gains (losses) arising during period $ - $ - Issuance of notes receivable for sales of property $ - $ 96,800

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