Attached files
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| EX-31.1 - Big Bear Mining Corp. | ex31-1.htm |
| EX-32.1 - Big Bear Mining Corp. | ex32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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or
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[ ]
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission File Number 333-132547
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BIG BEAR MINING CORP.
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(Exact name of registrant as specified in its charter)
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Nevada
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20-4350483
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification
No.)
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60 E Rio Salado Parkway, Suite 900, Tempe, Arizona
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85281
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(Address of principal executive offices)
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(Zip Code)
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480.253.0323
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(Registrant’s telephone number, including area code)
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15111 n. Hayden Road, Suite 160, Scottsdale, AZ 85260
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(Former name, former address and former fiscal year, if changed since last report)
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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.
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[X]
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YES
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[ ]
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NO
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
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| Large accelerated filer [ ] | Accelerated filer [ ] | |||
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Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
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Smaller reporting company [X] | |||
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
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[ ] YES [X] NO
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
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[ ] YES [ ] NO
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APPLICABLE ONLY TO CORPORATE ISSUERS
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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138,950,000 common shares issued and outstanding as of May 17, 2010
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PART I - FINANCIAL INFORMATION
Item1. Financial Statements.
These financial statements have been prepared by our company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with such SEC rules and regulations. In the opinion of management, the accompanying statements contain all adjustments necessary to present fairly the financial position of our company as of March 31, 2010, and our results of operations, and our cash flows for the three month period ended March 31, 2010. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto filed as a part of our company’s Form 10-K.
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BIG BEAR MINING CORP.
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(AN EXPLORATION STAGE COMPANY)
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BALANCE SHEETS
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ASSETS
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March 31,
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December 31,
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2010
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2009
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(Unaudited)
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Current assets:
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Cash
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$ | 251,499 | $ | 1,317 | ||||
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Total current assets
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251,499 | 1,317 | ||||||
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Total assets
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$ | 251,499 | $ | 1,317 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
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Current liabilities:
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Accounts payable
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$ | 19,640 | $ | 12,290 | ||||
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Shareholder advance
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695 | 495 | ||||||
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Total current liabilities
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20,335 | 12,785 | ||||||
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Total liabilities
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20,335 | 12,785 | ||||||
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SHAREHOLDERS' EQUITY (DEFICIT)
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Common stock, $.001 par value, 1,500,000,000 shares authorized, 138,950,000 shares issued and outstanding
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138,950 | 138,950 | ||||||
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Additional paid-in-capital
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155,850 | (94,150 | ) | |||||
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Deficit accumulated during the exploration stage
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(63,636 | ) | (56,268 | ) | ||||
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Total shareholders' equity (deficit)
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231,164 | (11,468 | ) | |||||
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
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$ | 251,499 | $ | 1,317 | ||||
See accompanying notes to financial statements
F-1
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BIG BEAR MINING CORP.
(AN EXPLORATION STAGE COMPANY)
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STATEMENTS OF OPERATIONS
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Three Months Ended March 31, 2010 and 2009
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and Period from April 14, 2005 (Inception) through March 31, 2010
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(Unaudited)
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Three Months Ended
March 31, 2010
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Three Months
Ended
March 31, 2009
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Inception
through
March 31, 2010
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Expenses:
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General and administrative
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$ | 7,368 | $ | 6,881 | $ | 63,636 | ||||||
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Net loss
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$ | (7,368 | ) | $ | (6,881 | ) | $ | (63,636 | ) | |||
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Net loss per share:
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Basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
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Weighted average shares outstanding:
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Basic and diluted
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138,950,000 | 138,950,000 | ||||||||||
See accompanying notes to financial statements
F-2
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(AN EXPLORATION STAGE COMPANY)
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STATEMENTS OF CASH FLOWS
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Three Months Ended March 31, 2010 and 2009
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and Period from April 14, 2005 (Inception) through March 31, 2010
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(Unaudited)
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Three Months Ended March 31,
2010
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Three Months Ended March 31,
2009
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Inception through
March 31,2010
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (7,368 | ) | $ | (6,881 | ) | $ | (63,636 | ) | |||
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Adjustments to reconcile net deficit to cash used
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by operating activities:
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Accounts payable
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7,350 | 4,650 | 19,640 | |||||||||
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CASH FLOWS USED IN OPERATING ACTIVITIES
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(18 | ) | (2,231 | ) | (43,996 | ) | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from shareholder advance
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200 | - | 695 | |||||||||
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Share subscription received
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250,000 | - | 250,000 | |||||||||
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Issuance of common stock for cash
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- | - | 44,800 | |||||||||
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CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
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250,200 | - | 295,495 | |||||||||
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NET INCREASE (DECREASE) IN CASH
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250,182 | (2,231 | ) | 251,499 | ||||||||
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Cash, beginning of period
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1,317 | 7,869 | - | |||||||||
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Cash, end of period
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$ | 251,499 | $ | 5,638 | $ | 251,499 | ||||||
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SUPPLEMENTAL CASH FLOW INFORMATION
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Interest paid
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$ | - | $ | - | $ | - | ||||||
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Income taxes paid
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$ | - | $ | - | $ | - | ||||||
See accompanying notes to financial statements
F-3
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BIG BEAR MINING CORP.
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(AN EXPLORATION STAGE COMPANY)
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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Big Bear Mining Corp. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's registration statement filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2009 as reported in Form 10-K, have been omitted.
NOTE 2 - COMMON STOCK
On January 21, 2010, the Nevada Secretary of State effected a forward stock split of the Company’s authorized and issued and outstanding shares of common stock on a one (1) old common shares for fifty (50) new common share basis, such that the Company’s authorized capital increased from 30,000,000 shares of common stock with a par value of $0.001 to 1,500,000,000 shares of common stock with a par value of $0.001 and, correspondingly, the Company’s issued and outstanding shares of common stock increased from 2,779,000 shares of common stock to 138,950,000 shares of common stock. The stock split is presented retroactively in these financial statements.
In March, 2010 the Company received $50,000 as subscription for private placement of 250,000 shares of the Company’s common stock at $0.20 per share. The related common shares were not issued by March 31, 2010 and the issuance date of these financial statements.
Intosh Financing Agreement
Effective March 31, 2010, the Company entered into a financing agreement (the "Financing Agreement") with Intosh Services Limited ("Intosh"), whereby the Company has the right to request Intosh to purchase up to $1,400,000 of the Company's securities until March 31, 2011, unless extended by either the Company or Intosh for an additional 12 months.
Under the terms of the Financing Agreement, the Company may from time to time request a purchase from Intosh up to $200,000 (each, an "Advance") per request to fund the Company’s operating expenses, acquisitions, working capital and general corporate activities. Following receipt of any Advance, the Company shall issue Intosh common stocks of the Company at $0.70 per share.
As of March 31, 2010, the Company received its first Advance of $200,000 for which the shares have not been issued.
NOTE 3 – RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2010 the Company accrued consulting fees of $2,000 to the president of the Company, which was outstanding at March 31, 2010.
Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment.
F-4
As of March 31, 2010 the amount of $695 outstanding, bears no interest and is due on demand.
The Company neither owns nor leases any real or personal property, an officer has provided office services without charge. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
NOTE 4 - SUBSEQUENT EVENTS
Rubicon Option Agreement
Effective April 1, 2010, the Company entered into a property purchase option agreement (the “Rubicon Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”) for the right and option to acquire from Rubicon up to 100% interest in a total of 14 mining claims (the “Rubicon Claims”) in the Red Lake Mining Division of Northwestern Ontario, Canada. Considerations for the 100% interest are as follows:
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-
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Initial cash payment of $20,000 (paid);
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Cash payment of $15,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2011;
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Cash payment of $20,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2012;
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Cash payment of $25,000 and issuance of common shares of the Company valued at $30,000 on April 1, 2013; and
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Cash payment of $30,000 on April 1, 2014.
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In accordance with the Rubicon Option Agreement Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000.
Sol d’or Option Agreement
Effective April 11, 2010 the Company entered into a property purchase option agreement (the “Sol d’or Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”), whereby the Company is entitled to acquire from Rubicon up to 100% interest in nine claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the property. Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of $16,000 (paid) and issuance of the Company’s common stocks valued at $20,000 (not issued);
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Cash payment of $15,000 and issuance of the Company’s common stocks valued at $20,000 on April 11, 2011;
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Cash payment of $20,000 and issuance of the Company’s common stocks valued at $20,000 on April 11, 2012;
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Cash payment of $25,000 and issuance of the Company’s common stocks valued at $20,000 on April 11, 2013; and
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Cash payment of $35,000 on April 11, 2014.
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In accordance with the Sol d’or Option Agreement Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000.
Stevens Lake Option Agreement
Effective April 13, 2010 the Company entered into a property purchase option agreement (the “Stevens Lake Option Agreement”) with Rubicon Minerals Corp. (“Rubicon”), whereby the Company is entitled to acquire up to 100% interest in three claims in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada, and to participate in the further exploration and development of the Property.
F-5
Considerations for the 100% interest in the nine claims are as follows:
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Initial cash payment of 7,000 (paid) and issuance of the Company’s common stocks valued at $20,000 (not issued);
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Cash payment of $12,000 and issuance of the Company’s common stocks valued at $20,000 on April 13, 2011;
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Cash payment of $15,000 and issuance of the Company’s common stocks valued at $20,000 on April 13, 2012;
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Cash payment of $20,000 and issuance of the Company’s common stocks valued at $20,000 on April 13, 2013; and
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Cash payment of $30,000 on April 13, 2014.
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In accordance with the Stevens Lake Option Agreement Rubicon retains a royalty of 2% of the net smelter returns, 50% of which the Company has the option to purchase with cash payment of $1,000,000.
Common Stocks Transactions
On April 19, 2010 Steve Rix, the officer and director of the Company, acquired a total of 30,000,000 shares of the Company’s common stock from Aaron Hall, the Company’s former officer and director, in a private transaction for approximately $2,000.
On April 27, 2010, the Company entered into a share cancellation agreement with Aaron Hall, whereby Mr. Hall agreed to return to the Company and cancel 66,750,000 shares of the common stocks held by him. The shares are to be returned to treasury by the Company.
F-6
Item2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common stock" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", and "our company" mean Big Bear Mining Corp., unless otherwise indicated.
General Overview
We were incorporated in the State of Nevada on April 14, 2005. We are engaged in the acquisition and exploration of mining properties. We maintain our statutory registered agent's office at Suite 304-2470 St. Rose Pkwy, Henderson, Nevada 89074 and our business office is located at 60 E Rio Salado Parkway, Suite 900, Tempe, Arizona 85281.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Our Current Business
We are an exploration stage resource company, and are primarily engaged in the exploration for and development in the properties in which we have acquired interests. On April 1, 2010 we entered into an option agreement with Perry English (for Rubicon Minerals Corporation) for a 100% interest in the Skinner and Shabu Lake properties (the "Property") located in the prolific Red Lake Mining Division of Northwestern Ontario, Canada. As per terms of the agreement we shall be required to make a total cash payment of $200,000 in order to acquire the 100% interest.
On April 11, 2010 we entered into a property interest purchase option agreement with Perry English for Rubicon Minerals Corp. for 100% interest in 9 claims totaling 4,104 acres in the Birch/Uchi portion of the Red Lake Mining Division. The group of claims are located in Honeywell and McNaughton Township. This group is host to the Sol d'or Mine.
-3-
On April 13, 2010, we entered into a property interest purchase option agreement with Perry English for Rubicon Minerals Corp. for 100% interest in 3 claims totaling 96 acres in the Birch/Uchi portion of the Red Lake Mining Division of Northwestern Ontario, Canada.
Results of Operations
Three month Summary ending March 31, 2010 and 2009
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Three Months Ended
March 31
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2010
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2009
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| Revenue | $ | Nil | Nil | |||||
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Expenses
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$ | 7,368 | $ | 6,881 | ||||
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Net Loss
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$ | (7,368 | ) | $ | (6,881 | ) | ||
Expenses
Our total expenses for the three month periods ended March 31, 2010 and March 31, 2009 are outlined in the table below:
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Three Months Ended
March 31
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2010
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2009
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General and administrative
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$ | 7,368 | $ | 6,881 | ||||
Expenses for the three months ended March 31, 2010, increased by 7.1% as compared to the comparative period in 2009 primarily as a result of an increase in general and administrative expenses.
Results of Operations
Revenue
We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter.
Equity Compensation
We currently do not have any stock option or equity compensation plans or arrangements.
Liquidity and Financial Condition
Working Capital
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At March 31,
2010
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At December 31,
2009
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Increase/ Decrease
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Current Assets
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$ | 251,499 | $ | 1,317 | $ | 250,182 | ||||||
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Current Liabilities
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$ | 20,335 | $ | 12,785 | $ | 7,550 | ||||||
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Working Capital (deficit)
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$ | 231,164 | $ | (11,468 | ) | $ | 242,632 | |||||
-4-
Cash Flows
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Three months Ended
March 31,
2010
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Three months Ended
March 31,
2009
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Net Cash Used in Operating Activities
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$ | (18 | ) | $ | (2,231 | ) | ||
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Net Cash Provided by Investing Activities
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$ | Nil | $ | Nil | ||||
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Net Cash Provided by Financing Activities
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$ | 250,200 | $ | Nil | ||||
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Net Increase in Cash During the Period
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$ | 250,182 | $ | (2,231 | ) | |||
For the next 12 months we plan to expend a total of approximately $660,000 in respect of our mineral properties in which we have an option to acquire.
We estimate that we will spend approximately $440,000 on general and administrative expenses, over the next 12 months.
We will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.
Specifically, we estimate our operating expenditure requirements for the next 12 months to be as follows:
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Estimated Funding Required During the Next 12 Months
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Expenditures
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Amount
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General and administrative
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$ | 440,000 | |
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Future property acquisitions
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$ | 400,000 | |
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Exploration costs
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$ | 200,000 | |
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Future exploration costs
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$ | 1,700,000 | |
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Property payments
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$ | 20,000 | |
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Total
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$ | 2,760,000 | |
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Cash on hand, March 31, 2010
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$ | 251,499 | |
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
Future Financings
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including approximately $2,508,501 over the next 12 months to pay for our ongoing expenses. These expenses include general and administrative, exploration costs, property payments and future property acquisitions. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.
We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
-5-
Effective March 31, 2010, we entered into a financing agreement with Intosh Services Limited, whereby we have the right to request Intosh to purchase up to $1,400,000 of our securities until March 31, 2011, unless extended by either our company or Intosh for an additional 12 months. Under the terms of the financing agreement, we may from time to time request a purchase from Intosh up to $200,000 per request to fund our company’s operating expenses, acquisitions, working capital and general corporate activities. Following receipt of any advance, we shall issue Intosh common stocks of our company at $0.70 per share.
Other than described above, we do not have any arrangements for additional financing for the expansion of our exploration operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Cash and Cash Equivalents
Our company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with ASC 830, ‘‘Foreign Currency Matters’’, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations.
-6-
Mineral Interest
Mineral property acquisition costs are capitalized in accordance with ASC 932. Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. To date our company has not established any reserves on our mineral properties.
Impairment of Long-Lived Assets
Our company reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in our company’s current business model. For purposes of recognition and measurement of an impairment loss, a long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.
Use of Estimates
The preparation of financial statements in conformity generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the period. Actual results may differ from those estimates.
Basic Loss per Share
Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period. The weighted average number of shares outstanding during the periods has been retroactively restated to reflect a forward stock split of 50 shares for 1 share, effective January 21, 2010.
Income Taxes
The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Our company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Recent Accounting Pronouncements
During the period ended March 31, 2010 and subsequently, the Financial Accounting Standards Board (“FASB”) has issued a number of financial accounting standards, none of which did or are expected to have a material impact on the Company’s results of operations, financial position, or cash flows.
Item 3. Quantitative Disclosures About Market Risks
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item4. Controls and Procedures.
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
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As of March 31, 2010, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during our quarter ended March 31, 2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II - OTHER INFORMATION
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Item1. Legal Proceedings.
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We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors
Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".
Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.
We need to continue as a going concern if our business is to succeed, if we do not we will go out of business.
Our registered public accounting firm’s report to our audited financial statements for the year ended December 31, 2009 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.
Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations.
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If we do not obtain additional financing, our business will fail.
Our current operating funds are less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan. As of March 31, 2010 we had cash in the amount of $251,499. We currently have minimal operations and we have no income.
Our business plan calls for significant expenses in connection with the exploration of the property. We do not currently have sufficient funds to conduct initial exploration on the property and require additional financing in order to determine whether the property contains economic mineralization. We will also require additional financing if the costs of the exploration of the property are greater than anticipated.
We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market prices for copper, silver and gold, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. The only other anticipated alternative for the financing of further exploration would be our sale of a partial interest in the property to a third party in exchange for cash or exploration expenditures, which is not presently contemplated.
Because we have commenced limited business operations, we face a high risk of business failure.
We are preparing to commence exploration on a property in the summer of 2010. Accordingly, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on April 14, 2005 and have been involved primarily in organizational activities and the acquisition of our mineral property. We have not earned any revenues as of the date of this prospectus.
Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from development of the mineral claims and the production of minerals from the claims, we will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
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We lack an operating history and we expect to have losses in the future.
We have not started our proposed business operations or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon the following:
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Our ability to locate a profitable mineral property;
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Our ability to generate revenues; and
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Our ability to reduce exploration costs.
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Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
We have no known ore reserves and we cannot guarantee we will find any gold or if we find gold, that production will be profitable. Even if we are successful in discovering gold or other mineralized material we may not be able to realize a profit from its sale. If we cannot make a profit, we may have to cease operations.
We have no known ore reserves. We have not identified any gold on the mineral claims and we cannot guarantee that we will ever find any gold. The report we reviewed in selecting the mineral claims for exploration are old and may be out of date. Even if we find that there is gold on our mineral claims, we cannot guarantee that we will be able to recover the gold. If we cannot find gold or it is not economical to recover the gold, we will have to cease operations.
Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.
The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material. If we do not find mineralized material, we will cease operations.
Because we are small and do not have much capital, we must limit our exploration. Because we may have to limit our exploration, we may not find mineralized material, although our mineral claims may contain mineralized material. If we do not find mineralized material, we will cease operations.
If we become subject to onerous government regulation or other legal uncertainties, our business will be negatively affected.
There are several governmental regulations that materially restrict mineral property exploration and development. Under Ontario mining law, to engage in certain types of exploration will require work permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. While these current laws do not affect our current exploration plans, if we proceed to commence drilling operations on the mineral claims, we will incur modest regulatory compliance costs.
In addition, the legal and regulatory environment that pertains to the exploration of ore is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for ore deposits. The growth of demand for ore may also be significantly slowed. This could delay growth in potential demand for and limit our ability to generate revenues. In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been applied. These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed.
We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations.
Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
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Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals.
We plan to continue to source exploration mineral claims. The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that additional exploration on our properties will establish that additional commercially exploitable reserves of gold exist on our properties Problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and often result in exploration efforts being unsuccessful. The additional potential problems include, but are not limited to, unanticipated problems relating to exploration and attendant additional costs and expenses that may exceed current estimates. These risks may result in us being unable to establish the presence of additional commercial quantities of ore on our mineral claims with the result that our ability to fund future exploration activities may be impeded.
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934, which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. In particular, prior to selling a penny stock, broker/dealers must give the prospective customer a risk disclosure document that: contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; contains a description of the broker/dealers' duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of Federal securities laws; contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask prices; contains the toll free telephone number for inquiries on disciplinary actions established pursuant to section 15(A)(i); defines significant terms used in the disclosure document or in the conduct of trading in penny stocks; and contains such other information, and is in such form (including language, type size, and format), as the SEC requires by rule or regulation. Further, for sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement before making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
We have no known ore reserves and we cannot guarantee we will find any gold or if we find gold, that production will be profitable.
We have no known ore reserves. We have not identified any gold on the property and we cannot guarantee that we will ever find any gold. We did not rely upon any expert advice in selecting the property for the exploration. Even if we find that there is gold on our property, we cannot guarantee that we will be able to recover the gold. Even if we recover the gold, we cannot guarantee that we will make a profit. If we cannot find gold or it is not economical to recover the gold, we will have to cease operations.
Rain and snow may make the road leading to our property impassable. This will delay our proposed exploration operations and could prevent us from working.
While we plan to conduct our exploration year round, it is possible that snow or rain could cause roads leading to our claims to be impassable. When roads are impassable, we are unable to work.
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Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material. If we do not find mineralized material, we will cease operations.
Because we are small and do not have much capital, we must limit our exploration. Because we may have to limit our exploration, we may not find mineralized material, although our property may contain mineralized material. If we do not find mineralized material, we will cease operations.
As we face intense competition in the mining industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees.
The mining industry is intensely competitive in all of its phases. Competition includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified employees, our exploration and development programs may be slowed down or suspended.
Trading of our stock may be restricted by the SEC's Penny Stock Regulations which may limit a stockholder's ability to buy and sell our stock.
The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.
Anti-Takeover Provisions
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
Our By-laws contain provisions indemnifying our officer and directors against all costs, charges and expenses incurred by them.
Our By-laws contain provisions with respect to the indemnification of our officer and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officer.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. [Removed and Reserved]
Item 5. Other Information
On April 27, 2010, we entered into a share cancellation/return to treasury agreement with Aaron Hall, our former officer and director. Pursuant to the agreement, Mr. Hall has agreed to the return and cancel of 66,750,000 shares of our common stock currently held by him. Post cancellation, Mr. Hall continues to hold 250,000 shares of common stock. As at the date of filing of this quarterly report, the shares have been delivered to our transfer agent for cancellation but have not yet been recorded as cancelled.
Item 6. Exhibits.
Exhibits required by Item 601 of Regulation S-K
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Exhibit Number
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Description
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(3)
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Articles of Incorporation and Bylaws
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3.1
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Articles of Incorporation (incorporated by reference from our SB-2 Registration Statement filed March 17, 2006).
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3.2
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Bylaws (incorporated by reference from our SB-2 Registration Statement filed March 17, 2006).
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(10)
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Material Contracts
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10.1
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Financing Agreement between Big Bear Mining Corp. and Intosh Services Limited, dated March 31, 2010 (incorporated by reference from our Current Report on Form 8-K filed April 8, 2010)
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10.2
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Share Cancellation/Return to Treasury Agreement with Aaron Hall dated April 27, 2010 (incorporated by reference from our Current Report on Form 8-K filed April 20, 2010)
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10.3
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Sol d’or Purchase Option Agreement between Big Bear Mining Corp. and Perry Vern English for Rubicon Minerals Corp., dated, April 14, 2010 (incorporated by reference from our Current Report on Form 8-K filed April 23, 2010)
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10.4
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Stevens Lake Purchase Option Agreement between Big Bear Mining Corp. and Perry Vern English for Rubicon Minerals Corp., dated, April 19, 2010 (incorporated by reference from our Current Report on Form 8-K filed April 23, 2010)
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(31)
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Rule 13a-14(d)/15d-14(d) Certifications
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31.1*
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Section 302 Certification of Principal Executive Officer and Principal Financial Officer.
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(32)
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Section 1350 Certifications
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32.1*
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Section 906 Certification of Principal Executive Officer and Principal Financial Officer.
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* Filed herewith
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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.
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BIG BEAR MINING CORP.
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(Registrant)
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Dated: May 20, 2010
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/s/ Steve Rix
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Steve Rix
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President, Treasurer, Secretary and Director
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(Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)
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