SOMBRIO CAPITAL CORP - FORM 10-Q

Attached files

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EX-31.1 - SOMBRIO CAPITAL CORP 10Q, CERTIFICATION 302 - SOMBRIO CAPITAL CORP	sombrioexh31_1.htm
EX-32.1 - SOMBRIO CAPITAL CORP 10Q, CERTIFICATION 906 - SOMBRIO CAPITAL CORP	sombrioexh32_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the quarterly period ended July 31, 2010

o Transition Report Under Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the transition period from _____ to _____

COMMISSION FILE NUMBER 000-52667

SOMBRIO CAPITAL CORP.

(Exact name of registrant as specified in its charter)

NEVADA	98-0533822
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

311 Tawny Road, Sarnia, Ontario, Canada, N7S 5K1

(Address of principal executive offices, including zip code)

519-542-1229

(Issuer’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 7,187,498 shares of common stock as of September 8, 2010

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

The following consolidated interim unaudited financial statements of Sombrio Capital Corp. (the “Company”) for the three month period ended July 31, 2010 are included with this Quarterly Report on Form 10-Q:

(a)	Consolidated Balance Sheets as at July 31, 2010 and October 31, 2009.

(b)	Consolidated Statement of Operations for (i) the three months ended July 31, 2010 and 2009, (ii) for the nine months ended July 31, 2010 and 2009, and (iii) the cumulative period from inception (March 31, 2006) to July 31, 2010.

(c)	Consolidated Statements of Cash Flows for (i) the nine months ended July 31, 2010 and 2009, and (ii) the cumulative period from inception (March 31, 2006) to July 31, 2010.

(d)	Statement of Stockholders’ Equity for the period from incorporation (March 31, 2006) to July 31, 2010.

(e)	Notes to Financial Statements.

SOMBRIO CAPITAL CORPORATION
(An Exploration Stage Company)
BALANCE SHEETS
as at July 31, 2010 (unaudited) and October 31, 2009
(Stated in U.S. dollars)

	July 31,			October 31,
	2010			2009
	(Unaudited)
ASSETS
Current
Cash	$	2,186		$	62

	$	2,186		$	62

LIABILITIES
Current
Accounts Payable		11,513			-

Non current
Loan Payable		26,221			10,050

		37,734			10,050


STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
5,000,000 preferred stock with a par value of $0.001
per share, of which none are issued and outstanding;
100,000,000 common voting stock with a par value of
$0.001 per share
Issued and outstanding:
7,187,498 common shares outstanding as at July 31,
2010 and October 31, 2009		7,188			7,188
Additional Paid-In Capital		116,122			116,122
Accumulated Other Comprehensive Income		1,683			1,683
Deficit Accumulated During The Exploration Stage		(160,541	)		(134,981	)

		(35,548	)		(9,988	)

	$	2,186		$	62

See accompanying notes to interim financial statements.

SOMBRIO CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)

													Cumulative
													Period from
													Inception
													March 31,
	For the Three Months Ended						For the Nine Months Ended						2006 to
	July 31,						July 31,						July 31,
	2010			2009			2010			2009			2010

Revenue				$	-		$	-		$	-		$	-

Expenses
Mining Lease	$	10,756		$	-		$	15,757		$	-		$	15,756
Exploration Expenses					-						-			17,052
Filing Fees		1,331			703			3,274			5,769			16,447
Professional Fees		2,203			1,000			6,421			11,545			81,403
Transfer Agent fees					-						-			19,466
General and Administrative		36			552			108			1,023			8,504

		14,326			2,255			25,560			18,337			158,628

Operating Loss		(14,326	)		(2,255	)		(25,560	)		(18,337	)		(158,628	)
Write Down of Mineral Property		-			-			-			-			3,596

Net Loss For The Period		(14,326	)		(2,255	)		(25,560	)		(18,337	)		(162,224	)

Other Comprehensive Loss
Foreign currency translation adjustment		-			-			-			940			1,683

Total Comprehensive Loss	$	(14,326	)	$	(2,255	)	$	(25,560	)	$	(17,397	)	$	(160,541	)

Basic and Diluted Loss Per share	$	(0.002	)	$	(0.000	)	$	(0.004	)	$	(0.002	)

Weighted Average Number
Of common Shares Outstanding		7,187,498			7,187,498			7,187,498			7,187,498

See accompanying notes to interim financial statements.

SOMBRIO CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)

							Cumulative
							Period
							from
							Inception
							March 31,
	For the Nine Months Ended						2006 to
	July 31,						July 31,
	2010			2009			2010

Cash flows (Used In) operating activities:
Net loss for the period	$	(25,560	)	$	(18,337	)	$	(160,541	)
Change in non-cash operating working capital items
Accounts payable and accrued liabilities		11,513			-			11,513
Write down of mineral properties								3,596
		(14,047	)		(18,337	)		(145,432	)

Cash flows provided by investing activities
Mineral property acquisition costs								(3,596	)

Cash flows privided by financing activities:
Stock issued for cash		-			-			123,310
Proceeds of loans		16,171			8039			26,221
Other
		16,171			8,039			149,531

Foreign Exchange Effect on Cash		-			940			1,683

Net increase (decrease) in cash		2,124			(9,358	)		2,186

Cash, beginning of the period		62			9,479			-

Cash, end of the period	$	2,186		$	121		$	2,186

Supplemental disclosure of cash flow:
Cash paid during the period for:
Interest	$	-		$	-
Taxes	$	-		$	-

See accompanying notes to interim financial statements.

SOMBRIO CAPITAL CORPORATION
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period from March 31, 2006 (Inception) to July 31, 2010
(Stated in U.S. Dollars)
(Unaudited)

									Accumulated			Accumulated
									Other			Deficit			Total
							Additional		Compre-			during the			Shareholders'
	Common Stock						Paid-In		hensive			Development			Equity
	Shares			Amount			Capital		Income (Loss)			Stage			(Deficit)

Inception, March 31, 2006		-		$	-		$	-	$	-		$	-		$	-
May 31, 2006 - Stock issued
for cash at $0.001		5,000,000			5,000											5,000
July 13, 2006 - Stock issued
for cash at $0.03		999,999			1,000			29,000								30,000
September 23, 2006 - Stock
issued for cash at $0.06		760,999			761			44,899								45,660
Foreign currency translation										(178	)					(178	)
Net Loss for the period													(11,648	)		(11,648	)

Balances, October 31, 2006		6,760,998		$	6,761		$	73,899	$	(178	)	$	(11,648	)	$	68,834

December 31, 2006 - Stock
issued for cash at $0.10		418,500			419			41,431								41,850
April 16, 2007 - Stock
issued for cash at $0.10		8,000			8			792								800
Foreign currency traslation										878						878
Net loss for the year													(57,724	)		(57,724	)

Balances, October 31, 2007		7,187,498		$	7,188		$	116,122	$	700		$	(69,372	)	$	54,638

Foreign currency traslation										43						43
Net loss for the year													(54,239	)		(54,239	)

Balances, October 31, 2008		7,187,498		$	7,188		$	116,122	$	743		$	(123,611	)	$	442

January 7, 2009 - Stock cancelled
returned to Treasury		(5,000,000	)		(5,000	)										(5,000	)
January 7, 2009 - Stock issued
for cash at $0.001 per share		5,000,000			5,000											5,000
Foreign currency traslation										940						940
Net loss for the year													(11,370	)		(11,370	)

Balances, October 31, 2009		7,187,498		$	7,188		$	116,122	$	1,683		$	(134,981	)	$	(9,988	)

Net loss for the 9 months ended
July 31, 2010													(25,560	)		(25,560	)

Balances, July 31, 2010		7,187,498		$	7,188		$	116,122	$	1,683		$	(160,541	)	$	(35,548	)

See accompanying notes to interim financial statements.

SOMBRIO CAPITAL CORP.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

JULY 31, 2010

(Stated in U.S. Dollars)

1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS

These unaudited interim financial statements as of and for the nine months ended July 31, 2010 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end October 31, 2009 report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine month period ended July 31, 2010 are not necessarily indicative of results for the entire year ending October 31, 2010.

Organization

Sombrio Capital Corp. (“the Company”) was incorporated in the State of Nevada, U.S.A., on March 31, 2006. The Company’s principal executive offices are in Sarnia, Ontario, Canada.

Exploration Stage Activities

The Company was formed for the purpose of acquiring exploration and development stage natural resource properties. The Company is an exploration stage company as defined in the Securities and Exchange Commission (“S.E.C.”) Industry Guide No. 7. The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. In 2006, the Company acquired an undivided 100% interest in a mineral claim known as “Lincoln 1” located in the Province of British Columbia. The lease was abandoned in 2008. In 2010 the company signed a lease on five lode mining claims in Elko County Nevada, which became effective April 20, 2010.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As shown in the accompanying financial statements, for the period from March 31, 2006 (inception) to July 31, 2010, the Company had no revenue and incurred net operating losses aggregating $160,541. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of natural resource properties. Management has plans to seek additional capital through debt, and private and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.

The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

	a)	Organization and Start-up Costs

		Costs of start up activities, including organizational costs, are expensed as incurred.

	b)	Mineral Property Interests

		The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 360, (“FAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets”, when facts and circumstances indicate impairment may exist.

		The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. Also, long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.

		Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a production mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project. The Company does not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.

	b)		Mineral Property Interests (Continued)

			If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.

			The Company’s business activities are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

			The accumulated costs of properties that are developed on the stage of commercial production will be amortized to operations through unit-of-production depletion if and when revenue is generated from the Company’s business activities.

	c)		Financial Instruments

			The Company’s financial instruments consist of cash, and accounts payable and accrued liabilities.

			Unless otherwise noted, it is management’s opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

	d)		Basic and Diluted Loss Per Share

			Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

			The Company has no potentially dilutive securities outstanding as of April 30, 2010.

			The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the nine months ended July 31, 2010 30, 2010 and 2009:

	2010			2009
Numerator:
Basic and diluted net loss per share:
Net Loss	$	(25,560	)	$	(17,397	)

Denominator

Basic and diluted weighted average number of shares outstanding		7,187,498			7,187,4698

Basic and Diluted Net Loss Per Share	$	(0.004	)	$	(0.002	)

e)	Foreign Currency Translation

	The Company’s functional currency is the Canadian dollar. Transactions in Canadian currency are translated into U.S. dollars as follows:

	i)	monetary items at the exchange rate prevailing at the balance sheet date;
	ii)	non-monetary items at the historical exchange rate;
	iii)	revenue and expense at the average rate in effect during the applicable accounting period.

	Translation adjustments resulting from this process are recorded in Stockholders’ Equity as a component of Accumulated Other Comprehensive Income (Loss).

	Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are recorded in the Statement of Operations.

f)	Use of Estimates

	The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates.

g)	Impairment of Long-Lived Assets

	In accordance with FASB ASC Topic 360, (“FAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such cases, the amount of the impairment is determined based on the relative fair values of the impaired assets.

3. MINERAL PROPERTY

During 2006, the Company acquired an undivided 100% interest in a mineral claim (known as the “Lincoln 1”) located in the Province of British Columbia for $3,596.

The Company ceased work on the claim. The property was fully written down and abandoned as at the fiscal year ended October 31, 2008.

The company signed a lease on five lode mining claims in Elko County Nevada, which became effective April 20, 2010. The lease requires minimum annual lease payments, escalating according to schedule, applied to a 1.5% royalty on net smelter returns. The Company has the right to buy out the royalty for $5,000,000, which is mandatory by the 7th anniversary of the lease. The lease requires the Company to pay all regulatory mining claim maintenance or rental fees.

4. RECENT ACCOUNTING PRONOUNCEMENTS

The following Recent Accounting Pronouncements are disclosed as they may be applicable to the Company:

In May, 2009, the FASB issued ASC 855, Subsequent Events, which established general standards of accounting and disclosure for events that occur after the balance sheet date, but before financial statements are issued or available to be issued. In accordance with ASC 855, the Company has evaluated subsequent events through the date the financial statements were filed.

In June, 2009, the FASB issued their final SFAS, No. 168, “FASB Accounting Standards Codification ( “ASC”) and the Hierarchy of Generally Accepted Accounting Principles”. This was reflected in the codification as FASB ASC 105, Generally Accepted Accounting Principles. “ASC” is the single source of authoritative US generally accepted accounting principles recognized by the FASB to be applied to nongovernmental entities. It is effective for financial statements issued for interim and annual periods ending after September 15, 2009. It will not have an impact on the Company’s financial position, results of operations or cash flows.

5. CAPITAL STOCK

On May 31, 2006 the company sold 5,000,00 shares of common stock at $0.001 per share for cash.

On July 13, 2006 pursuant to a private placement, the Company sold 999,999 shares of common stock at $0.03 per share for cash.

On September 23, 2006, pursuant to a private placement, the Company sold 760,999 shares of common stock at $0.06 per share for cash.

On December 31, 2006, pursuant to a private placement, the Company sold 418,500 shares of common stock at $0.10 per share.

On April 16, 2007, pursuant to a private placement, the Company sold 8,000 shares of common stock for $0.10 per share.

On January 7, 2009, 5,000,000 shares were cancelled and returned to Treasury.

On January 7, 2009, pursuant to a private placement, the Company sold 5,000,000 shares of common stock for $0.001 pr share.

As at April 30, 2010, the Company has no option plan, warrants or other dilutive securities.

As at April 30, 2010, the Company has authorized 100,000,000 shares of common stock with a par value of $0.001, of which 7,187,498 shares were issued and outstanding.

6. INCOME TAXES

	a)	Income Tax Provision

		The provision for income taxes differs from the result which would be obtained by applying the statutory income tax rate of 34% ( 2009 – 34%) to income before income taxes. The difference results from the following items for the fiscal years ended October 31, 2009 and 2008:

	2009			2008
Computed expected (benefit of) income taxes	$	(22,046	)	$	(18,500	)
Increase in valuation allowance		22,046			18,500
Income tax provision	$	0		$	0

Significant components of the Company’s deferred income tax assets are as follows:

	2009			2008
Deferred income tax assets	$	45,546		$	42, 000
Valuation allowance		(45,546	)		(42,000	)
Net deferred income tax assets	$	0		$	0

The Company has incurred operating losses of approximately $134,000 which if unutilized, expire in 2029, Subject to certain restrictions, the Company has mineral property and exploration expenditures of $32,808 available to reduce future taxable income. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have not been recognized in these financial statements, and have been offset by a valuation allowance. The following table lists the fiscal year in which the loss was incurred and the expiation date of the operating loss carry forwards:

	INCOME TAX OPERATING
	LOSS CARRY FORWARD
			EXPIRATION
	AMOUNT		DATE
2009	$	10,430		2029
2008		54,000		2028
2007		58,000		2027
2006		12,000		2026
Total income tax operation loss carry forward	$	134,430

7. CHANGE IN CONTROL

On December 30, 2008 Derek Page voluntarily resigned as Chief Executive Officer, Chief financial Officer and Secretary of the Company. Ken MacAlpine was appointed in his place. Ken MacAlpine was appointed to the Board of Directors, whereupon Derek Page resigned as director.

On January 7, 2009 the 5,000,000 shares controlled by Derek Page through 644822 British Columbia Ltd. were cancelled and returned to Treasury. On the same date Ken MacAlpine purchased 5,000,000 shares at $0.001 per share through his owned and controlled corporation KIF Capital Corporation, representing approximately 69.5% of the total outstanding number of shares of common stock of the Company.

8. FINANCIAL COMMITMENT

The Company is required under the active mining lease in Elco County, Nevada to pay minimum payments for the next five years as follows:

Fiscal year ended October 31,

2010	$	5,000	Paid
2011		7,500
2012		10,000
2013		10,000
2014		25,000
	$	57,500

9. CONTINGENCIES, LITIGATION

There were no loss contingencies or legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.

Item 2. Management’s Discussion and Analysis of Financial condition and Results of Operations

THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and predictions. We are an exploration stage company and have not yet generated or realized any revenues.

Overview

We were incorporated as Sombrio Capital Corp. under the laws of Nevada on March 31, 2006. We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We currently hold a lease on five (5) unpatented lode mineral claims that we refer to as the Enright Hill Prospect. Further exploration of these mineral claims is required before a final determination as to their viability can be made. Although exploratory work on the claims conducted prior to our obtaining a lease on the property has indicated some potential showings of mineralization, we are uncertain as to the potential existence of a commercially viable mineral deposit existing in these claims.

Our plan of operations is to carry out exploration work on these claims in order to ascertain whether they possess commercially exploitable quantities of gold, silver, copper or any other valuable minerals. We will not be able to determine whether or not our mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.

We have not, nor has any predecessor, identified any commercially exploitable reserves of these minerals on our mineral claims. We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on our mineral claims. After acquiring a lease on the Enright Hill Prospect, we retained the services of David Wolfe, Consulting Geologist. Mr. Wolfe prepared a technical report for us on the mineral exploration potential of the claims. Included in this report is a recommended exploration program which consists of trenching, mapping and sampling and drilling.

We have no revenues, have achieved losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. Accordingly, we will be dependent on future additional financing in order to maintain our operations and continue seeking new business opportunities.

Our Plan of Operations

Our business plan is to proceed with the exploration of the Enright Hill Prospect mineral claims to determine whether there are commercially exploitable reserves of gold, silver or other metals.

1. We plan to complete phase one of our exploration program recommended by David Wolfe, our Consulting Geologist, on our Enright Hill Prospect mineral claims. Phase one will consist of detailed mapping and geochemical sampling of the claims and target areas near the top of Enright Hill to better define the gold-silver mineralization. Phase one is estimated to cost approximately $5,200. We have commissioned David Wolfe to carry out this phase of our exploration program in September of 2010 and expect to have results in late October 2010. We currently do not have sufficient cash reserves to proceed with this phase of the exploration program, and plan to fund this phase through a loan from our president Mr. MacAlpine.

2. We plan to complete phase two of our exploration program on our Enright Hill mineral claims. Phase two will consist of further detailed mapping and geochemical sampling of the claims. and is estimated to cost approximately $10,500. We expect to commence this second phase of our exploration program in November of 2010, depending on the availability of our consulting geologist. The company currently does not have sufficient cash reserves to proceed with this phase of its exploration program. However the company’s President Mr. MacAlpine has agreed to lend the company enough cash to proceed with this phase of the exploration program.

3. If warranted by the results of phase three, we intend to proceed with phase three of our recommended exploration program. Phase three is estimated to cost $18,850 and will be comprised of drill hole planning, staking and permitting. The company currently does not have sufficient cash reserves to proceed with this phase of its exploration program.

During the exploration stage of the Enright Hill Prospect, our President will be devoting approximately 8 hours per week of his time to our business. We do not foresee this limited involvement as negatively impacting our company over the next twelve months as all exploratory work is being performed by outside consultants. If, however, the demands of our business require more time of our president such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, he is prepared to adjust his timetable to devote more time to our business. However, he may not be able to devote sufficient time to the management of our business, as and when needed.

Our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail. As an exploration stage company, we are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our company may have difficulties raising capital until we locate a prospective property through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

We incurred operating losses in the amount of $158,628 from inception on March 31, 2006 through the period ended July 31, 2010. These operating expenses were composed of exploration expenses, professional fees, and other administrative expenses.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report on our audited financial statements that they have substantial doubt we will be able to continue as a going concern.

Financings

Our operations to date have been funded by equity investment. All of our equity funding has come from a private placement of our securities We completed an offering of 5,000,000 shares of our common stock at a price of $0.001 per share to Mr. Derek Page, a former director and officer, on March 31, 2006, for total proceeds of $5,000. We completed this offering pursuant to Section 4(2) of the Securities Act.

We completed an offering of 999,999 shares of our common stock at a price of $0.03 per share to a total of five purchasers on July 13, 2006. The total proceeds from this offering were $30,000. We completed this offering pursuant to Rule 903 of Regulation S of the Securities Act

We completed an offering of 760,999 shares of our common stock at a price of $0.06 per share to a total of 13 purchasers on September 23, 2006 for total proceeds of $45,660. We completed this offering pursuant to Rule 903 of Regulation S of the Securities Act.

We completed an offering of 426,500 shares of our common stock at a price of $0.10 per share to a total of 30 purchasers on December 31, 2006 and April 16, 2007 for total proceeds of $42,650. Of these shares, 418,500 were issued on December 31, 2006 and 8,000 were issued on April 26, 2007. We completed this offering pursuant to Rule 903 of Regulation S of the Securities Act.

On January 7, 2009, we completed an offering of 5,000,000 shares of its common stock at a price of $0.001 per share to KIF Capital Corp. (“KIF”). KIF is a private company owned and controlled by Ken MacAlpine, a director and officer of the Company. The total amount the Company received from this offering was $5,000. The Company completed the offering pursuant to Regulation S under the Securities Act of 1933.

Off-Balance Sheet Arrangements

We have no significant 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

N/A

Item 4. Controls and Procedures.

As of the end of the period covered by this Report, the Company’s President, and principal financial officer (the “Certifying Officer”), evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, the officer concluded that, as of the date of the evaluation, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in the Company’s periodic filings under the Securities Exchange Act of 1934 is accumulated and communicated to management to allow timely decisions regarding required disclosure.

The Certifying Officer has also indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses.

Our management, including the Certifying Officer, does not expect that our disclosure controls or our internal controls will prevent all errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the

individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Item 4(t). Controls and Procedures.

The information required pursuant to item 4(t) has been provided in Item 4.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1(a). Risk Factors

There have been no changes to our risk factors from those disclosed in our Post-Effective Amendment No. 1 to Form SB-2/A on Form S-1 filed on May 24, 2010.

Item 2. Unregistered Sales of Equity Securities

We did not issue any securities without registration pursuant to the Securities Act of 1933 during the three months ended July 31, 2010.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Securities Holders

No matters were submitted to our security holders for a vote during the quarter of our fiscal year ending July 31, 2010.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements 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.

SOMBRIO CAPITAL CORP.

By: /s/ Ken MacAlpine

Ken MacAlpine, President,

Chief Executive Officer and

Chief Financial Officer Director

Date: September 8, 2010

SOMBRIO CAPITAL CORP - FORM 10-Q - September 8, 2010

Attached files

SOMBRIO CAPITAL CORP Reports