Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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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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FOR THE QUARTERLY PERIOD ENDED JULY 31, 2010
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number 333-156368
BEARING MINERAL EXPLORATION, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
92 Wishing Well Drive
Toronto, Ontario
CANADA, M1T 1J4
(Address of principal executive offices, including zip code.)
(416) 816-6219
(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 last 90 days.
YES [ X ] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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 [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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 [ ]
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 5,968,750 as of September 9, 2010.
PART I – FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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Balance Sheets (Unaudited)
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F-2
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Statements of Expenses (Unaudited)
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F-3
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Statements of Cash Flows (Unaudited)
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F-4
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Notes to Financial Statements
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F-5
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Bearing Mineral Exploration, Inc.
(An Exploration Stage Company)
Balance Sheet (Unaudited)
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July 31,
2010
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October 31,
2009
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ASSETS
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Current Assets
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Cash
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$ | 2,650 | $ | 16,399 | ||||
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Prepaid Expense
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- | 498 | ||||||
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Total Assets
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$ | 2,650 | $ | 16,897 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current Liabilities
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Accounts payable
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3,544 | 129 | ||||||
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Accrued liabilities
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- | 5,000 | ||||||
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Advance from shareholder
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25,000 | 15,000 | ||||||
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Total Liabilities
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$ | 28,544 | $ | 20,129 | ||||
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Stockholders’ Equity
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Common stock
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75,000,000 shares authorized, with a $0.001 par value,
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5,968,750 shares issued and outstanding
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$ | 5,969 | $ | 5,969 | ||||
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Additional paid-in capital
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35,044 | 35,044 | ||||||
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Deficit accumulated during exploration stage
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(66,907 | ) | (44,245 | ) | ||||
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Total Stockholders’ Equity
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(25,894 | ) | (3,232 | ) | ||||
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Total Liabilities and Stockholders’ Equity
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$ | 2,650 | $ | 16,897 | ||||
The accompanying notes are an integral part of these financial statements
F-2
Bearing Mineral Exploration, Inc.
(An Exploration Stage Company)
Statement of Expenses (Unaudited)
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Three Months
Ended
July 31,
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Nine Months
Ended
July 31,
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For the period from June 11, 2008
(date of inception)
to July 31,
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2010
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2009
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2010
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2009
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2010
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EXPENSES
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General and administrative expenses
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$ | 4,756 | $ | 4,244 | $ | 22,662 | $ | 24,059 | $ | 62,111 | ||||||||||
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Mineral property costs
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- | 1,514 | - | 1,514 | 4,796 | |||||||||||||||
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Total Expenses
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4,756 | 5,758 | 22,662 | 25,573 | 66,907 | |||||||||||||||
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Net Loss
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$ | (4,756 | ) | $ | (5,758 | ) | $ | (22,662 | ) | $ | (25,573 | ) | $ | (66,907 | ) | |||||
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Loss Per Share:
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Basic and Diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
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Weighted Average Number of
Shares Outstanding
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Basic and Diluted
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5,968,750 | 5,968,750 | 5,968,750 | 5,968,750 | ||||||||||||||||
The accompanying notes are an integral part of these financial statements
F-3
Bearing Mineral Exploration, Inc.
(An Exploration Stage Company)
Statements of Cash Flows (Unaudited)
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Nine Months Ended
July 31,
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For the Period From
June 11, 2008
(date of inception)
to July 31,
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2010
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2009
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2010
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CASH FROM OPERATING ACTIVITIES:
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Net loss
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$ | (22,662 | ) | $ | (25,573 | ) | $ | (66,907 | ) | |||
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Changes in operating assets and liabilities
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Accounts payable and accrued liabilities
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(1,585 | ) | (7,748 | ) | 3,544 | |||||||
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Prepaid expenses
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498 | - | - | |||||||||
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Net Cash Used in Operating Activities
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(23,749 | ) | (33,321 | ) | (63,363 | ) | ||||||
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CASH FROM FINANCING ACTIVITIES:
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Net advances from shareholder
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10,000 | 4,492 | 25,000 | |||||||||
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Proceeds from issuance of common stock
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- | - | 41,013 | |||||||||
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Net Cash from Financing Activities
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10,000 | 4,492 | 66,013 | |||||||||
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Net increase (decrease) in Cash
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(13,749 | ) | (28,829 | ) | 2,650 | |||||||
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Cash, Beginning
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16,399 | 38,117 | – | |||||||||
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Cash, Ending
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$ | 2,650 | $ | 9,288 | $ | 2,650 | ||||||
The accompanying notes are an integral part of these financial statements
F-4
Bearing Mineral Exploration, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
July 31, 2010
1. Basis of Financial Statement Presentation
The accompanying unaudited interim financial statements of Bearing Mineral Exploration, Inc. 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, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2009 Annual Financial Statements 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 period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period ended October 31, 2009, as reported in the Form 10-K, have been omitted.
2. Recent Issued Accounting Pronouncements
In January 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-06, which requires additional fair value disclosures. This guidance requires reporting entities to disclose transfers in and out of Levels 1 and 2 and requires gross presentation of purchases, sales, issuances and settlements in the Level 3 reconciliation of the three-tier fair value hierarchy. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements related to Level 3 activity. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The guidance on transfers between Levels 1 and 2 is effective for the Company as of its third fiscal quarter ended July 31, 2010. The guidance on Level 3 activity is effective for the Company’s fiscal year beginning November 1, 2011. The Company is currently evaluating the impact the adoption will have on its financial position and results of operations.
In February 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-09 regarding subsequent events disclosure. This guidance updates ASC topic 855, “Subsequent Events” (formerly SFAS No. 165, “Subsequent Events”) and clarifies that an entity that is a Securities and Exchange Commission filer is not required to disclose the date through which subsequent events have been evaluated. This guidance was effective upon issuance, and the Company adopted the provisions effective with the preparation of its financial statements for the nine months ended July 31, 2010.
3. Going Concern
As of July 31, 2010, the Company has never generated any revenues and has accumulated losses of $66,907 since inception. The Company has limited cash resources and will likely require new financing, either through issuing shares or debt, to continue the development of its business. Management intends to offer additional common stock; however, there can be no assurance that management will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
F-5
Bearing Mineral Exploration, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
July 31, 2010
4. Related Party Transactions
As of July 31, 2010, our President had advanced an aggregate of $25,000 to the Company for additional working capital. The amount advanced is unsecured, non-interest bearing and due on demand.
F-6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to “common shares” refer to the common shares in our capital stock.
As used in this quarter report the terms “we”, “us”, “our”, and the “Company” means Bearing Mineral Exploration, Inc., unless otherwise indicated.
General
We were incorporated in the State of Nevada on June 11, 2008. We are a start –up, exploration stage corporation and have not yet realized any revenues from our business operations. Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues from our business operations and we expect to generate operating losses during some or all of our planned development stages, which raises substantial doubt about our ability to continue as a going concern. Accordingly, we will need to raise cash from sources other than internal revenues.
Our original plan of operation was to conduct exploration activities on one mineral claim located in the Province of Newfoundland, Canada; herein referred to as the Collins Lake property. Our exploration target was to find an ore body containing gold. To date we have not performed any work on the property. We have not yet generated or realized any revenues from our business operations.
We had cash resources of $2,650 and total liabilities of $28,544 for a working capital deficit of $25,894 as at July 31, 2010. We currently do not have sufficient funds to continue with our exploration program as we will continue to incur administrative and professional charges associated with preparing, reviewing, auditing and filing our financial statements and our periodic and other disclosure documents. During the period, our President decided that it was in our best interest to forfeit title to the Collins Lake property due to our inability to commence exploration work on a timely basis and due to the costly fees associated with maintaining title to the claim. Alternatively, we have been exploring new business opportunities.
Plan of Operations
Our plan of operation for the next three months will be to explore other business opportunities although to date, we have not identified any new business opportunities and have no agreements related to such opportunities. It is the intent of the Company to: (i) consider guidelines of industries in which the Company may have an interest; (ii) adopt a business plan regarding engaging in business in any selected industry; and (iii) to commence such operations through funding and/or the acquisition of a “going concern” engaged in any industry selected.
Any new business opportunities will likely require additional capital. We do not believe we have sufficient funds to meet our cash requirements for the next twelve months. We will continue to incur administrative and professional charges associated with preparing, reviewing, auditing and filing our financial statements and our periodic and other disclosure documents and will need to raise additional capital. We intend to raise the capital by issued debt and/or equity securities. At the present time, we have not made any plans to raise additional money and there is no assurance that we will be able to raise additional money in the future. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about Bearing Mineral Exploration, Inc. upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible delays in the exploitation of the business opportunities. Any new business opportunities will likely require additional capital.
If additional capital is required we will raise funds by issuing debt and/or equity securities although we have no current arrangements or agreements to such financings at this time. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Results of Activities
For the nine months ended July 31, 2010 compared to July 31, 2009 and for the three months ended July 31, 2010 compared to July 31, 2009
For the three months ended July 31, 2010 and 2009: We had a net loss of $4,756 for the three months ended July 31, 2010 compared to a net loss of $5,758 for the three month period ended July 31, 2009. The decrease in operating expenses duringn the three months ended July 31, 2010 compared to July 31,2009 was primarily due to a decrease in mineral property costs, as the Company decided to forfeit title to the Collins Lake mineral claim during the period ended July 31, 2010. During the quarter ended July 31, 2010, the decrease in mineral property costs was offset by an increase in general and administrative expenses associated with legal fees of $2,372 correlating to the letter of intent with vLinx, Inc.; a former potential merger candidate.
For the nine months ended July 31, 2010 and 2009: We had a net loss of $22,662 for the nine months ended July 31, 2010 compared to a net loss of $25,573 for the nine month period ended July 31, 2009. The decrease of $2,911 in operating expenses during the nine month period ended July 31, 2010 compared to July 31, 2009 was due to a decrease in general and administrative expenses and mineral property costs, as the Company decided to forfeit title to the Collins Lake mineral claim during the period ended July 31, 2010.
The Company had no revenues for the three and nine month periods ended July 31, 2010 and 2009 and does not expect to recognize revenue in the foreseeable future. Since inception we have used our common stock to raise money for the property acquisition of the Collins Lake mineral claim, for the preparation of an exploration work program by Consulting Geologist, Richard Jeanne, for corporate expenses and to repay outstanding indebtedness.
Net cash from the sale of shares since inception on June 11, 2008 to July 31, 2010 was $ 41,013. In addition, our President; Gerhard Schlombs has advanced a total of $25,000 to the Company for working capital. This advance will need to be repaid once funds become available. There can be no assurance that he will continue to advance funds as required or that methods of financing will be available or accessible on reasonable terms. If additional capital is required we will raise the funds by issuing debt and/or equity securities although we have no current arrangements to such financings at this time.
Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our business operations.
On June 17, 2008, we issued 3,300,000 restricted shares of common stock to Gerhard Schlombs; our sole officer and director in consideration of $3,300, pursuant to Regulation S of the Securities Act of 1933 in that the sale took place outside of the United States of America and Mr. Schlombs in a non-US person.
On September 19, 2008 we completed a private placement of 2,590,000 shares of common stock to 23 investors in consideration of $25,900. The shares were issued as restricted securities pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933 in that all sales took place outside of the United States of America and all purchasers were non-US persons.
On October 6, 2008 we completed a private placement of 78,750 shares of common stock to 10 investors in consideration of $11,813. The shares were issued as restricted securities pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933 in that all sales took place outside of the United States of America and all purchasers were non-US persons.
As of July 31, 2010 we had $2,650 in total current assets and total current liabilities of $28,544 for a working capital deficit of $25,894 compared to $16,897 in total assets and total liabilities of $20,129 for a working capital deficit of $3,232 as of October 31, 2009. Total liabilities for the period ended July 31, 2010 were comprised of general and administrative expenses, audit fees, legal fees, transfer agent fees and the loan payable to our President; Mr. Schlombs, while total liabilities for the year ended October 31, 2009 were comprised of audit fees, transfer agent fees and the loan payable to Mr. Schlombs.
We do not believe we have sufficient funds to meet our cash requirements for the next twelve months, as we have yet to commence operations, and have not generated any revenues there can be no assurance that we can generate significant revenues from operations. The Company’s management is exploring a variety of options to meet the Company’s cash requirements and future capital requirements, including the possibility of equity offerings, debt financing and business combinations. There can be no assurance that the Company will be able to raise additional capital, and if the Company is unable to raise additional capital, we will either have to suspend operations until we do raise the cash, or cease operations entirely.
The Company’s failure to generate revenues and conduct operations since its inception raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements included in this quarterly report have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its obligations in the normal course of business. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
Critical Accounting Policies
There have been no material changes in our existing accounting policies and estimates from the disclosures included in our Form 10-K.
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ITEM 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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ITEM 4.
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CONTROLS AND PROCEDURES
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Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are not effective since the following material weaknesses exist:
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(i)
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The Company’s management is relying on external consultants for purposes of preparing its financial reporting package and may not be able to identify errors and irregularities in the financial reporting package before its release as a continuous disclosure document.
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(ii)
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As the Company is governed by one officer who is also a director, there is an inherent lack of segregation of duties and lack of independent governing board.
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Once the Company has sufficient personnel available, our Board of Directors will nominate an audit committee and audit committee financial expert and we will appoint additional personnel to assist with the preparation of our financial statements; which will allow for proper segregation of duties as well as additional manpower for proper documentation.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceedings 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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following documents are included herein:
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Exhibit No.
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Document Description
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
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32.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer).
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on behalf by the undersigned, thereto duly authorized on this 10th day of September 2010.
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BEARING MINERAL EXPLORATION, INC.
(Registrant)
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BY:
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GERHARD SCHLOMBS
Gerhard Schlombs
President, Principal Executive and Principal Financial Officer,
Treasurer/Secretary, Principal Accounting Officer, and member
of the Board of Directors
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EXHIBIT INDEX
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Exhibit No.
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Document Description
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31.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.
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32.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer).
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