Attached files
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commissions file number 000-53586
DARLINGTON MINES LTD.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
20A, Time Centre
53-55 Hollywood Road
Central, Hong Kong
(Address of principal executive offices, including zip code)
(852) 5371 1266
(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: 3,515,000 as of September 14, 2010.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Darlington Mines Ltd.
(A Development Stage Company)
Balance Sheets
As at July 31, 2010 (Unaudited) and October 31, 2009
July 31, October 31,
2010 2009
-------- --------
$ $
ASSETS
Current Assets
Cash 114 1,522
-------- --------
Total Assets 114 1,522
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable 11,329 21,196
Loan payable (Note 3) 32,545 6,000
-------- --------
Total Liabilities 43,874 27,196
-------- --------
Contingencies (Note 1)
Stockholders' Equity (Deficit)
Common Stock, 100,000,000 shares authorized, $0.00001 par value,
3,515,000 issued and outstanding 35 35
Additional Paid In Capital 101,515 101,515
Donated Capital (Note 3(b)) 47,500 47,500
Deficit Accumulated During the Development Stage (192,810) (174,724)
-------- --------
Total Stockholders' Equity (Deficit) (43,760) (25,674)
-------- --------
Total Liabilities and Stockholders' Equity (Deficit) 114 1,522
======== ========
(See Notes to Financial Statements)
2
Darlington Mines Ltd.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Accumulated from For the For the For the For the
August 23, 2006 Three Months Three Months Nine months Nine months
(Date of Inception) to Ended Ended Ended Ended
July 31, July 31, July 31, July 31, July 31,
2010 2010 2009 2010 2009
---------- ---------- ---------- ---------- ----------
$ $ $ $ $
Revenue -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Expenses
Donated rent (Note 3(b)) 9,500 -- 750 -- 2,250
Donated services (Note 3(b)) 38,000 -- 3,000 -- 9,000
Office and regulatory 11,176 3,370 253 3,787 711
Interest expenses 4,161 -- 311 -- 385
Impairment loss on mineral properties 8,545 -- -- -- 6,545
Professional fees 121,428 4,081 6,090 14,299 19,926
---------- ---------- ---------- ---------- ----------
Total Expenses 192,810 7,451 10,404 18,086 38,817
---------- ---------- ---------- ---------- ----------
Net Loss (192,810) (7,451) (10,404) (18,086) (38,817)
========== ========== ========== ========== ==========
Net Loss Per Share - Basic and Diluted (.01) (.01) (.01) (.01)
========== ========== ========== ==========
Weighted Average Shares Outstanding 3,515,000 6,015,000 3,515,000 6,015,000
========== ========== ========== ==========
(See Notes to Financial Statements)
3
Darlington Mines Ltd.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the For the
Nine months Nine months
Ended Ended
July 31, July 31,
2010 2009
-------- --------
$ $
Operating Activities
Net loss (18,086) (38,816)
Adjustments to reconcile net loss to net
cash used in operating activities:
Donated services and rent -- 11,250
Changes in operating assets and liabilities:
Prepaid expenses -- 4,045
Accounts payable (9,867) 13,091
-------- --------
Net Cash Used In Operating Activities (27,953) (10,430)
-------- --------
Investing Activity -- --
-------- --------
Net Cash Provided Used In Investing Activities -- --
-------- --------
Financing Activities
Loan payable 26,545 4,500
-------- --------
Net Cash Provided By Financing Activities 26,545 4,500
-------- --------
Increase (decrease) in Cash (1,408) (5,930)
Cash - Beginning of Period 1,522 10,321
-------- --------
Cash - End of Period 114 4,391
======== ========
Supplemental Disclosures
Interest paid -- --
Income taxes paid -- --
(See Notes to Financial Statements)
4
Darlington Mines Ltd.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS
The Company was incorporated in the State of Nevada on August 23, 2006. The
Company's principal business is the acquisition and exploration of mineral
resources in Asia. We have not produced any significant revenues from our
principal business or commenced significant operations and are considered
an early exploration stage company as defined by SEC Guide 7 with reference
to Financial Accounting Standards Board (FASB) issued Accounting Standards
Codification (ASC) topic 915.
We are in the early exploration stage. In the exploration stage, management
devotes most of its time to conducting exploratory work and developing its
business. These unaudited financial statements have been prepared on a
going-concern basis, which implies that we will continue to realize our
assets and discharge our liabilities in the normal course of business. The
Company has never generated revenues since inception and has never paid any
dividends and is unlikely to pay dividends or generate earnings in the
immediate or foreseeable future. The continuation of the Company as a going
concern is dependent upon the continued financial support from its
shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, confirmation of the Company's interests
in the underlying properties, and the attainment of profitable operations.
As of July 31, 2010, the Company had a working capital deficit of $43,760
and has accumulated losses of $192,810 since inception. These factors raise
substantial doubt regarding the Company's ability to continue as a going
concern. 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.
2. SIGNIFICANT ACCOUNTING POLICIES
INTERIM UNAUDITED FINANCIAL STATEMENTS
These interim unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States for interim financial information and with the instructions for SEC
Form 10-Q. They do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Therefore, these financial statements should be read in
conjunction with the Company's audited financial statements and notes
thereto for the years ended October 31, 2009 and 2008 included in the
Company's Form 10K filed on January 29, 2010 with the SEC. The financial
statements included herein are unaudited; however, they contain all normal
recurring accruals and adjustments that, in the opinion of management, are
necessary to present fairly the Company's financial position at July 31,
2010, and the results of its operations for the three months and nine
months ended July 31, 2010 and 2009 and the results of its cash flows for
the nine months ended July 31, 2010 and 2009. The results of operations for
the three months and nine months ended July 31, 2010 are not necessarily
indicative of the results to be expected for future quarters or the full
year.
BASIS OF PRESENTATION
These financial statements and related notes are presented in accordance
with accounting principles generally accepted in the United States, and are
expressed in US dollars. The Company's fiscal year-end is October 31.
USE OF ESTIMATES
The preparation of financial statements in accordance with United States
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses in the reporting period. The Company
regularly evaluates estimates and assumptions related to donated services
and expenses, and deferred income tax asset valuation allowances. The
Company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other
sources. The actual results experienced by the Company may differ
materially and adversely from the Company's estimates. To the extent there
are material differences between the estimates and the actual results,
future results of operations will be affected.
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Darlington Mines Ltd.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTS
The following FASB pronouncements have been adopted by the Company during
the nine months ended July 31, 2010:
Effective November 1, 2009, the Company adopted the FASB ASC "Fair Value
Measurements and Disclosures" guidance with respect to recurring financial
assets and liabilities. Effective November 1, 2009, the Company adopted the
FASB ASC "Fair Value Measurements and Disclosures" guidance as it relates
to nonrecurring fair value measurement requirements for nonfinancial assets
and liabilities. The ASC guidance defines fair value, establishes a
framework for measuring fair value in GAAP, and expands disclosure about
fair value measurements. The adoption of the standard had no impact on the
Company's financial statements.
On June 30, 2009, FASB issued Accounting Standard Update (ASU) No. 2009-01
(Topic 105) - Generally Accepted Accounting Principles - amendments based
on - Statement of Financial Accounting Standards No. 168 "The FASB
Accounting and Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles". Beginning with this Statement FASB will no
longer issue new standards in the form of Statements, FASB Staff Positions,
or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting
Standard Updates. This ASU includes FASB Statement No. 168 in its entirety.
While ASU's will not be considered authoritative in their own right, they
will serve to update the Codification, provide the bases for conclusions
and changes in the Codification, and provide background information about
the guidance. The Codification modifies the GAAP hierarchy to include only
two levels of GAAP: authoritative and non-authoritative. ASU No. 2009-01
became effective for the Company's quarter ended October 31, 2009.
Implementation of this Standard did not have any impact on the Company's
financial statements.
In August 2009, FASB issued ASU No. 2009-05 - Fair Value Measurements and
Disclosures (Topic 820) - Measuring Liabilities at Fair Value. This ASU
clarifies the fair market value measurement of liabilities. In
circumstances where a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair
value using one or more of the following techniques: a technique that uses
quoted price of the identical or a similar liability or liabilities when
traded as an asset or assets, or another valuation technique that is
consistent with the principles of Topic 820 such as an income or market
approach. ASU No. 2009-05 was effective upon issuance and it did not result
in any significant financial impact on the Company upon adoption.
In September 2009, FASB issued ASU No. 2009-12 - Fair Value Measurements
and Disclosures (Topic 820) - Investments in Certain Entities That
Calculate Net Asset Value per Share (or its equivalent). This ASU permits
use of a practical expedient, with appropriate disclosures, when measuring
the fair value of an alternative investment that does not have a readily
determinable fair value. ASU No. 2009-12 became effective for the Company's
quarter ended January 31, 2010. Since the Company does not currently have
any such investments, the adoption of the ASU did not have any significant
financial impact on the Company's financial statements.
In January 2010, FASB issued ASU No. 2010-06 regarding fair value
measurements and disclosures and improvement in the disclosure about fair
value measurements. This ASU requires additional disclosures regarding
significant transfers in and out of Levels 1 and 2 of fair value
measurements, including a description of the reasons for the transfers.
This section of the ASU is effective for interim and annual reporting
periods beginning after December 15, 2009 Further, this ASU requires
additional disclosures for the activity in Level 3 fair value measurements,
requiring presentation of information about purchases, sales, issuances,
and settlements in the reconciliation for fair value measurements. This
section of the ASU is effective for interim and annual reporting periods
beginning after December 15, 2010. The adoption of this ASU did not have a
material impact on its financial statements.
In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent
events and amendments to certain recognition and disclosure requirements.
Under this ASU, a public company that is a SEC filer, as defined, is not
required to disclose the date through which subsequent events have been
evaluated. This ASU is effective upon issuance. The adoption of this ASU
did not have a material impact on its financial statements.
Other recently issued ASC guidance has either been implemented or are not
significant to the Company.
3. LOAN PAYABLE
The Company has received funding by way of a non-interest bearing unsecured
demand loan.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
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 this report. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
PLAN OF OPERATION
While we were incorporated on August 23, 2006, we are considered a start-up,
early exploration stage company and have not yet generated or realized any
revenues from our business operations.
Our auditors have 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 and no revenues are anticipated until
we begin removing and selling minerals. There is no assurance we will ever reach
this point. We do not have sufficient funds to maintain our operations for the
next 12 months.
We do not intend to hire additional employees at this time. All of the work on
any mineral property will be conducted by unaffiliated independent contractors
that we will hire. The independent contractors will be responsible for
surveying, geology, engineering, exploration, and excavation. The geologists
will evaluate the information derived from the exploration and excavation and
the engineers will advise us on the economic feasibility of removing the
mineralized material.
RESULTS OF OPERATIONS
In October 2008, we completed our public offering and received $101,500.
Since our inception we completed our public offering and conducted exploration
activities on one property. We did not obtain any favorable information from our
exploration activity and accordingly, the claim was allowed to expire.
MILESTONES
The following are our milestones:
1. Locate a new mineral claim
2. Raise $15,000 to pay current liabilities of $11,329 and to pay for a
new claim
3. Enter into a debt settlement agreement to eliminate $32,545 of debt
LIMITED OPERATING HISTORY - NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us 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, possible delays in the exploration of our properties, and possible
cost overruns due to price and cost increases in services.
To become profitable and competitive, we must locate a property which contains
mineralized material.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Additional equity financing could
result in additional dilution to our existing shareholders.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we raised funds from our public offering. We have
spent all of the money we raised.
At the present time, we have not made any arrangements to raise additional cash.
We currently need additional funds and if we are unable to locate them we will
either have to suspend operations until we do raise the cash, or cease
operations entirely.
In April 2007, we issued 5,000,000 shares of common stock to our officers and
directors pursuant to the exemption from registration contained in Regulation S
of the Securities Act of 1993. The purchase price of the shares was $50. This
was accounted for as an acquisition of shares.
On October 1, 2008, we completed our public offering by selling 1,010,000 shares
of common stock to 18 persons and raised $101,000.
On October 2, 2008, we issued 5,000 restricted shares of common stock to one
person in consideration of $500.
7
On October 19, 2009, Michelle Masich returned 2,500,000 restricted shares of
common stock owned by her to the Company.
As of July 31, 2010 our total assets were $114 consisting entirely of cash and
our total liabilities were $43,874. Our net working capital deficiency is
$43,760.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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.
ITEM 4. CONTROLS AND PROCEDURES.
We maintain "disclosure controls and procedures," as such term is defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"),
that are designed to ensure that information required to be disclosed in our
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure. We
conducted an evaluation (the "Evaluation"), under the supervision and with the
participation of our Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO"), of the effectiveness of the design and operation of our disclosure
controls and procedures ("Disclosure Controls") as of the end of the period
covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on
this Evaluation, our President has concluded that the Company's disclosure
controls and procedures were not effective because of the identification of a
material weakness in our internal control over financial reporting which is
identified below, which we view as an integral part of our disclosure controls
and procedures:
1. The Company has limited segregation of duties which is not consistent
with good internal control procedures.
2. The Company does not have a written internal control procedurals
manual which outlines the duties and reporting requirements of the
Directors and any staff to be hired in the future. This lack of a
written internal control procedurals manual does not meet the
requirements of the SEC or good internal controls.
Management believes that the material weaknesses set forth in items 1 and 2
above did not have an affect on the Company's financial results.
The Company and its management will endeavor to correct the above noted
weaknesses in internal control once it has adequate funds to do so.
Management will continue to monitor and evaluate the effectiveness of the
Company's internal controls and procedures and its internal controls over
financial reporting on an ongoing basis and are committed to taking further
action and implementing additional enhancements or improvements, as necessary
and as funds allow.
CHANGES IN INTERNAL CONTROL
We have also evaluated our internal controls for financial reporting, and there
have been no changes in our internal controls or in other factors that could
affect those controls subsequent to the date of their last evaluation.
8
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS.
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.
ITEM 6. EXHIBITS.
The following documents are included herein:
Exhibit No. Document Description
----------- --------------------
31.1 Certification of Principal Executive Officer and Principal
Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act
of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized on this 14th day of September, 2010.
DARLINGTON MINES LTD.
BY: /s/ Francis Chiew
-------------------------------------------------
Francis Chiew, President, Chief Executive Officer
Chief Financial Officer, Chief Operating Officer,
Secretary, Treasurer, and sole Director
