Black Sea Metals Inc. - FORM 10-Q

Attached files

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EX-32.1 - SECTION 906 CERT - Black Sea Metals Inc.	ex32_1.htm
EX-31.1 - CERT - Black Sea Metals Inc.	ex31_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 August 31, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-51563

TEXADA VENTURES INC.

(Exact Name of Registrant as Specified in its Charter)

NEVADA		98-0374224
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11616 East Montgomery Drive, No. 54
Spokane Valley, Washington		99206
(Address of Principal Executive Offices)		(Zip Code)

(509) 301-6635

(Registrant’s Telephone Number, including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark whether the Registrant is o a large accelerated filer, o an accelerated file, o a non-accelerated filer, or x a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act)

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

Number of shares of issuer’s common stock outstanding as of October 15, 2010: 25,363,985

TABLE OF CONTENTS

Page

PART I – FINANCIAL INFORMATION	2


Item 1: Financial Statements	2

Balance Sheets, August 31, 2010 (unaudited) and November 30, 2009	3

Statements of Operations for the nine and three months ended August 31, 2010 and 2009
and from the date of inception on October 17, 2001 through August 31, 2010 (unaudited)	4

Statements of Cash Flows for the nine months ended August 31, 2010 and 2009
and from the date of inception on October 17, 2001 through August 31, 2010 (unaudited)	5

Notes to Financial Statements (unaudited)	6

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3: Qualitative and Quantitative Disclosures About Market Risk	19

Item 4T: Controls and Procedures	20


PART II – OTHER INFORMATION	21

Item 1: Legal Proceedings	21

Item 1A: Risk Factors	21

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3: Defaults Upon Senior Securities	21

Item 4: [Removed and Reserved]	21

Item 5: Other Information	21

Item 6: Exhibits	21

Signatures	22

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q, and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine months ended August 31, 2010 are not necessarily indicative of the results that can be expected for the year ending November 30, 2010.

As used in this Quarterly Report, the terms "we", "us", "our", “the Company” and “Texada” mean Texada Ventures Inc., unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

Texada Ventures Inc.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)

	August 31, 2010			November 30, 2009
	(Unaudited)

ASSETS

Current Assets

Cash	$	3,184		$	2,416

Total Assets	$	3,184		$	2,416

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable (Note 5(c))	$	128,137		$	117,788
Accrued liabilities (Note 4)		200,323			148,113
Due to related parties (Notes 5(a) and (b))		77,671			70,389
Promissory notes payable (Note 6)		452,500			365,000

Total Current Liabilities		858,631			701,290

Convertible debentures, less unamortized discount of $2,192 and $5,497, respectively (Note 7)		582,808			579,503

Total Liabilities		1,441,439			1,280,793

Nature of Operations and Continuance of Business (Note 1)
Commitments and Subsequent Events (Notes 10 and 11)

Stockholders’ Deficit

Preferred shares, 100,000,000 shares authorized, $0.001 par value; None issued and outstanding		–			–

Common shares, 200,000,000 shares authorized, $0.001 par value; 24,293,334 shares issued and outstanding (Note 8)		24,293			24,293

Additional paid-in capital		340,107			340,107

Deficit accumulated during the exploration stage		(1,802,655	)		(1,642,777	)

Total Stockholders’ Deficit		(1,438,255	)		(1,278,377	)

Total Liabilities and Stockholders’ Deficit	$	3,184		$	2,416

(The accompanying notes are an integral part of these financial statements)

Texada Ventures Inc.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

(Unaudited)

	Accumulated from			For the			For the			For the			For the
	October 17, 2001 (Date of Inception)			Nine months Ended			Nine months Ended			Three months Ended			Three months Ended
	to August 31,			August 31,			August 31,			August 31,			August 31,
	2010			2010			2009			2010			2009

Revenue	$	–		$	–		$	–		$	–		$	–

Operating Expenses

Amortization		798			–			–			–			–
Consulting (Notes 5(a) and (b))		208,280			25,322			53,800			4,033			19,185
Exploration costs		20,091			–			–			–			–
General and administrative		628,747			115,354			88,585			23,016			12,716
Loss on foreign exchange		945			1,389			5,000			1,252			1,598
Mineral property costs		3,747			–			–			–			–

Total Operating Expenses		862,608			142,065			147,385			28,301			33,499

Loss from Operations		(862,608	)		(142,065	)		(147,385	)		(28,301	)		(33,499	)

Other Income (Expense)

Accretion of discount on convertible debentures		(231,808	)		(3,305	)		(9,989	)		(1,345	)		(416	)
Interest income		4,022			–			–			–			–
Interest on convertible debentures		(136,957	)		(35,132	)		(35,144	)		(11,797	)		(11,797	)
Interest on promissory notes		(63,364	)		(17,078	)		(16,554	)		(5,734	)		(5,734	)
Interest on related party loans		(8,500	)		–			–			–			–
Gain on settlement of debt		5,960			70			–			–			–
Loss on disposal of equipment		(2,075	)		–			–			–			–
Loss on write down of note receivable		(86,797	)		–			–			–			–
Loss on write down of oil and gas deposit		(365,000	)		–			–			–			–
(Provision) recovery for loan receivable		(55,528	)		37,632			–			20,817			–

Total Other Income (Expense)		(940,047	)		(17,813	)		(61,687	)		1,941			(17,947	)

Net Loss	$	(1,802,655	)	$	(159,878	)	$	(209,072	)	$	(26,360	)	$	(51,446	)

Net Loss Per Share – Basic and Diluted				$	(0.01	)	$	(0.01	)	$	–		$	–

Weighted Average Shares Outstanding					24,293,334			24,293,334			24,293,334			24,293,334

(The accompanying notes are an integral part of these financial statements)

Texada Ventures Inc.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

(Unaudited)

	Accumulated from October 17, 2001 (Date of Inception) to August 31, 2010			For the Nine months Ended August 31, 2010			For the Nine months Ended August 31, 2009

Operating Activities

Net loss	$	(1,802,655	)	$	(159,878	)	$	(209,072	)

Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of convertible debt discount		231,808			3,305			9,989
Amortization		798			–			–
Gain on settlement of debt		(5,890	)		–			–
Loss on disposal of equipment		2,075			–			–
Loss on write down of note receivable		86,797			–			–
Provision for loan receivable		45,652			(47,508	)		–
Write-off of oil and gas deposit		365,000			–			–

Changes in operating assets and liabilities:
Note receivable		(9,876	)		–			(9,876	)
Prepaid expenses		–			–			(4,880	)
Accounts payable and accrued liabilities		338,336			72,435			88,283
Due to related parties		83,561			7,282			49,657

Net Cash Used in Operating Activities		(664,394	)		(124,364	)		(75,899	)

Investing Activities

Acquisition of oil and gas interests		(365,000	)		–			–
(Advance) Repayment of note receivable		(132,449	)		37,632			–
Purchase of equipment		(2,873	)		–			–

Net Cash (Used In) Provided by Investing Activities		(500,322	)		37,632			–

Financing Activities

Advances from related party loan		50,000			–			–
Repayment of related party loan		(50,000	)		–			–
Proceeds from convertible debentures		585,000			–			–
Proceeds from promissory notes payable		452,500			87,500			75,000
Proceeds from issuance of common shares		130,400			–			–

Net Cash Provided by Financing Activities		1,167,900			87,500			75,000

Increase (Decrease) in Cash		3,184			768			(899	)

Cash - Beginning of Period		–			2,416			3,352

Cash - End of Period	$	3,184		$	3,184		$	2,453

Supplemental Disclosures
Interest paid	$	8,500		$	–		$	–
Income taxes paid	$	–		$	–		$	–

(The accompanying notes are an integral part of these financial statements)

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

1. Nature of Operations and Continuance of Business

Texada Ventures Inc. (the “Company”) was incorporated in the State of Nevada on October 17, 2001. The Company is an Exploration Stage Company, as defined by ASC 915, Development Stage Entities. The Company’s principal business is the acquisition and exploration of oil and gas and mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its 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, and the attainment of profitable operations. As at August 31, 2010, the Company has a working capital deficit of $855,447 and has accumulated losses of $1,802,655 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.

As at August 31, 2010, the Company had cash of $3,184 on hand, and for the next twelve months, management anticipates that the minimum cash requirements to fund its proposed exploration program and continued operations will be $500,000. Accordingly, the Company does not have sufficient funds to meet planned expenditures over the next twelve months, and will need to seek additional debt or equity financing to meet its planned expenditures. There is no assurance that the Company will be able to raise sufficient cash to fund its future exploration programs and operational expenditures.

2. Summary of Significant Accounting Policies

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 November 30.

Interim Financial Statements

The 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 to Securities and Exchange Commission (“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 year ended November 30, 2009, included in the Company’s Annual Report on Form 10-K filed on March 16, 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 August 31, 2010, and the results of its operations and cash flows for the fiscal periods ended August 31, 2010 and 2009. The results of operations for the three months and nine months ended August 31, 2010 are not necessarily indicative of the results to be expected for future quarters or the full year.

Reclassifications

Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

2. Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to its investment in mining and mineral claims, valuation of note receivable, stock-based compensation, and deferred income tax asset valuations. 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.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at August 31, 2010, the Company has 1,155,133 split-adjusted dilutive securities outstanding. At August 31, 2010 and 2009, the effect of the Company’s outstanding common stock equivalents would have been anti-dilutive. Accordingly, only basic EPS is presented.

Mineral Property Costs

The Company is engaged in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs are capitalized in accordance with ASC 360, Property, Plant, and Equipment, when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that a mineral property is acquired through the issuance of the Company’s shares, the mineral property will be recorded at the fair value of the respective property or the fair value of common shares, whichever is more readily determinable.

When mineral properties are acquired under option agreements with future acquisition payments to be made at the sole discretion of the Company, those future payments, whether in cash or shares, are recorded only when the Company has made or is obliged to make the payment or issue the shares. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and feasibility, the costs incurred to develop such property are capitalized.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Based Compensation, and ASC 505-50, Equity Based Payments to Non-Employees using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

2. Summary of Significant Accounting Policies (continued)

Long-lived Assets

In accordance with ASC 360, Property, Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Financial Instruments

ASC 820, Fair Value Measurements requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments consist principally of cash, accounts payable, amounts due to related parties, promissory notes payable, and convertible debentures. Pursuant to ASC 820, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company’s convertible debentures are recorded using the amortized cost basis, with the discount amortized to interest expense over the term of the debentures. The fair value of the convertible debentures is determined using “Level 2” inputs and approximate carrying value.

The Company has operations in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

2. Summary of Significant Accounting Policies (continued)

j) Financial Instruments (continued)

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of August 31, 2010 as follows:

Fair Value Measurements Using

Quoted Prices in

Significant

Active Markets

Other

Significant

For Identical

Observable

Unobservable

Balance as of

Instruments

Inputs

August 31,

(Level 1)

(Level 2)

(Level 3)

2010

Assets:

Cash equivalents

3,184

–

3,184

Total assets measured

at fair value

3,184

–

3,184

Management believes that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in a foreign currency and the Company follows ASC 830, Foreign Currency Translation. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Adopted Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. Mineral Properties

Pursuant to an agreement dated November 2, 2001, the Company acquired a 100% interest in eight mineral claims located in the Whitehorse Mining District, Yukon Territory, Canada known as the Peek claims for $2,500. The property is being held in trust for the Company by a third party.

4. Accrued Liabilities

Accrued liabilities consist of accrued interest of $200,323 (November 30, 2009 - $148,113) on the convertible debentures and promissory notes payable.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

5. Related Party Transactions

On September 12, 2008, Company entered into an engagement letter with the Chief Executive Officer (“CEO”) of the Company as described in Note 10. Pursuant to the agreement the Company incurred $12,283 (2009 - $10,616) in consulting fees to a company owned and controlled by the CEO of the Company during the nine months ended August 31, 2010. As at August 31, 2010, $8,452 (November 30, 2009 - $13,059) in consulting fees are owed to the CEO.

During the nine months ended August 31, 2010, the Company incurred $12,000 (2009 - $12,000) in consulting fees to the former President of the Company. As at August 31, 2010, $56,000 (November 30, 2009 - $44,000) in consulting fees and $13,219 (November 30, 2009 - $13,330) of expenditures incurred on behalf of the Company are owed to the former President of the Company. Subsequent to August 31, 2010, the Company entered into a settlement agreement with the former President. Pursuant to the agreement, the Company settled $36,000 by issuing 180,000 shares of the Company’s common stock.

As at August 31, 2010, accounts payable includes $3,125 (November 30, 2009 - $3,125) owing to a former director for expenses incurred on the Company’s behalf.

The Company neither owns nor leases any real or personal property. The Chief Financial Officer provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein.

6. Promissory Notes Payable

On March 30, 2010, the Company entered into a promissory note with a third party for $60,000, which is unsecured, non interest bearing and due on demand.

On February 15, 2010, the Company entered into a promissory note with a third party for $27,500, which is unsecured, non interest bearing and due on demand.

On March 25, 2009, the Company entered into a promissory note with a third party for $25,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

On December 19, 2008, the Company entered into a promissory note with a third party for $50,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

On October 27, 2008, the Company entered into a promissory note with a third party for $140,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

On February 15, 2007, the Company entered into a promissory note with a third party for $50,000, which is unsecured, due on demand and bears interest at 8% per annum. Interest is payable annually due on or before February 14 of each year.

On November 20, 2006, the Company entered into a promissory note with a third party for $100,000, which is unsecured, due on demand and bears interest at 8% per annum.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

7. Convertible Debentures

On April 10, 2007, the Company issued a 6% convertible debenture with a principal amount of $200,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder.

In accordance with ASC 470-20, Debt with Conversion and Other Options, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $80,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $200,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $78,352 had been accreted increasing the carrying value of the convertible debenture to $198,352. As at December 18, 2008, the Company had accrued interest of $25,151.

Pursuant to ASC 470-60, Troubled Debt Restructurings by Debtors, the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt at the date of modification was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at August 31, 2010, $79,383 has been accreted increasing the carrying value of the convertible debenture to $199,384. As at August 31, 2010, the Company has accrued interest of $52,373.

On May 2, 2007, the Company issued a 6% convertible debenture with a principal amount of $125,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder.

In accordance with ASC 470-20, Debt with Conversion and Other Options, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $50,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debentures. The Company records accretion expense over the term of the convertible debenture up to its face value of $125,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $48,933 had been accreted increasing the carrying value of the convertible debenture to $123,933. As at December 18, 2008, the Company had accrued interest of $15,267.

Pursuant to ASC 470-60, Troubled Debt Restructurings by Debtors, the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt at the date of restructuring was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at August 31, 2010, $51,894 has been accreted increasing the carrying value of the convertible debenture to $124,607. As at August 31, 2010, the Company has accrued interest of $32,281. On October 14, 2010, the Company entered into a settlement agreement with the convertible note holder. Pursuant to the settlement agreement, the Company settled the outstanding principle and $33,130 of accrued interest through issuance of 790,651 shares of the Company’s common stock.

On November 19, 2007, the Company issued a 6% convertible debenture with a principal amount of $110,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

7. Convertible Debentures (continued)

In accordance with ASC 470-20, Debt with Conversion and Other Options, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $44,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $110,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $42,598 had been accreted increasing the carrying value of the convertible debenture to $108,598. As at December 18, 2008, the Company had accrued interest of $8,333.

On March 11, 2008, the Company issued a 6% convertible debenture with a principal amount of $150,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder.

In accordance with ASC 470-20, Debt with Conversion and Other Options, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $60,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $150,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $57,356 had been accreted increasing the carrying value of the convertible debenture to $147,356. As at December 18, 2008, the Company had accrued interest of $8,584.

8. Common Stock

On March 30, 2009, the Company effected a 2.5 to 1 reverse stock split of the authorized, issued and outstanding common stock. As a result, the authorized share capital decreased from 500,000,000 shares of common stock with a par value of $0.001 per share to 200,000,000 shares of common stock with a par value of $0.001 per share. The issued and outstanding shares decreased from 60,733,335 shares of common stock to 24,293,334 shares of common stock. All share amounts have been retroactively adjusted for all periods presented.

9.	Segment Disclosures

The Company operates in one operating segment, which is the acquisition and exploration of oil and gas resources and mineral resources. The Chief Executive Officer is the Company’s Chief Operating Decision Maker (“CODM”) as defined by ASC 280, Segment Report. The CODM allocates resources and assesses the performance of the Company based on the results of operations.

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

August 31, 2010

(Expressed in US dollars)

(unaudited)

10. Commitments

On September 12, 2008, the Company entered into an engagement letter with the Company’s Chief Executive Officer to provide management services in consideration for fees based upon time expended, with a designated portion payable in cash and balance payable in the Company’s common stock at a deemed price of $2.50 per split-adjusted share. Refer to Note 5(a). In February 2010, that agreement was modified to convert non-cash portions of invoice charges through January 2010 into equity at the same price and terms as outside investors in a private placement or if the Company is unsuccessful in a private placement, shares would be issued with valuation at the then-current market price. The timing of the share issue is at the discretion of the Company’s CEO.

11. Subsequent Events

On October 14, 2010, the Company entered into a debt settlement agreement with the holder of the convertible debenture described in Note 7(b). Pursuant to the agreement, the Company settled the $125,000 convertible debenture and $33,130 of accrued interest by issuing 790,651 shares of the Company’s common stock.

On October 14, 2010, the Company entered into a debt settlement agreement with a creditor. Pursuant to the agreement, the Company settled $20,000 of accounts payable by issuing 100,000 shares of the Company’s common stock.

On October 14, 2010, the Company entered into a settlement agreement with the former President. Pursuant to the agreement, the Company settled $36,000 of the amounts owing described in Note 5(b) by issuing 180,000 shares of the Company’s common stock.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute “forward-looking statements”. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our Annual Reports on Form 10-K and our Current Reports on Form 8-K.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Texada Ventures Inc. (the “Company”) is engaged in the business of acquisition and exploration of mineral and resource properties. We were incorporated on October 17, 2001 under the laws of the State of Nevada. Our principal office is located at 11616 E. Montgomery Drive, Suite 54, Spokane Valley, WA 99206. Our phone number is 509-301-6635. Our facsimile number is 509-924-2524.

OUR BUSINESS

We have acquired a 100% undivided interest in a group of mineral claims located in the Wheaton River District in the Yukon Territory, Canada that we refer to as the Peek Claims.

We have not earned any revenues to date. Our plan of operation is to continue to carry out exploration work on our claims in order to ascertain whether they possess commercially exploitable mineral deposits. We are presently in the exploration stage of our business and we can provide no assurance that commercially viable mineral deposits exist on our current or targeted claims or that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs. We will not be able to determine whether or not our current or targeted mineral claims contain a commercially exploitable deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.

We generally conduct our business through verbal agreements with consultants and arms-length third parties. Our verbal agreement with our geologist includes his reviewing all of the results from the exploratory work performed upon the site and making recommendations based on those results in exchange for payments equal to the usual and customary rates received by geologists performing similar consulting services.

As a result of our failure to generate substantial revenues since our inception, we reviewed our initial business plan in order to evaluate the progress of our mining business. We have not attained profitable operations to date and are dependent upon obtaining financing to pursue our plan of operation. Following Dr. John Veltheer’s acquisition of 49% of our issued and outstanding shares and his appointment to the board of Texada in October 2006, we decided to continue to develop our current mining business and to seek other business opportunities in related industries. In accordance with that decision, in September 2008, we appointed Ted R. Sharp as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of our Board of Directors.

During the quarter ended February 28, 2010, we entered into a term sheet (“DIA Term Sheet”) with Diamond Industry Associates Ltd. (“DIA”) whereby we would acquire 100% of DIA’s issued and outstanding shares or alternatively the assets and contractual obligations of DIA. On May 30, 2010, the DIA Term Sheet was terminated.

We can give no assurance that we will be successful in an acquisition or attracting the capital necessary to consummate a transaction at terms that are acceptable to us.

RECENT CORPORATE DEVELOPMENTS

We experienced no significant corporate developments during the quarter ended August 31, 2010.

PLAN OF OPERATION

As a result of our failure to generate any revenues since our inception, we have not been satisfied with our initial business plan to this point. In September 2008, we appointed Ted R. Sharp as a member of our Board of Directors and as our President, Chief Executive Officer and Chief Financial Officer.

Our current plan of operation is to continue exploration work on our mineral properties, as described below, while also seeking acquisition opportunities to acquire a company or operation which would return sufficient shareholder value. We are currently evaluating acquisition targets in complementary industries. We cannot assure you that we will be successful in locating a suitable acquisition target, or that our capital raising efforts will be successful given the current state of the financial markets or that we can successfully complete an acquisition.

Mineral Properties

As described in previous filings, we have taken a phased approach to our exploration efforts on the Peek Claims, and have received a geological report on the results of Phase III of our program with further recommendations from our geological consultant of additional activities prior to engaging in Phase IV of our plan. In his report, our geologist recommended that, prior to proceeding with Phase IV, further geological engineering should be undertaken to define the exact source areas for the known and new vein float material. Our geologist recommended reserving a total of $10,000 for a two-stage delineation program prior to commencing Phase IV of our exploration program. We proceeded with our geologist’s recommendation and completed the first phase of the delineation program during the summer exploration season of 2006. A detailed, close-spaced, soil geochemical survey over the conductors using a plugger style overburden sampling drill was recommended to locate the bed rock source of the mineralization following completion of Phase I of the delineation program.

Our decision to proceed to Phase IV of our initial exploration program will be made based on factors such as other business opportunities, the final assay results and the recommendations of our geologist, the grades of any mineralization found, the size and extent of the mineralized zones, and the strength of metal prices in international markets. Phase IV is currently estimated to cost $120,000. Given our current working capital situation and the costs of implementing Phase IV of our exploration program, we currently do not anticipate implementing Phase IV in the foreseeable future. See “Liquidity and Capital Resources” below.

Our expenditures toward the exploration of our mineral claims may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of exploration do not reveal viable commercial mineralization, we may decide to abandon our claims and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. This assessment will include an assessment of our cash reserves after the completion of Phase III, the price of minerals and the market for financing of mineral exploration projects at the time of our assessment.

Plan of Operations

During the exploration stage, Ted R. Sharp, our President, Secretary, Treasurer, Chief Executive Officer and Chief Financial Officer, and Dr. Veltheer will only be devoting approximately twenty hours per week of their time to our business. We do not foresee this limited involvement as negatively impacting the Company over the next twelve months. All exploratory work on our mining properties, if any, is being performed by our geological consultant, Mr. Timmins, who contracts with appropriately experienced parties to complete work programs. However, if as a result of our acquisition efforts, the demands of our business require more business time of Mr. Sharp or Dr. Veltheer,

such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, they are prepared to adjust their timetable to devote more time to our business.

RESULTS OF OPERATIONS

This discussion and analysis should be read in conjunction with the accompanying financial statements and related notes. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis the Company reviews its estimates and assumptions. The estimates were based on historical experience and other assumptions that the Company believes to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but the Company does not believe such differences will materially affect our financial position or results of operations.

Critical Accounting Policies

Critical accounting policies, the policies the Company believes are most important to the presentation of its financial statements and require the most difficult, subjective and complex judgments, are outlined below, are also disclosed in the Company’s Form 10-K as filed with the SEC on March 16, 2010, and have not changed significantly.

Mineral Property Costs

The Company is engaged in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs are capitalized when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that a mineral property is acquired through the issuance of the Company’s shares, the mineral property will be recorded at the fair value of the respective property or the fair value of common shares, whichever is more readily determinable.

Stock-based Compensation

The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Revenue and Expenses

Summary	Three Months Ended August 31				Nine Months Ended August 31

	2010		2009		2010		2009
Revenue		-		-		-		-
Operating Expenses	$	28,301	$	33,499	$	142,065	$	147,385

Net Income (Loss) From Operations

(28,301

)

(33,499

)

(142,065

)

(147,385

)

Summary of Revenue

We have not earned any revenues to date. Our plan of operation, in regards to mineral properties, is to continue to carry out exploration work on our claims in order to ascertain whether they possess commercially exploitable quantities of mineral deposits and to explore acquisition opportunities. We do not anticipate earning revenues until such time as we are able to locate and process commercially exploitable levels of mineral resources on our properties or acquire commercially viable or producing properties.

We are presently in the exploration stage of our business and we can provide no assurance that a commercially viable mineral deposit exists on our claims or that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs. 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. Also, we cannot assure you that we will be able to acquire any commercially viable properties or, if acquired, that we will be able to develop or operate any acquired property in a profitable manner.

Summary of Expenses

Our expenses for the three ended August 31, 2010 and 2009, consisted of the following:

	Three Months Ended August 31						Nine Months Ended August 31
	2010			2009			2010			2009
Expenses (Operating Expenses)
Consulting	$	4,033		$	19,185		$	25,322		$	53,800
General and administrative	$	23,016		$	12,716		$	115,354		$	88,585
Loss on foreign exchange	$	1,252		$	1,598		$	1,389		$	5,000
Other Income (Expense)
Accretion of discount on convertibledebentures	$	(1,345	)	$	(416	)	$	(3,305	)	$	(9,989	)
Interest income		-			-			-			-
Interest on convertible debentures	$	(11,797	)	$	(11,797	)	$	(35,132	)	$	(35,144	)
Interest on promissory notes	$	(5,734	)	$	(5,734	)	$	(17,078	)	$	(16,554	)
Interest on related party loans		-			-			-			-
Recovery of loan receivable	$	20,817			-		$	37,632			-
Gain on settlement of debt	$	70			-			-			-

For the three months ended August 31, 2010, our operating expenses decreased from the same period in 2009, reversing the trend of the previous three months of our fiscal year. The decrease in operating expenses for the most recent quarter is primarily due to a decrease in consulting fees of $15,152, which was partially offset by the increase in general and administrative expenses of $10,300. Other income for the nine months ended August 31, 2010 increased by $19,888, primarily due to a recovery on a loan receivable for which a provision for potential uncollectability had been created in fiscal 2009.

For the nine months ended August 31, 2010, our operating expenses were roughly equal to the same period in 2009. General and administrative expense increased by $26,769, which was offset by a decrease in consulting of $28,478. Other expenses for the nine months ended August 31, 2010 decreased by $43,874, primarily due to a $37,632 recovery on a loan receivable for which a provision for potential uncollectability had been created in fiscal 2009 and decreased accretion of discounts on the convertible debentures.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital Summary		At August 31, 2010				At November 30, 2009
Current Assets		$	3,184			$	2,416

Current Liabilities		(858,631	)		(701,290	)
Working Capital (Deficit)	$	(855,447	)	$	(698,874	)

Summary of Cash Flows
	Nine Months Ended August 31
		2010			2009
Net Cash Used In Operating Activities	$	(124,364	)	$	(75,899	)
Net Cash Used In Investing Activities		37,632			-
Net Cash Provided By Financing Activities		87,500			75,000
Net Increase (Decrease) In Cash During Period	$	768		$	(899	)

As at August 31, 2010, we had a cash balance of $3,184 and a working capital deficit of $855,447. The increase in our working capital deficit at August 31, 2010 from our year ended November 30, 2009 is primarily a result of increases in account payable of $10,349, accrued interest payable on convertible debentures and promissory notes of $52,210, party payables of $7,282, and additional promissory note liabilities of $87,500 in the most recent quarter.

The Company has issued four separate 6% convertible debentures with principal amounts totaling $585,000 which were due and payable on December 31, 2008. Each of these convertible debentures has been extended to December 31, 2010. Interest is payable at the option of the Company in cash or shares. As at August 31, 2010, the Company had not made any interest payments and pursuant to the debentures has accrued default interest of 8% since the quarter ended May 31, 2008. Interest payable has accumulated to a total of $136,957. The principal and accrued interest on the debentures may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder.

Because we have as yet been unsuccessful in our efforts to raise equity to fund an acquisition, we will not have cash sufficient to satisfy the debentures in cash. We estimate that we would require a minimum of $858,631 to fund payment of our current liabilities. Absent such financing, we may negotiate with the holders of the promissory notes to extend the due dates, convert them to common stock or modify terms sufficient to remove or delay the requirement to satisfy the obligations with cash. Should we be unable to reach conversion or modification of the promissory notes on terms acceptable to us, we may be required to default on the obligations.

The Company has also issued promissory notes as follows:

On March 30, 2010, the Company entered into a promissory note with a third party for $60,000, which is unsecured, non interest bearing and due on demand.

On February 15, 2010, the Company entered into a promissory note with a third party for $27,500, which is unsecured, non interest bearing and due on demand.

On November 20, 2006, the Company entered into a promissory note with a third party for $100,000, which is unsecured, due on demand and bears interest at 8% per annum.

As of October 14, 2010, we owed $452,500 in aggregate principal amount on these promissory notes. We do not have sufficient capital to satisfy these promissory notes in cash if payment is demanded by their holders.

Subsequent to the Company’s fiscal quarter ended August 31, 2010, on October 14, 2010, the Company entered into a debt settlement agreement with the holder of a 6% convertible debenture. Pursuant to the agreement, the Company settled the $125,000 convertible debenture and $33,130 of accrued interest by issuing 790,651 shares of its common stock. Additionally, on October 14, 2010, the Company entered into a debt settlement agreement with a creditor, pursuant to which the Company settled $20,000 of accounts payable by issuing 100,000 shares of its common stock and entered into a debt settlement agreement with its former President, pursuant to which the Company settled $36,000 of the amounts owing by issuing 180,000 shares of its common stock.

We also maintain our position in mining claims in our mineral property referred to as the Peek Claim. In the event we decide to proceed with Phase IV of our exploration program, which is estimated to cost $120,000, we will need to obtain additional financing of nearly $1,000,000 to fund exploration, operating expenses and working capital deficit.

We do not expect our business to achieve profitability in the near future as we expect to continue to incur substantial acquisition, development and operating expenses. We will require additional funding to fund our working capital requirements. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or debt to fund our estimated general administration, exploration and other working capital requirements.

Currently, we do not have sufficient capital to implement our plan of operation over the next twelve months and we do not have any financing arrangements in place and there is no assurance that we will be able to obtain sufficient financing to fund our capital requirements. If we do not obtain the necessary financing, then our plan of operation will be scaled back according to the amount of funds available. The inability to raise the necessary financing will severely restrict our ability to continue exploration programs or acquisition activities as planned.

Our auditors expressed substantial doubt regarding our ability to continue as a going concern related to our financial statements for the year ended November 30, 2009, and these circumstances have not improved. The factors related to the determination of our ability to continue as a going concern include our working capital deficit, lack of foreseeable revenues from operations, need for additional capital to maintain our interest in the Peek Claims, and need for additional capital to fund our general and administrative requirements. Management’s plan to resolve the going concern uncertainty had been to raise additional capital of $3 million to acquire DIA through debt or equity financing during coming months. As noted above, the DIA Term Sheet was terminated on May 30, 2010, and therefore our plan for recovery has changed. Our ability to continue as a going concern is dependent on our ability to raise additional capital, complete an acquisition and conduct successful exploration activities on our properties and drive appreciation in the value of our exploration properties and assets. If we are unable to raise additional capital in a timely manner, sufficient to close an as yet unidentified acquisition, we may be required to sell our Peek Claims or permit such claims to lapse. As a result, we may be forced to discontinue operations.

We have not declared or paid dividends on our shares since incorporation and do not anticipate doing so in the foreseeable future.

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 are material to our stockholders.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCUSSION ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including the Chief Executive Officer / Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the Chief Executive Officer / Chief Financial Officer has concluded that as of the end of the period covered by this report, due to material weaknesses in internal controls over financial reporting as described in our Form 10-K filed on March 16, 2010, the Company’s disclosure controls and procedures were not adequately designed and were not effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms.

Management is taking steps to address the material weaknesses previously identified. We engaged legal counsel who is experienced and qualified to practice before the Securities and Exchange Commission, who actively reviewed Company events and major transactions to advise management on appropriate disclosure of those events and transactions. In addition, we engaged Lancaster & David to provide accounting consulting services and to assist in the preparation of our financial statements. Ted R. Sharp, CPA, our CEO and CFO, has substantial experience as a CFO of publicly-traded companies. Company filings with the SEC are reviewed by the Board of Directors, our management, and our SEC legal firm for proper and complete disclosure. Although the lack of sufficient working capital has had an adverse effect on significant improvement in disclosure controls and procedures, management believes that internal control over financial reporting in the future will improve the results of its evaluation of disclosure controls.

Changes in internal controls over financial reporting

During the period covered by this report, there were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or 15(d)-15(f)) that occurred during the period covered by this quarterly report 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

None.

ITEM 1A. RISK FACTORS

Not required for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibits
31.1	Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

___________________________

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		TEXADA VENTURES INC.


	By:	s/ Ted R. Sharp
		TED R. SHARP
		Chief Executive Officer, Chief Financial Officer
		President, Secretary and Treasurer and
		Director
		(Principal Executive Officer
		and Principal Accounting Officer)

	Date:	October 15, 2010

Black Sea Metals Inc. - FORM 10-Q - October 15, 2010

Attached files

Black Sea Metals Inc. Reports