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EX-32 - EXHIBIT 32 - CRATER MOUNTAIN RESOURCES, INC.crater-ex32.htm
EX-31 - EXHIBIT 31 - CRATER MOUNTAIN RESOURCES, INC.crater-ex31.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
December 31, 2010
 
 
Commission File Number 333-151085

CRATER MOUNTAIN RESOURCES, INC.
(Exact name of registrant as specified in its charter)


       Nevada                                                                                               20-8837756
(State or other jurisdiction of incorporation or organization)               (I.R.S. Employer Identification No.)


 4666 Mission Avenue, Suite 1
San Diego, CA 92116  
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (619) 819-7595 

 
Former Name, Address and Fiscal Year, if Changed Since Last Report
None


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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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  ___  No  X  

As of December 31, 2010 there were 30,000,000 shares of our common stock issued and outstanding.
 

 
1

 


TABLE OF CONTENTS
     
     
PART I. FINANCIAL INFORMATION
 
3
     
Item 1. Financial Statements      
 
3
     
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
 
12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 
13
     
Item 4T. Controls and Procedures 
 
13
     
PART II . OTHER INFORMATION 
 
14
     
 Item 1. Legal Proceedings
 
14
     
 Item 1A. Risk Factors 
 
14
     
 Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds
 
14
     
 Item 3.  Default Upon Senior Securities
 
14
   
 
Item 4.  Submission of Matters to a Vote of Security Holders
 
                     14
     
 Item 5.  Other Information
 
14
     
Item 6. Exhibits 
 
14
     
SIGNATURES     
 
15
     


 





 
2

 


PART I - FINANCIAL INFORMATION
 
Item 1. Financial statements
 
The financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the period presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Registration Statement on Form S-1/A, filed on September 30, 2010 with the U.S. Securities and Exchange Commission (SEC) and can be found on the SEC website at www.sec.gov.





















 
3

 


 
CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
 
 
         
 December 31,
 
 June 30,
         
2010
 
2010
         
 (unaudited)
 
 (Audited)
               
 
ASSETS
         
               
CURRENT ASSETS
         
 
Cash
   
 $                        368
 
 $                     1,265
               
   
Total current assets
   
                           368
 
                        1,265
               
   
TOTAL ASSETS
   
 $                        368
 
 $                     1,265
               
               
               
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
         
               
CURRENT LIABILITIES
         
   
Line of credit
   
 $                   14,800
 
 $                     9,800
   
Interest payable
   
                           631
 
                           267
               
   
Total current liabilities
   
                      15,431
 
                      10,067
               
   
TOTAL LIABILITIES
   
                      15,431
 
                      10,067
               
STOCKHOLDERS' DEFICIT
         
 
Common stock, $0.001 par value; 150,000,000
         
   
shares authorized; 30,000,000 shares issued and outstanding
 
                      30,000
 
                      30,000
 
Additional paid-in-capital
   
                      13,200
 
                      11,400
 
Deficit accumulated during the exploration stage
   
                    (58,263)
 
                    (50,202)
               
   
Total stockholders' deficit
   
                    (15,063)
 
                      (8,802)
               
   
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
   
 $                        368
 
 $                     1,265
               

 
he accompanying notes are an integral part of the financial statements.
 

 
 
4

 

 
CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
 (UNAUDITED)

 
                       
     
Three months ended
Three months ended
Six months ended
Six months ended
 From inception (April 11, 2007)
     
December 31,
 
December 31,
 
December 31,
 
December 31,
 
to December 31,
     
2010
 
2009
 
2010
 
2009
 
 2010
                       
REVENUES
 $                             -
 
 $                             -
 
 $                             -
 
 $                             -
 
 $                              -
                       
EXPENSES
                 
 
Selling, general and administrative
                         3,262
 
                           925
 
                        7,697
 
                        3,364
 
                       57,632
   
Total expenses
                         3,262
 
                           925
 
                        7,697
 
                        3,364
 
                       57,632
                       
OTHER EXPENSE
                 
 
Interest expense
                            187
 
                              -
 
                           364
 
                              -
 
                            631
   
Total other expense
                            187
 
                              -
 
                           364
 
                              -
 
                            631
                       
NET LOSS
 $                    (3,449)
 
 $                       (925)
 
 $                    (8,061)
 
 $                    (3,364)
 
 $                   (58,263)
                       
NET LOSS PER SHARE - BASIC
 $                           -
 
 $                           -
 
 $                           -
 
 $                           -
   
                       
WEIGHTED AVERAGE NUMBER OF
           
       SHARES OUTSTANDING - BASIC
                30,000,000
 
               30,000,000
 
               30,000,000
 
               30,000,000
   
                       





The accompanying notes are an integral part of the financial statements.
 

 
 
5

 

 
CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS‘EQUITY (DEFICIT)
(UNAUDITED)
 
                       
                 
Deficit
   
                 
accumulated
   
     
 Common stock
   
 Additional
 
 during the
 
 Total
     
 Number of
     
 paid-in
 
 development
 
 stockholders'
     
 shares
 
 Amount
 
 capital
 
 stage
 
 deficit
                       
Balance April 11, 2007
                               -
 
 $                    -
 
 $                    -
 
 $                        -
 
 $                          -
                       
Common stock issued for
                 
 
cash, May 8, 2007
                 
 
at $0.001 per share
              30,000,000
 
                30,000
 
                       -
 
                           -
 
                     30,000
                       
                       
Net loss
 
                               -
 
                         -
 
                         -
 
                   (3,010)
 
                      (3,010)
                       
Balance June 30, 2007
              30,000,000
 
                30,000
 
                         -
 
                   (3,010)
 
                     26,990
                       
                       
Contributed capital
                               -
 
                         -
 
                  4,200
 
                             -
 
                       4,200
                       
                       
Net loss
 
                               -
 
                         -
 
                         -
 
                 (19,220)
 
                    (19,220)
                       
Balance June 30, 2008
              30,000,000
 
                30,000
 
                  4,200
 
                 (22,230)
 
                     11,970
                       
                       
Contributed capital
                               -
 
                         -
 
                  3,600
 
                             -
 
                       3,600
                       
Net loss
 
                               -
 
                         -
 
                         -
 
                 (15,030)
 
                    (15,030)
                       
Balance June 30, 2009
              30,000,000
 
                30,000
 
                  7,800
 
                 (37,260)
 
                          540
                       
                       
Contributed capital
                             -
 
                       -
 
                  3,600
 
                           -
 
                       3,600
                       
Net loss
 
                             -
 
                       -
 
                       -
 
                 (12,942)
 
                    (12,942)
                       
Balance June 30, 2010, (audited)
              30,000,000
 
30,000.00
 
11,400.00
 
(50,202.00)
 
(8,802.00)
                       
                       
Contributed capital
                             -
 
                       -
 
                  1,800
 
                           -
 
                       1,800
                       
Net loss
 
                             -
 
                       -
 
                       -
 
                   (8,061)
 
                      (8,061)
                       
Balance December 31, 2010, (unaudited)
              30,000,000
 
 $             30,000
 
 $             13,200
 
 $              (58,263)
 
 $                 (15,063)
                       
                       

 
The accompanying notes are an integral part of the financial statements.
 
 
 
6

 


CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
                                    From inception
         
                 Six months ended
                Six months ended
              (April 11, 2007) 
         
December 31,
 
December 31,
 
to December 31,
         
2010
 
2009
 
 2010
                   
 CASH FLOWS FROM OPERATING ACTIVITIES
       
 
 Net loss
 $                    (8,061)
 
 $                    (3,364)
 
 $                   (58,263)
 
 Adjustments to reconcile
         
   
 net loss to net cash used
         
   
 from operating activities:
         
     
 Contributed capital for rent
                         1,800
 
                         1,800
 
                       13,200
 
 Changes in operating assets and liabilities:
         
   
 Increase in interest payable
                            364
 
                              39
 
631
                   
       
 Net cash flows used in operating activities
                       (5,897)
 
                       (1,525)
 
                      (44,432)
                   
 CASH FLOWS FROM FINANCING ACTIVITIES
       
 
 Issuance of common stock
                                -
 
                                -
 
                       30,000
 
 Increase in line of credit
                         5,000
 
                         2,800
 
                       14,800
                   
       
 Net cash flows provided from financing activities
                         5,000
 
                         2,800
 
                       44,800
                   
 NET INCREASE IN CASH
                          (897)
 
                         1,275
 
                            368
                   
 CASH
         
   
 BEGINNING OF PERIOD
                         1,265
 
                            540
 
                                 -
                   
 CASH
         
   
 END OF PERIOD
 $                         368
 
 $                      1,815
 
 $                         368
                   
Non Cash Activity
         
                   
                   
             
                        -
 
                      -
             
                        -
 
                      -
                   

 
The accompanying notes are an integral part of the financial statements.

 
7

 
 
 
CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 1 – ORGANIZATION AND PURPOSE

Nature of operations
Crater Mountain Resources, Inc. (An Exploration Stage Company) (the “Company”) was incorporated under the laws of the State of Nevada on April 11, 2007.  The principal office of the corporation is 4666 Mission Avenue, Suite 1, San Diego, CA 92116.
 
The business purpose of the Company is the exploration and mining of precious metals, specifically gold, in Papua New Guinea.
 
A Development Stage Company

The accompanying financial statements have been prepared in accordance with the FASB ASC 915-10, "Development Stage Entities".  A development stage enterprise is one in which planned principal operations have not commenced; or if its operations have commenced, there have been no significant revenues derived there from.  As of December 31, 2010, the Company has not fully commenced nor has it received significant revenues from its planned principal operations.
 
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the six month period ended December 31, 2010, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2011.  For further information refer to the financial statements and footnotes thereto included in our form 10-K for the year ended June 30, 2010.
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Definition of Fiscal Year

The Company’s fiscal year is June 30.
 
Going Concern
 
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The Company has incurred losses since inception resulting in an accumulated deficit of $58,263 as of December 31, 2010 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern.  The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private placement of common stock.
 
 
 
 

 
 
8

 

CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010
(UNAUDITED)

 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Going Concern
 
The financials statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence.
 
Income taxes
 
The Company follows the liability method of accounting for income taxes in accordance with FASB ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances.  Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.

Cash and Cash Equivalents
 
Cash and cash equivalents consist of highly liquid investments with maturities of three months or less when purchased.  Cash and cash equivalents are on deposit with financial institutions without restrictions.
 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported period.  Actual results could differ from these estimates.

Earnings (Loss) Per Share Calculations:

Basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities.  Basic earnings (loss) per share is computed using the weighted-average number of outstanding common shares during the applicable period.  Diluted earnings per share is computed using the weighted-average number of common shares and common stock equivalent shares outstanding during the period.  Common stock equivalent shares are excluded from the computation if their effect is antidilutive.  For all periods presented, the Company has sustained losses, which would make use of equivalent shares antidilutive and, as such, the calculation has not been included.



 
 
 

 
 
9

 


CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
 (UNAUDITED)


 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

New Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-6, “Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures
 
of the valuation techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009, except for the disclosure of purchases, sales, issuances and settlements of Level 3 measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. As ASU 2010-6 only requires enhanced disclosures, the Company does not expect that the adoption of this update will have a material effect on its financial statements.
 

NOTE 3 – STOCKHOLDERS’ DEFICIT

As of December 31, 2010, 150,000,000 shares of the Company’s $0.001 par value common stock had been authorized, of which 30,000,000 were issued and outstanding.  Of the total shares outstanding, 30,000,000 were issued to the founding shareholders for cash of $30,000 or $0.001 per share.

NOTE 4 – RELATED PARTY TRANSACTIONS

On or about April 14, 2009, The Magellan Global Fund, Ltd. (“Magellan”) entered into a rescission agreement with all of the share holders of Crater Mountain Resources that Magellan gave or sold shares. As a result, Magellan became the sole shareholder of the Company.  The Magellan Global Fund, LP, a Delaware Limited Partnership, was formed in September 2006. Messrs. Harry Orfanos and Niko Lahanas, who are Officers and Directors of the Company, are the Managing Partners of The Magellan Global Fund, LP.  The General Partner of the limited partnership is Orinda Advisors, LLC, a Delaware limited liability company. Harry Orfanos and Niko Lahanas are also the owners, officers and directors of Orinda Advisors, LLC. This transaction has had no effect on the financial condition of the Company.

On December 14, 2009, the Company executed an unsecured line of credit in the amount of $20,000 with Magellan Global Fund, Ltd. (“Magellan”). The line of credit carries an annual interest rate of 5% and has a term of one year, at which any outstanding balance is due in full. Additionally, on December 14, 2010, Magellan extended the term of the loan one year from the original due date. As of December 31, 2010, an amount of $14,800 had been used for general corporate purposes.
 



 
10

 




CRATER MOUNTAIN RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
 (UNAUDITED)

 
NOTE 4 – RELATED PARTY TRANSACTIONS (continued)
 
We are currently operating out of the offices paid for by our President, Roger Renken, located at 4666 Mission Blvd, Suite 1, San Diego, California on a rent-free basis. There is no written agreement or other material terms or arrangements relating to said arrangement. This agreement has been reflected as an increase in rent expense (SG&A) and contributed capital by the Company’s Officer totaling $1,800, $1,800 and $13,200 for the six months ended December 31, 2010 and 2009 and from inception (April 11, 2007) to December 31, 2010.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
11

 
 
FORWARD LOOKING STATEMENTS
 

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Results of Operations

The following discussion should be read in conjunction with the audited financial statements and notes thereto included in our Form 10-K filed on September 21, 2010 with the U.S. Securities and Exchange Commission (SEC) and can be found on the SEC website at www.sec.gov.

We are an exploration stage company formed for the purpose of exploration and mining of precious metals, specifically gold, in Papua New Guinea.  We are a start up, development stage mining company and have not yet generated any revenues from operations since inception.  From inception on April 11, 2007 to December 31, 2010, our total net loss is $58,263.
 
The following table provides selected financial data about the Company as of December 31, 2010.  For detailed financial information, see the financial statements included in this Form 10-Q.
 
Balance Sheet Data:
 
12/31/2010
 
Cash
 
$
368
 
Total assets
 
$
368
 
Total liabilities
 
$
15,431
 
Stockholders' deficit
 
$
(15,063)
 

 
We have conducted minimal operations since our inception and do not have any present operations. During the six months ended December 31, 2010 and 2009, we generated no revenues.  Accordingly, a comparative analysis and discussion of our results of operations is not meaningful and will not be presented herein.
 
Limited Operating History
 
There is little to no historical financial information about our Company upon which to base an evaluation of our performance or to make a decision regarding an investment in the shares. We are still in the development stages and have not yet generated or realized any revenues from operations. We cannot guarantee we will be successful in our business operations or will achieve significant levels of market acceptance for our proposed business. Our business could be subject to any or all of the problems, expenses, delays and risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration and/or development of our properties, possible cost overruns due to price and cost increases in services we require and the absence of an operating history.  Therefore, we cannot guarantee we will be able to achieve or maintain profitable operations.
 
 
 
 
 
 
12

 
 
 
 
Registration Statement
 
On February 19, 2010, our Form S-1 registration statement was declared effective by the SEC, allowing us to sell a total of 4,000,000 shares of our common stock and raise a total of $2,000,000, which we intend to use to implement our business operations  As of  August 19, 2010, however, no shares had yet been sold and the offering period  of 180 days had expired  On September 30, 2010, we filed an Amendment to the registration statement  with the SEC to extend the offering period for another 180  days from the effective date to allow us additional time to sell the shares. This offering is the initial public offering of common stock of Crater Mountain Resources, Inc.  and no public market currently exists for our securities or the shares being offered. We are offering for sale a total of 4,000,000 shares of common stock on a "self-underwritten" basis, which means the shares, will be offered and sold by our officers and directors, without any commissions being paid to them for any shares sold.  The offering will be an "all-or-none" offering, which means we will need to sell all of the shares before we can use any of the proceeds. We intend to establish a separate bank account, where all proceeds from sales of shares will be deposited until the offering is sold out and the total offering amount of $2,000,000 is raised, or until the 4,000,000 shares being offered in this registration have been sold, at which time the funds will be transferred to our business account for use in our proposed business operations. In the event we do not sell all of the shares and/or raise all of the proceeds before the expiration date of the offering, all monies collected will be returned promptly to the subscribers, without deductions or interest.
 
Further, there is no assurance that we will not encounter unforeseen difficulties that may deplete our capital resources more rapidly than anticipated. Upon successful completion of our initial offering, we intend to pursue our exploration activities to determine if viable mineralization exists on our property that warrants further exploration or development. We are totally dependent on receiving the proceeds from the offering to implement our proposed business plans.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, and are not required to provide the information under this item.
 
ITEM 4T. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 ("Exchange Act”) is recorded, processed, summarized and reported within the specified time periods. Our Chief Executive Officer and Principal Financial Officer (the "Certifying Officer”) is responsible for maintaining our disclosure controls and procedures. Prior to the filing of this report, our Certifying Officer evaluated the effectiveness of our disclosure controls and procedures for the period covered by this report. Based on the evaluation, our Certifying Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that (a) information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and (b) that the information is accumulated and communicated to our management, including the Certifying Officer, as appropriate, to allow timely decisions regarding required disclosure. We have conducted a review of the effectiveness of our internal controls over financial reporting as disclosed herein.
 
We also maintain a system of internal controls designed to provide reasonable assurance that (i) transactions are executed in accordance with management's general and specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with the United States generally accepted accounting principles and to maintain accountability for assets; (ii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. We believe that our internal controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles. Since our most recent evaluation, there have been no changes in our internal controls, or in other factors that could significantly affect our internal controls, nor were any corrective actions required with regard to significant deficiencies and material weaknesses. Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement and/or instance of fraud. Controls are susceptible to manipulation, especially in instances of fraud caused by the collusion of two or more people, including our senior management. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Under the supervision and with the participation of our Certifying Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control -Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2010. Since our most recent evaluation, there have been no changes in our internal control of financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 


 
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PART II - OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
We are not currently a party to any pending legal proceeding and none are threatened that we are aware of.

ITEM 1A. RISK FACTORS
 
Our securities are highly speculative and involve a high degree of risk, including among other items the risk factors described in our amended Registration Statement on Form S-1/A, filed on September 30, 2010. You should carefully consider those risk factors and other information in our Registration Statement on Form S-1 and this quarterly report before deciding to invest in our securities. We are unaware of any material changes in or additional risk factors since the filing of our S-1/A Registration Statement.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
We had no sales of unregistered equity securities during the period ended December 31, 2010.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES
 
None.
 
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.
 
 
ITEM 5. OTHER INFORMATION - SUBSEQUENT EVENTS
 
None.
 

ITEM 6. EXHIBITS

A) The following exhibits marked with an asterisk and required to be filed herein are incorporated by reference and can be found in their entirety in our original Form S-1 registration statement, filed on May 22, 2008, on the SEC website at www.sec.gov:

Exhibit No.  Description

* 3(i)                Articles of Incorporation
* 3(ii)               Bylaws
31                     Sec. 302 Certification
32                     Sec. 906 Certification


 
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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.

 
CRATER MOUNTAIN RESOURCES, INC. a Nevada corporation (Registrant)
 
Dated:    January 30, 2011

 /s/  Roger Renken                
By: Roger Renken, President, Secretary,
Treasurer, Principal Accounting Officer and Director
 
 
 
 
 
 
 
 
 
 

 

 
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