VRDT Corp - FORM 10-Q - February 17, 2011

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - VRDT Corp	ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - VRDT Corp	ex31-2.htm
EX-32.2 - EXHIBIT 32.2 - VRDT Corp	ex32-2.htm
EX-31.1 - EXHIBIT 31.1 - VRDT Corp	ex31-1.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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

q	TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____ TO_____

Commission File number: 000-52677

WINWHEEL BULLION, INC.

(Exact name of registrant as specified in its charter)

Delaware		26-3773798
(State or other jurisdiction Of incorporation)		(I.R.S. Employer Identification No.)

4695 MacArthur Court, 11th Floor, Newport Beach, California 92660

(Address of principal executive offices)

202-536-5191

(Issuer’s telephone number)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	q	Accelerated filer	q

Non-accelerated filer	q	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 q No x

As of January 18, 2011, the registrant had 3,700,726 shares of its Common Stock outstanding.

TABLE OF CONTENTS

WINWHEEL BULLION, INC.

(A DEVELOPMENT STAGE COMPANY)

Part I – Financial Information

Item 1	Financial Statements

	Balance Sheets as of December 31, 2010 and March 31, 2010	3

	Statements of Operations for the Nine and Three Months Ended December 31, 2010, and 2009 and for the Period from Inception, August 19, 1999, through December 31, 2010	4

	Statements of Cash Flows for the Nine Months Ended December 31, 2010, and 2009 and the Period from Inception, August 19, 1999, through December 31, 2010	5

	Notes to the Financial Statements	7

Item 2	Management’s Discussion and Analysis or Plan of Operation	10

Item 3	Quantitative and Qualitative Disclosures about Market Risk	13

Item 4	Controls and Procedures	13

Part II – Other Information

Item 1	Legal Proceedings	14

Item 2	Unregistered Sales Of Equity Securities And Use Of Proceeds	14

Item 3	Defaults 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

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Winwheel Bullion, Inc.
(A Development Stage Company)
Balance Sheets

	December 31,			March 31,
	2010			2010
	(unaudited)

ASSETS

Current assets
Cash	$	31		$	38
Prepaid expenses		6,944			2,982

Total current assets		6,975			3,020

Total assets	$	6,975		$	3,020

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities
Accounts payable and accrued expenses	$	162,788		$	154,498
Related party payable		125,596			94,236
Interest payable to shareholder		15,483			9,120

Total current liabilities		303,867			257,854

Total liabilities		303,867			257,854

Stockholders' deficiency
Common stock, $.001 par value, 95,000,000 shares
authorized; 3,700,726 shares issued and outstanding		3,701			3,701
Additional paid-in capital		8,334,539			8,334,539
Accumulated deficit during the development stage		(8,635,132	)		(8,593,074	)

Total stockholders' deficiency		(296,892	)		(254,834	)

Total liabilities and stockholders' deficiency	$	6,975		$	3,020

See accompanying notes to financial statements.

Winwheel Bullion, Inc.
(A Development Stage Company)
Statements of Operations
(unaudited)

													For the Period
													August 19, 1999
	Three Months Ended						Nine Months Ended						(Inception) to
	December 31,						December 31,						December 31,
	2010			2009			2010			2009			2010

Sales	$	-		$	-		$	-		$	-		$	370,800
Cost of sales		-			-			-			-			-

Gross profit		-			-			-			-			370,800

General and administrative expenses		4,794			11,864			35,695			40,417			6,867,148
Impairment of long-lived assets		-			-			-			-			855
Impairment of loan receivable		-			-			-			-			130,000
Total expenses		4,794			11,864			35,695			40,417			6,998,003

Loss from operations		(4,794	)		(11,864	)		(35,695	)		(40,417	)		(6,627,203	)

Other income (expense)
Interest expense		(2,252	)		(1,532	)		(6,363	)		(3,819	)		(558,290	)
Other income		-			-			-			-			56,889
Loss from conversion of shareholder debt		-			-			-			-			(1,506,528	)

Net loss	$	(7,046	)	$	(13,396	)	$	(42,058	)	$	(44,237	)	$	(8,635,132	)


Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

Weighted average shares outstanding		3,700,726			3,700,726			3,700,726			3,539,271

See accompanying notes to financial statements.

Winwheel Bullion, Inc.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)

							For the Period
							August 19, 1999
	Nine Months Ended						(Inception) to
	December 31,						December 31,
	2010			2009			2010

Cash flows from operating activities
Net income (loss)	$	(42,058	)	$	(44,237	)	$	(8,635,132	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			-			52,789
Impairment of long-lived assets		-			-			855
Impairment of loan receivable		-			-			130,000
Accrued interest payable converted to equity		-			-			209,817
Common stock issued for services		-			-			123,599
Loss from conversion of stockholder debt to common stock		-			-			1,506,528
Expenses paid by stockholder and affiliate		-			-			636,796
Payables and services converted to common stock		-			-			770,674
Changes in operating assets and liabilities
Prepaid expenses		(3,962	)		(6,247	)		(6,944	)
Accounts payable and accrued liabilities		8,290			7,849			172,042
Interest payable to shareholder		6,363			3,819			351,240

Net cash used in operating activities		(31,367	)		(38,815	)		(4,687,736	)

Cash flows from investing activities
Acquisition of property and equipment		-			-			(53,644	)
Loan receivable		-			-			(130,000	)

Net cash used in investing activities		-			-			(183,644	)

Cash flows from financing activities
Proceeds from parent company		-			-			697,193
Proceeds from notes payable - other		-			-			385,000
Proceeds from notes payable - shareholder		31,360			38,541			1,894,744
Proceeds from notes payable - affiliates		-			-			2,564,191
Payments on notes payable - other		-			-			(338,018	)
Payments on notes payable - stockholder		-			-			(190,699	)
Payments on notes payable - affiliates		-			-			(141,000	)

Net cash provided by financing activities		31,360			38,541			4,871,411

Winwheel Bullion, Inc.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)

							For the Period
							August 19, 1999
	Nine Months Ended						(Inception) to
	December 31,						December 31,
	2010			2009			2010

Net increase in cash		(7	)		(274	)		31

Cash at beginning of period		38			606			-

Cash at end of period	$	31		$	332		$	31

Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	-		$	-		$	-

Taxes paid	$	-		$	-		$	-

Noncash investing and financing activities:
Common stock issued pursuant to conversion of note payable	$	-		$	-		$	-

See accompanying notes to financial statements.

WINWHEEL BULLION, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

The accompanying unaudited financial statements of Winwheel Bullion, Inc. (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the interim period ended December 31, 2010 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending March 31, 2011. In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Recent Accounting Pronouncements

In August 2010, the FASB issued Accounting Standards Update 2010-21, "Accounting for Technical Amendments to Various SEC Rules and Schedules". This Accounting Standards Update amends various SEC paragraphs pursuant to the issuance of Release No. 33-9026; Technical Amendments to Rules, Forms, Schedules and Codifications of Financial Reporting Policies. Management does not expect this update to have a material effect on the Company's financial statements.

In July 2010, the FASB issued Accounting Standards Update ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The main objective of ASU 2010-20 is to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This Update is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The amendments in this Update affect all entities with financing receivables, excluding short-term trade accounts receivable or receivables measured at fair value or lower of cost or fair value. The effect likely will be less significant for many commercial and industrial entities whose financing receivables are primarily short-term trade accounts receivable. For nonpublic entities, the disclosures are effective for annual reporting periods ending on or after December 15, 2011. The Company does not expect adopting this statement to have a material impact on its results of operations, financial position or cash flows at the date of adoption.

In February 2010, the FASB issued Accounting Standards Update 2010-09, "Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements." This FASB retracts the requirement to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or were available to be issued. ASU 2010-09 is effective for interim and annual financial periods ending after February 24, 2010, and has been applied with no material impact on the Company's financial statements.

In February 2010, the FASB issued Accounting Standards Update 2010-08, "Technical Corrections to Various Topics." This FASB eliminates inconsistencies and outdated provisions in GAAP and provides needed clarification on others. ASU 2010-08 is effective for interim and annual financial periods ending after February 2010, and has been applied with no material impact on the Company's financial statements.

In August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05, Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value of such liability using one or more of the techniques prescribed by the update. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In June 2009, the FASB issued guidance related to the accounting for transfers of financial assets codified primarily in ASC Topic 860, “Transfers and Servicing.” This guidance requires entities to provide more information about transfers of financial assets and a transferor’s continuing involvement, if any, with transferred financial assets. It also requires additional disclosures about the risks that a transferor continues to be exposed to because of its continuing involvement in transferred financial assets. ASC Topic 860 eliminates the concept of a qualifying special-purpose entity and changes the requirements for de-recognition of financial assets. This Topic is effective for the company in its interim and annual reporting periods beginning on and after January 1, 2010. The company is currently evaluating the impact that the adoption of ASC Topic 860 will have on the reporting of its financial results.

In May 2009, the FASB issued new guidance codified primarily in ASC Topic 855, “Subsequent Events.” This guidance was issued in order to establish principles and requirements for reviewing and reporting subsequent events and requires disclosure of the date through which subsequent events are evaluated and whether the date corresponds with the time at which the financial statements were available for issue (as defined) or were issued. This guidance is effective for interim reporting periods ending after June 15, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements. Refer to Note 9, “Subsequent Events,” for the required disclosures in accordance with ASC Topic 855.

In April 2009, the FASB issued new guidance codified primarily in ASC Topic 825, “Financial Instruments.” This guidance requires an entity to provide disclosures about fair value of financial instruments in interim financial information and is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements. Refer to Note 5, “Fair Value of Financial Instruments,” for the disclosures required in accordance with this guidance.

NOTE 2 - RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained losses of $42,058 and $73,636 for the nine months ended December 31, 2010 and the year ended March 31, 2010, respectively. The Company had an accumulated deficit of $8,635,132 at December 31, 2010. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is highly dependent on its ability to continue to obtain investment capital and loans from an affiliate and shareholder in order to fund the current and planned operating levels. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to bring in income generating activities and its ability to continue receiving investment capital and loans from an affiliate and shareholder to sustain its current level of operations. No assurance can be given that the Company will be successful in these efforts.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 - BALANCE SHEET DETAILS

Prepaid expenses consist of the following:

Prepaid insurance	$	6,944

Total prepaid expenses	$	6,944

Accounts payable consists of the following:

Vendors	$	162,788

Total accounts payable	$	162,788

NOTE 5 - NOTES PAYABLE

Martin Consultants, Inc. periodically provided loans to the Company for working capital needs. Martin Consultants, Inc. is 100% owned by Jeffrey Martin, a previous majority shareholder of the Company. Activity for the nine months ended December 31, 2010 and the year ended March 31, 2010 are as follows:

Balance at March 31, 2009	$	61,000
Converted to common stock		(61,000	)
Balance at March 31, 2010		-
Activity		-
Balance at December 31, 2010	$	-

From the time of change in control of the Company, Martin Consultants, Inc. and Jeffrey Martin have agreed to forgo any further interest payments and the Company owes no interest to Martin Consultants, Inc. In July 2009, the balance was converted to 300,000 shares of common stock of the Company.

Since the change in control of the Company, Winwheel Bullion Holdings, LLC (“WBHLLC”, formerly known as Winwheel Bullion, LLC), the majority shareholder of the Company, periodically provided loans to the Company for working capital needs. WBHLLC is 100% owned by Sungjin Kim. Activity for the nine months ended December 31, 2010 and the year ended March 31, 2010 are as follows:

Balance at March 31, 2009	$	46,502
Issued		47,734
Balance at March 31, 2010		94,236
Issued		31,360
Balance at December 31, 2010	$	125,596

The notes issued to WBHLLC are payable on demand and bears interest at the rate of 8% per year.

NOTE 6 - RELATED PARTIES

WBHLLC is owned 100% by Sungjin Kim, who was the Chief Executive Officer and Director of the Company until his resignation on June 23, 2009. WBHLLC owns 48.6% of the Company. WBHLLC maintains business interests in other ventures outside of the Company. Additionally, as discussed in Note 5, the Company owes WBHLLC $125,596 as of December 31, 2010. The Company has accrued interest payable to WBHLLC of $15,483 as of December 31, 2010.

NOTE 7 - IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Accounting Standard Codification (ASC) 360-10, “Impairment or Disposal of Long-lived Assets,” the Company reviews for Impairment of long-lived assets whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. The Company considers the carrying value of assets may not be recoverable based upon its review of the following events or changes in circumstances: the asset's ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant industry or economic trends. An impairment of $855 was recognized on long lived assets during the year ended March 31, 2009.

NOTE 8 - STOCKHOLDERS' EQUITY

Common Stock

On July 28, 2009, the Company’s board of directors by unanimous written consent authorized the conversion of the $61,000 debt to Martin Consultants, Inc. to 300,000 shares of common stock of the Company (see Note 5).

On May 5, 2008, the Company's board of directors by unanimous written consent authorized one for ten reverse split. Accordingly, all references to numbers of common shares and per share data in the accompanying financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. Concurrent with the reverse stock split, the board of directors authorized an increase in common shares from 50,000,000 to 95,000,000.

On September 5, 2007, the Company converted $167,392 of notes payable to Jeffrey D. Martin to 669,577 shares of common stock. The common stock issued in the conversion was valued at $0.25 per share, based on the quoted market price and the Company recognized a loss on the conversion of $1,506,528 in 2007.

Preferred Stock

The Company authorized 5,000,000 shares of preferred stock at $0.001 par value. As or December 31, 2010, no shares have been issued or are outstanding.

NOTE 9 - SUBSEQUENT EVENTS

The Company has evaluated events from December 31, 2010 through the date whereupon the financial statements were issued and has determined that there are no additional items to disclose.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THESE FORWARD LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR ANTICIPATED RESULTS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" IN THIS “MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT. THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH "SELECTED FINANCIAL DATA" AND THE COMPANY'S FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

Plan of Operation

The Company formerly known as Skreem Entertainment Corp./Diversified Global Holdings, Inc. was a development stage company that was incorporated in Nevada on or about August 19, 1999 and was formed to promote, finance and manage artists and projects in the music industry. The stockholders of Skreem Entertainment Corp, on or about May 5, 2008, approved the name change from Skreem Entertainment Corp. to Diversified Global Holdings, Inc., approved a reverse split of ten shares of common stock for one share of common stock, and approved the increase of authorized capital to 100,000,000 consisting of 95,000,000 shares of common stock and 5,000,000 shares of preferred stock. On or about September 4, 2008, Skreem Entertainment Corp. changed to Diversified Global Holdings, Inc. with effective reverse split and increase of authorized capital. On or about August 11, 2008, there was a change in control as noted in Form 8-K dated August 19, 2008. The name of the Company was officially changed from Diversified Global Holdings, Inc. to Winwheel Bullion Inc. (“WWB” or the “Company”) as noted in Form 8-K dated October 20, 2008. The Company’s common stock is currently traded on the NASDAQ OTC Bulletin Board under the symbol “WWBU.OB” whereas prior to the name change traded as SKNT.OB. With the change of officers and director of the Company associated with change in control of majority shareholder as noted in Form 8-K filings dated August 19, 2008 and September 16, 2008, incorporated as though fully set forth herein, the director and officers, in the best interest of the Company, have changed the business of the Company to land development. The Company is a development stage company that was incorporated in Delaware on August 1, 2008 and is located in the State of California. The Company has been pursuing potential projects and funding. With the world economic issues and status, the efforts of the Company are more challenging but will continue to pursue in efforts to build business and bring in income generating activities.

Results of Operations for the Three Months Ended December 31, 2010 as Compared to the Three Months Ended December 31, 2009.

Overview

Total revenues did not change from $0 for the three months ended December 31, 2010 from $0 for the three months ended December 31, 2009.

Total operating expenses decreased to $4,794 for the three months ended December 31, 2010 from $11,864 for the three months ended December 31, 2009. This $7,070 or 59.6% decrease was primarily attributable to the decrease in professional and consulting fees.

Results of Operations for the Nine Months Ended December 31, 2010 as Compared to the Nine Months Ended December 31, 2009.

Overview

Total revenues did not change from $0 for the nine months ended December 31, 2010 from $0 for the nine months ended December 31, 2009.

Total operating expenses decreased to $35,695 for the nine months ended December 31, 2010 from $40,417 for the nine months ended December 31, 2009. This $4,722 or 11.7% decrease was primarily attributable to the increase in professional and consulting fees and insurance expenses.

Liquidity and Capital Resources

As of December 31, 2010, the Company had cash of $31 and a deficit in working capital of $296,892. Net loss was $42,058 for the nine months ended December 31, 2010. The Company generated a negative cash flow from operations of $31,367 for the nine months ended December 31, 2010. The negative cash flow from operating activities for the period is primarily attributable to the Company's increase in prepaid expenses, $3,962, offset by an increase in accounts payable and accrued liabilities, $8,290, and interest payable to stockholder, $6,363. The increase in financing activities is attributable to the Company’s proceeds from its shareholder, $31,360.

	Nine months ended
	December 31, 2010			December 31, 2009
Cash used in operating activities	$	(31,367	)	$	(38,815	)
Cash used in investing activities		0			0
Cash provided by financing activities		31,360			38,541
Net changes to cash	$	(7	)	$	(274	)

Cash used in operations decreased by $7,448 to $31,367 for the nine months ended December 31, 2010 from $38,815 for the corresponding prior period. The decrease is attributable to increases in professional and consulting fees and other general and administrative expenses offset by an increase in accounts payable and accrued liabilities.

GOING CONCERN

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained income of $0 and losses of $42,058 for the nine months ended December 31, 2010 compared to income of $0 and losses of $44,237 for the nine months ended December 31, 2009. The Company had an accumulated deficit of $8,635,132 at December 31, 2010. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is highly dependent on its ability to continue to obtain investment capital and loans from an affiliate and shareholder in order to fund the current and planned operating levels. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to bring in income generating activities and its ability to continue receiving investment capital and loans from an affiliate and shareholder to sustain its current level of operations. No assurance can be given that the Company will be successful in these efforts.

OUR BUSINESS IS SUBJECT TO MANY RISK FACTORS, INCLUDING THE FOLLOWING (REFERENCES TO "OUR," "US," "WE," AND WORDS OF SIMILAR MEANING) IN THESE RISK FACTORS REFER TO THE COMPANY.

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.

It is more difficult for our shareholders to sell their shares because we are not, and may never be, eligible for NASDAQ or any national stock exchange.

We are not presently, nor is it likely that for the foreseeable future we will be, eligible for inclusion in NASDAQ or for listing on any United States national stock exchange. To be eligible to be included in NASDAQ, a company is required to have not less than $4,000,000 in net tangible assets, a public float with a market value of not less than $5,000,000, and a minimum bid price of $4.00 per share. At the present time, we are unable to state when, if ever, we will meet the NASDAQ application standards. Unless we are able to increase our net worth and market valuation substantially, either through the accumulation of surplus out of earned income or successful capital raising financing activities, we will never be able to meet the eligibility requirements of NASDAQ. As a result, it will more difficult for holders of our common stock to resell their shares to third parties or otherwise, which could have a material adverse effect on the liquidity and market price of our common stock.

Sungjin Kim owns indirectly through related parties approximately 48.6% of our outstanding common stock, and has significant influence over our corporate decisions, and as a result, if you invest in us, your ability to affect corporate decisions will be limited.

Sungjin Kim holds 1,800,000 shares of our common stock indirectly through Winwheel Bullion Holdings, LLC (“WBHLLC”, formerly known as Winwheel Bullion, LLC), representing approximately 48.6% of the outstanding shares of our common stock. Accordingly, Mr. Kim will have significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control even after such conversion and exercise by other investors, as Mr. Kim will likely continue to be our largest shareholder. The interests of Mr. Kim may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other shareholders. Additionally, potential investors should take into account the fact that any vote of shares purchased will have limited effect on the outcome of corporate decisions.

The Company has entered into indemnification agreements with the officers and directors and we may be required to indemnify our Directors and Officers, and if the claim is greater than $1,000,000, it may create significant losses for the Company.

We have authority under Delaware and California law to indemnify our directors and officers to the extent provided in that statute. Our Bylaws require the Company to indemnify each of our directors and officers against liabilities imposed upon them (including reasonable amounts paid in settlement) and expenses incurred by them in connection with any claim made against them or any action, suit or proceeding to which they may be a party by reason of their being or having been a director or officer of the company. We maintain officer's and director's liability insurance coverage with limits of liability of $1,000,000. Consequently, if such judgment exceeds the coverage under the policy, the Company may be forced to pay such difference. We have entered into indemnification agreements with each of our officers and directors containing provisions that may require us, among other things, to indemnify our officers and directors against certain liabilities that may arise by reason of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. Management believes that such indemnification provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. We are subject to claims arising from disputes with employees, vendors and other third parties in the normal course of business. These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time. If the plaintiffs in any suits against us were to successfully prosecute their claims, or if we were to settle such suits by making significant payments to the plaintiffs, our operating results and financial condition would be harmed. In addition, our organizational documents require us to indemnify our senior executives to the maximum extent permitted by Delaware and California law. If our senior executives were named in any lawsuit, our indemnification obligations could magnify the costs of these suits.

Future changes in financial accounting standards and other applicable regulations by various governmental regulatory agencies may cause lower than expected operating results and affect our reported results of operations.

Changes in accounting standards and their application may have a significant effect on our reported results on a going forward basis and may also affect the recording and disclosure of previously reported transactions. New standards have occurred and will continue to occur in the future. For example, in December 2004, the Financial Accounting Standards Board issued SFAS No. 123 (revised 2004), as amended, “Share Based Payment” (“SFAS No. 123R”), which requires us to expense stock options at fair value effective January 1, 2006. Under SFAS No. 123R, the recognition of compensation expense for the fair value of stock options reduces our reported net income and net income per share subsequent to implementation; however, this accounting change will not have any impact on the cash flows of our business. Under the prior rules, expensing of the fair value of the stock options was not required and therefore, no compensation expense for stock options was included in reported net income and net income per share in fiscal 2006. The Company issued 100,000 shares of stock options in fiscal 2007, recognizing $24,150 of compensation expense. Any future issuances of stock options, in addition to the fiscal 2006 issuances, will cause additional compensation expense to be recognized. As of December 31, 2010, there are no outstanding stock options.

The Sarbanes-Oxley Act of 2002 and various new rules subsequently implemented by the Securities and Exchange Commission (“SEC”) and the NASDAQ National Market have imposed additional reporting and corporate governance practices on public companies.

In addition, if we do not adequately continue to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in the future, we may not be able to accurately report our financial results or prevent error or fraud, which may result in sanctions or investigation by regulatory authorities, such as the SEC. Any such action could harm our business, financial results or investors’ confidence in our company, and could cause our stock price to fall.

The nature of our businesses exposes us to the risk of litigation and liability under environmental, health and safety and product liability laws.

Certain aspects of our businesses involve risks of liability. In general, litigation in our industry, including class actions that seek substantial damages, arises with increasing frequency. Claims may be asserted under environmental, labor, health and safety or product liability laws. Litigation is invariably expensive, regardless of the merit of the plaintiffs’ claims. Given the general risks, as stated, there is a chance that the Company could be named as a defendant in the future, and there can be no assurance that regardless of the merit of such claims, we will not be required to make substantial settlement payments in the future.

If the Company decides to operate internationally, there are risks which could adversely affect operating results.

Currently, we have no projects, projections or foreign interest involving international operations. However, the Company may in the future, given the opportunity, decide to pursue projects, business, or otherwise conduct operations internationally. Doing business in foreign countries does subject the Company to additional risks, any of which may adversely impact future operating results, including:

international political, economic and legal conditions;

our ability to comply with foreign regulations and/or laws affecting operations and projects;

difficulties in attracting and retaining staff and business partners to operate internationally;

language and cultural barriers;

seasonal reductions in business activities and operations in the countries where our international projects are located;

integration of foreign operations;

potential adverse tax consequences; and

potential foreign currency fluctuations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As the Company is a “smaller reporting company,” this item is inapplicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Interim Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the year ending March 31, 2010 covered by this Form 10-K. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.

Management is still in the process of evaluating its internal controls over financial reporting, based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this on-going evaluation, management has concluded that the Company’s internal control over financial reporting were not effective as of March 31, 2010 under the criteria set forth in the Internal Control—Integrated Framework. The determination was made partially due to the small size of the company and a lack of segregation of duties.

Changes in Internal Control over Financial Reporting

Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

Number	Description
3.1 (1)	Articles of Incorporation, as Amended
3.2 (1)	Bylaws
31.1 (2)	Certification of Chief Executive Officer of Winwheel Bullion, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 (2)	Certification of Chief Financial Officer of Winwheel Bullion, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 (2)	Certification of Chief Executive Officer of Winwheel Bullion, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63
32.2 (2)	Certification of Chief Financial Officer of Winwheel Bullion, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63

(1)

(2)

Previously filed with the form 8-K filed on April 7, 2004 and is incorporated herein by reference.

Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

	WINWHEEL BULLION, INC.


Date: February 17, 2011	By:	/s/ Stephen V. Williams
		Stephen V. Williams
		Chief Executive Officer

Date: February 17, 2011	By:	/s/ Bruce Harmon
		Bruce Harmon
		Interim Chief Financial Officer

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