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EX-31.1 - SECTION 302 CERTIFICATION - SILVER STREAM MINING CORP. | exhibit311.htm |
EX-32.2 - SECTION 906 CERTIFICATION - SILVER STREAM MINING CORP. | exhibit321.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 February 28, 2011
o Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period _____________to______________
Commission File Number 333-121044
| W.S. INDUSTRIES, INC. |
|
| (Exact name of small Business Issuer as specified in its charter) |
|
Nevada |
| 98-0439650 |
(State or other jurisdiction of |
| (IRS Employer Identification No.) |
incorporation or organization) |
|
|
4255 Arbutus Street |
|
|
Vancouver, British Columbia |
| V6C 3T3 |
(Address of principal executive offices) |
| (Postal or Zip Code) |
Issuer's telephone number, including area code: |
| (604) 568-0059 | ||
|
|
| ||
| N/A |
| ||
| (Former name, former address and former fiscal year, if changed since last report |
|
Indicate by check mark whether the registrant (1) 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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes o No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Small reporting company
x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
x Yes o No
State the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date: 21,088,680 shares of $0.001 par value common stock outstanding as of April 14, 2011.
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
1
W.S. INDUSTRIES, INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
February 28, 2011
(Unaudited)
(Stated in US Dollars)
F-1
W.S. INDUSTRIES, INC.
(A Development Stage Company)
INTERIM BALANCE SHEETS
February 28, 2011 and August 31, 2010
(Unaudited)
(Stated in US Dollars)
| February 28, | August 31, |
| 2011 | 2010 |
ASSETS |
|
|
Current |
|
|
Cash | $ 4,459 | $ 3,475 |
|
|
|
Equipment- Note 2 | 167 | 195 |
| $ 4,626 | $ 3,670 |
LIABILITIES | ||
Current |
|
|
Accounts payable and accrued liabilities Note 5 | $ 522,120 | $ 418,146 |
Loans and advances Note 3 | 53,699 | 28,699 |
| 575,819 | 446,845 |
|
|
|
CAPITAL DEFICIT | ||
Capital Stock Note 4 |
|
|
Common Stock, $0.001 par value |
|
|
25,000,000 authorized |
|
|
21,088,680 issued and outstanding ( August 31, 2010: 21,088,680) | 21,089 | 21,089 |
Additional paid-in capital | 214,097 | 214,097 |
Deficit accumulated during the development stage | (811,894) | (683,876) |
Accumulated other comprehensive income | 5,515 | 5,515 |
|
|
|
| (571,193) | (443,175) |
| $ 4,626 | $ 3,670 |
SEE ACCOMPANYING NOTES
F-2
W.S. INDUSTRIES, INC.
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
for the three and six months ended February 28, 2011 and 2010 and
for the period from April 5, 2004 (Date of Inception) to February 28, 2011
(Unaudited)
(Stated in US Dollars)
| Three months ended | Six months ended | April 5, 2004 (Date of Inception) to | ||
| February 28, | February 28, | February 28, | February 28, | February 28, |
| 2011 | 2010 | 2011 | 2010 | 2011 |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Storage rental fee | $ - | $ - | $ - | $ - | $ 17,285 |
Expenses |
|
|
|
|
|
Administrative services Note 5 | 5,400 | 5,400 | 10,800 | 10,800 | 59,466 |
Bad debt expense | - | - | - | - | 8,085 |
Bank charges and interest Note 6 | 9,547 | 5,233 | 17,950 | 9,966 | 57,914 |
Consulting fees | - | - | - | - | 8,878 |
Courier and postage | - | - | - | - | 177 |
Depreciation | 14 | 21 | 28 | 42 | 2,074 |
Entertainment | - | - | - | - | 2,810 |
Management fees and bonus - Notes 5 and 6 andand | 30,300 | 30,300 | 60,600 | 60,600 | 382,600 |
Office and miscellaneous | - | - | - | 25 | 12,864 |
Professional fees | 10,704 | 7,460 | 30,711 | 23,147 | 195,715 |
Registration and filing fees | 5,260 | 1,629 | 7,961 | 4,645 | 42,585 |
Rent | - | - | - | - | 17,418 |
Research and marketing | - | - | - | - | 7,500 |
Telephone | - | - | - | - | 3,027 |
Travel | - | - | - | - | 6,154 |
Wages | - | - | - | - | 6,139 |
| 61,225 | 50,043 | 128,050 | 109,225 | 813,406 |
Loss before other items | (61,225) | (50,043) | (128,050) | (109,225) | (796,121) |
Interest income | - | - | - | - | 4,327 |
Foreign exchange loss | (29) | (24) | 32 | (174) | (10,100) |
Impairment of investment | - | - | - | - | (10,000) |
Net loss for the period | (61,254) | (50,067) | (128,018) | (109,399) | (811,894) |
Foreign currency translation adjustment | - | - | - | (162) | 5,515 |
Comprehensive loss for the period | $ (61,254) | $ (50,067) | $ (128,018) | $ (109,399) | $ (806,379) |
Basic and diluted loss per share | $ 0.00 | $ 0.00 | $0.01 | $0.01 |
|
Weighted average number of shares outstanding | 21,088,680 | 21,088,680 | 21,088,680 | 21,088,680 |
|
SEE ACCOMPANYING NOTES
F-3
W.S. INDUSTRIES, INC.
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the six months ended February 28, 2011 and 2010 and
for the period from April 5, 2004 (Date of Inception) to February 28, 2011
(Unaudited)
(Stated in US Dollars)
|
| Six months ended |
| April 5, 2004 (Date of Inception) to | ||
|
| February 28, |
| February 28, | ||
|
| 2011 |
| 2010 |
| 2011 |
|
|
|
|
|
| (cumulative) |
Cash Flows used in Operating Activities |
|
|
|
|
|
|
Net loss for the period | $ | (128,018) | $ | (109,399) | $ | (811,894) |
Items not affecting cash: |
|
|
|
|
|
|
Depreciation |
| 28 |
| 42 |
| 2,074 |
|
|
|
| - |
| - |
Impairment of investment |
| - |
| - |
| 10,000 |
Changes in non-cash working capital balances: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
| 103,974 |
| 108,921 |
| 576,862 |
Net cash (used in) operating activities |
| (24,016) |
| (436) |
| (222,958) |
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
Loans and advances |
| 25,000 |
| 3,100 |
| 52,383 |
Common stock issued |
| - |
| - |
| 297,186 |
Common stock repurchased |
| - |
| - |
| (62,000) |
Net cash provided by financing activities |
| 25,000 |
| 3,100 |
| 287,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows used in Investing Activities |
|
|
|
|
|
|
Acquisition of equipment |
| - |
| - |
| (4,427) |
Acquisition of investments |
| - |
| - |
| (64,903) |
Net cash used in investing activities |
| - |
| - |
| (69,330) |
Effect of exchange rate changes on cash |
| - |
| (162) |
| 9,178 |
|
|
|
|
|
|
|
Net increase (decrease) in cash during the period |
| 984 |
| 2,502 |
| 4,459 |
Cash, beginning of period |
| 3,475 |
| 856 |
| - |
|
|
|
|
|
|
|
Cash, end of period | $ | 4,459 | $ | 3,358 | $ | 4,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information |
|
|
|
|
|
|
Interest and taxes paid in cash | $ | - | $ | - | $ | - |
SEE ACCOMPANYING NOTES
F-4
W.S. INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS EQUITY (CAPITAL DEFICIT)
for the period April 5, 2004 (Date of Inception) to February 28, 2011
(Unaudited)
(Stated in US Dollars)
| Common Shares |
| Additional Paid-in |
| Deficit Accumulated during the Development |
| Accumulated Other Comprehensive |
|
| ||
| Number |
| Par Value |
| Capital |
| Stage |
| Income |
| Total |
Issued for cash: Private placement agreements at $0.000049 | 20,007,680 | $ | 20,008 | $ | (19,022) | $ | - | $ | - | $ | 986 |
at $0.01 | 2,000,000 |
| 2,000 |
| 18,000 |
| - |
| - |
| 20,000 |
at $0.20 | 81,000 |
| 81 |
| 16,119 |
| - |
| - |
| 16,200 |
Foreign currency translation adjustment | - |
| - |
| - |
| - |
| 380 |
| 380 |
Net loss for the period | - |
| - |
| - |
| (11,573) |
| - |
| (11,573) |
Balance, August 31, 2004 | 22,088,680 |
| 22,089 |
| 15,097 |
| (11,573) |
| 380 |
| 25,993 |
Foreign currency translation adjustment | - |
| - |
| - |
| - |
| 1,279 |
| 1,279 |
Net loss for the year | - |
| - |
| - |
| (32,276) |
| - |
| (32,276) |
Balance, August 31, 2005 | 22,088,680 |
| 22,089 |
| 15,097 |
| (43,849) |
| 1,659 |
| (5,004) |
Issued for cash: |
|
|
|
|
|
|
|
|
|
|
|
Private placement agreements at $0.20 | 1,000,000 |
| 1,000 |
| 199,000 |
|
|
| - |
| 200,000 |
Shares repurchased |
|
|
|
|
|
|
|
|
|
|
|
at $0.20 | (2,000,000) |
| (2,000) |
| (398,000) |
| - |
| - |
| (400,000) |
Capital contribution | - |
| - |
| 398,000 |
| - |
| - |
| 398,000 |
Foreign currency translation adjustment | - |
| - |
| - |
| - |
| 4,788 |
| 4,788 |
Net loss for the year | - |
| - |
| - |
| (51,090) |
| - |
| (51,090) |
Balance, August 31, 2006 | 21,088,680 |
| 21,089 |
| 214,097 |
| (94,939) |
| 6,447 |
| 146,694 |
Issued for cash: |
|
|
|
|
|
|
|
|
|
|
|
Private placement agreements at $0.20 | 300,000 |
| 300 |
| 59,700 |
| - |
| - |
| 60,000 |
Shares repurchased Note 4 |
|
|
|
|
|
|
|
|
|
|
|
at $0.20 | (300,000) |
| (300) |
| (59,700) |
| - |
| - |
| (60,000) |
Foreign currency translation adjustment | - |
| - |
| - |
| - |
| 785 |
| 785 |
Net loss for the year | - |
| - |
| - |
| (54,962) |
| - |
| (54,962) |
Balance, August 31, 2007 | 21,088,680 |
| 21,089 |
| 214,097 |
| (149,901) |
| 7,232 |
| 92,517 |
Foreign currency translation adjustment | - |
| - |
| - |
| - |
| (944) |
| (944) |
Net loss for the year | - |
| - |
| - |
| (128,431) |
| - |
| (128,431) |
Balance, August 31, 2008 | 21,088,680 |
| 21,089 |
| 214,097 |
| (278,332) |
| 6,288 |
| (36,858) |
SEE ACCOMPANYING NOTES
F-5
W.S. INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2011
(Unaudited)
(Stated in US Dollars)
Note 1
Nature of Operations and Ability to Continue as a Going Concern
The Company is in the development stage and offers wine storage and cellaring services and also invests in wine for long term appreciation and resale. Though the Company had disposed of its wine collection during the year ended August 31, 2009, going forward the Company intends to provide these services as it had done in the past while continuing to explore new investment opportunities. The Company was incorporated in the State of Nevada, United States of America on April 5, 2004 and its fiscal year end is August 31. Effective July 2, 2008, the Company is listed for trading on the Over-the-Counter Bulletin Board in the United States of America. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its obligations and commitments in the normal course of operations. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At February 28, 2011, the Company had an accumulated deficit of $811,894 (August 31, 2010: $683,876) and has a working capital deficit of $571,360 (August 31, 2010: $443,370) and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations 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 has no formal plan in place to address this concern but is considering obtaining additional funds by debt financing to the extent there is a shortfall from operations. While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds for operations.
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements of the Company for the year ended August 31, 2010. The interim results are not necessarily indicative of the operating results expected for the full fiscal year ending on August 31, 2011. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading.
Note 2
Equipment
|
|
|
| ||
| February 28, 2011 | ||||
|
| Accumulated |
| ||
| Cost | Depreciation | Net | ||
|
|
|
| ||
Computer equipment | $ 1,940 | $ 1,773 | $ 167 |
|
| Accumulated |
| ||
| Cost | Depreciation | Net | ||
|
|
|
| ||
| August 31, 2010 | ||||
|
|
|
| ||
|
| Accumulated |
| ||
| Cost | Depreciation | Net | ||
|
|
|
| ||
Computer equipment | $ 1,940 | $ 1,745 | $ 195 | ||
|
|
|
|
F-6
W.S. INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2011
(Unaudited)
(Stated in US Dollars)
Note 3
Loans and advances
Loans and advances totalling $53,699 (August 31, 2010: $28,699) are unsecured, non-interest bearing and have no specific terms of repayment.
Note 4
Capital Stock
On May 31, 2004, the Company forward split its common stock on the basis of 20.3 new for 1 old. The number of shares issued and outstanding, par value and additional paid-in capital has been restated to give retroactive effect to the forward split of its common stock.
Subsequent to February 28, 2011, the Company increased its authorized share capital from 25,000,000 to 150,000,000 common shares.
Private Placements
On May 31, 2004, the Company issued 20,007,680 common shares at $0.000049 per share, for total proceeds of $986. During June 2004, the Company issued 2,000,000 common shares at $0.01 per share, for total proceeds of $20,000. During June, July, and August 2004, the Company issued 81,000 common shares at $0.20 per share, for total proceeds of $16,200. On July 20, 2006, the Company issued 1,000,000 common shares at $0.20 per share, for total proceeds of $200,000. On July 27, 2007, the Company issued 300,000 common shares at $0.20 per share, for total proceeds of $60,000.
During the year ended August 31, 2006, the Company reacquired 2,000,000 common shares from a director of the Company for $2,000 pursuant to a promissory note, which was paid prior to August 31, 2006. The fair value of this transaction was recorded at $0.20 per share and consequently the Company has received a capital contribution of $398,000.
In December 2006, the Company received an order for production from the British Columbia Securities Commission to provide certain information and documents relating to, inter alia, the sale of the above noted 1,000,000 common shares at $0.20 per share to verify the availability of the registration and prospectus exemptions relied upon by the Company in offering such shares to residents of British Columbia. To resolve the matter, the Company issued a voluntary rescission offer to rescind any previous subscriptions of these shares and offered a full refund of the subscription monies. In lieu and in place of these shares, the Company offered an equivalent number of shares for sale pursuant to the updated private placement dated June 27, 2007. Of the nine original investors included in the 1,000,000 share private placement, three of these investors accepted the rescission offer at $0.20 per share and were refunded the total amount of their investment of $60,000 and 300,000 common shares were returned to treasury and cancelled. The remaining six investors rejected the rescission offer and three new investors completed and paid the remaining portion of the private placement by the payment of $60,000.
F-7
W.S. INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2011
(Unaudited)
(Stated in US Dollars)
Note 5
Related Party Transactions
Pursuant to a resolution dated June 1, 2008, the President of the Company is to be paid a monthly management fee of $2,600 per month. The amount may be adjusted from time to time at the discretion of the Board of Directors. As at February 28, 2011, there is an amount of $113,100 (August 31, 2010: $ 97,500) accrued and payable in respect of this management fee.
Pursuant to a resolution dated June 1, 2008, the spouse of the President of the Company is to be paid monthly to provide administrative services to the Company at a rate of $1,800 per month. The amount may be adjusted from time to time at the discretion of the Board of Directors. As at February 28, 2011, there is an amount of $59,400 ( August 31, 2010: $48,600) accrued and payable in respect of these administrative services.
During the three and six months ended February 28, 2011, the Company incurred management fees of $7,800 and $15,600 respectively (February 28, 2010: $7,800 and $15,600) payable to the President of the Company.
As at February 28, 2011, accounts payable and accrued liabilities include $172,500 (August 31, 2011: $159,300) due to the director of the Company with respect to the unpaid above noted fees and bonus and unpaid administrative reimbursements. The amount is unsecured, non-interest bearing, and due on demand.
Note 6
Commitment
On March 1, 2008 the Company entered into a Management Agreement whereby the Company is obligated to pay $7,500 per month in return for various management services. The agreement has no fixed term; however, accrued fees incur interest at a rate of 15% per annum whereby interest is compounded quarterly. In connection with this agreement the Company has incurred $22,500 and $45,000 during the three and six months ending Feb 28, 2011 (2010 - $45,000 and $22,500) in management fees and accrued interest of $8,339 and $17,834 for the three and six months ending February 28, 2011 (2010 - $5114 and $9,230). As at February 28, 2011the balance of unpaid management fees and accrued interest thereon totals $267,575.
Note 7
Subsequent Event
Subsequent to February 28, 2011, the Company agreed with certain of its creditors to extinguish the amounts owed to those creditors in exchange for convertible promissory notes having principal balances totalling $540,964 representing the amounts extinguished. These notes mature one year from the date of their issuance and bear no terms of interest except for one note totalling $288,670 which bears interest at the rate of 15% per annum. The terms of the convertible promissory notes allow the note holders to elect to convert the principal and accrued interest thereon into common shares at the lower of $0.01 per share or 10% of the lowest last trade price posted in the week of the notice of conversion.
F-8
ITEM 2
MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Financial Condition
We are a development stage corporation and have realized limited operations and generated limited revenues from our business operations.
On July 2, 2008 the Company began trading on the over-the-counter-bulletin-board (OTCBB) under the symbol WSID. For the interim period ended November 30, 2009 we generated no revenues from operations and have experienced losses since inception.
On July 2, 2008 the Company began trading on the over-the-counter-bulletin-board (OTCBB) under the symbol WSID. We have no revenues from operations, have experienced losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations.
As of the period ended February 28, 2011 the Company has cash on hand of $4,459, compared to $3,475 as at August 31, 2010. At February 28, 2011 the Company estimated that it would require $125,000 to meet its operating needs for the current fiscal year, the Company has not yet satisfied its need for cash. The Company will rely on its President to determine how to raise these funds, bearing in mind the best interests of the Company.
To date, the Company has not recognized significant revenue through its operations and had an accumulated deficit of $811,894 since inception. We have no assurance that, if needed, future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Results of Operations
There is limited historical financial information about us upon which to base an evaluation of our performance. We are in development stage operations and have generated limited revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns.
Our net loss for the six months ended February 28, 2011 was $128,018 as compared to the net loss of $109,399 for the six months ended February 28, 2010. In the three month period ended February 28, 2011 our net loss was $61,254 compared to $50,067 for the three month period ended February 29, 2010.
Professional fees, which include accounting and audit fees and legal fees, increased for the six month period ended February 28, 2011 over the six month period ended February 28, 2010 from $23,147 to $30,711. As well, professional fees for the three months ended February 28, 2011 increased to $10,704 from $7,460 for the three month period ended February 28, 2010.
Bank charges and interest increased to $17,950 for the six month period ended February 28, 2011 as compared to $9,966 for the six month period ended February 28, 2010. As well, bank charges and interest increased to $9,547 for the three month period ended February 28, 2011 from $5,233 for the three month period ended February 28, 2010.. These increases were a result of interest charges incurred on unpaid management fees.
Liquidity and Capital Requirements
As of February 28, 2011, the Company had total assets of $4,626, and total liabilities of $575,819. As of February 28, 2011, the Company had cash of $4,459 and a working capital deficiency of $571,360.
2
The Company has no other capital resources other than the ability to use its common stock to raise additional capital. The Companys current cash is not sufficient to sustain operations in the next 3 months. Estimated cash needed for next 12 months is $125,000. The cash will be mainly used for general administrative, corporate (legal, accounting and audit), financing and management.
No commitments to provide additional funds have been made by management or other stockholders except as set forth above. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover operation expenses. There are no assurances that we will be able to secure further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Subsequent to February 28, 2011, the Company increased its authorized share capital from 25,000,000 to 150,000,000 common shares.
ITEM 3
DISCLOSURES ABOUT MARKET RISK
Foreign Currency
In addition to the U.S. Dollar, we conduct business in Canadian Dollars and, therefore, are subject to foreign currency exchange risk on cash flows primarily related to expenses. Accounting and management fees which make up approximately three quarters of our expenses are paid in US funds. Since we primarily operate in US dollars our exposure to foreign currency risk should the Canadian dollar appreciate is limited. To date we have not engaged in hedging activities to hedge our foreign currency exposure. In the future, we may enter into hedging instruments to manage our foreign currency exchange risk or continue to be subject to exchange rate risk.
Inflation
Although inflation has not materially impacted our operations in the recent past, increased inflation could have a negative impact on our operating and general and administrative expenses, as these costs could increase.
ITEM 4
CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to our management, including our president and our secretary and treasurer, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of February 28, 2011, our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.
There have been no changes in our internal control over financial reporting that occurred during the quarter ended February 28, 2011 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II OTHER INFORMATION
LEGAL PROCEEDINGS
None
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ITEM 1A
RISK FACTORS
There has been no change to the risk factors since the year ended August 31, 2010 as filed with the audited financial statements.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
DEFAULTS UPON SENIOR SECURITIES
None
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
OTHER INFORMATION
None
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter for which this report is filed. The following exhibits are filed with this report:
31.1
CEO/CFO Section 302 Certification
32.1
CEO/CFO Section 906 Certification
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ITEM 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
W.S. INDUSTRIES INC.
Dated: April 14, 2011
By: /s/ Fraser Campbell
--------------------------------
Name: Fraser Campbell
Title: President and Chief Executive Officer
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