RIMROCK GOLD CORP. - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION - RIMROCK GOLD CORP.	f10q0211ex31i_oteegee.htm
EX-32.1 - CERTIFICATION - RIMROCK GOLD CORP.	f10q0211ex32i_oteegee.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

OTEEGEE INNOVATIONS INC.

(Exact name of registrant as specified in Charter

NEVADA		333-149552
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

3651 Lindell Rd. Suite D155

Las Vegas, NV, 89103

(Address of Principal Executive Offices)

_______________

1-800-854-7970

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

Check whether the issuer (1) has 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o 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 filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o 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 o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of April 19, 2011: 38,390,000 shares of common stock.

OTEEGEE INNOVATIONS, INC.

FORM 10-Q

February 28, 2011

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1 - F-8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5
Item 4.	Control and Procedures	5

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	6
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	(Removed and Reserved)	6
Item 5.	Other Information	6
Item 6.	Exhibits	6

SIGNATURE

OTEEGEE INNOVATIONS, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

AS OF

(Expressed in United States Dollars)

	28 February 2011 (Unaudited)		31 August 2010 (Audited)
ASSETS
Current Assets
Cash	$	25,786	$	84
Convertible notes receivable		23,755		21,978
Advances to stockholder		707		-
Total Current Assets		50,248		22,062
Long Term Assets
Mineral claims		550,000		-
Equipment		1,858		3,213
Total Long Term Assets		551,858
Total Assets	$	602,106	$	25,275

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Accounts payable and accrued liabilities	$	83,494	$	77,988
Due on acquisition of mineral claims		250,000		-
Convertible note payable		29,037		18,540
Advances from stockholder		-		828
Advances from related party		305		5,000
Total Liabilities		362,836		102,356

Stockholders' Equity (Deficit)

Capital stock, $0.001 par value; Authorized 200,000,000; Issued and outstanding 30,390,000 (31 August 2010 - 15,390,000)		30,390			15,390
Additional paid-in capital		681,760			396,760
Accumulated other comprehensive loss		(7,184	)		(5,014	)
Common stock issuable		117,312			50,000
Deficit accumulated during the development stage		(583,008	)		(534,217	)
Total Stockholders' Equity (Deficit)		239,270			(77,081	)
Total Liabilities and Stockholders' Equity (Deficit)	$	602,106		$	25,275

The accompanying notes are an integral part of these consolidated financial statements.

F-1

OTEEGEE INNOVATIONS, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in United States Dollars)

	For the Three Months Ended 28 February 2011			For the Three Months Ended 28 February 2010
SALES		36			2,239
COST OF GOODS SOLD		-			1,751
GROSS PROFIT		36			488
EXPENSES
Interest and bank charges		442			190
Depreciation		822			721
Professional fees		33,450			30,677
Office and general		366			1,233
Advertising and promotion		1,810			528
Rent		-			149
Telecommunication		1,545			1,248
TOTAL OPERATING EXPENSES		38,435			34,746
LOSS FROM OPERATIONS		(38,399	)		(34,258	)
Foreign exchange loss		(35	)		(3,070	)
Realized loss on disposal of available-for-sale securities		-			(4,817	)
NET LOSS	$	(38,434	)	$	(42,145	)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT		(1,254	)		2,881
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF DEFERRED TAXES		-			4,809
COMPREHENSIVE LOSS		(39,688	)		(34,455	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		0.00			0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		29,223,333			10,667,780

The accompanying notes are an integral part of these consolidated financial statements.

F-2

OTEEGEE INNOVATIONS, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in United States Dollars)

	For the Six Months Ended 28 Feburary 2011			For the Six Months Ended 28 Feburary 2010			For the Period from Inception (5 June 2003) to 28 Feburary 2011

SALES		428			3,064			384,789
COST OF GOODS SOLD		-			2,145			265,934
GROSS PROFIT		428			919			118,855

EXPENSES
Professional fees		41,253			30,902			557,132
Interest and bank charges		795			2,042			19,578
Depreciation		1,592			1,442			19,231
Office and general		538			1,418			36,145
Advertising and promotion		2,431			566			36,753
Rent and occupancy costs		-			149			28,132
Vehicle		-			-			1,110
Bad debts		-			-			9,774
Telecommunications		2,577			2,250			38,906
TOTAL OPERATING EXPENSES		49,186			38,769			746,761
LOSS FROM OPERATIONS		(48,758	)		(37,850	)		(627,906	)
Foreign exchange (loss) gain		(33	)		(3,070	)		18,809
Interest income		-			-			11,821
Realized loss on disposal of available-for-sale securities		-			(4,817	)		(2,096	)
Gain on extinguishment of debt		-			-			19,126
Loss on disposal of assets		-			-			(2,762	)
NET LOSS	$	(48,791	)	$	(45,737	)	$	(583,008	)
Foreign currency translation adjustment		(2,170	)		1,792			(7,184	)
Unrealized loss on available-for-sale securities, net of tax		-			4,809			-
COMPREHENSIVE LOSS	$	(50,961	)	$	(39,136	)	$	(590,192	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		22,268,453			8,919,280

The accompanying notes are an integral part of these consolidated financial statements.

F-3

OTEEGEE INNOVATIONS, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in United States Dollars)

	For the Six Months Ended 28 February 2011			For the Six Months Ended 28 February 2010			For the Period from Inception (5 June 2003) to 28 February 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(48,791	)	$	(45,737	)	$	(583,008	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,592			1,442			19,223
Loss on disposal of assets		-			-			2,762
Issuance of common stock for services		-			-			101,000
Write off of deferred offering costs		-			-			120,000
Changes in operating assets and liabilities:
Accounts receivable		-			(571	)		-
Accounts payable and accrued liabilities		5,506			2,796			83,495
CASH FLOWS USED IN OPERATING ACTIVITIES		(41,693	)		(42,070	)		(256,528	)
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities		-			15			-
Disposition of equipment		-			-			4,462
Acquisition of equipment		-			-			(28,076	)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES		-			15			(23,614	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible note payable		10,000			-			28,540
Advances to Grail Semiconductor Inc.		-			(1,559	)		(21,978	)
Advances to stockholder		(1,535	)		(957	)		(707	)
Advances from (to) related party		(5,032	)		(16,683	)		120,305
Proceeds from common stock issuable		67,312			75,000			188,462
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		70,745			55,801			314,622
EFFECT OF FOREIGN CURRENCY TRANSLATION		(3,350	)		1,792			(8,694	)
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF TAX		-			4,809			-
NET INCREASE IN CASH		25,702			20,347			25,786
CASH, BEGINNING OF PERIOD		84			33			-
CASH, END OF PERIOD	$	25,786		$	20,380		$	25,786

The accompanying notes are an integral part of these consolidated financial statements.

F-4

OTEEGEE INNOVATIONS, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 28 FEBRUARY 2011

(Expressed in United States Dollars)

1.	ORGANIZATION AND NATURE OF OPERATIONS

Pay By The Day Holdings Inc. (“PBTD”) was incorporated in the State of Nevada on 31 August 2007. On 22 March 2010, PBTD filed a certificate of amendment to amend the articles of incorporation (the “Amendment”) with the Nevada Secretary of State changing the Company’s name to Oteegee Innovations, Inc. (the “Company” or “Oteegee”).

On 31 August 2007 the Company acquired Pay by the Day Company Inc. ("PBDC"), which was incorporated in Canada on 5 June 2003. PBDC is a company whose principal line of business is selling computers and other electronic components through telephone and web orders, which the company then finances through a third party.

On 2 December 2010 the Company closed an Asset Purchase Agreement (the “Agreement”) with Alain Champagne and other parties (the “Selling Group”) to acquire a One Hundred (100%) interest in the Abigail Lithium Project located in the James Bay, Quebec region of Canada (the “Project”). It is covered by NTS sheets 320/12 and 320/13. The Property is made up of 222 map-designated cells totaling 11,844 hectares. Pursuant to the Agreement, on December 7, 2010 the Company issued a total of 15,000,000 shares of common stock plus committed to an additional payment of $250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from the closing of the Agreement. In addition, the Company has agreed to a minimum initial exploration work budget of $300,000 to commence no later than 16 May 2011. In March 2011, the Company issued 5,000,000 shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Property.

The Company has agreed to pay the Selling Group a 3% royalty on any commercial producing mineral deposit. The Company has incorporated a new company in Wyoming named Tucana Explorations Inc. and the interest in the Project will be owned by Tucana Explorations Inc. (“Tucana”).

The Company will operate both PBDC and Tucana as wholly owned subsidiaries. The Company operates under the web-site address www.oteegeeinnovations.com with its two subsidiary web-site addresses as www.paybytheday.com and www.tucanaexploration.com.

2.	BASIS OF PRESENTATION

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended 28 February 2011 are not necessarily indicative of the results that may be expected for the year ending 31 August 2011. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended 31 August 2010.

3. GOING CONCERN

These consolidated financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop profitable operations. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

The Company is actively seeking financing for its current projects. The Company is optimistic that the financing will be secured and the going concern risk will be removed. We are in discussions with various parties and believe a successful financing is imminent. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of shares of common stock from the Company’s authorized capital.

There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these consolidated financial statements.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

F-5

4. SIGNIFICANT ACCOUNTING POLICIES

Mineral Claims

Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs are capitalized including licenses and lease payments. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount.

Recent Accounting Pronouncements

In December 2010, the Financial Accounting Standards Board (“FASB”) issued amendments that modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with the existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. These amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial position, results of operations or cash flows.

In October 2009, the FASB issued amended revenue recognition guidance for arrangements with multiple deliverables. The new guidance eliminates the residual method of revenue recognition and allows the use of management’s best estimate of selling price for individual elements of an arrangement when vendor specific objective evidence (VSOE), vendor objective evidence (VOE) or third-party evidence (TPE) is unavailable. For the Company, this guidance is effective for all new or materially modified arrangements entered into on or after July 1, 2011 with earlier application permitted as of the beginning of a fiscal year. Full retrospective application of the new guidance is optional. The Company is currently assessing its implementation of this new guidance, but does not expect a material impact on the consolidated financial statements.

Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

5.	CONVERTIBLE NOTES PAYABLE

In May 2010 the Company issued a one year convertible note payable in the amount of $14,990. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before 26 May 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.75 per common share.

In August 2010 the Company issued a one year convertible note payable in the amount of $3,550. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before 11 August 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.10 per common share.

In November 2010 the Company issued a one year convertible note payable in the amount of $10,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before 29 November 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and non-assessable shares of common stock at a conversion price of $0.05 per common share.

F-6

6.	ADVANCES (TO) FROM STOCKHOLDER

The advances (to) from stockholder were from the sole director and shareholder, Jordan Starkman. The amount as at 28 February 2011 of ($702) (31 August 2010 - $828) is non interest bearing, unsecured and due on demand. The carrying value of the advances approximates the market value due to the short term maturity of the financial instruments.

7.	CONVERTIBLE NOTES RECEIVABLE

In accordance with a Letter of Intent entered into on 12 March 2010, the Company provided advances for administrative and other organizational expenses to Grail Semiconductor, Inc and Solar Utilities, which were required to close the acquisition of the assets of Grail Semiconductor. The advances are non-interest bearing and secured by convertible notes to equity of Grail Semiconductor and Solar Utilities. If a closing does not occur, the notes will convert to equity according to the terms of the respective note, and such conversion will be the sole recourse of the Company for all such expenditures. On 20 August 2010, the Company received a notice of termination of the Letter of Intent with Grail Semiconductor. As of the date of this report, the notes have not been converted into equity of Grail Semiconductor and Solar Utilities.

8.	RELATED PARTY TRANSACTIONS

The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:

Advances from a related company controlled by Jordan Starkman, the sole director of the Company as at 28 February 2011 were $305 (August 31 2010 - $5,000). These advances are non interest bearing, unsecured and with no specific terms of repayment.

9. CAPITAL STOCK

In November 2010 the Company received $8,000 in exchange for 160,000 shares of common stock to be issued at $0.05 per share. The value of $8,000 is included in common shares issuable which are a component of additional paid-in-capital.

During the year ended August 31, 2010, the Company recorded $50,000 for consulting services rendered in exchange for common shares to be issued. The value of $50,000 is included in common shares issuable which are a component of additional paid-in-capital. On 1 March 2011, the Company issued 2,000,000 shares of common stock at a price of $0.025 per share.

In December 2010, pursuant to the Agreement, the Company issued 15,000,000 shares of common stock at $0.02 per share to the Selling Group to acquire a 100% interest in the Abigail Lithium Project located in the James Bay, Quebec region of Canada. The total purchase price of the property of $550,000 represents the fair value of the Company’s common stock on the date of issuance, as this value was more readily determinable.

In January 2011 the Company received $30,000 in exchange for 1,000,000 shares of common stock to be issued at $0.03 per share. The value of $30,000 is included in common shares issuable which are a component of additional paid-in-capital. These shares were issued 1 March 2011.

In February 2011 the Company received $16,765 in exchange for 419,125 shares of common stock to be issued at $0.04 per share. The value of $16,675 is included in common shares issuable which are a component of additional paid-in-capital.

In February 2011 the Company received $12,547 in exchange for 418,221 shares of common stock to be issued at $0.03 per share. The value of $12,547 is included in common shares issuable which are a component of additional paid-in-capital.

F-7

10. CONTINGENCIES

In accordance with the Agreement, the Company will also owe to the Selling Group the following contingent payments:

·	The initial cash payment of $250,000 will be paid as follows: $100,000 paid within 90 days of executing the Agreement, and a second payment of $150,000 due within 180 days of executing the Agreement.

·	After spending a total amount of $2,500,000 on the Property, $250,000 and an additional 1,000,000 shares of the Company’s common stock shall be delivered to the Selling Group.

·	After spending a total amount of $5,000,000 on the Property a further $250,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the Selling Group.

·	If a feasibility study is put in place an additional $250,000 and 1,000,000 shares of the Company’s common stock shall be delivered to the Selling Group.

·	If a bankable feasibility is put in place a further $500,000 and 2,000,000 shares of the Company’s common stock shall be delivered to the Selling Group.

11. SUPPLEMENTAL CASH FLOW INFORMATION

During the three and six months ended 28 February 2011 and 2010 and for the period from inception to 28 February 2011, there were no interest or taxes paid by the Company.

12. SUBSEQUENT EVENTS

On 1 March 2011, the Company issued the 2,000,000 shares of common stock at a price of $0.025 per share as discussed in note 9.

On 1 March 2011, the Company issued 5,000,000 shares of common stock at a price of $0.02 per share reflecting the first payment of $100,000 for the Abigail Property as discussed in note 1.

On 1 March 2011, the Company issued the 1,000,000 shares of common stock for $30,000 at a price of $0.03 per share as discussed in note 9.

F-8

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

The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop profitable operations. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

Plan of Operation for Tucana Exploration Inc.

On December 2, 2010, the Company closed an Asset Purchase Agreement with a group of sellers to acquire 100% interest in the Abigail Lithium Project located in the James Bay, Quebec region. The property is made up of 222 map-designated cells totaling 11,844 hectares. The Company plans on commencing an initial work program on the property consisting of an airborne electromagnetic and magnetic survey covering the entire property, at a 125-m line spacing. This survey will locate the ultramafic intrusions if they exist, the basalt and/or ultramafic remnants, the contrast between the gneiss and Champion Lake granitoids and, if the magnetic contrast with the encasing rocks is strong enough, the pregmatites. The survey will be followed up by a geological survey and prospecting program covering the targets to be defined by the airborne survey.

The budget to complete the initial work program on the property is described below:

Airborne Magnetic and Electromagnetic Survey (125m line spacing):
Airborne survey, mob and demob, lump sum		20,000
Survey (Mag and VLF) 1,095km @ $73/km		79,935
Wait time, additional survey lines, ect		35,000
Contingency 12%		16,192
Total Airborne Survey	$	151,127

Geological Survey and Prospecting:
Geological survey, 2 geologists, 2 helpers, room and board, helicopter support if needed, assays, all inclusive for approximately 45 days		135,000
Contingency 12%		16,200
Total Geological Survey	$	151,200
Total Airborne and Geological	$	302,327

The Company has incorporated a new company in Wyoming named Tucana Explorations Inc. The interest in the Abigail Lithium Project is owned by Tucana Explorations Inc.

The Company will be committed to an initial exploration work budget of a minimum of $300,000 to commence no later than May 16, 2011.

The Company is currently negotiating the financing of the Company’s business operations with a number of parties. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.

Plan of Operation for PBTD Segment

The Company will continue with the Pay By The Day operations and its promotion of PBTD CreditPlus after the Abigail acquisition is completed. The promotion of PBTD CreditPlus is contingent upon the Company successfully obtain financing and will begin with the production of a new 30 second direct response commercials. The campaign will be nationwide with multiple station coverage. We are currently in discussions with a Canadian based media company to produce an infomercial that will air on stations across Ontario. The cost of producing and airing the infomercial is approximately $20,000. We expect the profits generated from the infomercial campaign to fund additional air time slots. PBTD anticipates the production of the infomercial and commercial to begin 6-8 months once the financing is obtained. We produced two 30 second spot commercials in 2004 that aired Canada wide with a focus on Northern Ontario and all of Alberta. The new television advertising campaign will be initiated with the guidance of an advertising agency. We determine the areas of interest and the agency provides us with various rates, time slots available, and the stations catering to our focus area.

We plan to hire 2-3 additional sales people plus 1 administrative staff member. The hiring of additional staff will take place once the funds are raised to advertise more aggressively. Depending on the number of incoming calls to us and the success of the advertising campaign, we may also be required to upgrade our phone system and upgrade our current database to allow for easier access to customer files. Currently, management is able to process applications and handle the incoming calls with our current resources.

We have formed a relationship with Equifax. This allows us to process the credit files and check customers credit scores ourselves prior to sending the application to our third party finance service provider. The cost of running an Equifax file is $10. This is an additional expense to the company that will be added into our customer's purchases. We have also been approved by Equifax to report customer's trade files to Equifax on a monthly basis. There is no fee associated with reporting to Equifax.

The fundamental concept of our business involves the granting of credit by either our third party finance service provider or by PBTD internally. Our relationship with our third party finance service provider is one that will hopefully expedite our growth process by providing an easy application process with a high probability of customer approval rates. They have the ability to finance both A and B level credit on a Conditional Sales Contract program or a 3 year lease contract. A Conditional Sales Contract is commonly known as buying on an installment plan and requires the giving of a promissory note for the purchase price under the contract. It is a type of agreement to sell whereby a seller retains title to the goods sold and delivered to a purchaser until full payment has been made. A conditional buyer has the right of possession of the goods so long as the terms and conditions of the agreement are met. A Conditional Sales Contract is similar to a lease contract except at the end of the term the buyer obtains ownership of the goods as soon as the final payment to the seller is made.

We receive 100% of the transaction amount on “A” credit deals and due to the added risk for “B” credit customers, the payout is 90% of the transaction amount. For example, if the purchase amount is $1,000, our third party service provider pays us 100% of the $1,000 for an “A” credit customer. If the customer has “B” level credit then the payout amount to us is 90% of the $1,000 transaction amount. There is no recourse on transactions rated as an “A” credit deal, however we have 1st payment recourse on “B” credit deals. Once the customer has made there 1st payment, we are no longer liable for the sale amount. We currently have no exposure at this point in time. We are currently being funded on deals once the merchandise has been shipped from our facilities and the customer acknowledges receipt of goods. We currently have a 3-5 hour turnaround time for approvals or declines. We are not related to any of our service providers except for the relationships described.

Our business operation relies upon a third party service provider to approve for credit and finance our customer’s purchases. If we encounter difficulty in obtaining customer credit approvals for financing, the company’s business will suffer. Due to our difficulty in obtaining credit approvals, we have reached an agreement with Tanner Financial Services Inc. in July 2008 to accept and process our customer applications.

We believe the relationship with Tanner Financial will increase our approval rates leading to increased sales, as they are a more aggressive lender willing to take on additional risk by financing A, B, and C level credit customers. The terms and conditions of the agreement with Tanner Financial are the same as previous 3rd party finance providers. Furthermore, the company has turned to self-financing and has financed new/off-lease desktop computers and laptops, and consumer electronics for customers willing to put down 50% of the total purchase price of their order. The main selling features and the attractiveness of our financing route is the 0% interest rate and the reporting of the trade to Equifax on a monthly basis, allowing the customers who can afford the 50% down to rebuild or reestablish credit history. The key component is the 50% down payment, and we realize this financing option is not for everybody. The 50% down payment can translate into a $200-$500 down payment which is significant for customers who wish to pay for purchases on a payment plan and for those who cannot afford to make purchases at their local store.

We believe we can continue the operation of financing merchandise internally with a limited amount of capital because the 50% down payment required by the customer covers the majority of the cost of the merchandise. We have limited our exposure and risk in case of default by the customer, and there is limited capital required to finance these purchases. As we raise additional capital, we will on a case-by-case basis determine if additional risk is warranted based on the customer’s credit rating.

Results of Operations for the three months ended February 28, 2011 compared to the three months ended February 28, 2010

For the period from inception through February 28, 2011, we had $384,789 in revenue. Cost of goods sold and operating expenses for the period from inception totaled $265,934 and $746,747, respectively and our loss from operations was $627,892 and our net loss was $582,994.

Revenue for the three months ended February 28, 2011 was $36 compared to $2,239 for the three months period ended February 28, 2010. The revenue was generated from Equifax’s commission program based upon the Equifax link on the Pay By The Day web site. We receive a fee for every customer that completes an Equifax report from our site.

Operating expenses for the three months ended February 28, 2011 were $38,435 compared to $34,746 for the three months ended February 28, 2010. The increase in operating expenses during the three months ended February 28, 2011 compared to the three months ended February 28, 2010 is primarily attributed to professional fees. Professional fees for the three months ended February 28, 2011 were $33,450 and $30,677 for the three months ended February 28, 2010. These fees paid in the three months ended February 28, 2011 were attributable to legal, accounting, consulting, and auditing services related to quarterly and audit filings and advisory relating to future planned corporate acquisitions.

Net loss was $38,434 for the three months ended February 28, 2011 and $42,145 for the three months ended February 28, 2010. The realized loss on disposal of available securities for sale of $4,817 contributed to the increase in the net loss in the three months ended February 28, 2010. The decrease net loss during the period was a result of foreign exchange loss and the one-time realized loss on disposal of securities in the three months period ended February 28, 2010.

The vast majority of our sales consist of computer and electronic products financed through our internal financing program or our third party finance service provider. The profit is generated from the margins on the products sold. We charge 0% interest on our internal financing and CreditPlus card, and we do not have any interest charges revenue. Service fees revenue from our CreditPlus Card is nil. We expect to generate service fees revenue once our CreditPlus advertising campaign begins.

We have experienced a dramatic decrease in sales from fiscal year August 31, 2005 to February 28, 2011. Our slow growth and decrease in sales is attributed to the difficulty in effectively approving customer credit applications. We have also been affected by the current credit market conditions and as a result approval rates have decreased due to the poor credit quality of customers applying for credit.

If our third party finance providers increase the criteria for credit approvals or its parameters for credit approvals, the increased restriction on credit approvals will make customer applications more difficult to finance. In this situation, it is uncertain if we will be able to continue to finance customer‘s purchases through our third party service provider. We may have to enter into additional agreements with multiple third party finance providers, or increase the number of transactions financed internally. Our decrease in sales from inception to date is also attributed to the lack of advertising dollars to fully market the Company and our offerings. In addition, over the past two years there has been a significant drop in the selling prices of computers and consumer electronics making these goods easily accessible at local retailers without the need for customer financing. Furthermore, the dramatic drop in retail prices of computers and consumer electronics has reduced our profit margins.

Liquidity and Capital Resources

As of February 28, 2011 we had a cash balance of $25,786 and a working capital deficit of $312,588.

In November 2010 the Company received $8,000 in cash in exchange for 160,000 shares of common stock to be issued. As of the date of this report, the shares of common stock have not been issued.

In November 2010 the Company issued a one year convertible note payable in the amount of $10,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 5% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before November 29, 2011, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount into fully paid and nonassessable shares of common stock at a conversion price of $0.05 per common share.

In January 2011 the Company received $30,000 in exchange for 1,000,000 shares of common stock to be issued at $0.03 per share. These shares were issued March 1, 2011.

In February 2011 the Company received $16,765 in exchange for 419,125 shares of common stock to be issued at $0.04 per share. These shares are expected to be issued in the next quarter.

In February 2011 the Company received $12,547 in exchange for 418,221 shares of common stock to be issued at $0.03 per share. These shares are expected to be issued in the next quarter.

On March 1, 2011, the Company issued 5,000,000 shares in the Company at a price of $0.02 per share reflecting the first payment of $100,000 for the Abigail Property.

The above proceeds will be used to fund operations and our initial work program costs for the Abigail Lithium Project as discussed in our Plan of Operations.

Acquisition of the Abigail Property

On December 2, 2010, the Company closed an Asset Purchase Agreement (the “Agreement”) to acquire 100% interest in the Abigail Lithium Project located in the James Bay, Quebec region. The property is made up of 222 map-designated cells totaling 11,844 hectares. On December 7, 2010 the Company issued 15 million shares of common stock to the group of sellers, plus committed to an additional payment of $250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from the closing of the Agreement. In March 2011, the Company issued 5,000,000 shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Abigail Property..

In addition, the Company will commit to a minimum initial exploration work budget of $300,000 to commence no later than May 16, 2011. The Company is required to raise a minimum of $550,000 within 6 months as defined in the agreement with the selling group of the Abigail property. Such agreements are conditional upon the raising of funds to pursue the Company’s new business model. There is no assurance that the company will raise the capital required to complete the acquisition and the Company is currently seeking capital to complete its obligation. The Company is currently negotiating the amount required with various parties. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital.

In the event the Company is not successful in completing its obligations pursuant to the Asset Purchase Agreement, the Company will continue with its prior business model and plan of operation. Our liquidity and capital requirements for our current business plan is discussed below.

Operations of Pay By The Day segment

We are currently seeking funding for our planned expansion and would like to raise a minimum of $200,000 in order to aggressively promote and advertise our brand and CreditPlus program. To achieve our goals, a large portion of the funds raised will be invested in advertising. Our success is contingent upon our customers seeing our ads and calling our 1-800 phone number. There is a distinct correlation between the number of dollars invested in advertising and the number of sales made. The proceeds raised will also be used to fund a greater portion of transactions through our internal financing program. We expect to raise additional funds within the next 6-8 months. A private placement is the most likely scenario for the company to achieve success in raising additional funds for its operations. There are no discussions with any parties at this point in time for additional funding; however, we will attempt to discuss our business plan with various brokers in the US.

We believe we can satisfy our cash requirements for the next twelve months with our expected revenues and if needed an additional loan from our sole director, Jordan Starkman. However, completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to achieve our profit, revenue, and growth goals.

We anticipate that our operational, and general & administrative expenses for the next 12 months will total approximately $25,000. The $25,000 will be financed through our anticipated sales of approximately $5,000 plus if needed, an advance from our sole director, Jordan Starkman. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees, unless financing is raised. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and required, and our progress with the execution of our business plan.

In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern. We will need approximately $200,000 to aggressively pursue and implement our growth goals through an advertising campaign.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain market risks, including changes in interest rates and currency exchange rates. We do not undertake any specific actions to limit those exposures.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosures. Because of inherent limitations, our disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of such disclosure controls and procedures are met.

As of the end of the period covered by this report we conducted an evaluation, under the supervision of our sole chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were ineffective as of February 28, 2011.

There was no change in our internal control over financial reporting during the period covered by this report that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On December 7, 2010 the Company issued 15,000,000 common shares to acquire 100% interest in the Abigail Lithium Project located in the James Bay, Quebec region.

On March 1, 2011, the Company issued 2,000,000 shares of common stock at a price of $0.025 per share for consulting services rendered in the prior fiscal year.

On March 1, 2011, the Company issued 5,000,000 shares of common stock at a price of $0.02 per share reflecting the first payment of $100,000 for the Abigail Property.

On March 1, 2011, the Company issued 1,000,000 shares of common stock for $30,000 at a price of $0.03 per share.

The above proceeds will be used to fund operations and our initial work program costs for the Abigail Lithium Project as discussed in our Plan of Operations.

Item 3. Defaults Upon Senior Securities.

None

Item 4. (Removed and Reserved)

Item 5. Other Information.

None

Item 6. Exhibits.

(a) Exhibits

31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Signature	Title	Date

/s/ Jordan Starkman	President, Chief Executive Officer, Chairman of the Board of Directors,	April 19, 2011
Jordan Starkman	Chief Financial Officer, Controller and Principal Accounting Officer

RIMROCK GOLD CORP. - FORM 10-Q - April 19, 2011

Attached files

RIMROCK GOLD CORP. Reports