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EXCEL - IDEA: XBRL DOCUMENT - Discovery Gold CorpFinancial_Report.xls
EX-32.1 - EXHIBIT 32.01 SECTION 906 CERTIFICATION - Discovery Gold Corpf10q013112_ex32z1.htm
EX-31.2 - EXHIBIT 31.02 SECTION 302 CERTIFICATION - Discovery Gold Corpf10q013112_ex31z2.htm
EX-32.2 - EXHIBIT 32.02 SECTION 906 CERTIFICATION - Discovery Gold Corpf10q013112_ex32z2.htm
EX-10.13 - EXHIBIT 10.13 CONSULTING AGREEMENT - Discovery Gold Corpf10q013112_ex10z13.htm
EX-10.12 - EXHIBIT 10.12 CONVERTIBLE PROMISSORY NOTE - Discovery Gold Corpf10q013112_ex10z12.htm
EX-10.14 - EXHIBIT 10.14 CONSULTING AGREEMENT - Discovery Gold Corpf10q013112_ex10z14.htm
EX-31.1 - EXHIBIT 31.02 SECTION 302 CERTIFICATION - Discovery Gold Corpf10q013112_ex31z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 


FORM 10-Q


   X .    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended January 31, 2012


       .    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from ______ to _______


Commission File Number 333-167284

 

NORMAN CAY DEVELOPMENT, INC.

[f10q013112_10q001.jpg]

 (Name of small business issuer in its charter)

 

Nevada

 

27-2616571

(State of incorporation)

  

(I.R.S. Employer Identification No.)


4472 Winding Lane

Stevensville, MI 49127

 (Address of principal executive offices)

 

(269) 429-7002

(Registrant’s telephone number)


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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  X . No      . (Not required)


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

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


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


As of March 12, 2012, there were 48,200,000 shares of the registrant’s $0.001 par value common stock issued and outstanding.





NORMAN CAY DEVELOPMENT, INC. *


TABLE OF CONTENTS 

Page

 

 

PART I. FINANCIAL INFORMATION

 

  

 

ITEM 1.

FINANCIAL STATEMENTS

3

ITEM 2.

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

13

ITEM 3.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

16

ITEM 4.

CONTROLS AND PROCEDURES

16

  

 

PART II. OTHER INFORMATION

 

  

 

ITEM 1.

LEGAL PROCEEDINGS

16

ITEM 1A.

RISK FACTORS

17

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

17

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

17

ITEM 4.

[REMOVED AND RESERVED]

17

ITEM 5.

OTHER INFORMATION

17

ITEM 6.

EXHIBITS

18


Special Note Regarding Forward-Looking Statements

 

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Norman Cay Development, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, except as otherwise indicated by the context, references in this report to “Company”, “NCDL”, “we”, “us” and “our” are references to Norman Cay Development, Inc.   




2



PART I - FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS














NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)


Consolidated Financial Statements


For the Periods Ended January 31, 2012 (unaudited) and April 30, 2011























Consolidated Balance Sheets (unaudited)

4

Consolidated Statements of Operations (unaudited)

5

Consolidated Statements of Cash Flows (unaudited)

6

Notes to the Financial Statements (unaudited)

7



3



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

(unaudited)


 

January 31,

2012

$

April 30,

2011

$

 

 

 

ASSETS

 

 

 

 

 

Cash

9,337

71,160

 

 

 

Total Current Assets

9,337

71,160

 

 

 

Mineral property

4,650,000

 

 

 

 

4,659,337

71,160

 

 

 

LIABILITIES

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable and accrued liabilities

94,165

36,963

Due to related parties

36,600

100

Note payable

66,446

65,416

Note payable – related

100,000

 

 

 

Total Liabilities

297,211

102,479

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Preferred Stock

Authorized: 10,000,000 preferred shares with a par value of $0.001 per share

Issued and outstanding: nil preferred shares

 

 

 

Common Stock

Authorized: 250,000,000 common shares with a par value of $0.001 per share

Issued and outstanding: 47,500,000 and 97,500,000 common shares, respectively

47,500

97,500

 

 

 

Common shares issuable

90,000

 

 

 

Additional paid-in capital

4,990,500

(22,500)

 

 

 

Accumulated deficit during the exploration stage

(765,874)

(106,319)

 

 

 

Total Stockholders’ Equity (Deficit)

4,362,126

(31,319)

 

 

 

Total Liabilities and Stockholders’ Equity (Deficit)

4,659,337

71,160

 

 

 


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





4



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Consolidated Statements of Operations

(unaudited)


 


For the Three

Months Ended

January 31,

2012

$


For the Three

Months Ended

January 31,

2011

$


For the Nine

Months Ended

January 31,

2012

$


For the Nine

Months Ended

January 31,

2011

$

Accumulated from April 29, 2010

(Date of Inception) to January 31,

 2012

$

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

Consulting fees

174,999

444,987

444,987

General and administrative

121,077

3,278

148,041

23,426

177,002

Professional fees

29,450

15,000

57,200

53,500

129,300

 

 

 

 

 

 

Total Operating Expenses

325,526

18,278

650,228

76,926

751,289

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

Interest expense

3,350

1,649

9,327

3,663

14,585

 

 

 

 

 

 

Net Loss

(328,876)

(19,927)

(659,555)

(80,589)

(765,874)


Net Loss per Share – Basic and Diluted        



(0.01)

(0.00)

(0.01)

(0.00)

 


Weighted Average Shares Outstanding – Basic and Diluted             

47,105,435

88,206,522

73,542,391

79,402,174

 

 

 

 

 

 

 


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





5



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Consolidated Statements of Cashflows

(unaudited)


 


For the Nine

Months Ended

January 31,

2012

$


For the Nine

Months Ended

January 31,

2011

$

Accumulated from

April 29, 2010

(Date of Inception) to January 31,

2012

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss for the period

(659,555)

(80,589)

(765,874)

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Shares issued for services

413,000

413,000

Shares issuable for services

90,000

90,000

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts payable

57,202

22,821

94,165

Due to related parties

11,500

100

11,600

 

 

 

 

Net Cash Used In Operating Activities

(87,853)

(57,668)

(157,109)

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

Purchase of mineral property

(250,000)

(250,000)

Proceeds from option agreement

150,000

150,000

 

 

 

 

Net Cash Used In Investing Activities

(100,000)

(100,000)

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Proceeds from issuance of common stock

75,000

75,000

Proceeds from issuance of note payable

101,030

55,488

166,446

Proceeds from related parties

25,000

25,000

 

 

 

 

Net Cash Provided By Financing Activities

126,030

130,488

266,446

 

 

 

 

Increase (Decrease) in Cash

(61,823)

72,820

9,337

 

 

 

 

Cash – Beginning of Period

71,160

4,918

 

 

 

 

Cash – End of Period

9,337

77,738

9,337

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

Interest paid

Income tax paid

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Issuance of founders’ shares

5,000

Issuance of shares to acquire mineral property

4,550,000

4,550,000

Cancellation of common shares

(69,000)

(69,000)

 

 

 

 


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



6



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)



1.

Nature of Operations and Continuance of Business


Norman Cay Development, Inc. (the “Company”) was incorporated in the State of Nevada on April 29, 2010. The Company is an Exploration Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. On September 2, 2011, the Company entered into a share exchange agreement (the “Agreement”) with Discovery Gold Ghana Limited (“Discovery”), a company organized under the laws of the country of Ghana.  Under the terms of the Agreement, the Company acquired 100% of the issued and outstanding shares of Discovery in exchange for $100,000 and 17,500,000 common shares of the Company.  


On September 1, 2011, the Company discontinued its intention of being a retailer or wireless telephones and service plans and changed its operating focus to the acquisition and development of mineral properties in the country of Ghana.


Going Concern


These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of January 31, 2012, the Company has not recognized any revenue, and has an accumulated deficit of $765,874. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.  These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  


2.

Summary of Significant Accounting Policies


a)

Basis of Presentation and Principles of Consolidation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars.  These consolidated financial statements include the accounts of the Company and its subsidiary, Discovery Gold Ghana Limited, a company incorporated in Ghana.  All significant intercompany transactions and balances have been eliminated.  The Company’s fiscal year end is April 30.


b)

Use of Estimates


The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


c)

Interim Financial Statements


These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.


d)

Cash and cash equivalents


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



7



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)


2.

Summary of Significant Accounting Policies (continued)


e)

Basic and Diluted Net Loss per Share


The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.


f)

Financial Instruments


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


Level 1


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


Level 2


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


Level 3


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


f)

Financial Instruments (continued)


The Company’s financial instruments consist principally of cash, and amounts due to related parties.  Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


g)

Comprehensive Loss


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As of January 31, 2012 and April 30, 2011, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.



8



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)


2.

Summary of Significant Accounting Policies (continued)


h)

Mineral Property Costs


The Company has been in the exploration stage since its inception and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, “Property, Plant, and Equipment” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.


i)

Asset Retirement Obligations


The Company follows the provisions of ASC 440, “Asset Retirement and Environmental Obligations”, which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The Company did not have any asset retirement obligations at January 31, 2012.


j)

Recent Accounting Pronouncements


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


3.

Acquisition of Discovery Gold Ghana Ltd.


On September 2, 2011, the Company entered into a share exchange agreement to acquire 100% of the issued and outstanding common shares of Discovery in exchange for $250,000 and issuance of 17,500,000 common shares of the Company.  

The purchase price was allocated to the following assets and liabilities:


 

$

Purchase price

 

 

 

Cash

250,000

17,500,000 common shares

4,550,000

 

 

 

4,800,000

 

 

Fair value of Discovery net assets

 

 

 

Mineral Property

4,800,000

 

 

 

4,800,000




9



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)



4.

Mineral property


Edum Banso Property


On August 27, 2011, Discovery, the wholly-owned subsidiary of the Company, entered into an option agreement with Xtra-Gold Resource Corp. to acquire a 100% interest in the right, title, and interest to mineral properties in Ghana.  Under the terms of the option agreement, Discovery would pay $250,000 (paid) and issue 17,500,000 common shares of the Company (issued).  


On January 25, 2012, the Company, through its wholly-owned subsidiary Discovery, entered into an earn-in agreement with North Springs Resources Corp (“North Springs”).  Under the terms of the earn-in agreement, North Springs would acquire a 10% working interest in Edum Banso in exchange for the following:


Cash consideration of $1,250,000 to be paid according to the following schedule:


·

An initial payment of $250,000, of which $150,000 is due within 5 days of the execution of the agreement (received), and the remaining $100,000 to be paid within thirty days of the execution of the agreement (received subsequent to period end);

·

$500,000 on or before July 31, 2012;

·

$500,000 on or before December 31, 2012.


In the event that North Springs defaults or does not remit payment by July 31, 2012, 50% of the working interest shall automatically revert back to the Company and North Springs will have been deemed to have forfeited its right to provide the final payment due on December 31, 2012.  Furthermore, the Company shall have the option to re-acquire 2.5% of the original 10% interest in exchange for $150,000.  


In addition, North Springs will acquire an additional 25% working interest in the Edum Banso property pursuant to the issuance of 10,000,000 common shares of North Springs on the condition that the fair value of the common shares of North Springs is no less than $2,500,000 on October 1, 2012.  If the fair value is less than $2,500,000 on October 1, 2012, the Company will have the option to return the 10,000,000 common shares of North Springs and cancel the additional 25% working interest.  As at January 31, 2012, the North Springs common shares had not been received by the Company.


Acquisition costs (note 3)

4,800,000

 

 

Option payment received

(150,000)

 

 

 

4,650,000


5.

Note Payable


a)

As at January 31, 2012, the Company owes $66,446 (April 30, 2011 - $65,416) of notes payable to a non-related party. The amounts owing are unsecured, due interest at 10% per annum, and due on demand.  During the period ended January 31, 2012, the Company recorded interest expense of $4,971 (2010 - $2,014).


b)

As at January 31, 2012, the Company owes $100,000 (April 30, 2011 - $nil) of notes payable to related party. The amounts owing are unsecured, due interest at 10% per annum, and due on demand. During the period ending January 31, 2012, the Company recorded interest expense of $4,356 (2010 - $nil).



10



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)



6.

Related Party Transactions


a)

As at January 31, 2012, the Company owes $1,600 (April 30, 2011 - $100) to the President and CEO of the Company. The amount owing is unsecured, non-interest bearing, and due on demand.


b)

As at January 31, 2012, the Company owes $10,000 (April 30, 2011 - $ nil) to the Chief Financial Officer of the Company. The amount owing is unsecured, non-interest bearing, and due on demand.


c)

As at January 31, 2012, the Company owes $25,000 (April 30, 2011 - $nil) to the President and Director of Discovery.  The amount owing is unsecured, non-interest bearing, and due on demand.  


d)

Refer to Note 5(b).  


7.

Common Shares


The fair value of all common shares issued for services are valued using the end-of-day trading price on the date of issuance.  


a)

On September 13, 2011, the Company issued 1,000,000 common shares to a non-related party for consulting services with a fair value of $260,000.


b)

On September 15, 2011, the Company issued 17,500,000 common shares with respect to the acquisition of Discovery Gold Ghana Limited.


c)

On September 20, 2011, the President and CEO of the Company returned 69,000,000 common shares to treasury and the shares were subsequent cancelled.  


d)

On December 22, 2011, the Company issued 300,000 shares to the Chief Financial Officer of the Company, for management services with a fair value of $93,000.


e)

On January 10, 2012, the Company issued 100,000 shares with a fair value of $30,000 to a non-related party for as part of a consulting agreement.


f)

On January 19, 2012, the Company issued 100,000 shares with a fair value of $30,000 to a non-related party for as part of a consulting agreement.


g)

As at January 31, 2012, the Company is committed to issue 300,000 shares for consulting services with a fair value of $90,000.  


8.

Commitments


a)

On December 22, 2011, the Company entered into a consulting agreement with a non-related party for general business and management consulting commencing November 1, 2011.  Under the terms of the agreement, the Company is obligated to issue 100,000 common shares and make monthly payments of $5,000.  The agreement is for a period of three months with an option to extend the terms to twelve months.  


b)

On January 10, 2012, the Company entered into a consulting agreement with a non-related party for general business and management consulting commencing December 1, 2011.  Under the terms of the agreement, the Company is obligated to issue 600,000 common shares, payable at 100,000 common shares per month over the term of the agreement, and make monthly payments of $5,000.  The agreement is for a period of six months.



11



NORMAN CAY DEVELOPMENT, INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(unaudited)



9.

Subsequent Events


a)

In February 2012, the Company received $100,000 from North Springs as settlement for the initial payment of the earn-in agreement.  Refer to Note 4.  


b)

Subsequent to January 31, 2012, the Company issued 200,000 common shares to the Chief Financial Officer of the Company for monthly management fees for February and March 2012.


c)

Subsequent to January 31, 2012, the Company issued 300,000 common shares to consultants as part of the consulting agreements as disclosed in Note 8.  


d)

On February 9, 2012, the Company entered into a consulting agreement with a director and a company controlled by a director of the Company for consulting services.  Under the terms of the agreement, the Company would pay $3,500 per month and issue 500,000 common shares payable at 100,000 per month for a period of five months commencing on the date of the agreement.  The Company issued 200,000 common shares on March 5, 2012.


e) 

As of the date of the filing the Company has received the 10,000,000 shares of North Springs Resources Corp. common stock for the additional 25% working interest in the Edum Banso property.  





12





ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


FORWARD-LOOKING STATEMENTS


This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.


RESULTS OF OPERATIONS


Working Capital


  

January 31,

2012

$

April 30,

2011

$

Current Assets

9,337

71,160

Current Liabilities

297,211

102,479

Working Capital (Deficit)

(287,874)

(31,319)


Cash Flows


  

Nine months ended January 31,

2012

$

Nine months ended January 31,

2011

$

Cash Flows from (used in) Operating Activities

(87,853)

(57,668)

Cash Flows from (used in) Investing Activities

(100,000)

-

Cash Flows from (used in) Financing Activities

126,030

130,488

Net Increase (decrease) in Cash During Period

(61,823)

72,820


Operating Revenues


During the periods ended January 31, 2012 and 2011, the Company did not earn any operating revenues.  


Operating Expenses and Net Loss


During the nine months ended January 31, 2012, the Company incurred operating expenses of $650,228 compared with $76,926 for the nine months ended January 31, 2011.  The increase in operating expenses was attributed to consulting fees of $444,987 relating to the issuance of common shares for services, and an increase of $124,615 for general and administrative expenses relating to due diligence and acquisition costs of the Edum Banso property.  Overall, general and administrative expenses were consistent to prior year.  


For the nine months ended January 31, 2012, the Company recorded a net loss of $659,555 compared with a net loss of $80,589 for the nine months ended January 31, 2011.  In addition to operating expenses, the Company incurred interest expense of $9,327 during the nine months ended January 31, 2012 compared with $3,663 during the nine months ended January 31, 2011 relating to interest on its note payable.  The increase in interest expense was due to the fact that the current year accounted for the full term of the $65,416 note payable whereas the prior year only incorporated a partial term of the note, as well as interest expense on an additional $100,000 note payable in September 2011 that bears interest at 10% per annum.  



13






Liquidity and Capital Resources


At January 31, 2012, the Company had cash of $9,337 and total assets of $4,659,337 compared with cash and total assets of $71,160 at April 30, 2011.  The decrease in cash is attributed to the fact that the Company incurred operating expenses with minimal financing from debt sources and the increase in total assets was attributed to $4,800,000 acquisition cost of the Edum Banso property in August 2011 less recovery of $150,000 from option payments received during the period.    


At January 31, 2012, the Company had total liabilities of $297,211 compared with $102,479 at April 30, 2011.  The increase in total liabilities was attributed to an additional $100,000 note payable issued in September 2011 that is unsecured, bears interest at 10% per annum, and is due on demand, and an increase of $78,703 in accounts payable and accrued liabilities.


The Company had a working capital deficit of $287,874 at January 31, 2012 compared with $31,319 at April 30, 2011.  The increase in working capital deficit was attributed to expenditures incurred during the period for operating costs that were not replaced with financing, and also with respect to the issuance of a $100,000 note payable and $125,000 accounts payable relating to the original acquisition cost of the Edum Banso property as well as additional financing of $25,000 from related parties that were used as part of the acquisition cost.  


Cashflow from Operating Activities


During the nine months ended January 31, 2012, the Company used cash flows of $87,853 in operating activities compared with $57,668 of cash flows during the nine months ended January 31, 2011.  Overall, cash flows used for operating activities were consistent with prior year, and the slight increase is due to the availability of cash to settle outstanding obligations.   


Cashflow from Investing Activities


During the nine months ended January 31, 2012, the Company used $100,000 of cash for investing activities relating to the acquisition of the Edum Banso mineral property.  During the nine months ended January 31, 2011, the Company did not have any investing activities.  


Cashflow from Financing Activities


During the nine months ended January 31, 2012, the Company received $126,030 in proceeds from financing activities comprised of $101,030 from a notes payable that are unsecured, bears interest at 10% per annum, and is due on demand and proceeds of $25,000 from a related party that is non-interest bearing.  During the nine months ended January 31, 2011, the Company received proceeds of $130,488 comprised of $55,488 from the issuance of a 10% note payable and $75,000 from the issuance of common shares.  


Quarterly Developments


On January 23, 2012, the Company, through its wholly-owned subsidiary, Discovery Gold Ghana Limited (“DGG”), made a final payment of one hundred thirty five thousand dollars ($135,000) to Xtra-Gold Resources to acquire a 100% right, title and interest in and to that certain mineral property known as the Edum Banso Concession located in Ghana in the South Western Region of West Africa.


On January 25, 2012, the Company, through its wholly-owned subsidiary, DGG, entered into that certain Earn-In Agreement (the “Earn In Agreement”) by and between DGG and North Springs Resources Corp., a Nevada corporation (“NSRS”). Pursuant to the Agreement, NSRS shall acquire a working interest (the “Working Interest”) in DGG’s interest (“DGG’s Interest”) in that certain mineral concession located in the Edum Banso Region of the Western Region of Ghana (the “Property”), per the terms of the Earn In Agreement, a copy of which was previously filed with the Form 8-K filed by the Company on January 27, 2012 and is incorporated herein by this reference.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.



14






Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.


Off-Balance Sheet Arrangements


We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


In March 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-11 (“ASU No. 2010-11”), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of provisions of ASU No. 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-10 (“ASU No. 2010-10”), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-09 (“ASU No. 2010-09”), “Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.”  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Company’s adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued ASU 2010-06 (“ASU No. 2010-06”), “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Company’s adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued an amendment to ASC Topic 505, “Equity”, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The Company’s adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.



15






In January 2010, the FASB issued an amendment to ASC Topic 820, “Fair Value Measurements and Disclosure”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Company’s adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.


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


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 4.

CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of January 31, 2012, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on August 10, 2011, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control over Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.



16






ITEM 1A.

RISK FACTORS.


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


1.

Quarterly Issuances:


During the quarter, we issued 300,000 restricted shares of our common stock to our Chief Financial Officer, Mr. Dean Huge, for services previously rendered to the Company.


2.

Subsequent Issuances:


Subsequent to the quarter, we issued 200,000 restricted shares of our common stock to our Chief Financial Officer, Mr. Dean Huge, for his services rendered to the Company during the months of February and March 2012.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

[REMOVED AND RESERVED].


ITEM 5.

OTHER INFORMATION.


On December 12, 2011, the Company executed an Unsecured Promissory Note (the “Note”) to Don Ross (“Mr. Ross”).  Under the terms of the Note, the Company has borrowed a total of $25,000 from Mr. Ross, which accrues interest at an annual rate of 10% and is due on demand from Mr. Ross.  The Note also contains customary events of default.  


On December 22, 2011, the Company entered into a Consulting Agreement (the “WP Consulting Agreement”) with Wheatfield Partners (“Wheatfield”), with an effective date of November 1, 2011, pursuant to which Wheatfield shall provide advisory and consulting services to the Company including the development, implementation and maintenance of an ongoing program to develop the Company’s current mining property and to identify further mineral properties available for acquisition by the Company.  The term of the WP Consulting Agreement is for an initial three (3) months and thereafter for additional terms of three (3) months, with a maximum of twelve (12) months.  In exchange for such services, Wheatfield shall receive a payment of five thousand U.S. dollars ($5,000) per month for the first two (2) months of the WP Consulting Agreement and ten thousand U.S. dollars ($10,000) thereafter per month for every month that the WP Consulting Agreement remains in force.  Additionally, Wheatfield shall receive one hundred thousand (100,000) shares of the Corporation’s common stock per month over a six (6) month period.  


On January 10, 2012, the Company entered into a Consulting Agreement (the “Brodie Consulting Agreement”) with Ian Brodie (“Mr. Brodie”), with an effective date of December 1, 2011 (the “Brodie Effective Date”), pursuant to which Mr. Brodie shall provide general business and management consulting services to the Corporation. The term of the Brodie Consulting Agreement is for an initial six (6) months from the Effective Date.  In exchange for such services, Mr. Brodie shall receive a payment of five thousand U.S. dollars ($5,000) per month for every month that the Brodie Consulting Agreement remains in force.  Additionally, Mr. Brodie shall receive one hundred thousand (100,000) restricted shares of the Corporation’s common stock per month over a six (6) month period.



17






ITEM 6.

EXHIBITS


Exhibit

Number

 


Description of Exhibit

 


Filing

3.01

 

Articles of Incorporation

 

Filed with the SEC on June 3, 2010 as part of our Registration Statement on Form S-1.

3.02

 

Bylaws

 

Filed with the SEC on June 3, 2010 as part of our Registration Statement on Form S-1.

10.01

 

Management Agreement between the Company and Shelley Guidarelli dated April 30, 2011

 

Filed with the SEC on June 3, 2010 as part of our Registration Statement on Form S-1.

10.02

 

Promissory Note between the Company and Steve Ross dated May 10, 2010

 

Filed with the SEC on August 10, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.03

 

Amended Promissory Note between the Company and Steve Ross dated October 19, 2010

 

Filed with the SEC on October 21, 2010 as part of our Amended Registration Statement on Form S-1/A.

10.04

 

Consulting Agreement between the Company and Voltaire Gomez dated September 24, 2010

 

Filed with the SEC on December 17, 2010 as part of our Quarterly Report on Form 10-Q.

10.05

 

Investor Relations Agreement between the Company and LiveCall Investor Relations Company dated May 15, 2011

 

Filed with the SEC on August 10, 2011 as part of our Annual Report on Form 10-K.

10.06

 

Consulting Agreement between the Company and Kevin Coombes dated September 1, 2011

 

Filed with the SEC on September 14, 2011 as part of our Quarterly Report on Form 10-Q.

10.07

 

Share Exchange Agreement with Discovery Gold Ghana Limited dated September 2, 2011

 

Filed with the SEC on September 7, 2011 as part of our Current Report on Form 8-K.

10.08

 

Convertible Promissory Note between the Company and Donald Ross dated September 14, 2011

 

Filed with the SEC on September 14, 2011 as part of our Quarterly Report on Form 10-Q.

10.09

 

Earn-In Agreement by and between North Springs Resources Corp. and Discovery Gold Ghana Limited dated January 25, 2012

 

Filed with the SEC on January 27, 2012 as part of our Current Report on Form 8-K.

10.10

 

Consulting Agreement by and among the Company, CMB Investments Ltd. and Ralph Shearing dated February 9, 2012

 

Filed with the SEC on February 14, 2012 as part of our Current Report on Form 8-K.

10.11

 

Engagement Agreement between the Company and Source Capital Group, Inc. dated February 14, 2012

 

Filed with the SEC on February 21, 2012 as part of our Current Report on Form 8-K.

10.12

 

Convertible Promissory Note between the Company and Donald Ross dated December 12, 2011

 

Filed herewith.

10.13

 

Consulting Agreement between the Company and Wheatfield Partners dated December 22, 2011

 

Filed herewith.

10.14

 

Consulting Agreement between the Company and Ian Brodie dated January 10, 2012

 

Filed herewith.

21.01

 

List of Subsidiaries

 

Filed with the SEC on October 17, 2011 as part of our Current Report on Form 8-K.

31.01

 

Certification of Principal Executive Officer Pursuant to Rule 13a-14

 

Filed herewith.

31.02

 

Certification of Principal Financial Officer Pursuant to Rule 13a-14

 

Filed herewith.

32.01

 

CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

 

Filed herewith.

32.02

 

CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

 

Filed herewith.

101.INS*

 

XBRL Instance Document

 

Filed herewith.

101.SCH*

 

XBRL Taxonomy Extension Schema Document

 

Filed herewith.

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

Filed herewith.

101.LAB*

 

XBRL Taxonomy Extension Labels Linkbase Document

 

Filed herewith.

101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

Filed herewith.

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document

 

Filed herewith.


*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.


[SIGNATURE PAGE TO FOLLOW]



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SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

 

 

 

  

 

 

  

NORMAN CAY DEVELOPMENT, INC.  

 

 

  

Dated: March 14, 2012

 

/s/ Shelley Guidarelli            

  

  

By:  Shelley Guidarelli

  

  

Its: President and CEO

  

  

 

 

 

 

 

  

 

 

  

NORMAN CAY DEVELOPMENT, INC.  

 

 

  

Dated: March 14, 2012

 

/s/ Dean Huge                       

  

  

By:  Dean Huge

  

  

Its: CFO

  

  

 



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


  

Dated:  March 14, 2012

/s/ Shelley Guidarelli            

  

By:  Shelley Guidarelli

Its:  Director


Dated:  March 14, 2012

/s/ Dean Huge                       

  

By:  Dean Huge

Its:  Director


Dated:  March 14, 2012

/s/ Ralph Shearing                 

  

By:  Ralph Shearing

Its:  Director




19