Attached files
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| EXCEL - IDEA: XBRL DOCUMENT - Oro East Mining, Inc. | Financial_Report.xls |
| EX-31.1 - Oro East Mining, Inc. | ex31-1.htm |
| EX-32.1 - Oro East Mining, Inc. | ex32-1.htm |
| EX-31.2 - Oro East Mining, Inc. | ex31-2.htm |
U.S. 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 March 31, 2012
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-53136
Oro East Mining, Inc.
(formerly known as Accelerated Acquisitions I, Inc.)
Delaware
(State or other jurisdiction of incorporation or organization)
26-2012582
(I.R.S. Employer Identification Number)
1127 Webster Street, Suite 28, Oakland, CA 94607
(Address of Principal Offices)
(510) 544-1516
(Issuer’s Telephone Number)
122 Ocean Park Blvd. Suite 307, Santa Monica, CA 90405
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No ¨
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.
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Large Accelerated Filer ¨
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Accelerated Filer ¨
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Non-Accelerated Filer ¨
(Do not check if a smaller
reporting company)
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Smaller Reporting Company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 27,916,440 shares of common stock, par value $.0001 per share, outstanding as of May 14, 2012.
ORO EAST MINING, INC.
- Table of Contents -
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Page(s)
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PART I – FINANCIAL INFORMATION:
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Item 1.
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Item 2.
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5 | |||
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Item 3.
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6 | |||
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Item 4T.
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6 | |||
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PART II – OTHER INFORMATION:
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Item 1.
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7 | |||
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Item 1A.
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7 | |||
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Item 6.
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7 | |||
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PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ORO EAST MINING, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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March 31,
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December 31,
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2012
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2011
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ASSETS
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Current assets:
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Cash
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$ | 46,030 | $ | 83,633 | ||||
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Other current assets
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192 | 192 | ||||||
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Total current assets
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46,222 | 83,825 | ||||||
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Property and equipment, net
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244,026 | 254,163 | ||||||
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TOTAL ASSETS
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$ | 290,248 | $ | 337,988 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable
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$ | 14,825 | $ | 3,925 | ||||
| Short-term note payable to shareholder | 82,000 | 82,000 | ||||||
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Convertible note payable
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199,169 | 199,169 | ||||||
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Accrued liabilities
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24,197 | 12,619 | ||||||
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Advances-related party
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181,794 | 118,448 | ||||||
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Total current liabilities
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501,985 | 416,161 | ||||||
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STOCKHOLDERS' DEFICIT
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Preferred stock, $.0001 par value per share, 10,000,000 shares
authorized; no shares issued and outstanding
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- | - | ||||||
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Common stock, $.0001 par value per share, 100,000,000 shares
authorized; 27,916,440 shares issued and outstanding
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2,792 | 2,792 | ||||||
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Additional paid-in capital
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1,883,064 | 1,820,703 | ||||||
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Accumulated deficit
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(2,103,748 | ) | (1,910,151 | ) | ||||
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Accumulated other comprehensive income
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6,155 | 8,483 | ||||||
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TOTAL STOCKHOLDERS' DEFICIT
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(211,737 | ) | (78,173 | ) | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
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$ | 290,248 | $ | 337,988 | ||||
See accompanying notes to unaudited consolidated financial statements.
ORO EAST MINING, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES AND COMPREHENSIVE LOSS
(Unaudited)
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February 15,
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2008
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(Inception)
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Through
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Three Months ended March 31,
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March 31,
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2012
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2011
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2012
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Operating expenses:
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General and administrative
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$ | 190,585 | $ | 180,348 | $ | 1,514,146 | ||||||
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Exploration costs
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- | 214,142 | 577,417 | |||||||||
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Total operating expenses
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190,585 | 394,490 | 2,091,563 | |||||||||
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Other income (expense):
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Interest expense
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(3,016 | ) | (2,893 | ) | (19,823 | ) | ||||||
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Foreign currency gain (loss)
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4 | 44,532 | (21,042 | ) | ||||||||
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Gain on disposal of assets
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- | - | 28,680 | |||||||||
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Total other income (expense)
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(3,012 | ) | 41,639 | (12,185 | ) | |||||||
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Net loss
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(193,597 | ) | (352,851 | ) | (2,103,748 | ) | ||||||
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Other comprehensive income (loss),
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Foreign currency translation adjustment
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(2,328 | ) | - | 6,155 | ||||||||
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Comprehensive loss
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$ | (195,925 | ) | $ | (352,851 | ) | $ | (2,097,593 | ) | |||
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Basic earnings (loss) per share - Basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | ||||||
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Weighted average number of common shares outstanding
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27,916,440 | 27,203,222 | ||||||||||
See accompanying notes to unaudited consolidated financial statements.
ORO EAST MINING, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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February 18,
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2008
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(Inception)
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Through
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Three Months ended
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March 31,
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2012
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2011
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2012
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CASH FLOW FROM OPERATING ACTIVITES:
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Net loss
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$ | (193,597 | ) | $ | (352,851 | ) | $ | (2,103,748 | ) | |||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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10,137 | 9,400 | 47,837 | |||||||||
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Gain on disposal of assets
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- | - | (28,680 | ) | ||||||||
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Share-based compensation
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62,361 | 56,250 | 307,728 | |||||||||
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Changes in operating assets and liabilities:
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Other current assets
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- | - | (191 | ) | ||||||||
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Accounts payable
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10,900 | 34,114 | 14,825 | |||||||||
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Accrued liabilities
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11,578 | 2,975 | 28,639 | |||||||||
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Net cash used in operating activities
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(98,621 | ) | (250,112 | ) | (1,733,590 | ) | ||||||
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CASH FLOW USED IN INVESTING ACTIVITES,
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Purchases of property and equipment
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- | - | (64,015 | ) | ||||||||
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CASH FLOW FROM FINANCING ACTIVITIES:
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Proceeds from issuance of common stock
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- | 250,000 | 1,570,685 | |||||||||
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Proceeds from short-term note
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- | - | 82,000 | |||||||||
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Net proceeds from shareholder advances
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63,346 | 32,813 | 184,795 | |||||||||
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Net cash provided by financing activities
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63,346 | 282,813 | 1,837,480 | |||||||||
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Effect of exchange rate on cash
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(2,328 | ) | - | 6,155 | ||||||||
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NET INCREASE (DECREASE) IN CASH
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(37,603 | ) | 32,701 | 46,030 | ||||||||
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CASH AT BEGINNING OF PERIOD
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83,633 | 126,355 | - | |||||||||
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CASH AT END OF PERIOD
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$ | 46,030 | $ | 159,056 | $ | 46,030 | ||||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Interest paid
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$ | - | $ | - | $ | 4,100 | ||||||
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NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Note payable forgiven by shareholder
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$ | - | $ | 7,443 | $ | 7,443 | ||||||
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Equipment purchased on short-term note payable
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$ | - | $ | 199,169 | $ | 199,169 | ||||||
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Trade in of truck
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$ | - | $ | - | $ | 79,682 | ||||||
See accompanying notes to unaudited consolidated financial statements.
ORO EAST MINING, INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Business
Oro East Mining, Inc. (“we”, “our”, or the “Company”) was incorporated in Delaware on February 15, 2008. The Company is currently in the exploration stage and does not have any customers, or revenue.
(b) Basis of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated.
(c) Basis of Presentation
The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments for a fair statement of the results and operations and financial position for the interim periods presented have been included. All such adjustments are of a normal recurring nature. The March 31, 2012 interim consolidated financial statements presented herein may not be indicative of the results of the Company for the year ending December 31, 2012. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the SEC on March 30, 2012.
(d) Share-based Compensation
The Company recognizes the services received in a share-based payment transaction as the services are received. The services received are measured at the fair value of the equity instruments issued.
(e) Going Concern
The accompanying interim consolidated financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying interim consolidated financial statements, the Company has a negative deficit accumulated during the exploration stage of $2,103,748 and has negative working capital of $455,763 at March 31, 2012. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management’s plan includes obtaining additional funds by equity financing and/or related party advances, but there is no assurance of additional funding being available. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying interim consolidated financial statements do not include any adjustments that might arise as a result of this uncertainty.
NOTE 2 RELATED PARTY TRANSACTIONS
The shareholder and officer of the Company paid expenses on behalf of the Company during the three months ended March 31, 2012. As of March 31, 2012 and December 31, 2011, the Company owed shareholder and officer the amount of $181,794 and $118,448, respectively. The balances are unsecured, non-interest bearing and due on demand.
NOTE 3 EQUITY
During the fiscal year 2011 and 2010, the Company entered into consulting agreements with two companies to issue up to 24,440 and 225,000 common shares respectively for services to be received over the period of two years. The shares are forfeitable if the services are not provided. The shares were valued at $2/share for a total of $498,880. During the three months ended March 31, 2012, the Company recognized $62,361 in share based compensation related to the consulting services.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information that the Company’s management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with the Company’s consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. Undue certainty should not be placed on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Business Overview
We are an exploration stage mining company engaged in the search for gold, copper and other precious or industrial mineral deposits and have not yet generated or realized any revenues from our business.
We do not expect any significant changes or hiring of employees since contracts are given to consultants and sub-contractor specialists in specific fields of expertise for the exploration work. We do not expect to purchase or sell any plant or significant equipment. We intend to lease or rent any equipment, such as backhoe, diamond drill, generators and so on, that we will need in order to carry out our exploration activities.
In October of 2011, we filed a registration statement on the Form S-1 for the public offering of 6,866,440 shares of common stock (“Offering”) and are waiting for the SEC’s approval.
Results of Operations
The following is a summary of the Company’s operation results for the three months ended March 31, 2012 and 2011:
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2012
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2011
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(Unaudited)
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Total operating expenses
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$ | 190,585 | $ | 394,490 | ||||
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Total other income (expense)
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(3,012 | ) | 41,639 | |||||
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Net loss
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$ | (193,597 | ) | $ | (352,851 | ) | ||
The Company is still in the exploration stage, and no revenue has been generated since the inception of the Company on February 15, 2008.
Operating expenses decreased by about $200,000 for the first quarter of 2012 as compared to the first quarter of 2011 was due to the decrease of about $214,000 in exploration costs. There were no exploration activities during the first quarter of 2012 due to heavy flooding in the Philippines during January 2012 and the pending of SEC’s approval of Form S-1 for funding from additional stock issuance. General and administrative expenses did not change much between the two quarters ended March 31, 2012 and 2011.
Liquidity and Capital Resources
As of March 31, 2012 and December 31, 2011, the Company had a total of $290,248 and 337,988 in assets including $46,030 and $83,633 of cash, respectively. Decrease of about $48,000 in total assets was due to the $37,000 net cash used for the operations and the $10,000 increase in accumulated depreciation for the first quarter of 2012. The Company also had $501,985 and $416,161 current liabilities as of March 31, 2012 and December 31, 2011, respectively. Increase of about $86,000 in total current liabilities was due to the increase of $63,000, $11,000, and $12,000 in related party advances, accounts payable, and accrued liabilities, respectively.
The following is a summary of the Company's cash flows provided by (used in) operating and financing activities for the three months ended March 31, 2012 and 2011:
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2012
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2011
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(Unaudited)
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Net Cash Used In Operating Activities
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$ | (98,621 | ) | $ | (250,112 | ) | ||
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Net Cash Provided By Financing Activities
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63,346 | 282,813 | ||||||
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Effect of exchange rate on cash
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(2,328 | ) | - | |||||
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Net increase/(decrease) on cash
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$ | (37,603 | ) | $ | 32,701 | |||
Our principal sources of liquidity are our cash and the cash flow provided by the shareholder advances and equity financing. We believe that further equity financing is needed to satisfy our anticipated cash requirements through the next 12 months.
Total cash decreased by about $37,000 was mainly due to about $100,000 of cash used for funding the operations despite about $63,000 of cash provided by shareholder advances during the quarter ended March 31, 2012. There was no cash used for investing activities during the quarters ended March 31, 2012 and 2011.
Critical Accounting Policies
There have been no material changes in the critical accounting policies since December 31, 2011.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2012. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective as of March 31, 2012.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the first quarter ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
To the best knowledge of the sole officer and sole director, the Company is not a party to any legal proceeding or litigation.
Item 1A. RISK FACTORS
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item
Item 6. EXHIBITS
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Exhibit
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Description
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31.1
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31.2
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32.1
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101.INS
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XBRL Instance Document *
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101.SCH
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XBRL Taxonomy Extension Schema Document. *
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document *
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document *
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document *
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document *
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* Filed herewith
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Dated: May 14, 2012
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ORO EAST MINING, INC.
(Registrant)
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By:
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/s/ Tian Q Chen
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Chief Executive Officer
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(Principal Executive Officer and Principal
Financial and Accounting Officer)
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