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U.S. 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 July 31, 2012

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

For the transition period from ______________________ to ______________________

Commission File No. 333-178199

GYSAN HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada

 

Not Applicable

(State or other jurisdiction of incorporation or formation)

 

(I.R.S. employer identification number)


Unit 7, 833 - 1st Avenue N.W.

Calgary, AB, Canada T2N 0A4

(Address of principal executive offices) (Zip Code)

Registrant's telephone number: (403) 229-2351
_______________________________________________

Securities registered under Section 12(b) of the Exchange Act:

None.


Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.0001 par value per share

(Title of Class)

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

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of July 15, 2012: 13,616,000 shares of common stock.

Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]





1



GYSAN HOLDINGS, INC.
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS INDEX




PART I – FINANCIAL INFORMATION:



Item 1.

Financial Statements (Unaudited).......................................................................................................

3

Consolidated Balance Sheets..............................................................................................................

4

Consolidated Statements of Operations..............................................................................................

5

Consolidated Statements of Stockholders’ Equity..............................................................................

6

Consolidated Statements of Cash Flows.............................................................................................

7

Notes to the Consolidated Financial Statements.................................................................................

8-14

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.............

15

Item 3.

Quantitative and Qualitative Disclosure About Market Risks............................................................

16

Item 4T.

Controls and Procedures ....................................................................................................................

16




PART II – OTHER INFORMATION:



Item 1.

Legal Proceedings...............................................................................................................................

17

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 5.

Other Information ...............................................................................................................................

17

Item 6.

Exhibits ...............................................................................................................................................

17


Signatures .................................................................................................................................................................

19



2




Gysan Holdings Inc.

July 31, 2012

Consolidated Financial Statements

(Unaudited)



Gysan Holdings Inc.

CONSOLIDATED BALANCE SHEETS

      
   

July 31,
2012

 

October 31,
2011

   

(unaudited)

 

(audited)

      

ASSETS

Current

   
 

Cash and cash equivalents

 $         19,460

 

 $         98,546

 

Sales tax receivable

                306

 

                  -   

 

Inventory

              3,312

 

                  -   

   

            23,078

 

            98,546

      

Property & equipment (Note 3)

              2,361

 

              4,027

      

Total Assets

 $         25,439

 

 $       102,573

      

LIABILITIES

Current

   
 

Sales tax payable

                  -   

 

                232

 

Due to shareholder (Note 4)

            16,087

 

              3,606

      

Total Liabilities

            16,087

 

              3,838

      

STOCKHOLDERS' EQUITY

Capital Stock

   
 

Authorized

   
  

100,000,000 common shares, voting, par value $.0001 each

   
  

90,000,000 preferred shares, par value $.0001 each

   
 

Issued

   
  

13,616,000 and 13,616,000 common shares, respectively

              1,362

 

              1,362

Additional paid in capital

          117,717

 

          117,717

Deficit

         (107,674)

 

          (19,890)

Accumulated other comprehensive loss

            (2,053)

 

               (454)

      

Total Stockholders' Equity

              9,352

 

            98,735

      

Total Liabilities and Stockholders' Equity

 $         25,439

 

 $       102,573

Approved by the Board of Directors,

   

                              , Director

  

                             , Director


3








Gysan Holdings Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

 
          
   

Three months

ended
July 31

 

Three months ended
July 31

 

Nine months ended
July 31

 

Nine months ended
July 31

   

2012

 

2011

 

2012

 

2011

          
          

Revenue

 $    4,964

 

 $   9,667

 

 $   39,038

 

 $    15,989

Cost of goods sold

 (2,786)

 

 -   

 

 (24,446)

 

 -   

Gross profit

 $    2,178

 

 $   9,667

 

 $   14,592

 

 $    15,989

          

Expenses

       
 

General & administration

 6,603

 

 17,318

 

 40,208

 

 23,614

 

Professional fees

 10,648

 

 -   

 

 38,582

 

 -   

 

Consulting fees

 5,194

 

 -   

 

 19,477

 

 -   

 

Rent & office expenses

 662

 

 1,279

 

 2,266

 

 3,149

 

Depreciation

 519

 

 593

 

 1,619

 

 1,696

   

 23,626

 

 19,190

 

 102,152

 

 28,459

          

Loss from operations

 (21,448)

 

 (9,523)

 

 (87,560)

 

 (12,470)

          

Other income

 77

 

 34

 

 (155)

 

 34

          

Loss before income tax

 (21,371)

 

 (9,489)

 

 (87,715)

 

 (12,436)

          

Income tax expense (recovery)

 (2)

 

 -   

 

 69

 

 -   

          

Net loss for the period

 (21,369)

 

 (9,489)

 

 (87,784)

 

 (12,436)

          

Other comprehensive income

       
 

Foreign currency adjustment

 (1,888)

 

 2,707

 

 (1,599)

 

 4,290

          

Comprehensive loss

 $(23,257)

 

 $(6,782)

 

 $ (89,383)

 

 $ (8,146)

          

Basic and diluted income loss per share

$   (0.002)

 

$ (0.001)

 

$    (0.006)

 

$  (0.002)

          

Weighted average number of shares outstanding

  13,616,000

 

  7,150,000

 

  13,616,000

 

  7,150,000



4










Gysan Holdings Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 
            
 

Capital Stock

 

Additional Paid in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings (Deficit)

 

Total

 

Shares

 

Amount

    

Balance, November 1, 2010

7,150,000

 

$          715

 

$            (621)

 

$                    638

 

$             22,231

 

$                22,963

            

Issuance of shares

6,466,000

 

            647

 

         118,338

 

                         -   

 

                       -   

 

                118,985

            

Net loss for the year ended
October 31, 2011

                    -   

 

               -   

 

                  -   

 

                         -   

 

              (42,121)

 

                (42,121)

            

Other comprehensive loss for the year ended October 31, 2011

                    -   

 

               -   

 

                  -   

 

                 (1,092)

 

                       -   

 

                  (1,092)

            

Balance, October 31, 2011

      13,616,000

 

$       1,362

 

$       117,717

 

$                  (454)

 

$            (19,890)

 

$                98,735

            

Net loss for the period ended
July 31, 2012

                    -   

 

               -   

 

                  -   

 

                         -   

 

              (87,784)

 

                (87,784)

            

Other comprehensive loss for the period ended July 31, 2012

                    -   

 

               -   

 

                  -   

 

                 (1,599)

 

                       -   

 

                  (1,599)

            

Balance, July 31, 2012

      13,616,000

 

         1,362

 

         117,717

 

                 (2,053)

 

            (107,674)

 

$                  9,352



5







Gysan Holdings Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

     
          
   

Three months ended
July 31

 

Three months ended
July 31

 

Nine months ended
July 31

 

Nine months ended
July 31

   

2012

 

2011

 

2012

 

2011

          

Operating activities

       
 

Net loss for the period

$(21,369)

 

$ (9,489)

 

$(87,784)

 

$(12,436)

 

Item not requiring an outlay of cash:

       
  

Depreciation

519

 

593

 

1,619

 

1,696

 

Changes in non-cash working capital:

       
  

Accounts receivable

-   

 

 (4,430)

 

-   

 

 (4,430)

  

Accounts payable

-   

 

2,049

 

-   

 

 (147)

  

Sales tax payable (receivable)

 (5)

 

382

 

 (538)

 

        322

  

Income tax payable

-   

 

-   

 

-   

 

 (5,930)

  

Inventory

3,295

 

-   

 

 (3,312)

 

-   

  

Due to (from) shareholder

15,808

 

 (689)

 

12,481

 

 (17,018)

          
 

Net cash provided by (used in) operating activities

 (1,752)

 

 (11,584)

 

 (77,534)

 

 (37,943)

          

Financing Activities

       
 

Common shares issued

-   

 

1,267

 

-   

 

118,984

 

Additional Paid in Capital

-   

 

117,717

 

-   

 

-   

          
 

Net cash proved by financing activities

-   

 

118,984

 

-   

 

118,984

          

Net cash increase (decrease) for the period

 (1,752)

 

107,400

 

 (77,534)

 

81,041

          

Foreign exchange translation

 (1,776)

 

2,715

 

 (1,552)

 

3,897

          

Cash and cash equivalents,

beginning of the period

22,989

 

15,494

 

98,546

 

40,671

          

Cash and cash equivalents, end of the period

$ 19,460

 

$125,609

 

$ 19,460

 

$ 125,609



6





GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS


Gysan Holdings Inc. (“Gysan” or the “Corporation”) was incorporated in the state of Nevada, United States on March 11, 2011. On June 10, 2011, Gysan acquired Gysan Enterprises Ltd. of Calgary, Alberta, Canada as its wholly owned subsidiary. Gysan Enterprises Ltd. (“Gysan Alberta”) was incorporated on November 4, 2009 with its head office located in Calgary, Alberta, Canada. Gysan Alberta provides supporting services to an auction company to establish a new flooring division and focuses on selling and marketing various types of floor coverings, namely, hardwood, engineered, and laminates to the local market. Corporation clients include homeowners, business owners, and custom builders from Calgary and the surrounding areas.


The Corporation issued 7,150,000 shares of common stock in exchange for 100 percent of the outstanding common shares of Gysan Alberta. Although the Corporation was the legal acquirer, the transaction was accounted for as a recapitalization of Gysan Alberta in the form of a reverse merger, whereby Gysan Alberta becomes the accounting acquirer and was deemed to have retroactively adopted the capital structure of the Corporation. Accordingly, the accompanying consolidated financial statements reflect the historical consolidated financial statements of Gysan Alberta for all periods presented, and do not include the historical financial statements of the Corporation. All costs associated with the reverse merger transaction were expensed as incurred.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


This summary of significant accounting policies is presented to assist in understanding the financial statements. The consolidated financial statements and notes are the representations of the Corporation’s management, who is responsible for their integrity and objectivity. These consolidated financial statements have been prepared in accordance with the instructions to form 10Q, and therefore do not include all the information necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. These consolidated financial statements should be read in conjunction with the annual consolidated financial statements and footnotes thereto included in the Company’s registration statement filed with the Securities and Exchange Commission.


Basis of Presentation


The Corporation’s financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These consolidated financial statements include the Corporation’s wholly owned subsidiary, Gysan Enterprises Ltd., and 100 percent of its assets, liabilities and net income or loss since acquisition. All inter-company accounts and transactions have been eliminated.


While the information presented in the accompanying interim consolidated financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Operating results for the period ended July 31, 2012 are not necessarily indicative of the results that can be expected for the year ended October 31, 2012.



7



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)



Cash and Cash Equivalents


For purposes of the Statement of Cash Flows, management considers liquid investments with an original maturity of three months or less to be cash equivalents. As at July 31, 2012, all cash amounts deposited in accounts were federally insured.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.


Comprehensive Income (Loss)


The Corporation adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Corporation’s other comprehensive income represents foreign currency translation adjustments.


Net Income (loss) per Common Share


FASB ASC 260 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants



and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive.



8



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)


Financial Instruments


Fair Value


The guidance for fair value measurements establishes the authoritative definition of fair value, sets out a framework for measuring fair value and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Corporation uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follows:


§

Level 1 – observable inputs such as quoted prices in active markets;

§

Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

§

Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.


Cash is measured using level 1 inputs.


Assets and Liabilities that are measured at Fair Value on a Recurring Basis


The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.


The Corporation’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.


The fair value of financial instruments consisting of cash and cash equivalents, accounts payable and due to shareholder were estimated to approximate their carrying values based on the short-term maturity of these instruments.




Risks


Financial instruments that potentially subject the Corporation to credit risk consist principally of cash.  


Management does not believe the Corporation is exposed to significant credit risk. Management, as well, does not believe the Corporation is exposed to significant interest rate risks during the period presented in these consolidated financial statements.



9



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)


Fair Value Measurements


The Corporation follows FASB ASC 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This new accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Corporation defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.


When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Corporation considers the principal or most advantageous market in which the Corporation would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.  


The Corporation has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Corporation has not elected the fair value option for any eligible financial instruments.


Currency risks


The Corporation incurs expenditures in Canadian dollars. Consequently, some assets and liabilities are exposed to Canadian dollar foreign currency fluctuations. As at July 31,



2012, cash, accounts receivable, due to shareholder and accounts payable and accrued charges were all denominated in Canadian dollars.


Equipment


Equipment is recorded at cost. Amortization is calculated using the declining balance method and at the following annual rate which is intended to amortize the cost over its useful life:

Automobile – 30% over 48 months



10



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)


Impairment of Long-Lived Assets


Impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. No impairments of these types of assets were recognized during the period ended July 31, 2012.


Deferred Taxes


A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.


Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, some portion or all of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.


Revenue Recognition and Deferred Revenue


The Corporation recognizes revenue when persuasive evidence of an arrangement exists, shipment has occurred or services rendered, the price is fixed or determinable and payment is reasonably assured. Customers take ownership at point of sale and bear the costs and risks of delivery.


Foreign currency translation


The functional currency of the Corporation is Canadian dollars (“C$”). The Corporation maintains its financial statements in United States currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of other comprehensive income (loss) for the respective periods.


Recent Accounting Pronouncements


In June 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income. ASU 2011-05 amends ASC 220, Comprehensive Income, by requiring entities to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements, removing the option to present the components of other comprehensive income as part of the statement of stockholder’s equity. The items that must be reported in other comprehensive income were not changed. ASU 2011-05 will be effective for the Corporation for fiscal years, and interim periods within those years, beginning after December 15, 2011 and must be applied retrospectively. The Corporation is evaluating its presentation options under this ASU; however these changes are not expected to impact the consolidated financial statements other than the change in presentation.




11



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)


 

In May 2011, FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 amends ASC 820, Fair Value Measurement, by expanding existing disclosure requirements for fair value measurements and modifying certain definitions in the guidance, which may change how the fair value measurement guidance of ASC 820 is applied. ASU 2011-04 will be effective for the Corporation for interim and annual periods beginning after December 15, 2011 and must be applied prospectively. The Corporation is evaluating the impact that this ASU may have on its consolidated financial statements, if any.



NOTE 3 – PROPERTY AND EQUIPMENT




 

 July 31, 2012

  

Accumulated

 
 

Cost

Depreciation

Net

Automobile

 $       7,265

 $             4,904

 $        2,361

 

 $       7,265

 $             4,904

 $        2,361


 

October 31, 2011

  

Accumulated

 
 

Cost

Depreciation

Net

Automobile

 $       7,322

 $             3,295

 $        4,027

 

 $       7,322

 $             3,295

 $        4,027


NOTE 4 – DUE TO SHAREHOLDER


As at July 31, 2012, the Corporation was obligated to a shareholder for funds advanced to the Corporation for working capital. The advances are unsecured and no interest rate or payback schedule has been established.


NOTE 5 – CAPITAL STOCK


On April 11, 2011, the Corporation issued 2,600,000 common shares for gross proceeds of $272 by way of private placement.



12



GYSAN HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

July 31, 2012


NOTE 5 – CAPITAL STOCK (CONT’D.)


On May 27, 2011, the Corporation issued 3,866,000 common shares for gross proceeds of $118,694 by way of private placement.


On June 10, 2011, the Corporation issued 7,150,000 common shares for total consideration of $113 in exchange for 100 percent of the outstanding common shares of Gysan Enterprises Ltd. As described in Note 1, the transaction was accounted for as a reverse merger and a retroactive recapitalization.


As at July 31, 2012, there were no warrants or options outstanding.



13



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


FORWARD LOOKING STATEMENTS


The following discussion contains forward-looking statements that reflect the company’s plans, estimates and beliefs. The actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report on Form 10-Q.


OVERVIEW


Gysan Holdings Inc. (“Gysan Holdings”) was incorporated in the State of Nevada on March 11, 2011. Gysan Holdings acquired 100 percent of the outstanding common stock of Gysan Enterprises Ltd. on June 13, 2011. Gysan Enterprises Ltd., a wholly owned subsidiary of the Company, began its operations in November, 2009 by providing support services to an auction company to establish a new flooring division. Gysan Enterprises is now focused on selling and marketing various types of floor coverings, including hardwood, engineered flooring and other type of floor coverings. Sales are made at the retail level to homeowners and at the wholesale level to business owners, and custom builders located in Calgary, Alberta, Canada and the surrounding areas.


RESULT OF OPERATIONS


Assets


Total assets decreased from $102,573 at October 31, 2011 to $25,439 at July 31, 2012. Total assets consist of current assets and non-current assets. At July 31, 2012, total current assets, comprising of all cash, cash equivalents, and inventory were $23,078 compared to $98,546 at October 31, 2011. The decrease was primarily due to the increase in inventory and the expenses incurred in the nine months ended July 31, 2012. At July 31, 2012, total non-current assets, comprising of a motor vehicle, were $2,361, compared to $4,027 at October 31, 2011.


Liabilities


Total liabilities increased from $3,838 at October 31, 2011 to $16,087 at July 31, 2012. Total liabilities consist of current liabilities. The increase in current liabilities is primarily a result of a shareholder loan advanced to the company for use as working capital.


Three Months Ended July 31, 2012 Compared to Three Months Ended July 31, 2011


Revenue


Sales revenue for the three months ended July 31, 2012 decreased by $4,703 or approximately 48.7% to $4,964 from $9,667 in 2011. The decrease in sales revenue for the quarter is primarily due to the decrease in services provided to auctioning services.


Cost of Sales and Gross Profit


Cost of sales for the three months ended July 31, 2012 was $2,786 compared to $0 for the corresponding period in 2011, for an increase of 100.0%. For the three months ended July 31, 2012, gross profit decreased by $7,489 or 77.5% from $9,667 in 2011 to $2,178 in 2012. The decrease in gross profits corresponds to the decrease in revenue and the increase in cost of goods sold.


Operating Expenses


Operating expenses for the three months ended July 31, 2012 were $23,626, an increase of $4,436 or 23.1% from $19,190 in 2011. The increase in operating expenses was a direct result of the increase in fees paid to consultants, attorneys, and accountants during the period for performing various tasks related to the company’s filings. Operating expenses in the three months ended July 31, 2012 compared to the same period in 2011 was marked by an increase in professional fees of $10,648 and an increase in consulting fees of $5,194.


Earnings after Taxes


The Company incurred a net loss of $21,369 for the three months ended July 31, 2012, compared to a net loss of $9,489 for the three months ended July 31, 2011. The decrease in net income is largely attributable to the decrease in revenue and the increase in professional and consulting fees.


Cash Flow from Operations


The Company generated a negative cash flow of $1,752 from its operations for the three months ended July 31, 2012, compared to a negative cash flow of $11,584 in 2011. During the quarter, the Company has not completed any financing.



14



LIQUIDITY AND CAPITAL RESOURCES


As at July 31, 2012, the Company had working capital of $6,991, which comprised of cash, cash equivalents, and inventory.


FINANCIAL CONDITION


The company currently anticipates that its available cash resources will not be sufficient to meet its anticipated working capital for at least the next 12 months. We may need to raise additional capital to fund our operations and expansion and to build up our inventory of products.


If additional funds are raised through further issuances of equity or convertible debt securities, the percentage ownership of current stockholders will be reduced and holders



of those new securities may have rights, preferences and privileges senior to those of current shareholders.


In addition, the company may not be able to obtain additional financing on favourable terms, if at all. If adequate funds are not available or are not available on terms favourable to the company, the business, results of operations and financial condition could be adversely affected.


Item 3.

Quantitative and Qualitative Disclosure About Market Risks.

Not Applicable.

Item 4T.

Controls and Procedures.

(a)

Evaluation of disclosure controls and procedures.

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, the Company’s principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation these officers have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective and were adequate to insure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act were recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms. It is also important to point out that all internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statements preparation and presentation.

(b)

Changes in internal controls.

There have been no significant changes in our internal controls or other factors that would significantly affect such controls and procedures subsequent to the date we completed our evaluation. Therefore, no corrective actions were taken.



15



PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

To the best knowledge of the Company’s officers and directors, the Company is currently not a party to any material pending legal proceeding.

Item 1A.

Risk Factors.

Not applicable as a smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.

Defaults Upon Senior Securities.

None.

Item 5.

Other Information.



None.

Item 6.

Exhibits


(a) Exhibits

*3.1

Certificate of Incorporation

*3.2

Amended and Restated Certificate of Incorporation

*3.3

By-laws

*4.0

Stock Certificate

31.1

Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

31.2

Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1

Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

32.2

Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

101.INS

XBRL Insatance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Lable Linkbase

101..PRE

XBRL Taxonomy Extension Presentation Linkbase


* Filed as an exhibit to the Company's registration statement on Form S-1, as filed with the Securities and Exchange Commission on November 28, 2011 and incorporated herein by this reference.

 

(b) Reports of Form 8-K

None.





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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.

Dated:  September 13, 2012

 

GYSAN HOLDINGS, INC.


By:  /s/ Grace Weisgerber

Name:  Grace Weisgerber

Title: President






















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