UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

 

FORM 10-Q

_______________

 

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

 

For the quarterly period ended December 31, 2012

 

OR

 

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

 

  For the transition period from ______ to ______.

 

Commission File Number: 001-34858

___________________________________________________

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

 (Exact name of registrant as specified in its charter)

___________________________________________________

 

 

Nevada			98-0568076
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)
13520 Oriental St. Rockville, MD			20853
(Address of principal executive offices)			(Zip Code)

 

(202) 536-5191

 (Registrant’s telephone number, including area code)

_____________________________________________________

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).          Yes  x  No  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer  o	Accelerated Filer  o
Non-Accelerated Filer  o	Smaller Reporting Company  x

 

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

 

As of February 8, 2013 the registrant had 322,800,000 shares of its Common Stock, $0.001 par value, outstanding.  

 

 

 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

FORM 10-Q

DECEMBER 31, 2012

INDEX

 

PART I -- FINANCIAL INFORMATION		Page
Item 1.	Financial Statements	2
	Balance Sheets as of December 31, 2012 (unaudited) and September 30, 2012	3
	Statements of Operations for the Three Months Ended December 31, 2012 and 2011 and for the Period March 26, 2007 (Inception) to December 31, 2012 (unaudited)	4
	Statements of Cash Flows for the Three Months Ended December 31, 2012 and 2011 and for the Period March 26, 2007 (Inception) to December 31, 2012 (unaudited)	5
	Notes to Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
PART II -- OTHER INFORMATION		13
Item 1.	Legal Proceedings	13
Item 1.A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Mine Safety Disclosures	13
Item 5.	Other Information	13
Item 6.	Exhibits	13
SIGNATURE		14

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1.    Financial Statements

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Balance Sheets

 

		December 31,				September 30,
		2012				2012
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	–			$	–
Total assets		$	–			$	–
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable		$	16,055			$	20,737
Accrued expenses			19,750				19,750
Amount due to shareholder			162,551				132,308
Total current liabilities			198,356				172,795
Other liabilities			–				–
Total liabilities			198,356				172,795
Stockholders' deficit:
Common stock, $.001 par value, 1,600,000,000 shares authorized, 322,800,000 shares issued and outstanding at December 31, 2012 and September 30, 2012, respectively			322,800				322,800
Additional paid-in capital			204,000				204,000
Deficit accumulated during the development stage			(725,156	)			(699,595	)
Total stockholders' deficit			(198,356	)			(172,795	)
Total liabilities and stockholders' deficit		$	–			$	–

 

             

See accompanying notes to financial statements.

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Statements of Operations

(unaudited)

 

										For the Period
										March 26, 2007
		For the Three Months Ended								(Inception) to
		December 31,				December 31,				December 31,
		2012				2011				2012
Net revenue		$	–			$	–			$	31,912
Cost of revenue			–				–				15,731
Gross profit			–				–				16,181
General and administrative expenses			25,561				5,049				441,774
Loss from operations			(25,561	)			(5,049	)			(425,593	)
Other income (expense):
Gain on disposal of subsidiaries			–				–				118,193
Exchange gain			–				–				1,028
Interest income			–				–				293
Other income			–				–				903
Interest expense			–				–				(2,170	)
Total other income (expense)			–				–				118,247
Loss before income taxes			(25,561	)			(5,049	)			(307,346	)
Provision for income taxes			–				–				–
Net loss			(25,561	)			(5,049	)			(307,346	)
Net loss attributable to noncontrolling interest			–				–				24,430
Net loss attributable to Paradigm Resource Management Corporation		$	(25,561	)		$	(5,049	)		$	(282,916	)
Net loss per share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding - Basic and Diluted			322,800,000				1,522,800,000

 

See accompanying notes to financial statements.

 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Statements of Cash Flows

(unaudited)

 

For the Period

March 26, 2007

For the Three Months Ended

(Inception) to

December 31,

December 31,

December 31,

2012

2011

2012

Cash flows from operating activities:

Net loss

$

(25,561

)

$

(5,049

)

$

(282,916

)

Adjustments to reconcile net loss to net cash used in operations:

Depreciation

–

–

2,914

Noncontrolling interest

–

–

(24,430

)

Gain on disposal of subsidiaries

–

–

(118,193

)

Common stock issued for services

–

–

400

Changes in operating assets and liabilities:

Accounts receivable

–

–

(859

)

Other receivable

–

–

1,812

Loan receivable

–

–

12,822

Due from related party

–

–

(19,443

)

Deposit

–

–

(5,871

)

Inventory

–

–

(1,897

)

Accounts payable

10,318

299

114,175

Accrued expenses

4,750

4,750

38,960

Net cash used in operating activities

(10,493

)

–

(282,526

)

Cash flows from investing activities:

Acquisition of subsidiary, net of cash

–

–

75,650

Disposal of subsidiary, net of cash

–

–

39,742

Capital expenditures

–

–

(12,511

)

Net cash provided by investing activities

–

–

102,881

Cash flows from financing activities:

Proceeds from loan payable

–

–

6,793

Amounts due shareholder

10,493

–

127,742

Amounts due directors

–

–

4,860

Proceeds from sale of common stock

–

–

44,160

Net cash provided by financing activities

10,493

–

183,555

Effect of exchange rate fluctuations on cash

–

–

(3,910

)

Net increase (decrease) in cash

–

–

–

Cash and cash equivalents at beginning of period

–

–

–

Cash and cash equivalents at end of period

$

–

$

–

$

–

 

See accompanying notes to financial statements.

                Continued

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Statements of Cash Flows (Continued)

 

 

										For the Period
										March 26, 2007
		For the Three Months Ended								(Inception) to
		December 31,				December 31,				December 31,
		2012				2011				2012
Supplemental disclosure of cash flow information:
Cash paid for interest		$	–			$	–			$	2,170
Cash paid for taxes		$	–			$	–			$	–
Supplemental disclosure of non-cash financing activities:
Accounts payable paid by shareholder		$	15,000			$	379			$	15,379
Accrued expenses paid by shareholder		$	4,750			$	–			$	19,250
Contribution, retirement and cancellation of 1,200,000,000 shares of common stock by principal shareholder
Common stock		$	–			$	–			$	(1,200,000	)
Additional paid in capital		$	–			$	–			$	204,000
Deficit accumulated during the development stage		$	–			$	–			$	996,000
Amounts due to director paid by shareholder		$	–			$	–			$	180

 

See accompanying notes to financial statements.                        

 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Notes to Financial Statements
December 31, 2012

(unaudited)

 

Note 1 – Nature of Business, Presentation and Going Concern

 

Organization

 

Paradigm Resource Management Corporation (the "Company") was incorporated in Nevada on March 26, 2007 under the name China Digital Ventures Corporation. The principal business of the Company was its web based telecom and IPTV businesses, both of which were disposed of during the year ended September 30, 2010. As of the date hereof, the Company has no operations.

 

On July 23, 2010, the Company experienced a change in control.  Canton Investments Ltd (“CIL”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders.  On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 1,150,000,000 post-split shares of the Company’s outstanding common stock for $205,750.  Also on July 23, 2010, CIL purchased 244,000,000 post-split shares of the Company’s outstanding common stock for $36,600 from various shareholders.  As a result of the change in control, CIL owned a total of 1,394,000,000 post-split shares of the Company’s common stock representing 91.54% at July 23, 2010.

 

On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation. The Company is currently contemplating acquisitions of certain gold, copper and uranium mineral property rights.

 

Stock Split

 

On June 1, 2012, the Company's Board of Directors declared a one hundred-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased the number of shares of common stock outstanding from 15,228,000 to 1,522,800,000. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to June 1, 2012. The total number of authorized common shares and the par value thereof was not changed by the split.

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

 

These unaudited financial statements should be read in conjunction with our 2012 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on December 27, 2012.

 

Going Concern

 

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $25,561 for the three months ended December 31, 2012 and has incurred cumulative losses since inception of $282,916. The Company has a stockholders’ deficit of $198,356 at December 31, 2012.  These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan.  No assurance can be given that the Company will be successful in these efforts.

 

The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. No assurance can be given that the Company will be successful in these efforts.

 

 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Notes to Financial Statements
December 31, 2012

(unaudited)

 

Note 1 – Nature of Business, Presentation and Going Concern (Continued)

 

Development Stage Enterprise

 

The Company is a development stage enterprise, as defined in ASC Topic 915 “Development Stage Entities” and as such, its planned principal operations have not fully commenced.

 

Note 2 – Related Party Transactions

 

In connection with the change in control which occurred on July 23, 2010, Canton Investments Ltd. (“Canton”), the Company’s principal shareholder, assumed an outstanding loan from the former shareholders of the Company of $19,103. During the year ended September 30, 2011, Canton paid an additional $37,879 of expenses in connection with the Company’s operations, as well as a $180 liability due to a director, resulting in an amount due to Canton of $57,162 at September 30, 2011. During the year ended September 30, 2012, Canton paid $379 of accounts payable and $12,000 of accrued expenses at September 30, 2011 plus $62,767 of expenses in connection with the Company’s operations, resulting in an amount due to Canton of $132,308 at September 30, 2012.

 

During the three months ended December 31, 2012, Canton paid $15,000 of accounts payable and $4,750 of accrued expenses at September 30, 2012 plus an additional $10,493 of expenses in connection with the Company’s operations, resulting in an amount due to Canton of $162,551 at December 31, 2012.   The loan is unsecured, non-interest bearing and there is no repayment date.

 

As of January 1, 2012, the Company agreed to compensate Mr. David Price, the Company’s Secretary and son of its Chief Executive Officer and Director, $5,000 per month for his services. At December 31, 2012, $5,000 was due to Mr. Price and included in accounts payable.

 

Note 3 – Stockholders’ Deficit

 

The Company has authorized 1,600,000,000 shares of Common Stock, $0.001 par value.  As of December 31, 2012 and September 30, 2012, the Company had 322,800,000 shares of Common Stock issued and outstanding, respectively.  

 

During the period from March 26, 2007 (date of inception) to September 30, 2007, the Company issued 1,000,000,000 shares of its common stock to founders of the Company for $10,000 cash or $0.00001 per share.

 

During the period from March 26, 2007 (date of inception) to September 30, 2007, the Company issued 300,000,000 shares of its common stock for $30,000 cash or $0.0001 per share.

 

During the year ended September 30, 2008, the Company issued 20,800,000 restricted shares of its common stock for $4,160 cash or $0.0002 per share.

 

During the year ended September 30, 2008, the Company issued 2,000,000 restricted shares of its common stock for services rendered aggregating $400 as stock based compensation.

 

On July 6, 2009, the Company issued 200,000,000 shares of its Common Stock to the then current major shareholder of the Company for the acquisition of 19,200,000 shares in China Integrated Media Corporation Limited.

 

Pursuant to the terms of the stock purchase agreement effective July 23, 2010 between Bing HE and Canton Investments Ltd., $19,103 of amounts due to a shareholder were contributed to capital.

 

On April 24, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to increase its authorized number of common shares to 1,600,000,000 at $0.001 par value.  

 

On June 1, 2012, the Company's Board of Directors declared a one hundred-to-one forward stock split which was distributed on June 22, 2012 to shareholders of record and has filed an amendment to its Articles of Incorporation in the State of Nevada. The par value of $0.001 remained the same. The impact of the forward split created an increase in common stock of $1,507,572 and a resultant charge to additional paid in capital and the deficit accumulated during the development stage of $69,332 and $1,438,240, respectively.

 

 

 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(A Development Stage Company)

Notes to Financial Statements
December 31, 2012

(unaudited)

 

Note 3 – Stockholders’ Deficit (Continued)

 

On September 10, 2012, the principal shareholder of the Company contributed 1,200,000,000 shares of common stock to the Company’s treasury valued at $204,000 or $.00017 per share, based on the price paid by the shareholder to acquire the shares.  The Company immediately retired and canceled these shares resulting in a gain of $996,000 which was recorded as a credit to deficit accumulated during the development stage.

 

Note 4 – Subsequent Events

 

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no such events that warrant disclosure or recognition in the financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

We believe that it is important to communicate our future expectations to our security holders and to the public.  This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions.  Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement.  Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

 

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012 and in our subsequent filings with the Securities and Exchange Commission.  The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

 

Company Overview

 

The Company was incorporated as China Digital Ventures Corporation in Nevada on March 26, 2007 and was in the web based telecom services business in China. The Company's mission was to acquire, own and manage a portfolio of "technology", "media" and "telecommunication" assets in China. During the periods presented, all revenue was derived from the telecom business sector.

 

In July 2009, the Company acquired a 76.8% interest in China Integrated Media Corporation Limited ("CIMC"), a public company in Australia.

In February 2010, the Company decided to divest from its investment in CIMC due to its inability to raise the capital necessary to pursue this investment on a timely manner and concerns on its internal liquidity. On April 30, 2010 the Company disposed of CIMC.

On June 20, 2010, the Company disposed of its subsidiary company, Lead Concept Limited, which operated its web based VOIP business as the Company was no longer competitive in this market segment. After this disposal, the Company had no operations.

 

On July 23, 2010, the Company experienced a change in control.  Canton Investments Ltd (“CIL”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders.  On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 1,150,000,000 shares of the Company’s outstanding common stock for $205,750.  Also on July 23, 2010, CIL purchased 244,000,000 shares of the Company’s outstanding common stock for $36,600 from various shareholders.  As a result of the change in control, CIL owns a total of 1,394,000,000 shares of the Company’s common stock representing 91.54%.

 

On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation. The Company is currently contemplating acquisitions of certain gold, copper and uranium mineral property rights.

 

On September 10, 2012, CIL contributed 1,200,000,000 shares of common stock to the Company’s treasury.  The Company immediately retired and canceled these shares. As a result of the contribution of shares, CIL owns a total of 194,000,000 shares of the Company’s common stock representing 60.1%.

 

The Company is currently a development stage enterprise.

 

Plan of Operation

 

On March 21, 2012, the Company signed a Letter of Intent to acquire all of the mineral rights properties of ARNEVUT Resources, Inc. (“ARNEVUT”), an exploration and mining company engaged in the identification, acquisition, evaluation, exploration and development of mineral properties in the United States. ARNEVUT holds mineral rights, or options to acquire mineral rights, on certain properties in Nevada, Utah, and New Mexico. After the completion of our due diligence, management decided not to complete the acquisition.

 

 

On May 22, 2012, the Company signed a Memorandum of Understanding between the shareholder group of Sao Camilo Mineradora Ltda. Group (“Sao Camilo”) to acquire a strategic equity interest in Sao Camilo. Sao Camilo was founded in 2006 with the objective of developing an iron ore proessing project, The Sao Camilo Project, to produce and export pellet feeds from its mining resources located nearby the city of Sao Raimundo Nonato, south of Piaui State, in the northeast region of Brazil. To date, Sao Camilo has acquired two farms totaling 690 hectares, which cover most of the mining rights, including the ideal location for the construction of plant facilities, piling stocks and tailings dam. After the completion of our due diligence, management decided not to complete the acquisition.

 

Management is currently assessing and evaluating new strategic opportunities as it remains in its development stage.

 

Results of Operations

 

For the Three Months Ended December 31, 2012 and 2011 and For the Period March 26, 2007 (Inception) to December 31, 2012

 

Revenues

 

The Company had no revenue for the three months ended December 31, 2012 and 2011.

 

For the period from March 26, 2007 (date of inception) to December 31, 2012, the Company realized revenue of $31,912, incurred a cost of revenue of $15,731 and achieved a gross profit of $16,181. All revenue was derived from the telecom business and reflects the disposal of the Company’s operating subsidiaries during the 2010 fiscal year.

 

Operating Expenses

 

For the three months ended December 31, 2012 total operating expenses were $25,561 compared to $5,049 for the three months ended December 31, 2011 resulting in an increase of $20,512. The increase in operating expenses primarily relates to increases in legal fees, accounting and audit fees, and costs associated with regulatory reporting.

 

For the period from March 26, 2007 (date of inception) to December 31, 2012, the accumulated gross profit was $16,181, the total operating expenses were $441,774 which was all general and administrative expenses, had $118,193 in gain on disposal of subsidiaries, $1,028 in exchange gain, $2,170 in interest expense, $1,196 in interest income and other income and loss attributable to minority interest of $24,430, resulting in an accumulated net loss to our shareholders of $282,916.

 

Liquidity and Capital Resources

 

Overview

 

As of December 31, 2012, the Company had no cash and a deficit in working capital of $198,356. Since July 23, 2010, the date CIL became our majority shareholder, our operating expenses have been funded and paid by CIL.

 

We do not have sufficient resources to effectuate our business. As of December 31, 2012, we had no cash. We expect to incur a minimum of $125,000 in expenses during the next twelve months of operations. We estimate that this will be comprised of the following expenses: $25,000 for business planning and development, and $100,000 for general overhead expenses such as legal and accounting fees, office overhead and general expenses.

 

Liquidity and Capital Resources during the Three Months Ended December 31, 2012 compared to the Three Months ended December 31, 2011

 

We used cash for operating activities of $10,493 and $0 for the three months ended December 31, 2012, and 2011, respectively. The elements of cash flow used in operations for the three months ended December 31, 2012 included a net loss of $25,561, offset by increases in accounts payable of $10,318 and accrued expenses of $4,750. The elements of cash flow used in operations for the three months ended December 31, 2011 included a net loss of $5,049, offset by increases in accounts payable of $299 and accrued expenses of $4,750.

 

We used no cash in investing activities during the three months ended December 31, 2012 and 2011.

 

Cash generated in our financing activities was $10,493 for the three months ended December 31, 2012, compared to cash generated of $0 during the comparable period in 2011. This increase was primarily attributed to amounts due to our principal shareholder for expenses paid on our behalf by the shareholder in 2012.

 

We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

 

Going Concern

 

Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the financial statements for the year ended September 30, 2012 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

 

Our unaudited financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

 

There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

 

Off-Balance Sheet Arrangements

 

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

 

Critical Accounting Policies

   

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

 

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended September 30, 2012, included in our Annual Report on Form 10-K as filed on December 27, 2012, for a discussion of our critical accounting policies and estimates.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

 

Item 4.  Controls and Procedures.

 

(a)

Evaluation of Disclosure Controls and Procedures

 

The Company’s principal executive officer (“PEO”) who is also the principal financial officer (“PFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based on this evaluation, the PEO/PFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the PEO/PFO, as appropriate, to allow timely decisions regarding required disclosure.

 

(b)

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

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

 

Item 1A.  Risk Factors

 

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

 

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

 

There were no unregistered sales of equity securities during the quarter ended December 31, 2012.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits 

 

Exhibit 31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
Exhibit 31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
Exhibit 32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
Exhibit 32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document **
101.SCH	XBRL Taxonomy Extension Schema Document **
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document **

 

*	Filed herewith.
**	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

  

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date:  February 14, 2013	By:	/s/ Robert M. Price
		Robert M. Price
		Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer)