U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

S	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED, March 31, 2013

 

£	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: 000-51443

 

MABWE MINERALS INC.

(Exact name of registrant as specified in its charter)

 

Wyoming		36-4739442
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

41 Howe Lane

Freehold N.J. 07728

(Address of Principal Executive Offices)

 

(732) 252-5146

(registrant’s telephone number)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant 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 checkmark 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 (paragraph 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 ¨    No x

 

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

 

Large accelerate filer ¨	Accelerated filer ¨
Non-accelerated filer ¨   ( Do not check if a smaller reporting company	Smaller reporting company x

 

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

 

As of April 30, 2013, there were 136,025,750 shares of the issuer’s common stock, $0.001 par value, outstanding.

  

  

	Page
PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements
Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	F-1
Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012 (unaudited) and exploration period June 29, 2012 through March 31, 2013	F-2
Consolidated Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2013 (unaudited)	F-3
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012 (unaudited) and exploration period June 29, 2012 through March 31, 2013	F-4
Notes to Consolidated Financial Statements (unaudited)	F-5
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.  Quantitative and Qualitative Disclosures About Market Risk	6
Item 4.  Controls and Procedures	6
PART II - OTHER INFORMATION
Item 1.  Legal Proceedings	7
Item 1A.  Risk Factors	7
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3.  Defaults Upon Senior Securities	7
Item 4.  Mine Safety Disclosures	7
Item 5.  Other Information	7
Item 6.  Exhibits	7
Signatures	8
Exhibits Filed with this Report on Form 10-Q	9

 

 

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

 

		March 31, 2013				December 31, 2012
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	44,661			$	17,605
Prepaid Expenses			57,411				76,411
Total current assets			102,072				94,016
OTHER ASSETS
Investment - W.G.B. Kinsey & Co (Pvt) Ltd			394,884				555,275
Mineral Rights			433,000				433,000
Total Other Assets			827,884				988,275
INTANGIBLE ASSETS
Goodwill			25,000				25,000
Total Intangible Assets			25,000				25,000
TOTAL ASSETS		$	954,956			$	1,107,291
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	62,457			$	59,753
Related Party Payable (Receivable) (Net)			(110,330	)			2,427
Note Payable Dodge Mines			5,000				13,500
Loan payable other			43,969				42,786
Liability for stock to be issued			10,000				20,000
Total current liabilities			11,096				138,466
TOTAL LIABILITIES			11,096				138,466
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued and outstanding			-				-
Common stock, $0.001 par; 500,000,000 shares authorized; 135,585,750 and 131,980,750 shares issued and outstanding			135,586				131,981
Additional paid-in capital			86,325,676				86,112,423
Additional paid-in capital - Warrants			80,642				-
Accumulated deficit (PRIOR to exploration stage)			(85,075,965	)			(85,075,965	)
Deficits accumulated during the exploration stage			(522,079	)			(199,614	)
Total stockholders' deficit			943,860				968,825
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	954,956			$	1,107,291
			-				-

  

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

 

 

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

										For the period
										June 29, 2012
		For the Three Months Ended								through
		March 31,				March 31,				March 31, 2013
		2013				2012				(exploration stage)
Operations:
OPERATING EXPENSES
Professional, consulting and marketing fees		$	91,496			$	-			$	165,128
Research and development			30,319				-				138,357
General and administrative			39,164				197				109,597
Total operating expenses			160,979				197				413,082
Loss from Operations			(160,979	)			(197	)			(413,082	)
OTHER INCOME (EXPENSE)
Interest income			-				-				-
Gain (Loss) on Investment - W.G.B. Kinsey - Equity Method			(160,391	)			-				(105,116	)
Change in fair value of conversion option and warrant liabilities			-				1,279,254				-
Amortization of discount on convertible debt			-				-				-
Interest expense			(1,095	)			(262,688	)			(3,881	)
Miscellaneous Expense			-				-				-
Total other income (expense)			(161,486	)			1,016,566				(108,997	)
Income (loss) before income taxes			(322,465	)			1,016,369				(522,079	)
Income tax benefit			-				-				-
NET INCOME (LOSS)		$	(322,465	)		$	1,016,369			$	(522,079	)
Income (loss) per share - basic		$	(0.00	)		$	0.05			$	(0.01	)
Weighted average number of shares outstanding - basic			133,745,638				19,800,929				82,354,980
Income (loss) per share - diluted		$	(0.00	)		$	0.05			$	(0.00	)
Weighted average number of shares outstanding - diluted			163,893,375				19,800,929				149,118,665

  

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

 

  

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(UNAUDITED)

 

														Additional								Defict
										Additional				Paid in								Accumulated
		Common Stock								Paid in				Capital				Accumulated				During the
		Shares				Amount				Capital				Warrants				Deficit				Exploration Stage				Total
Balance, January 1, 2011			8,808,350			$	8,808			$	66,585,639				-			$	(84,392,048	)		$	-			$	(17,797,601	)
Shares of stock issued to Raptor Resources Holdings Inc in the acquisition of 55% ownership			10,992,831				10,993				(10,993	)			-				-				-				-
Net loss			-				-				-				-				(6,439,166	)			-				(6,439,166	)
Balance, December 31, 2011			19,801,181			$	19,801			$	66,574,646			$	-			$	(90,831,214	)		$	-			$	(24,236,767	)
Conversion of convertible notes, warrants and derivative liability to common shares			13,510,752				13,511				18,434,071				-				-				-				18,447,582
Shares issued to RRHI for investment			79,078,817				79,079				(79,079	)			-				-				-				-
Net income through June 28, 2012			-				-				-				-				5,755,249				-				5,755,249
Shares issued for sevices and prepaid expenses			6,590,000				6,590				145,785				-				-				-				152,375
Shares issued for cash			5,000,000				5,000				245,000				-				-				-				250,000
Shares issued for Lantis/RRHI Restructure			3,000,000				3,000				297,000				-				-				-				300,000
Shares issued for equity purchase (WGB Kinsey & Co)			5,000,000				5,000				495,000				-								-				500,000
Net loss for the period June 29, 2012 through December 31, 2012			-				-				-				-				-				(199,614	)			(199,614	)
Balance, December 31, 2012			131,980,750			$	131,981			$	86,112,423			$	-			$	(85,075,965	)		$	(199,614	)		$	968,825
Net Loss through March 31, 2013			-				-				-				-				-				(322,465	)			(322,465	)
Shares issued for cash			2,505,000				2,505				137,353				80,642				-				-				220,500
Shares issued for services and prepaid expenses			1,100,000				1,100				75,900				-				-				-				77,000
			135,585,750			$	135,586			$	86,325,676			$	80,642			$	(85,075,965	)		$	(522,079	)		$	943,860

  

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

 

 

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(UNAUDITED)

 

										For the period
										June 29, 2012
										through
		For the Three Months Ended March 31,								March 31, 2013
		2013				2012				(exploration stage)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(322,465	)		$	1,016,369			$	(522,079	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Common Stock issues for services			77,000				-				159,350
Change in fair value of conversion option and warrant liabilities			-				(1,279,254	)			-
Change in fair value of investment			160,391				-				105,116
Changes in operating assets and liabilities:
Prepaid expenses and other assets decrease (increase)			19,000				-				12,614
Accounts payable and accrued liabilities increase (decrease)			2,704				260,562				33,519
Net cash used in operating activities			(63,370	)			(2,323	)			(211,480	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities			-				-				-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable			1,183				-				43,969
Proceeds from related parties, net of repayments			(112,757	)			-				(216,328	)
Proceeds from private placement, net of fees (including cash received for shares to be issued) - preferred and common stock			210,500				-				480,500
Repayments made on note payable for Dodge Mines			(8,500	)			-				(52,000	)
Net cash provided by financing activities			90,426								256,141
Net increase (decrease) in cash and cash equivalents			27,056				(2,323	)			44,661
CASH AT BEGINNING OF YEAR			17,605				2,323				-
CASH AT END OF YEAR		$	44,661			$	-			$	44,661
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	-			$	-			$	-
Cash paid for income taxes		$	-			$	-			$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Accrued interest payable added to principal balance		$	1,183			$	262,688			$	3,969
Goodwill acquired by related party payable		$	-			$	-			$	25,000
Prepaid expenses incurred as a result of issuance of common stock		$	7,000			$	-			$	152,000
Dodge Mines and related debt acquired from related party payable		$	-			$	-			$	406,000
Common stock issued for investment in Kinsey		$	-			$	-			$	500,000

  

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

 

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.

General

 

Organization and Basis of Presentation

 

The accompanying consolidated financial statements have been prepared by Mabwe Minerals Inc. f/k/a Raptor Networks Technology, Inc. (the “Company”) without audit (unless otherwise indicated) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading.  These consolidated financial statements include all of the adjustments which, in the opinion of management, are necessary for a fair presentation of financial position and results of operations.  All such adjustments are of a normal and recurring nature.  The March 31, 2013 consolidated balance sheet was derived from audited financial statements as of December 31, 2012.  These financial statements should be read in conjunction with the audited financial statements at December 31, 2012 included in the Company’s most recent annual report on Form 10-K.  Results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results of operations expected for the full year or for any other period. 

 

Effective with the change in control and conversion of notes and liabilities to equity, the Company entered the exploration stage on June 29, 2012.

 

On July 18, 2012 Mabwe Minerals Inc. acquired a 49% interest in Mabwe Minerals Zimbabwe (PVT) LTD ("MAB-Z") with the issuance of 25,000 shares of Raptor Resources Holdings Inc. Series B Preferred Convertible Stock ("Series B Preferred Stock"). Each share of Series B Preferred Stock is convertible into 50 common shares of Raptor Resources Holdings Inc. and 25 common shares of Mabwe Minerals Inc., both subject to a one year holding period. The remaining 51% ownership in MAB-Z is held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-Z will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-Z. MAB-Z is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.

 

The Company formally, on September 28, 2012, appointed Tapiwa Gurupira, a 41% stakeholder of MAB-Z, as a Director of Mabwe Minerals Inc.

 

On November 7, 2012 the principals of MAB-Z received approval from the government of Zimbabwe, Africa to form a new parent holding corporation for the purpose of holding MAB-Z and the percentage investment stake in WGB Kinsey & Company (“Kinsey”.) The new company will be called Mabwe Corporation (PVT) LTD (“MAB-C”.) The new corporation will own 100% of MAB-Z and 25% of Kinsey. The Company owns a 49% stake in MAB-C the newly formed corporation; the remaining 51% ownership in MAB-C held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.

 

 

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.

General (continued)

 

Going Concern

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  The Company has entered a new line of business as an exploration stage company. There is an accumulated deficit of $85,075,965 resultant from discontinued operations and an exploration stage deficit of $522,079. The Company has no revenues as of March 31, 2013. The Company entered the exploration stage on June 29, 2012.

 

In September 2008, the Company shifted its principal operating model from product sales to licensing enabling a reduction in headcount, footprint and infrastructure that reduced operating expense run rates substantially.  Since this shift in business model was not successful the Company entered into an agreement with California Capital Equity, LLC (“CCE”) granting CCE an exclusive license in its intellectual property, leaving the Company without any continuing rights in or to its intellectual property.

 

On August 1, 2011 CCE exercised its right as a secured lender against the Company’s assets since the Company was unable to pay its outstanding notes that were due and payable and held a public foreclosure sale of substantially all of the Company’s assets. CCE acquired all of these assets at a price of $100,000, which price was credited against the outstanding notes.  As a result of the public sale on August 1, 2011, the Company retained no material assets with which to continue its operations.  The Company sought companies or businesses with an interest in utilizing the Company as a public shell vehicle and in August 2011 signed a non-binding Letter of Intent with Raptor Resources Holdings Inc. (formerly Lantis Laser Inc. (OTCQB: RRHI) which on June 28, 2012 consummated the acquisition of an 80.14% controlling equity interest in the Company. Raptor Resources Holdings Inc. issued 5 million shares of their common stock to CCE and itself received 10,992,831 (post reverse split adjusted) shares in the Company to attain a 55.52% ownership as of June 28, 2012. The Company filed a Schedule 14C that was effective June 28, 2012 to amend its charter to increase the authorized shares of common stock of the Company to 500,000,000 shares. The Company issued 79,078,817 additional shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80.14%, and issued 13,510,752 shares of stock to CCE in consideration of the conversion of the convertible notes outstanding to CCE. The convertible notes previously issued by Raptor Networks Technology, Inc. were converted and the Company engaged in a 1:10 reverse stock split.

 

Simultaneous with the reverse stock split the company was renamed Mabwe Minerals Inc. (“Mabwe” or “the Company”.) Former shareholders of Raptor Networks Technology, Inc. (“RPTN”) were reissued 1 share of Mabwe Minerals Inc. for each 10 shares of RPTN. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post-split basis. All shares herein are reflected post-split in accordance with the Staff Accounting Bulletin.

 

The items discussed above raise substantial doubts about the Company's ability to continue as a going concern.  In light of these factors, management believes that with the investment in Kinsey and production anticipated to commence late second quarter to early third quarter of 2013 on the Dodge Mines, the Company will be well positioned to succeed. 

  

The financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.

General (continued)

 

Summary of Significant Accounting Policies

 

For a complete discussion of the Company’s significant accounting policies, please refer to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2012. 

 

Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

The Company has adopted the provisions of ASC 810-10-5, “Consolidation of VIEs”. ASC 810-10-5 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIEs residual returns.

 

As a result of the investment by Mabwe Minerals Inc. funded by Preferred Convertible Series B Stock of Raptor Resources Holdings Inc., MAB – Z has been identified by the Company as a VIE. The value of the Series B Preferred Convertible Stock is $25,000, which is reflected as Goodwill on the Consolidated Balance Sheet at March 31, 2013.

 

In addition, as the result of the investment by Mabwe Minerals Inc., MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.

  

Noncontrolling Interests

 

In accordance with ASC 810-10-45, Noncontrolling Interests in Consolidated Financial Statements, the Company classifies controlling interests as a component of equity within the balance sheets. The Company has retroactively applied the provisions in ASC 810-10-45 to the financial information for the period ended March 31, 2013. There was no activity from December 2, 2011 through June 28, 2012 in MAB-Z, the Company’s majority-owned subsidiary.

 

Recent Accounting Pronouncements

 

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2013, as compared to the recent accounting pronouncements disclosed in the Company’s Annual Report on Form 10-K that are of material significance, or have potential material significance, to the Company.

 

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2

.

Related Party Loans

 

With the acquisition of MAB-Z, the chief revenue producing asset (the mining rights of the Dodge Mine Blocks 1-6 and the associated note payable) was transferred from a fully-consolidated subsidiary of Raptor Resources Holdings Inc. TAG-Z to MAB-Z, a fully-consolidated variable interest entity of the Company, a majority-owned subsidiary of Raptor Resources Holdings Inc. The value transferred to MAB-Z for the Mining rights has a book value of $433,000 offset by a note payable $57,000 at the time of transfer. This value of $376,000 in related party loans is further offset by net payment of expenses incurred by and paid on behalf of consolidating parent Raptor Resources Holdings Inc. Though the balance in the related party payable is nearly identical to that of the Dodge Mine Blocks Net asset there have been several invoices flow through the account in either direction. The balance of related party payable contra balance of $110,330 consists of Company stock issued on behalf of Raptor Resources Holdings Inc. as payment for an advisory agreement in the amount of $70,000 along with the payment of other bills on behalf of Raptor Resources Holdings Inc., consisting of mainly legal and accounting fees. The value of the Note Payable for the Dodge Mines at March 31, 2013 was $5,000, as the Company paid $52,000 during the nine months ended March 31, 2013. Also in this related party activity is the charge for the 25,000 shares of stock that were issued by Raptor Resources Holdings Inc. to acquire MAB-Z. This transaction resulted in the recording of Goodwill on the books of MAB-Z, as the value of the 25,000 shares of Series B Preferred Convertible Stock of Raptor Resources Holdings Inc. has a value of $25,000. The Company is the ultimate beneficiary of that payment. Further consideration was exchanged but no other asset was created. Management performed an evaluation of the goodwill at December 31, 2012, and determined that no impairment adjustment was necessary at this time.

 

3.

Loans Payable – Other

 

Effective July 26, 2012 MAB-Z entered into a one year financing short term loan agreement with OVERSEAS TRADE AND FINANCING LIMITED for an amount of $40,000 with accrued interest at the rate of 12% . The balance with interest and fees of $43,969 at March 31, 2013 must be fully repaid within 360 days of the effective date. Failure to pay as prescribed or duly extend loan period will result in the accrual of late charges at a rate of 6% per annum. Extension and drawdown fees are 1% and 2% respectively.

 

4

.

Investment

 

On October 29, 2012, the Company, MAB-C, and WGB Kinsey & Company (“Kinsey”) entered into an Equity Exchange Agreement (“Equity Exchange Agreement”). In accordance with the Equity Exchange Agreement, the Company issued 5,000,000 shares of their common stock to Kinsey in exchange for a 25% ownership for MAB-C in Kinsey. Additionally, should the value of the 5,000,000 shares of common stock fail to be valued at $5,000,000 on December 31, 2013, the Company must issue additional shares of common stock to achieve that value for Kinsey. The common shares issued have been valued at $500,000, as the price of MBMI common stock was trading at $0.10 per share, and no valuation has been provided for Kinsey at this time.

 

Kinsey, based in Zimbabwe, Africa, has operated since 1955 in the mining and construction industry. They own their own mining equipment, including a fleet of articulated dump trucks, front and wheeled loaders, excavators, dozers and graders. With both open pit and open cast mining experience ranging from chrome to platinum to gold, they possess all the experience necessary to efficiently perform all the mining operations at the Dodge Mines.

 

The investment has been accounted for as an equity investment under ASC 323. In accordance with the ASC, the investment will be maintained at fair value, and increased or decreased based upon the net income or loss of Kinsey as well as any contributions made and dividends paid. The Company’s investment decreased $160,391 as a result of the incremental loss of Kinsey for the three months ended March 31, 2013 at 25% ownership by MAB-C.

 

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

5.

Fair Value Disclosures

 

ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under ASC 820-10 are described below:

 

	Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
	Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
	Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.  As required by ASC 820-10, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

The table below sets forth a summary of the fair values of the Company’s financial assets as of March 31, 2013:

 

		Total				Level 1				Level 2				Level 3
ASSETS:
Investment, equity method		$	394,884			$	-			$	394,884			$	-
		$	394,884			$	-			$	394,884			$	-

 

6.

Warrants

 

Warrants granted to investors, brokers and other service providers are summarized as follows:

 

Warrants				Exercise Price				Date Issued		Term
	60,071			$	4.40			1/17/2007		7 Years
	1,505,000			$	0.15			3/4/2013		1 Years
	Total:  1,565,071

  

 

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

7.

Acquisition

 

Effective July 18, 2012, the Company’s acquired a 49% interest of Mabwe Minerals Zimbabwe (PVT) LTD (MAB-Z) for 25,000 shares of Series B Convertible Preferred Stock of Raptor Resources Holdings Inc. The value of this transaction was $25,000. Management performed an evaluation of the goodwill at December 31, 2012, and determined that no impairment adjustment was necessary at this time.

  

MAB – Z was essentially a newly formed entity. The $25,000 was recorded as Goodwill.

  

Net Assets Purchased
Goodwill			25,000
Purchase Price		$	25,000

 

8.

Stockholders’ Deficit

 

The Company’s authorized capital consists of 500,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, no par value per share.

 

During the three months ended March 31, 2013, the Company issued 1,000,000 shares for $70,000 ($.07/share) through private placement without warrants. The Company also issued 1,000,000 at a value of $70,000 ($.07/share) on behalf of Raptor Resources Holdings Inc. as payment for an advisory agreement in lieu of cash. 100,000 shares were issued for public relations services to be provided over the first six months of 2013 at a value $7,000. During this period 1,505,000 shares were issued through private placement for cash along with 1,505,000 warrants that are exercisable for 1 year at $.15/share. The total number of shares issued for cash for the three months ended March 31, 2013 was 2,505,000 for $220,500. The controlling interest of Raptor Resources Holdings Inc. was diluted to 66.43% based on new issuances of common stock that quarter.

 

During the three months ended December 31, 2012, the Company issued: 5,000,000 shares of common stock valued at $500,000 to purchase for MAB-C, a 25% ownership in Kinsey per the Equity Exchange Agreement; 65,000 shares of common stock valued at $6,500 for services rendered; and 3,000,000 shares of common stock to two former officers of Raptor Resources Holdings Inc. to offset the related party debt outstanding with Raptor Resources Holdings Inc. The controlling interest of Raptor Resources Holdings Inc. was diluted to 68.25% based on new issuances of common stock this quarter.

 

During the three months ended September 30, 2012, the Company issued 11,525,000 shares of common stock for cash (5,000,000 shares for $250,000) and services (6,525,000 shares for $145,875) thus diluting the controlling interest percentage of Raptor Resources Holdings Inc. to 72.69%.

 

During 2012, the Company executed a 1:10 reverse stock split where every ten (10) shares of stock was converted to one (1) share. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post-split basis. All shares are reflected on a post-split basis unless indicated.

  

  

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

8.

Stockholders’ Deficit (continued)

  

On June 28, 2012, the Company successfully amended its charter which enabled it to increase the authorized shares to 500,000,000 and then the Company issued 79,078,817 shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80.14%, and simultaneously issued 13,510,752 shares of the Company stock to CCE in consideration for the conversion of the convertible notes outstanding to common stock. During 2011, the Company issued 10,992,831 shares of common stock (on a post-split basis) to Raptor Resources Holdings Inc.(f/k/a Lantis Laser Inc.) representing 55.52% of the Company. The transaction was treated as an equity transaction, and Raptor Resources Holdings Inc. issued 5,000,000 shares of their stock to CCE in exchange for the conversion of their debt to common stock of the Company.

 

There were no shares of common stock issued during 2011.

 

As of March 31, 2013, the Company has 135,585,750 shares issued and outstanding.

 

9.

Commitments

 

Letter of Credit

 

On February 8, 2013, MAB-Z was issued as beneficiary an irrevocable documentary letter of credit from Baker Hughes Oilfield Operations, Inc. in the documentary credit amount of $3,000,000 per lot of crude barite (or a total of $9,000,000) to pay for shipments from Beira, Mozambique to any U.S. Gulf port of three lots of barite meeting the specifications set forth in the letter of credit. The first shipment must be made between June 1, 2013 and August 31, 2013, the second shipment must be made between September 1, 2013 and November 30, 2013 and the third shipment must be made between December 1, 2013 and March 1, 2014.

 

10.

Subsequent Events

 

On April 29, 2013 the Company issued 50,000 shares of stock through private placement for cash in the amount of $5,000. The stock was issued with 50,000 warrants which are exercisable for one year at $.15 per share.

 

On April 22, 2013 the Company issued 50,000 shares of stock through private placement for cash in the amount of $5,000. The stock was issued with 50,000 warrants which are exercisable for one year at $.15 per share. The Company also issued 25,000 shares as payment for accounting services.

 

On April 10, 2013 the company issued 300,000 shares of stock through a private placement for cash in the amount of $30,000. The stock was issued with 300,000 warrants which are exercisable for one year at $.15 per share. The Company also issued 15,000 shares as payment for promotional services.

 

 

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

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:  this report contains forward-looking statements, including statements concerning future conditions in the network switching industry, our future business, financial condition, operating strategies and operational and legal risks.  These forward-looking statements generally include the plans and objectives of management for future operations, including plans and objectives relating to our future economic performance, and can generally be identified by the use of the words “plan,” “estimate,” “expect,” “believe,” “should,” “would,” “could,” “anticipate,” “may,” “forecast,” “project,” “pro forma,” “goal,” “continues,” “intend,” “seek” or variations of those terms and other similar expressions, including their use in the negative.  The forward-looking statements and associated risks may include, relate to or be qualified by other important factors, including, without limitation:

 

	·	our inability to continue as a going concern,
	·	our inability to raise additional capital,
	·	lower sales and revenues than forecast,
	·	our inability to carry out our marketing and sales plans,
	·	unexpected costs and operating deficits,
	·	our failure to establish relationships with and capitalize upon access to new customers,
	·	litigation and administrative proceedings involving us or our products,
	·	adverse publicity and news coverage,
	·	adverse economic conditions,
	·	entry of new and stronger competitors,
	·	changes in interest rates and inflationary factors, and
	·	other specific risks that may be referred to in this report or in other reports that we have issued.

 

These forward-looking statements necessarily depend upon assumptions and estimates that may prove to be incorrect.  Although we believe that the assumptions and estimates reflected in the forward-looking statements are reasonable, we cannot guarantee that we will achieve our plans, intentions or expectations.  The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ in significant ways from any future results expressed or implied by the forward-looking statements.  Except as required by law, we undertake no duty to update any forward-looking statement after the date of this report, either to conform any statement to reflect actual results or to reflect the occurrence of unanticipated events.

 

Any of the factors described above, elsewhere in this report, or in the “Risk Factors” section of our most recent annual report on Form 10-K could cause our financial results, including our net income (loss) or growth in net income (loss) to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially.

 

Overview

 

We were organized under the laws of the State of Colorado on January 22, 2001 under the name Pacific InterMedia, Inc. We originally were engaged in the business of offering EDGAR filing services to companies outsourcing the formatting and electronic filing of registration statements, periodic reports and other forms with the U. S. Securities and Exchange Commission (“SEC” or the “Commission”), but generated minimal revenues from these operations. On October 17, 2003, we completed a business combination transaction with Raptor Networks Technology, Inc., a California corporation (“Raptor”), whereby we acquired all of the issued and outstanding capital stock of Raptor in a cashless common stock share-for-share exchange in which Raptor became our wholly-owned subsidiary. Upon the completion of this acquisition transaction, we changed our name to Raptor Networks Technology, Inc. (the “Company”), terminated our EDGAR filing services operations and, by and through our subsidiary Raptor, became engaged in the data network switching industry.

  

 

As of July 31, 2011, all of our convertible notes payable fully matured, representing a total principal amount outstanding of $11,012,854 and accrued interest of $1,560,682 as of June 28, 2012. As of June 28, 2012 all notes and accrued interest were converted to common stock. When the Company originally did not repay these amounts the note holders exercised their right as a secured lender against substantially all of the Company’s assets and held a public foreclosure sale of substantially all of the Company’s assets and acquired all of these assets at a price of $100,000, which was credited against the outstanding notes on August 1, 2011.  As a result of the public sale on August 1, 2011, the Company retained no material assets with which to continue its former operations.

 

On December 5, 2011, the Company entered into a Stock Purchase Agreement, dated December 2, 2011 (“Stock Purchase Agreement”), with Raptor Resources Holdings Inc. ("Raptor Resources") (RRHI:QB) (formerly Lantis Laser Inc. (LLSR:QB)) pursuant to which we agreed to issue Raptor Resources 109,928,311 shares of our common stock or 55.52% of our issued and outstanding shares of common stock in exchange for 5,000,000 shares of unregistered Raptor Resources common stock. All officers and directors of Raptor Networks Technology, Inc. (“Raptor Networks”) resigned at the time of execution of the Stock Purchase Agreement. Raptor Networks effected a 1:10 reverse stock split, with Raptor Resources receiving 80.14% of the fully diluted shares of Raptor Networks common stock on a post-split basis and the company engaged in the exploration and mining of industrial minerals and metals thereon ceasing any involvement with the historical business of Raptor Networks. We are now a majority owned subsidiary of Raptor Resources. The name change to Mabwe Minerals Inc. (formerly Raptor Networks) and the 1:10 reverse split were effective upon approval by FINRA on June 28, 2012. In accordance with the Stock Purchase Agreement all our former outstanding convertible notes that were acquired by California Capital Equity, LLC ("CCE"), were converted to our shares of common stock in exchange for 5,000,000 shares of Raptor Resources Common Stock prior to our 1:10 reverse split and 13,510,752 shares of common stock of Mabwe Minerals Inc. on a post-split basis.

 

As of June 28, 2012, we have transitioned to an "exploration stage company" and will accordingly report and disclose information prescribed in ASC 915 and in accordance with accounting principles generally accepted in the United States of America (“GAAP”.) Following the shift of control to Raptor Resources Holdings under the terms of the Stock Purchase Agreement the Company intends to have as its core operations the mining and distribution of non-gold metals and minerals.

 

On July 18, 2012 a 49% stake was purchased in Mabwe Minerals Zimbabwe (PVT) Limited in exchange for 25,000 shares of Raptor Resources Holdings Inc. (RRHI) Preferred Convertible Series B Stock. This stock is convertible into 50 shares of RRHI common stock and 25 shares of Mabwe Minerals Inc. common stock following a 1 year holding period.

 

Effective August 1, 2012 Dodge Mine Blocks 1-6 and associated debt was transferred from TAG Minerals – Zimbabwe to Mabwe Minerals Zimbabwe (PVT) Limited in support core operations and expected future revenue streams resultant from industrial mineral mining.

 

Effective September 28, 2012, Tapiwa Gurupira, 41% stakeholder of Mabwe Minerals Zimbabwe (PVT) LTD was appointed as a Director board member to Mabwe Minerals Inc.

 

On November 7, 2012 the principals of Mabwe Minerals Zimbabwe (PVT) LTD ("MAB-Z") received approval from the government of Zimbabwe, Africa to form a new parent holding corporation for the purpose of holding Mabwe Minerals Zimbabwe (PVT) LTD ("MAB-Z") and the percentage investment stake in WGB Kinsey & Company (“Kinsey”.) The new company will be called Mabwe Corporation (PVT) LTD (“MAB-C”.) The new corporation will own 100% of MAB-Z and 25% of Kinsey. The Company owns a 49% stake in MAB-C the newly formed corporation; the remaining 51% ownership in MAB-C held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.

 

 

Going Concern Qualification

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  The Company has entered a new line of business as an exploration stage company. There is an accumulated deficit of $85,075,965 resultant from discontinued operations and an exploration stage deficit of $522,079. The Company has no revenues as of March 31, 2013. The Company entered the exploration stage on June 29, 2012.

 

These conditions, among others, raise substantial doubt about our ability to continue as a going concern and our independent registered public accounting firm has qualified their opinions with respect to our consolidated financial statements to include an explanatory paragraph related to our ability to continue as a going concern in their report for the year ended December 31, 2012. The accompanying financial statements do not reflect any adjustments which might be necessary if we are unable to continue as a going concern.

  

CRITICAL ACCOUNTING POLICIES

 

Critical Accounting Estimates and Judgments

 

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  The preparation of our financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures.  We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.  The significant accounting policies that are believed to be the most critical to aid in fully understanding and evaluating the reported financial results include the valuation of derivative financial instruments and stock-based compensation and the recoverability of deferred income tax assets.

  

Derivative Financial Instruments

 

Our senior convertible notes are classified as non-conventional convertible debt.  In the case of non-conventional convertible debt, we bifurcate our embedded derivative instruments and record them at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date.  Any prior change in fair value will be recorded as non-operating, non-cash income or expense at each reporting date.  If the fair value of the derivatives is higher at the subsequent balance sheet date, we will record a non-operating, non-cash charge.  If the fair value of the derivative is lower at the subsequent balance sheet date, we will record non-operating, non-cash income. As of June 28, 2012 all derivative instruments and associated liabilities were converted to equity.

 

To determine the fair value of the derivative instruments, we make certain assumptions regarding the expected term of exercise.  Because the expected term of the warrants impacts the volatility and risk-free interest rates used in the Black-Scholes calculations, these must be selected for the same time period as the expected term of the warrants.

 

Deferred Income Taxes

 

We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.  We have considered estimated future taxable income an ongoing tax planning strategies in assessing the amount needed for the valuation allowance.

 

  

RESULTS OF OPERATIONS

 

Comparison of Results of Operations for the Three Months Ended March 31, 2013 and 2012

 

The following table sets forth selected financial data regarding our financial position and operating results for the three months ended March 31, 2013 and 2012.  This data should be read in conjunction with our consolidated financial statements and related notes thereto beginning on page F-1 of this report.

  

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS

  

		For the Three Months Ended March 31,
		2013				2012				Change ($)				Change (%)
REVENUE, NET			-				-				-				0	%
COST OF SALES			-				-				-				0	%
GROSS PROFIT			-				-				-				0	%
OPERATING EXPENSES
Salary expense and salary related costs			-				-				-				0	%
Professional, consulting and marketing fees			91,496				-				91,496				0	%
Research and development			30,319				-				30,319				0	%
Selling, General and administrative			39,164				197				38,967				19780	%
Total operating expenses			160,979				197				160,782				81615	%
Loss from operations			(160,979	)			(197	)			(160,782	)			81615	%
OTHER INCOME (EXPENSE)
Interest Income (Expense)			(1,095	)			(262,688	)			261,593				-100	%
Gain on Investment - W.G.B. Kinsey - Equity Method			(160,391	)			-				(160,391	)			0	%
Change in Fair Value of Conversion option and warrant liabilities			-				1,279,254				(1,279,254	)			-100	%
Miscellaneous Expense			-				-				-				0	%
Total other income (expense)			(161,486	)			1,016,566				(1,178,052	)			-116	%
Income (loss) before income taxes			(322,465	)			1,016,369				(1,338,834	)			-132	%
Income tax benefit			-				-				-				0	%
NET INCOME (LOSS)			(322,465	)			1,016,369				(1,338,834	)			-132	%

 

Net Revenues

 

 There were no net revenues from continuing operations for the three months ended March 31, 2013 and 2012. The Company anticipates that mining operations will commence in the late second quarter or early third quarter of 2013.

 

Gross Profit

 

There was $0 gross profit from continuing operations for the three months ended March 31, 2013 and 2012.

 

 

Operating Expenses

 

The increase in operating expenses in 2013 compared to the same period of 2012 was $160,782 for the three months ended March 31, 2013. The increased expenses resulted from the Company entering the exploration stage and commencing a new business line of continuing operations and breaks down as follows:

 

Salary Expenses

 

There were no salary and salary-related expenses from continuing operations for the three March 31, 2013 and 2012.

  

Research and Development

 

Research and development expenses from continuing operations increased from $0 to $30,319 for the three months ended March 31, 2013. The increase was due to the Company commencing in a new line of business as an exploration company. The fees are related to new business line start-up costs involving land surveys, assay costs, inspections fees and casual labor related to the core business of industrial mineral mining.

 

Selling, General and Administrative

 

Selling, general and administrative expenses (SG&A) from continuing operations increased for the three months ended March, 31, 2013 from $197 to $39,164. This is an increase of $38,967 over the same period in the prior year. The increase was due to the Company commencing in a new line of business as an exploration company. The increased costs were mainly due to additional fees for business licenses, registration, legal and accounting fees in transition of the Company to a new line of business.

  

Net Other Income (Expense)

 

Net other expense in 2013 was $161,486 compared to a net other income of $1,016,566 in 2012 for the three months ended March 31. This change resulted from the following:

 

·

For the three months ended March 31, 2013, the loss was primarily due to the decrease in the fair value of our investment in WGB Kinsey & Co.  The net other income was due to a beneficial Change in fair value of conversion option and warrant liabilities in the amount of $1,279,254.  As June 28, 2012 all such notes and correspondent liabilities we converted to equity.

 

Liquidity and Capital Resources

 

Our independent registered public accounting firm has qualified their opinion with respect to our consolidated financial statements to include an explanatory paragraph related to our ability to continue as a going concern in their report for the year ended December 31, 2012.  Reports of independent registered public accounting firms questioning a company's ability to continue as a going concern generally are viewed very unfavorably by analysts and investors.  There are a number of risks and challenges associated with such a qualified report including, but not limited to, a significant impediment to our ability to raise additional capital or seek financing from entities that will not conduct such transactions in the face of such increased level of risk of insolvency and loss, increased difficulty in attracting talent and the diversion of the attention of executive officers and other key employees to raising capital or financing rather than devoting time to the day-to-day operations of our business.  We urge potential investors to review the report of our independent registered public accounting firm included in the Company’s annual report on Form 10-K for the year ended December 31, 2012 and our consolidated financial statements and related notes beginning on page F-1 of this Report, the cautionary statements included in the “Risk Factors” section under Item 1A of this Report and to seek independent advice concerning the substantial risks related thereto before making a decision to invest in us, or to maintain an investment in us.

 

 

Since our inception, including the year ended December 31, 2012, we have realized negligible revenues and have financed our operations almost exclusively from cash on hand raised through the sale of our securities and borrowings.  As of December 31, 2012, we had a surplus in working capital of $90,976.

 

Effective July 26, 2012 Mabwe Minerals Zimbabwe (PVT) LTD entered into a one year financing short term loans agreement with OVERSEAS TRADE AND FINANCING LIMITED for a line of $40,000 with accrued interest at the rate of 12% . The balance with interest and fees of $43,969 at March, 31, 2013 must be fully repaid within 360 days of the effective date. Failure to pay as prescribed or duly extend loan period will result in the accrual of late charges at a rate of 6% per annum, Extension and drawdown fees are 1% and 2% respectively

 

We had a cash balance of $44,661 at March 31, 2013 compared to $17,605 at December 31, 2012.

 

We expect to generate revenues from our mining operations late in the second quarter or early in the third quarter of 2013 and to seek financing to support our operations until revenues are generated. There is no certainty that any revenues will be generated or that we will be able to raise the necessary debt or equity financing to sustain our operations.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risks.

 

None

 

Item 4.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.  Our Chief Executive Officer and our Chief Financial Officer (currently the same person), after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded that our disclosure controls and procedures are not effective based on their evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15 on the basis that we have not been funded sufficiently for us to employ an additional person to serve as our Chief Financial Officer.

 

Changes in Internal Control over Financial Reporting.  During the quarter ended March 31, 2013, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

Inherent Limitations on Effectiveness of Controls.  Our management, including our Chief Executive Officer and our Chief Financial Officer (who are the same person, Al Pietrangelo) does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

 

PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

From time to time, we may be involved in various claims, lawsuits, disputes with third parties, actions involving allegations of discrimination or breach of contract actions incidental to the operation of our business.  We are not currently involved in any litigation which we believe could have a materially adverse effect on our financial condition or results of operations.

 

Item 1a.  Risk Factors.

 

Not applicable.

 

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

 

None.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures.

 

None.

 

Item 5.  Other Information.

 

None.

  

Item 6.  Exhibits.

 

Exhibit Number		Description
31.1 x		Certification of the Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 x		Certification of the Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 x		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 x		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

x Filed Herewith

 

  

SIGNATURES

 

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.

 

	MABWE MINERALS INC.
Date May 15, 2013	By:	/s/ Al Pietrangelo
		Al Pietrangelo, Chief Executive Officer, (principal executive officer), Chief Financial Officer (principal financial and accounting officer)

 

 

EXHIBITS FILED WITH THIS QUARTERLY REPORT ON FORM 10-Q

 

31.1	Certification of the Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002