Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2013
OR
o TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number : 000-28847
FORMCAP CORP.
( Exact name of registrant as specified in its charter )
Nevada
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1006772219
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( State or other jurisdiction of incorporation or organization )
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( I.R.S. Empl. Ident. No. )
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50 West Liberty Street, Suite 880, Reno, NV 89501
( Address of principal executive offices ) ( Zip Code )
888-777-8777
( Issuer's telephone number )
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES o NO x
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 o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a small reporting company. See definitions of "large accelerated filer,” “accelerated filer,” and “small reporting company" in Rule 12B-2 of the Exchange Act.
Large accelerated filer
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o |
Non-accelerated filer
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o |
Accelerated filer
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o |
Smaller reporting company
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x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x
The number of shares outstanding the issuer’s common stock, $0.001 par value, was 2,038,240 as of May 14, 2013.
FormCap Corp.
Form 10-Q
For the Quarter Ended March 31, 2013
TABLE OF CONTENTS
Contents
Item 1. |
Financial Statements
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3 | |||
Condensed Balance Sheets
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3 | ||||
Condensed Statements of Cash Flows
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5 | ||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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10 | |||
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk
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11 | |||
Item 4. |
Controls and Procedures
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12 | |||
PART II – OTHER INFORMATION | 13 | ||||
Item 1. |
Legal Proceedings
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13 | |||
Item 1A. |
Risk Factors
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13 | |||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
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13 | |||
Item 3. |
Defaults upon Senior Securities
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13 | |||
Item 4. |
Mine Safety Disclosures
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13 | |||
Item 5. |
Other Information
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13 | |||
Item 6. |
Exhibits
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13 | |||
SIGNATURES | 14 |
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FormCap Corp.
(A Development Stage Company)
Condensed Balance Sheets
March 31,
2013 |
December 31,
2012 |
|||||||
(Unaudited)
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||||||||
ASSETS
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TOTAL ASSETS
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Cash
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$ | - | $ | 48 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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CURRENT LIABILITIES
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Bank indebtedness
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$ | 4 | $ | - | ||||
Accounts payable and accrued liabilities
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44,919 | 34,837 | ||||||
Related party payables
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398,107 | 398,107 | ||||||
Notes payable - related parties
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161500 | 161500 | ||||||
Notes payable
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78,653 | 78,653 | ||||||
Royalty and license fee payable
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135,000 | 135,000 | ||||||
Total Current Liabilities
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818,183 | 808,097 | ||||||
TOTAL LIABILITIES
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818,183 | 808,097 | ||||||
STOCKHOLDERS’ DEFICIT
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||||||||
Preferred stock, 50,000,000 shares authorized at par value of $0.001, no shares issued and outstanding
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- | - | ||||||
Common stock, 200,000,000 shares authorized at par value of $0.001, 2,038,240 shares issued and outstanding
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2,038 | 2,038 | ||||||
Stock subscription receivable
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(17,000 | ) | (17,000 | ) | ||||
Additional paid-in capital
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11,176,574 | 11,176,574 | ||||||
Deficit accumulated during the development stage
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(11,979,795 | ) | (11,969,661 | ) | ||||
Total Stockholders’ Deficit
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(818,183 | ) | (808,049 | ) | ||||
TOTAL LIABLITIES AND STOCKHOLDERS’ DEFICIT
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$ | - | $ | 48 |
The accompanying notes are an integral part of these condensed financial statements.
3
FormCap Corp.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
Three Months ended
March 31,
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From Inception on April 10, 1991 to
March 31,
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|||||||||||
2013
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2012
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2013 | ||||||||||
REVENUES
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$ | - | $ | - | $ | 321,889 | ||||||
COST OF SALES
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- | - | 352,683 | |||||||||
GROSS MARGIN
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- | - | (30,794 | ) | ||||||||
OPERATING EXPENSES
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Consulting fees
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- | 27,500 | 1,042,867 | |||||||||
Loss on impairment of assets
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- | - | 1,146,206 | |||||||||
Financing expenses
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- | - | 778,946 | |||||||||
General and administrative expenses
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10,134 | 8,771 | 5,574,306 | |||||||||
Total Operating Expenses
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10,134 | 36,271 | 8,542,325 | |||||||||
LOSS FROM OPERATIONS
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10,134 | 36,271 | 8,573,119 | |||||||||
OTHER INCOME AND (EXPENSE)
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Interest expense
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- | - | (864,220 | ) | ||||||||
Gain on settlement of debt
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- | - | 286,855 | |||||||||
Loss on settlement of debt
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- | - | (2,829,311 | ) | ||||||||
Total Other Expense
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- | - | (3,406,676 | ) | ||||||||
LOSS BEFORE INCOME TAXES
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$ | 10,134 | $ | 36,271 | $ | 11,979,795 | ||||||
Provision for income taxes
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- | - | - | |||||||||
NETLOSS
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10,134 | $ | 36,271 | $ | 11,979,795 | |||||||
BASIC AND DILUTED NET LOSS PER COMMON SHARE
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$ | 0.00 | $ | 0.02 | ||||||||
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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2,038,240 | 2,015,772 |
The accompanying notes are an integral part of these condensed financial statements.
4
FormCap Corp.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31,
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From Inception on April 10, 1991 to
March 31,
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2013
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2012
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2013
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net Loss
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$ | (10,134 | ) | $ | (36,271 | ) | $ | 11,979,795 | ||||
Adjustments to reconcile net loss to net cash used by operating activities:
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Amortization of prepaid expenses
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- | 27,500 | 324,262 | |||||||||
Amortization of beneficial conversion feature
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- | - | 379,961 | |||||||||
Expenses paid on behalf of the Company
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- | 2,000 | 3,569 | |||||||||
Expenses paid by related parties
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- | - | 119,133 | |||||||||
Depreciation and amortization
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- | - | 277,322 | |||||||||
Gain on settlement of debt and extinguishing of oil and gas leases
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- | - | (286,855 | ) | ||||||||
Common stock and options issued for services
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- | - | 943,977 | |||||||||
Common stock and options issued for collateral and extension of debt
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- | - | 17,500 | |||||||||
Loss on impairment of assets
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- | - | 1,174,833 | |||||||||
Loss on settlement of debt
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- | - | 4,154,908 | |||||||||
Interest expense in connection with induced conversion
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- | - | 262,032 | |||||||||
Foreign currency exchange
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- | - | (120,814 | ) | ||||||||
Changes to operating assets and liabilities:
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Accounts receivable
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- | - | 3,203 | |||||||||
Inventories
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- | - | (66,200 | ) | ||||||||
Prepaid expenses and other current assets
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- | - | (140,429 | ) | ||||||||
Prepaid royalties
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- | - | (99,980 | |||||||||
Accounts payable and accrued liabilities
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10,082 | 670 | 108,374 | |||||||||
Related party payables
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- | 6,000 | - | |||||||||
Royalty and license fees
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- | - | 196,765 | |||||||||
Bank indebtedness
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4 | - | 4 | |||||||||
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Net Cash Used in Operating Activities
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(48 | ) | (101 | ) | (4,728,230 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
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Purchase of capital assets
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- | - | (104,880 | ) | ||||||||
Acquisition deposits
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- | - | (431,000 | ) | ||||||||
Purchase of oil and gas lease
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- | - | (250,000 | ) | ||||||||
Capitalized software expenditures
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- | - | (135,181 | ) | ||||||||
Principal payments on notes receivable
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- | - | 44,117 | |||||||||
Notes receivable advances
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- | - | (701,152 | ) | ||||||||
Proceeds from sale of notes receivable
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- | - | 350,000 | |||||||||
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Net Cash Used in Investing Activities
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- | - | (1,228,096 | ) | ||||||||
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Net Cash Used in Operating and Investing Activities
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(48 | ) | (101 | ) | (4,728,230 | ) |
The accompanying notes are an integral part of these condensed financial statements
5
FormCap Corp.
(A Development Stage Company)
Condensed Statements of Cash Flows (Continued)
(Unaudited)
For the Three Months Ended
March 31,
|
From Inception on April 10, 1991 to
March 31,
|
|||||||||||
2013
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2012
|
2013
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Net Cash Used in Operating and Investing Activities
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(48 | ) | (101 | ) | (4,728,230 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
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||||||||||||
Proceeds from related party payables
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- | - | 2,050,177 | |||||||||
Repayments of related party payables
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- | - | (637,012 | ) | ||||||||
Proceeds from notes payable
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- | - | 931,919 | |||||||||
Repayment of notes payable
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- | - | - | |||||||||
Proceeds from the sale of preferred stock
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- | - | 3,000 | |||||||||
Proceeds from the sale of common stock and stock options
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- | - | 3,608,242 | |||||||||
Net Cash Provided by Financing Activities
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- | - | 5,956,326 | |||||||||
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NET DECREASE IN CASH
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(48 | ) | (101 | ) | - | |||||||
CASH AT BEGINNING OF PERIOD
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48 | 504 | - | |||||||||
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CASH AT END OF PERIOD
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- | 403 | $ | - | ||||||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
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CASH PAID FOR:
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Interest
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- | - | $ | 12,650 | ||||||||
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NON CASH FINANCING ACTIVITIES:
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Common stock issued for rounding shares
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- | - | $ | 22 | ||||||||
Common stock issued for prepaid expenses
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- | - | $ | 280,000 | ||||||||
Conversion of related party payables to common stock
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- | - | $ | 3,559,999 |
The accompanying notes are an integral part of these condensed financial statements.
6
FormCap Corp.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
March 31, 2013
(Unaudited)
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2013, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2012 audited financial statements. The results of operations for the periods ended March 31, 2013 and 2012 are not necessarily indicative of the operating results for the full years.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in US dollars. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may differ from these estimates.
Reclassification of Financial Statement Accounts
Certain amounts in the condensed financial statements have been reclassified to conform to the presentation adopted in the March 31, 2013 financial statements.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reportable amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Development Stage Company
The Company is considered to be in the development stage as defined in Accounting Standards Codification (ASC) 915 “Development Stage Entities.” The Company is devoting substantially all of its efforts to development of business plans.
Basic Loss Per Share
Basic earnings (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no dilutive or potentially dilutive instruments outstanding as of March 31, 2013 and December 31, 2012.
Stock Issued in Exchange for Services
The valuation of common stock issued in exchange for services is valued at an estimated fair market value as determined by the most readily determinable value of either the stock or services exchanged. Values of the stock are based upon other sales and issuances of the Company’s common stock within the same general time period.
Cash and Cash Equivalents
Cash equivalents are comprised of certain highly liquid investments with original maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits of $250,000. The Company has not experienced any losses related to this concentration of risk. Deposits did not exceed insured limits during three months ended March 31, 2013 and the year ended December 31, 2012.
7
FormCap Corp.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
March 31, 2013
(Unaudited)
Financial Instruments
For accounts receivable, accounts payable, accrued liabilities, current portion of long-term debt and long-term debt, the carrying amounts of these financial instruments approximates their fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Foreign Currency Translation
The Company translates foreign currency transactions and balances to its reporting currency, United States Dollars, in accordance with ASC 830 “Foreign Currency Matters”. Monetary assets and liabilities are translated into the functional currency at the exchange rate in effect at the end of the year. Non-monetary assets and liabilities are translated at the exchange rate prevailing when the assets were acquired or the liabilities assumed. Revenue and expenses are translated at the rate approximating the rate of exchange on the transaction date. All exchange gains and losses are included in the determination of net income (loss) for the year.
Income Taxes
The Company applies ASC 740, which requires the asset and liability method of accounting for income taxes. The asset and liability method requires that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.
The Company adopted ASC 740, at the beginning of fiscal year 2008. This interpretation requires recognition and measurement of uncertain tax positions using a “more-likely-than-not” approach, requiring the recognition and measurement of uncertain tax positions. The adoption of ASC 740 had no material impact on the Company’s financial statements.
Recent Accounting Pronouncements
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
8
FormCap Corp.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
March 31, 2013
(Unaudited)
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - RELATED PARTY PAYABLES
The Company from time to time has borrowed funds from or has received services from several individuals and corporations related to the Company for operating purposes. As of March 31, 2013 and December 31, 2012 the Company owed related parties $559,607. These amounts bear no interest, are not collateralized, and are due on demand.
NOTE 5 - COMMON STOCK
The Company has two classes of stock authorized as of March 31, 2013. The Company has 50,000,000 shares of preferred stock authorized with no shares outstanding as of March 31, 2013 and December 31, 2012. The Company also has 200,000,000 shares of common stock authorized with 2,038,240 shares issued and outstanding as of March 31, 2013 and December 31, 2012.
During the year ended December 31, 2012, the Company issued new shares as follows:
On October 1, 2012, the Company effected a 1 for 50 reverse stock split. All references in these financial statements to number of common shares issued and outstanding, price per share and weighted average number of common shares have been adjusted to reflect the stock split on a retroactive basis, unless otherwise noted. The Company’s authorized preferred stock and authorized common stock remain unchanged.
Prior to the reverse stock split, the Company had 100,788,607 common shares issued and outstanding. Immediately after the reverse split the Company had 2,038,240 common shares issued and outstanding, including 22,467 common shares issued to various shareholders as a result of rounding. The rounding shares were not issued for compensation and have no net effect on owner’s equity.
No further shares were issued in the three months ended March 31, 2013.
NOTE 6 - SUBSEQUENT EVENT
On April 5, 2013 two third parties each advanced $6,000 to the Company. The loans are convertible into common stock, non-interest-bearing and are due on December 31, 2014.
9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.
Overview
The Company does not currently engage in any business activities that provide cash flow. The Company is currently in the development stage.
On July 8, 2009, the Company had signed an option agreement with Morgan Creek Energy Corp. to acquire up to a 50% Working Interest (40.75% Net Revenue Interest) in Morgan Creeks’ approximately 13,000 acre entire Frio Draw Prospect located in Curry County, New Mexico. Under the terms of the agreement, FormCap is required to drill and complete two mutually defined targets on the acreage to earn its interest.
Following the initial two wells, Morgan Creeks’ management and land team will work with FormCap to establish additional targets on the Frio draw based on technical data and drill results. The two companies will jointly fund additional targets and have committed to a minimum five holes drill program in order to effectively test the Frio Draw.
On September 25, 2009, the Company has received a letter from Morgan Creek Energy Corp. terminating the Option Agreement between FormCap Corp. and Morgan Creek Energy Corp. on the Frio Draw Prospect in New Mexico.
On October 20, 2009, the company acquired 5,313 acres of oil and gas leases (“leases”), all with primary terms of five years initiated in June 2009. The leases, known as the Weber City Prospect, are located in Curry County, New Mexico, which lies on the eastern most side of New Mexico bordering the State of Texas. The Company had acquired a 100% working interest (80% Net Revenue Interest) from Atlas Larunas LLC for $250,000.
On February 15, 2011, the Company assigned all its rights in the leases to Rich Investments Ltd. (“Rich”) and Leare Developments Ltd. (“Leare”), under the terms of a loans settlement agreement whereby Rich and Leare accepted the assignment of the leases in full and final satisfaction of the outstanding indebtedness of the Company to each of Rich and Leare.
On March 16, 2011, the Company signed a Farm-Out Agreement for oil and gas exploration in the Peco Area of Alberta. The Farm-Out Agreement between FormCap Corp. and a private Alberta Corporation is comprised of a Seismic Option, a Farm-Out and a Participation clause. The Agreement stipulated a commencement date for the shooting of a 3D seismic program on the Farm-Out Lands not later than June 1, 2011 and a Commencement Date of November 1, 2011 for spudding and continuous drilling of a Test Well. Due to conditions in the oil and gas industry these dates were amended to October 1, 2011 for commencement of seismic program and February 1, 2012 for the spudding of a Test Well. The Agreement provides FormCap 60 days following completion of the seismic program to elect to drill the Test Well. Upon completion of the Test Well FormCap shall have earned a 40% working interest in the well subject to a 10% Gross Overriding Royalty payable to the Farmor. The Farmor may elect to convert the Gross Overiding Royalty to a 50% interest in FormCap’s working interest (i.e.: a 20% working interest).
Results of Operations for the Three Months Ended March 31, 2013 and 2012.
Revenues. There was no revenue for the three months ended March 31, 2013 and 2012.
Operating Expenses. For the three months ended March 31, 2013, we had total operating expenses of $10,134 as compared to $36,271 for the three months ended March 31, 2011, a decrease of $26,137. We did not incur any Consulting Expenses for the three months ended March 31, 2013, as compared with $27,500 incurred during the three months ended March 31, 2012. Accounting and Audit and review fees were unchanged at $6,000 and $2,000 respectively for the three months ended March 31, 2013 and 2012, respectively. Filing and Transfer agents’ expense increased by $1,412 from $670 during the three months ended March 31, 2012 to $2,082 for the three months ended March 31, 2013 as a result of an accrual for 2012 year-end filing fees made the period under review.
10
Interest Expense. There were no interest expenses for the three months ended March 31, 2013 and 2012 as the liabilities of the Company bear no interest.
Net Loss. The net loss for the three months ended March 31, 2013 was $10,134 as compared to $36,271 for the three months ended March 31, 2011. These amounts are entirely comprised of the operating expenses as there were no other income or expenses.
Liquidity and Capital Resources
As at March 31, 2013, our current assets were $Nil (December 31, 2012 - $48) and our current liabilities were $818,183 (December 31, 2012 - $808,097), which resulted in a working capital deficit of $818,183, as compared with a working capital deficit of $808,049 at December 31, 2012.
Total Stockholders’ Deficit increased from $808,049 at December 31, 2011 to $818,183 at March 31, 2013.
Cash Flows Used in Operating Activities
We have not generated positive cash flows from operating activities. For the three months ended March 31, 2013, net cash flows used in operating activities was $10,134, consisting of primarily of the net loss for the period, offset by an increase of $10,082 in Accounts Payable and accrued liabilities, and an increase in bank indebtedness of $4.
Cash Flows Used in Investing Activities
For the three months ended March 31, 2013 and 2012, respectively, net cash flows used in investing activities were $Nil .
Cash Flow Provided by Financing Activities
We have financed our operations primarily from either advances from related parties or the issuance of equity and debt instruments. For the three months ended March 31, 2013 and 2012, respectively, we did not have any net cash flows from financing activities.
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Recent Accounting Pronouncements
For the three month period ended March 31, 2013, there were no accounting standards or interpretations issued that are expected to have a material impact on our financial position, operations or cash flows.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a “smaller reporting company” (as defined in Item 10(f)(1) of Regulation S-K), our Company is not required to provide information required by this Item.
11
Item 4. Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have carried out an evaluation of the effectiveness of the design and operation of our Company's disclosure controls and procedures as of the end of the period covered by this quarterly report, being September 30, 2012. This evaluation was carried out under the supervision and with the participation of our Company's management, including our President, Principal Executive Officer and Principal Financial Officer. Based upon that evaluation, our President, Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are not effective as of the end of the period covered by this report due to the material weaknesses described in Management's Report on Internal Control over Financial Reporting included in our annual report on Form 10-K for the year ended December 31, 2012.
There have been no significant changes in our Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our Company's reports filed under the Exchange Act is accumulated and communicated to management, including our Company's president and Principal Executive Officer as appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in our internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
12
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As a “smaller reporting company” (as defined in Item 10(f)(1) of Regulation S-K), our Company is not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On November 23, 2011 500,000 common shares were issued under a debt settlement agreement with a related Party.
On December 1, 2011, 200,000 common shares were issued under the terms of a Oil & Gas Farm-In, Operating and Consulting Agreement with a consultant.
On December 1, 2011, 200,000 common shares were issued to the same consultant as payment in full of debt arising under a Consulting Agreement.
On December 1, 2011, 200,000 common shares were issued to the President of the Company as payment for services rendered in the performance of his duties.
Item 3. Defaults upon Senior Securities
None.
Not applicable.
Item 5. Other Information
None
Item 6. Exhibits
Exhibit No.
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Description
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31
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32
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SIGNATURES
Pursuant to the requirements 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.
FORMCAP CORP. | |||
Dated: May 16, 2013
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By:
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/s/ Graham Douglas | |
Graham Douglas | |||
President, Secretary, Treasurer and Director | |||
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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