ALTEROLA BIOTECH INC. - Quarter Report: 2009 December (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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[X] |
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended December 31, 2009 | |
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[ ] |
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period __________ to __________ | |
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Commission File Number: 333-156091 |
Jedediah Resources Corp.
(Exact name of small business issuer as specified in its charter)
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Nevada |
N/A |
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(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
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100 – 111, 5th Ave., S.W., Suite 304
Calgary, Alberta, Canada T2P 3Y6 |
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(Address of principal executive offices) |
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(403) 481-9504 |
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(Issuer’s telephone number) |
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_______________________________________________________________ |
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(Former name, former address and former fiscal year, if changed since last report) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [
] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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 (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [ ] No [X]
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[ ] Large accelerated filer [ ] Accelerated filer |
[ ] Non-accelerated filer |
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[X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,273,000 common shares as of February 4, 2010.
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TABLE OF CONTENTS |
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PART I – FINANCIAL INFORMATION
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| 3 | ||
| 4 | ||
| 8 | ||
| 8 | ||
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PART II – OTHER INFORMATION
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| 9 | ||
| 9 | ||
| 9 | ||
| 9 | ||
| 9 | ||
| 9 | ||
| 9 | ||
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Our unaudited consolidated financial statements included in this Form 10-Q are as follows:
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These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating
results for the interim period ended December 31, 2009 are not necessarily indicative of the results that can be expected for the full year.
JEDEDIAH RESOURCES CORP.
(An Exploration Stage Company)
IMTERIM CONSOLIDATED BALANCE SHEETS
December 31, 2009 and September 30, 2009
(Stated in US Dollars)
(Unaudited)
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December 31
2009 |
September 30
2009 | |||
| ASSET | |||||
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Current |
|||||
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Cash |
$ | 1,091 | $ | 7,224 | |
| LIABILITY | |||||
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Current |
|||||
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Accounts payable and accrued liabilities – Note 5 |
$ | 24,192 | $ | 2,375 | |
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Promissory note payable – Note 6 |
1,906 | - | |||
| $ | 26,098 | $ | 2,375 | ||
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| STOCKHOLDERS’ EQUITY (DEFICIENCY) | |||||
| Preferred stock, $0.001 par value 10,000,000 shares authorized, none outstanding | |||||
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Common stock, $0.001 par value – Note 7
90,000,000 shares authorized 9,940,000 shares issued |
9,940 | 9,940 | |||
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Additional paid in capital |
124,678 | 124,678 | |||
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Deficit accumulated during the exploration stage |
(159,625) | (129,769) | |||
| (25,007) | 4,849 | ||||
| $ | 1,091 | $ | 7,224 | ||
Nature of Operations and Ability to Continue as a Going Concern – Note 2
Commitments – Notes 6 and 8
Subsequent Events – Note 9
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
for the three months ended December 31, 2009 and 2008,
and the period July 21, 2008 (Date of Inception)
to December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Three Months Ended
December 31, 2009 |
Three Months Ended
December 31, 2008 |
(Cumulative)
July 21, 2008
(Date of Inception) to
December 31, 2009 | ||||||
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Expenses |
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Accounting and audit fees |
$ | 19,425 | $ | 16,637 | $ | 52,070 | ||
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Bank charges |
53 | 173 | 422 | |||||
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Consulting fees |
- | - | 4,000 | |||||
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Foreign exchange |
40 | 263 | 303 | |||||
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Legal fees |
4,292 | 15,223 | 34,868 | |||||
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Management fees – Note 5 |
3,000 | 3,000 | 17,234 | |||||
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Mineral property option costs – Note 8 |
1,866 | 1,850 | 3,716 | |||||
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Mineral property exploration costs |
- | 10,077 | 16,157 | |||||
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Stock based compensation |
- | - | 26,000 | |||||
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Transfer agent and filing fees |
1,180 | 1,000 | 4,585 | |||||
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Travel |
- | 270 | 270 | |||||
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Net loss and Comprehensive Loss for the period |
$ | (29,856) | $ | (48,493) | $ | (159,625) | ||
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Basic and diluted loss per share |
$ | (0.00) | $ | (0.00) | ||||
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Weighted average number of shares outstanding |
9,940,000 | 9,864,348 | ||||||
JEDEDIAH RESOURCES CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three months ended December 31, 2009 and 2008,
and the period July 21, 2008 (Date of Inception)
to December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Three Months Ended
December 31, 2009 |
Three Months Ended
December 31, 2008 |
(Cumulative)
July 21, 2008
(Date of Inception) to
December 31, 2009 | ||||||
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Cash Flows used in Operating Activities |
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Net loss for the period |
$ | (29,856) | $ | (48,493) | $ | (159,625) | ||
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Adjustment to reconcile net loss to net cash used in operating activities: |
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Stock based compensation |
- | - | 26,000 | |||||
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Mineral property option costs |
1,866 | - | 1,866 | |||||
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Foreign exchange adjustment on promissory note |
40 | - | 40 | |||||
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Change in non-cash working capital item: |
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Prepaid expenses |
- | (3,160) | - | |||||
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Accounts payable and accrued liabilities |
21,817 | 4,685 | 24,192 | |||||
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Net cash used in operating activities |
(6,133) | (46,968) | (107,527) | |||||
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Cash Flows provided by Financing Activities |
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Capital stock issued |
- | 2,865 | 163,618 | |||||
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Capital stock returned to treasury - Note 5 |
- | - | (55,000) | |||||
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Net cash provided by financing activities |
- | 2,865 | 108,618 | |||||
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Increase (decrease) in cash during the period |
(6,133) | (44,103) | 1,091 | |||||
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Cash, beginning of the period |
7,224 | 103,584 | - | |||||
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Cash, end of the period |
$ | 1,091 | $ | 59,481 | $ | 1,091 | ||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | - | $ | - | $ | - | ||
| Income taxes | $ | - | $ | - | $ | - | ||
SEE ACCOMPANYING NOTES
JEDEDIAH RESOURCES CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
for the period from July 21, 2008 (Date of Inception) to December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Common Shares |
Additional
Paid In |
Deficit
Accumulated
During the
Exploration |
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Number |
Amount |
Capital |
Stage |
Total | ||||||||||
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Capital stock issued for cash –
at $0.01 |
5,500,000 | $ | 5,500 | $ | 49,500 | $ | - | $ | 55,000 | |||||
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Capital stock returned to treasury for cancellation on rescission of subscription (Note 7) |
(5,500,000) | (5,500) | (49,500) | - | (55,000) | |||||||||
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Capital stock issued for cash –
at $0.0095 |
5,500,000 | 5,500 | 46,746 | - | 52,246 | |||||||||
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Stock-based compensation for shares issued on discount (Note 7) |
- | - | 26,000 | - | 26,000 | |||||||||
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Capital stock issued for cash
– at $0.014 |
4,200,000 | 4,200 | 55,007 | - | 59,207 | |||||||||
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Less: commission |
- | - | (5,700) | - | (5,700) | |||||||||
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Net loss for the period |
- | - | - | (32,531) | (32,531) | |||||||||
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Balance September 30, 2008 |
9,700,000 | 9,700 | 122,053 | (32,531) | 99,222 | |||||||||
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Capital stock issued for cash
– at $0.01 |
240,000 | 240 | 2,625 | - | 2,865 | |||||||||
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Net loss for the year |
- | - | - | (97,238) | (97,238) | |||||||||
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Balance September 30, 2009 |
9,940,000 | 9,940 | 124,678 | (129,769) | 4,849 | |||||||||
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Net loss for the period |
- | - | - | (29,856) | (29,856) | |||||||||
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Balance December 31, 2009 |
9,940,000 | $ | 9,940 | $ | 124,678 | $ | (159,625) | $ | (25,007) | |||||
SEE ACCOMPANYING NOTES
JEDEDIAH RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 1 |
Basis of Presentation |
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While the information presented in the accompanying December 31, 2009 interim consolidated financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In
the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the Company’s September 30, 2009 audited financial statements (notes thereto) included in the Company’s Annual Report on Form 10-K. |
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Operating results for the three months ended December 31, 2009 are not necessarily indicative of the results that can be expected for the year ending September 30, 2010. |
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Note 2 |
Nature of Operations and Ability to Continue as a Going Concern |
The Company was incorporated in the state of Nevada, United States of America on July 21, 2008. The Company is an exploration stage company and was formed for the purpose of acquiring exploration and development stage mineral properties. The Company’s year-end is September 30.
The Company’s subsidiary holds a mineral claim located in British Columbia, Canada. The Company intends on exploring its mineral property and has not yet determined the existence of economically recoverable reserves. The recoverability of amounts incurred on its mineral property is dependent upon the existence
of economically recoverable reserves in the property, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete their development, and the attainment and maintenance of future profitable production or disposition thereof.
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values
as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2009, the Company has a working capital deficiency of $25,007, has yet to achieve profitable operations, has accumulated losses of $159,625 since its inception and expects to incur further losses in the development of its business, all of which casts substantial
doubt about the Company’s ability to continue as a going concern.
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 2 |
Nature of Operations and Ability to Continue as a Going Concern – (cont’d) |
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management
has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.
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Note 3 |
Summary of Significant Accounting Policies |
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The financial statements of the Company have been prepared in accordance with accounting principles generally accepted 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 vary from these estimates.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such SEC rules and regulations. The financial statements have, in management’s opinion, been properly
prepared within the framework of the significant accounting policies consistent with year-end.
Principles of Consolidation |
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These consolidated financial statements include the accounts of the Company and JRE Exploration Ltd., (“JRE”) a wholly owned subsidiary incorporated in Canada on October 1, 2008. All significant inter-company transactions and balances have been eliminated. |
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Newly Adopted Accounting Pronouncements
In June 2008, the FASB issued guidance, which outlines a two-step approach to evaluate the instrument’s contingent exercise provisions, if any, and to evaluate the instrument’s settlement provisions when determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity’s own stock. The Company adopted this guidance on October 1, 2009. The
adoption of this guidance had no effect on the financial position and results of operations of the Company. |
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 3 |
Summary of Significant Accounting Policies– (cont’d)
Newly Adopted Accounting Pronouncements – (cont’d) |
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In December 2007, the FASB issued guidance for Business Combinations, which establishes the principles and requirements for an acquirer, recognizes and measures in its financial statement the identifiable assets acquired and liabilities assumed, any non-controlling interest in the acquiree, and the goodwill acquired. This standard also establishes disclosure requirements which will enable users to evaluate the nature
and financial effects of the business combination. The Company adopted this guidance on October 1, 2009. The adoption of this guidance had no effect on the financial position and results of operations of the Company. |
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In March 2008, the FASB issued guidance, which requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. The adoption of this statement did not have a material effect on the Company’s reported financial position or results of operations. |
Newly Issued Accounting Pronouncements
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In June 2009 the FASB issued guidance on Accounting for Transfers of Financial Assets. The objective in issuing this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash
flows; and a transferor’s continuing involvement, if any, in transferred financial assets. The Board undertook this project to address (1) practices that have developed since the issuance of FASB guidance on Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, that are not consistent with the original intent and key requirements of that Statement and (2) concerns of financial statement users that
many of the financial assets (and related obligations) that have been derecognized should continue to be reported in the financial statements of transferors. |
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This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company is assessing the effect that the implementation of this new standard will have
on the financial statements. |
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 3 |
Summary of Significant Accounting Policies– (cont’d)
Newly Adopted Accounting Pronouncements – (cont’d) |
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In June 2009, the FASB issued authoritative guidance which amended the existing guidance for the consolidation of variable interest entities, to address the elimination of the concept of a qualifying special purpose entity. The guidance also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach
focused on identifying which enterprise has the power to direct the activities of a variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the guidance requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The guidance
is effective for the Company commencing October 1, 2010. The Company believes that the guidance will not have a material impact on its financial position, results of operations or cash flows. |
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In June 2008, the FASB ratified authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities. The guidance addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must be included in the earnings allocation in calculating earnings per share under the two-class method. The
guidance requires that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend-equivalents be treated as participating securities in calculating earnings per share. The guidance is effective for the Company on October 1, 2010, and shall be applied retrospectively to all prior periods. The Company believes that the guidance will not have a material impact on its financial position, results of operations or cash flows. |
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Note 4 |
Financial Instruments |
Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market
participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 4 |
Financial Instruments – (cont’d) |
In addition to defining fair value, the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair
value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
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Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. |
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Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
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Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. |
The carrying value of the Company’s financial assets and liabilities which consist of cash, and accounts payable and accrued liabilities, are valued using level 1 inputs. Promissory notes payable are valued using level 3 inputs. The Company believes that the recorded values approximate their fair value due to
the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.
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Note 5 |
Related Party Transactions – Notes 7 and 8 |
During the three month period ended December 31, 2009, the Company incurred $3,000 (2008 – $3,000) of management fees charged by the president of the Company.
As at December 31, 2009, accounts payable and accrued liabilities include $2,000 (September 30, 2009 - $nil) due to the president. The amount was unsecured, non-interest bearing and had no specific terms for repayment.
F-9
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 6 |
Promissory Note Payable |
Pursuant to a promissory note dated October 31, 2009, the Company promised to pay the owner of the “Bragg” claim $1,906 (CND$2,000). The note is unsecured, non-interest bearing, and is due on or before April 30, 2010.
On January 5, 2010, the Company settled the promissory note in full by the payment of cash.
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Note 7 |
Capital Stock |
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a) |
Authorized:
10,000,000 preferred shares with a par value of $0.001.
90,000,000 common shares with a par value of $0.001. |
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b) |
Issued: |
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On August 6, 2008, the Company issued 5,500,000 common shares to the Company’s president at $0.01 per share for total proceeds of $55,000.
On September 22, 2008, the incumbent president resigned as both an officer and director and a new president and director was appointed. At the request of the departing president, the Company’s board of directors rescinded his share subscription for 5,500,000 common shares and repaid the subscription proceeds of $55,000.
On September 22, 2008, the Company issued 5,500,000 common shares to the Company’s new president at $0.0095 (CDN$0.01) per share for total proceeds of $52,246 (CDN$55,000).
On September 22, 2008, the Company issued 3,960,000 common shares at approximately $0.014 (CDN$0.015) per share for total proceeds of $55,740 (CDN$59,400) pursuant to a private placement. On September 30, 2008, the Company issued 240,000 common shares at approximately $0.014 (CDN$0.015) per share for total proceeds of $3,467 (CDN$3,600) pursuant to a private placement.
The Company paid a commission of $5,700 for net proceeds of $53,507 for these private placements.
On October 29, 2008, the Company issued 240,000 common shares at approximately $0.01 (CDN$0.015) per share for total proceeds of $2,865 (CDN$3,600) pursuant to a private placement. |
F-10
Jedediah Resources Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
December 31, 2009
(Stated in US Dollars)
(Unaudited)
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Note 8 |
Commitments |
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a) |
On June 1, 2009, the Company entered into a Corporate Management Services Agreement with a Company wholly owned by the Company’s president for $1,000 per month plus expenses for services rendered by the Company’s President. The agreement may be terminated by either party upon 30 days written notice. |
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b) |
On October 6, 2008, the Company’s wholly owned subsidiary, JRE Exploration Ltd (“JRE”) entered into a property option agreement whereby JRE was granted an option to earn up to an 85% interest in a mineral claim (the “Bragg” claim) consisting of 594.1 hectares located in the Omineca Mining Division of British Columbia. It is located 78 miles north by north-west of the central
British Columbia city of Prince George, approximately 25 miles south of the town of McKenzie and approximately 5 miles west of the hamlet of McLeod Lake. Access to the property is by way of logging roads, extending north and west from McLeod Lake. The option agreement is denominated in Canadian dollars. Consideration for the option is cash payments totalling $8,482 (CDN$9,000) and aggregate exploration expenditures of $175,144 (CDN$186,000) as follows: |
i) Cash payments as follows:
§ $1,850 (CDN$2,000) upon execution of the Option agreement (paid);
§ $1,866 (CDN$2,000) on or before October 31, 2009 (paid by way ofpromissory note $1,906 exchanged at December 31, 2009 rate);
§ $4,766 (CDN$5,000) on or before October 31. 2010.
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ii) |
Exploration expenditures of $12,804 (CDN$15,000) on or before October 31, 2009, $24,538 (CDN$28,000) in aggregate on or before October 31, 2010; $175,144 (CDN$186,000) in aggregate on or before October 31, 2011. |
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Upon earning its 85% interest in the option, the Company shall enter into a joint venture agreement to develop and operate the property.
As at December 31, 2009, the Company had incurred, via the operator, exploration expenditures aggregating $16,157 (CDN$19,207).
The property option agreement was stated in Canadian dollars. The US dollar equivalent is converted using the foreign exchange rate as at December 31, 2009 for all future commitments. |
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Note 9 |
Subsequent Events |
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On January 5, 2010, pursuant to a share subscription agreement, the Company issued 3,333,000 Common Shares at $0.015 for aggregate proceeds of $50,000.
The Company evaluated subsequent events through the financial statements filing date of February 4, 2010. |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,”
“will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties
should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview and Plan of Operation
We were incorporated on July 21, 2008, under the laws of the state of Nevada. We hold an option to acquire an 85% interest in the Bragg claim, located in the Omineca district of central British Columbia, Canada. Mr. Ola Juvkam-Wold is our President, CEO, Treasurer, and director. Mr. Soren Nielsen is also our director and Ms. Mads Munch is our Secretary.
Our business plan is to proceed with the exploration of the Bragg claim to determine whether there are commercially exploitable reserves of gold or other metals on the claim. We intend to proceed with the exploration program as recommended by our consulting geologist.
Phase I of the exploration program consisted of on-site surface reconnaissance, mapping, sampling, and geochemical analyses. This phase of the program was initially estimated to cost approximately $13,050. However, we ultimately spent $16,157 (CDN$19,207) in exploration expenses to complete Phase I of the program, which was incurred
in the year ended September 30, 2009.
The field work of this phase is completed and we have received the Geological Summary Report which is under consideration by our board of directors at this time. The final Geological Report of Phase I has cost us approximately $870.
Having received the Geological Summary Report, our board of directors, in consultation with our consulting geologist will assess whether to proceed with additional mineral exploration programs. In making this determination to proceed with a further exploration, we will make an assessment as to whether the results of the initial
program are sufficiently positive to enable us to proceed. This assessment will include an evaluation of our cash reserves after the completion of the initial exploration, the price of minerals, and the market for the financing of mineral exploration projects at the time of our assessment.
In the next 12 months, we anticipate spending approximately $16,500 on administrative expenses, including fees payable in connection with complying with our SEC reporting obligations, and approximately $12,000 to Oro Enterprises Ltd.,( “Oro”) an Alberta corporation, and a company owned 100% by our President, Mr. Juvkam-Wold,
in accordance with a Corporate Management Services Agreement between us and Oro.
Thus, total expenditures over the next 12 months (excluding expected exploration costs for phase II) are therefore expected to be approximately $28,500. We had negative working capital of $25,007 as of December 31, 2009.
In the event our board of directors, in consultation with our consulting geologist, chooses to conduct the Phase II mineral exploration program beyond the initial program, we have insufficient funding on hand to do so. We will require additional funding in order to undertake Phase II exploration costs on the Bragg claim and to cover all
of our anticipated administrative expenses.
Phase II would entail permits, further sampling and geochemical analyses based on the outcome of the Phase I exploration program. The Phase II program will cost approximately $11,300.
The budget for Phase III of our exploration program is tentative in nature as the actual exploration program to be undertaken will depend upon the outcomes of the Phase I and Phase II exploration programs. Phase III of our exploration program will consist of further sampling and assaying, and the diamond drilling and drill core sampling
of three, 770 foot holes. It is currently estimated that Phase III will cost approximately $137,400.
Additional funding will be required in the form of equity financing from the sale of our common stock and from loans from our director in order to proceed with Phase II of our program on the Bragg Claim and to cover our administrative expenses. We cannot provide investors with any assurance, however, that we will be able to raise
sufficient funding from the sale of our common stock to fund all of our anticipated expenses. We do not have any arrangements in place for any future equity financing. We believe that outside debt financing will not be an alternative for funding exploration programs on the Bragg Claim. The risky nature of this enterprise and lack of tangible assets other than our mineral claim places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt
until such time as an economically viable mine can be demonstrated. The existence of commercially exploitable mineral deposits in the Bragg Claim is unknown at the present time and we will not be able to ascertain such information until we receive and evaluate the results of our exploration program.
In the event the results of our initial exploration program prove not to be sufficiently positive to proceed with further exploration on the Bragg claim, we intend to seek out and acquire interests in additional mineral exploration properties which, in the opinion of our consulting geologist, offer attractive mineral exploration opportunities. Presently, we have not given any consideration
to the acquisition of other exploration properties because we have not yet analyzed the results of our initial exploration program.
During this exploration stage Mr. Juvkam-Wold, our President, will only be devoting approximately five to ten hours per week of his time to our business. We do not foresee this limited involvement as negatively impacting our company over the next twelve months as all exploratory work is being performed by outside consultants. If,
however, the demands of our business require more business time of Mr. Juvkam-Wold for activities such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, he is prepared to devote more time to our business. However, he may not be able to devote sufficient time to the management of our business, as and when needed.
We do not intend to purchase any significant equipment for the next twelve months.
Results of Operations for the Three Months Ended December 31, 2009 and 2008 and Period from July 21, 2008 (Date of Inception) until December 31, 2009
We generated no revenue for the period from July 21, 2008 (Date of Inception) until December 31, 2009. We do not anticipate earning revenues until such time that we exercise our option and enter into commercial production of the Bragg Claim. We have recently begun the exploration stage of our business and we can provide no assurance
that we will discover commercially exploitable levels of mineral resources on the Bragg Claim, or if such resources are discovered, that we will enter into commercial production or if commercial production commences, that commercial production will be profitable.
We incurred operating expenses in the amount of $29,856 for the three months ended December 31, 2009, compared with $48,493 for the same period ended 2008. Our operating expenses for the three months ended December 31, 2009 decreased from the same period as a result of no exploration costs and less cash spent in legal fees.
We incurred operating expenses in the amount of $159,625 for the period from July 21, 2008 (Date of Inception) through December 31, 2009. These operating expenses consisted primarily of accounting and audit expenses of $52,070, legal fees of $34,868, management fees of $17,234, mineral property exploration payments of $16,157,and expenses
for stock based compensation of $26,000.
We recorded a net loss of $29,856 for the three months ended December 31, 2009, compared with $48,493 for the same period ended 2008. We recorded a net loss of $159,625 for the period from July 21, 2008 (Date of Inception) until December 31, 2009.
Liquidity and Capital Resources
As of December 31, 2009, we had total current assets of $1,091 consisting of cash. We had $26,098 in current liabilities as of December 31, 2009. Thus, we had a working capital deficit of $25,007 as of December 31, 2009.
We have not attained profitable operations and are dependent upon obtaining financing to pursue significant exploration activities beyond those planned for the current fiscal year. For these reasons, our auditors stated in their report to our audited financial statements for the period ended September 30, 2009 that they have substantial
doubt we will be able to continue as a going concern.
Off Balance Sheet Arrangements
As of December 31, 2009, there were no off balance sheet arrangements.
Going Concern
Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that we will be able to meet our obligations and continue our operations for the next fiscal year. Realization values may be substantially different from carrying values
as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should we be unable to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. As
discussed above, we have negative working capital as at December 31, 2009 and our operations are dependent upon financing to pursue significant exploration activies. There is no assurance that such financing are available to us or if available, at acceptable terms.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4T. Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2009. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief
Financial Officer, Mr. Ola Juvkam-Wold. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2009, our controls and procedures are inflective as of the end of period covered. There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2009.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC'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 reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. 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 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 internal control. 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, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On January 5, 2010, we issued 3,333,000 shares of our common stock to Murrayfield Limited in a private transaction for $50,000. The issuance was exempt pursuant to Section 4(2) of the Securities Act of 1933, as amended, and/or Rule 506 promulgated thereunder.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended December 31, 2009.
Item 5. Other Information
None
Item 6. Exhibits
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Exhibit Number |
Description of Exhibit |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Jedediah Resources Corp. | |
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Date: |
February 5, 2010 |
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By: /s/ Ola Juvkam-Wold
Ola Juvkam-Wold
Title: Chief Executive Officer and Director |