Bespoke Extracts, Inc. - Quarter Report: 2010 September (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934
For the quarterly period ended September 30, 2010
[_] Transition Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934
For the transition period from ______________ to _____________
Commission file number 000-52759
FIRST QUANTUM VENTURES, INC.
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(Exact name of registrant as specified in its charter)
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Nevada
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20-4743354
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(State or other jurisdiction ofincorporation or organization)
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(I.R.S. EmployerIdentification No.)
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2101 Vista Parkway, Suite 292
West Palm Beach FL33411
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(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (561) 228-6148
N/A
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(Former name or former address, if changes since last report)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 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 |X| No |_|.
Indicate by check mark whether the registrant is an accelerated filer, a non-accelerated filer, or a smaller reporting company.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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| X | Yes
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
As of October 27, 2010, there were approximately 29,429,232 shares of the Issuer's common stock, par value $0.001 per share outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors including the risk factors set forth in our Form 10-K. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
INDEX
| Item 1. | Financial Statements | F-1 |
| Item 2 | Management's Discussion and Analysis or Plan of Operations | 1 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 3 |
| Item 4T. | Controls and Procedures | 3 |
PART II. - OTHER INFORMATION
| Item 1 | Legal Proceedings | 4 |
| Item 1A. | Risk Factors | 4 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 4 |
| Item 3 | Defaults Upon Senior Securities | 4 |
| Item 4 | Submission of Matters to a Vote of Security Holders | 4 |
| Item 5 | Other Information | 4 |
| Item 6 | Exhibits | 4 |
| SIGNATURES | 5 | |
| EXHIBITS | ||
PART I. - FINANCIAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
| Consolidated Balance Sheet | F-2 |
| Consolidated Statements of Operations | F-3 |
| Consolidated Statements of Stockholders' Equity | F-4 |
| Consolidated Statements of Cash Flows | F-5 |
| Notes to Consolidated Financial Statement |
F-6
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F-1
First QuantumVentures, Inc.
(an development stage enterprise)
Balance Sheet
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September 30, 2010
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June 30, 2010
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(Unaudited)
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ASSETS
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CURRENT ASSETS
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Cash
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$ | 5,570 | $ | 13,545 | ||||
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Prepaid expenses
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0 | 3,750 | ||||||
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Total current assets
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5,570 | 17,295 | ||||||
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OTHER ASSETS
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Other assets
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0 | 0 | ||||||
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Total other assets
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0 | 0 | ||||||
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Total Assets
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$ | 5,570 | $ | 17,295 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable and accrued liabilities
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$ | 0 | $ | 0 | ||||
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Accrued interest on line of credit payable
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4,026 | 3,270 | ||||||
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Total current liabilities
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4,026 | 3,270 | ||||||
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LONG-TERM LIABILITIES
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Long-term line of credit payable
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30,000 | 30,000 | ||||||
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Total long-term liabilities
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30,000 | 30,000 | ||||||
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Total Liabilities
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34,026 | 33,270 | ||||||
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STOCKHOLDERS’ EQUITY
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Common stock, $0.001 par value, authorized 500,000,000 shares;
29,429,232 issued and outstanding
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29,429 | 29,429 | ||||||
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Additional paid-in capital
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295,487 | 295,487 | ||||||
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Deficit accumulated during the development stage
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(353,372 | ) | (340,891 | ) | ||||
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Total stockholders’ equity
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(28,456 | ) | (15,975 | ) | ||||
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Total Liabilities and Stockholders’ Equity
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$ | 5,570 | $ | 17,295 | ||||
The accompanying notes are an integral part of the financial statements
F-2
First Quantum Ventures, Inc.
(an development stage enterprise)
Statements of Operations
Three Months Ended September 30,
(Unaudited)
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2010
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‘2009 |
Cumulative from February 24, 2004 (inception) to Sept 30, 2010
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REVENUES
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$ | 0 | $ | 0 | $ | 0 | ||||||
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OPERATING EXPENSES:
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General and administrative expenses
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2,975 | 2,480 | 298,997 | |||||||||
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Interest expense
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756 | 1,715 | 25,750 | |||||||||
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Professional fees
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8,750 | 9,500 | 28,625 | |||||||||
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Total expenses
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12,481 | 13,695 | 353,372 | |||||||||
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Net income (loss)
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$ | (12,481 | ) | $ | (13,695 | ) | $ | (353,372 | ) | |||
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Income (loss) per weighted average common share
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$ | (0.00 | ) | $ | (0.01 | ) | ||||||
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Number of weighted average common shares outstanding
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29,429,232 | 340,632 | ||||||||||
The accompanying notes are an integral part of the financial statements
F-3
First Quantum Ventures, Inc.
(an development stage enterprise)
Statement of Stockholders’ Equity (Deficit)
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Number of
Shares
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Common
Stock
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Additional
Paid-in Capital
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Deficit
Accumulated
During the
Development
Stage
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Total
Stockholders’
Equity
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BEGINNING BALANCE, July 1, 2005
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34,030,390 | $ | 34,030 | $ | 0 | $ | (34,030 | ) | $ | 0 | ||||||||||
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Net loss
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0 | 0 | 0 | (8,582 | ) | (8,582 | ) | |||||||||||||
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BALANCE, June 30, 2006
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34,030,390 | 34,030 | 0 | (42,612 | ) | (8,582 | ) | |||||||||||||
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Net loss
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0 | 0 | 0 | (8,205 | ) | (8,205 | ) | |||||||||||||
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BALANCE, June 30, 2007
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34,030,390 | 34,030 | 0 | (50,817 | ) | (16,787 | ) | |||||||||||||
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1 for 100 reverse split
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(33,690,086 | ) | (33,690 | ) | 33,690 | 0 | 0 | |||||||||||||
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Net loss
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0 | 0 | 0 | (24,549 | ) | (24,549 | ) | |||||||||||||
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BALANCE, June 30, 2008
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340,304 | 340 | 33,690 | (75,366 | ) | (41,336 | ) | |||||||||||||
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Net loss
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0 | 0 | 0 | (25,891 | ) | (25,891 | ) | |||||||||||||
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BALANCE, June 30, 2009
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340,304 | 340 | 33,690 | (101,257 | ) | (67,227 | ) | |||||||||||||
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Shares issued for services
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20,000,000 | 20,000 | 180,000 | 0 | 200,000 | |||||||||||||||
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shares issued to settle debt & interest
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9,088,600 | 9,089 | 81,797 | 0 | 90,886 | |||||||||||||||
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Net loss
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0 | 0 | 0 | (239,634 | ) | (239,634 | ) | |||||||||||||
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BALANCE, June 30, 2010
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29,428,904 | 29,429 | 295,487 | (340,891 | ) | (15,975 | ) | |||||||||||||
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Net loss
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0 | 0 | 0 | (12,481 | ) | (12,481 | ) | |||||||||||||
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ENDING BALANCE, September 30, 2010 (unaudited)
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29,428,904 | $ | 29,429 | $ | 295,487 | $ | (353,372 | ) | $ | (28,456 | ) | |||||||||
The accompanying notes are an integral part of the financial statements
F-4
First Quantum Ventures, Inc.
(an development stage enterprise)
Statements of Cash Flows
Three Months Ended September 30,
(Unaudited)
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2010
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2009
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Cumulative from February 24, 2004 (inception) to Sept 30, 2010
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (12,481 | ) | $ | (13,695 | ) | $ | (353,372 | ) | |||
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Adjustments to reconcile net loss to net cash used by
operating activities:
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Common stock issued for services
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0 | 0 | 225,000 | |||||||||
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Changes in operating assets and liabilities
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(Increase) decrease in prepaid expenses
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3,750 | 0 | 0 | |||||||||
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Increase (decrease) in accrued interest
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756 | 1,714 | 17,756 | |||||||||
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Net cash provided (used) by operating activities
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(7,975 | ) | (11,981 | ) | (110,616 | ) | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Deposit on options
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0 | 0 | 0 | |||||||||
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Net cash provided (used) by investing activities
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0 | 0 | 0 | |||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Common stock issued for cash
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0 | 0 | 9,030 | |||||||||
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Proceeds from line of credit payable
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0 | 20,000 | 107,156 | |||||||||
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Payments on line of credit payable
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0 | 0 | 0 | |||||||||
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Net cash provided by financing activities
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0 | 20,000 | 116,186 | |||||||||
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Net increase (decrease) in cash
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(7,975 | ) | 8,019 | 5,570 | ||||||||
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CASH, beginning of period
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13,545 | 0 | 0 | |||||||||
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CASH, end of period
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$ | 5,570 | $ | 8,019 | $ | 5,570 | ||||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Non-Cash Financing Activities:
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None
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The accompanying notes are an integral part of the financial statements
F-5
First Quantum Ventures, Inc.
(an development stage enterprise)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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(a) The Company First Quantum Ventures, Inc.. is a Nevada chartered development stage corporation which conducts business from its headquarters in West Palm Beach, Florida.
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The following summarize the more significant accounting and reporting policies and practices of the Company:
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(b) Use of estimates The financial statements have been prepared in conformity with generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and revenues and expenses for the year then ended. Actual results may differ significantly from those estimates.
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(c) Start-up costs Costs of start-up activities, including organization costs, are expensed as incurred, in accordance with Statement of Position (SOP) 98-5.
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(d) Stock compensation for services rendered The Company may issue shares of common stock in exchange for services rendered. The costs of the services are valued according to generally accepted accounting principles and have been charged to operations.
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(e) Net income (loss) per share Basic loss per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period.
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(f) Property and equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, using the straight-line method. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.
(g) Cash and equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents
(h) Interim financial information The financial statements for the three months ended September 30, 2010 and 2009 are unaudited and include all adjustments which in the opinion of management are necessary for fair presentation, and such adjustments are of a normal and recurring nature. The results for the three months are not indicative of a full year results.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the net loss of $353,372 accumulated through September 30, 2010. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to begin its planned operations
F-6
First Quantum Ventures, Inc.
(an development stage enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - NOTES PAYABLE
The Company has entered into a convertible line of credit payable, which bears a 10% interest rate, a maturity date of December 31, 2011 and is unsecured. The line allows for draws up to $100,000, of which the Company has drawn $107,156, of which $77,156 has been converted into common stock of the Company. It is convertible at the option of the holder at the lesser of 60% of the 3 day prior closing price, $0.01 or the price shares are sold to a third party.
NOTE 5 – STOCKHOLDERS EQUITY
At September 30, 2010, the Company has 500,000,000 shares of par value $0.001 common stock authorized and 29,429,232 issued and outstanding.
F-7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our Financial Statements and Notes thereto appearing elsewhere in this Report on Form 10-Q as well as our other SEC filings.
Overview
First Quantum Ventures, Inc., (“FQVI”) was originally formed as Cine-Source Entertainment, Inc., (“Old Corporation”) a Colorado Corporation, on July 29, 1988. Pursuant to a Plan of Merger dated February 24, 2004, the Old Corporation filed Articles and Certificate of Merger with the Secretary of State of the State of Colorado merging the Old Corporation into Cine-Source Entertainment, Inc., (“The Surviving Corporation”), a Colorado Corporation. A previous controlling shareholder group of the Old Corporation arranged the merger for business reasons that did not materialize. On April 26, 2004, the Company effected a 1-for-200 reverse stock split. Thereafter, the name of the surviving corporation was changed to First Quantum Ventures, Inc., on April 27, 2004. On April 13, 2006 the Surviving Corporation formed a wholly owned subsidiary, a Nevada Corporation named First Quantum Ventures, Inc., and on May 5, 2006 merged Surviving Corporation into First Quantum Ventures, Inc., the Nevada Corporation.
The Company is a start-up, developmental stage company and has not yet generated or realized any revenues from business operations. The Company's auditors have issued a going concern opinion in our audited financial statements for the fiscal year ended June 30, 2010 and 2009. This means that our auditors believe there is doubt that the Company can continue as an on-going business for the next twelve months unless it obtains additional capital to pay its bills. This is because the Company has not generated any revenues and no revenues are anticipated. Accordingly, we must raise cash from sources such as investments by others in the Company and through possible transactions with strategic or joint venture partners. In the event we raise cash, we will likely use such funds to develop a new business plan, which is as yet undetermined. We do not plan to use any capital raised for the purchase or sale of any plant or significant equipment. The following discussion and analysis should be read in conjunction with the financial statements of the Company and the accompanying notes appearing subsequently under the caption "Financial Statements".
Comparison of Operating Results for the Quarter Ended September 30, 2010 to the Quarter Ended September 30, 2009
Revenues
The Company did not generate any revenues from operations for the three months ended September 30, 2010 or 2009. Accordingly, comparisons with prior periods are not meaningful. The Company is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and cost increases in services.
1
Operating Expenses
Operating expenses decreased by $1,214 from $13,695 for the three months ended September 30, 2009 to $12,481 for the three months ended September 30, 2010. The decrease in our net operating expenses is due to decreased professional fees expenses incurred.
Net Loss
Net loss decreased by $1,214 from net loss of $13,695 for the three months ended September 30, 2009 to a net loss of $12,481 for the three months ended September 30, 2010. The decrease in net operating loss is due to the decreased professional fees expenses incurred.
At September 30, 2010, our accumulated deficit was $353,372.
Assets and Liabilities
Our total assets were $5,570 at September 30, 2010. Our assets consist of cash of $5,570.
Total Current Liabilities are $4,026 at September 30, 2010. Our accrued interest on line of credit payable is $4,026.
Financial Condition, Liquidity and Capital Resources
At September 30, 2010, we had cash and cash equivalents of $5,570. Our working capital is presently minimal and there can be no assurance that our financial condition will improve. To date, we have not generated cash flow from operations. Consequently, we have been dependent upon third party loans to fund our cash requirements.
As of September 30, 2010, we had working capital of $1,544. At September 30, 2010, total liabilities were $34,032. This increase is attributable to borrowing to pay expenses. As of September 30, 2010, the Company had no outstanding debt other than a long-term line of credit. The Company is seeking to raise capital to implement the Company's business strategy. In the event additional capital is not raised, the Company may seek a merger, acquisition or outright sale.
No trends have been identified which would materially increase or decrease our results of operations or liquidity.
2
Plan of Operation
The Company's plan of operation through June 30, 2011 is to focus on finding a suitable merger candidate or a viable business plan. The Company is seeking to raise capital to implement the Company's business strategy. In the event additional capital is not raised, the Company may seek a merger, acquisition or outright sale.
Critical Accounting Policies
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
Loss per share: Basic loss per share excludes dilution and is computed by dividing the loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the period and dilutive potential common shares outstanding unless consideration of such dilutive potential common shares would result in anti-dilution. Common stock equivalents were not considered in the calculation of diluted loss per share as their effect would have been anti-dilutive for the periods ended September 30, 2010 and 2009.
Going Concern.
The Company has suffered recurring losses from operations and is in serious need of additional financing. These factors among others indicate that the Company may be unable to continue as a going concern, particularly in the event that it cannot obtain additional financing or, in the alternative, affect a merger or acquisition. The Company's continuation as a going concern depends upon its ability to generate sufficient cash flow to conduct its operations and its ability to obtain additional sources of capital and financing. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company is not subject to any specific market risk other than that encountered by any other public company related to being publicly traded.
Item 4T - Controls and Procedures
Our management, which includes our Chief Executive Officer who also serves as our principal financial officer, have conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-14(c) promulgated under the Securities and Exchange Act of 1934, as amended) as of a date (the "Evaluation Date") as of the end of the period covered by this report. Based upon that evaluation, our management has concluded that our disclosure controls and procedures are effective for timely gathering, analyzing and disclosing the information we are required to disclose in our reports filed under the Securities Exchange Act of 1934, as amended. There have been no significant changes made in our internal controls or in other factors that could significantly affect our internal controls subsequent to the end of the period covered by this report based on such evaluation.
3
PART II
OTHER INFORMATION
None.
None.
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
None
None
Item 6 Exhibits
(a) The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:
| Exhibit number | Descriptions |
| 31.1 | * Certification of the Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002. |
| 31.2 | * Certification of the Acting Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002. |
| 32.1 | * Certification Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. |
| 32.1 | * Certification Acting Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. |
* Filed herewith.
(b) The following sets forth the Company's reports on Form 8-K that have been filed during the quarter for which this report is filed:
None.
4
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| First Quantum Ventures, Inc. | |||
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By:
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/s/ Andrew Godfrey | |
| Andrew Godfrey | |||
| Chief Executive Officer, | |||
| President and Chairman of the Board* | |||
Date: November 15, 2010
* Andrew Godfrey has signed both on behalf of the registrant as a duly authorized officer and as the Registrant's principal accounting officer.