Annual Statements Open main menu

HIMALAYA TECHNOLOGIES, INC - Quarter Report: 2010 January (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2010

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

For the transition period from ________________ to _______________

333-147501
 (Commission file number)

HOMELAND RESOURCES LTD.
 (Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction
Of incorporation or organization)
 
26-0841675
(IRS Employer
Identification No.)

6801 Los Trechos NE, Albuquerque New Mexico
87109
(Address of principal executive offices)
(Zip Code)

(505) 264-0600
 (Registrant’s telephone number, including area code)

Not applicable
 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant 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 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
¨ Yes   ¨ No (Not Required)

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

Large accelerated filer ¨
 
Accelerated filer ¨
Non-accelerated filer ¨
 
Smaller reporting company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  60,000,000 shares of Common Stock, $.001 par value, as of March 15, 2010

 
 

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)

       
Page
PART I.
 
UNAUDITED FINANCIAL INFORMATION
   
         
Item 1.
 
Interim Financial Statements
 
3
         
   
Balance Sheets
January 31, 2010 (unaudited) and July 31, 2009
 
 
4
         
   
Statements of Operations (unaudited)
Three and Six Months Ended January 31, 2010 and 2009
and Cumulative Amounts from July 8, 2003 (Inception) to January 31, 2010
 
 
5
         
   
Statement of Stockholders’ Equity (Deficit) (unaudited)
Cumulative Amounts from July 8, 2003 (Inception) to January 31, 2010
 
6
         
   
Statements of Cash Flows (unaudited)
Six Months Ended January 31, 2010 and 2009
and Cumulative Amounts from July 8, 2003 (Inception) to January 31, 2010
 
 
7
         
   
Notes to Financial Statements (unaudited)
 
8
         
Item 2.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
10
         
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
 
11
         
Item 4.
 
Controls and Procedures
 
11
         
PART II.
 
OTHER INFORMATION
   
         
Item 1.
 
Legal Proceedings
 
12
         
Item 1A.
 
Risk Factors
 
12
         
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
 
12
         
Item 3.
 
Defaults Upon Senior Securities
 
12
         
Item 4.
 
Removed and Reserved
 
12
         
Item 5.
 
Other Information
 
12
         
Item 6.
 
Exhibit Index
 
12
         
Signatures
     
13

 
2

 

Part I.
UNAUDITED FINANCIAL INFORMATION

Item 1.
Interim Financial Statements

 
3

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)
BALANCE SHEETS
             
   
January 31,
2010
(Unaudited)
   
July 31,
2009
 
             
ASSETS
           
             
Current assets
           
Cash and cash equivalents
  $ 6     $ 89  
                 
Total Current Assets
    6       89  
                 
Mineral property (Note 3)
    1       1  
                 
Total assets
  $ 7     $ 90  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
Current liabilities
               
Accounts payable and accrued liabilities
  $ 80,048     $ 55,543  
                 
Total Current Liabilities
    80,048       55,543  
                 
Total liabilities
    80,048       55,543  
                 
Stockholders’ deficit
               
Common stock - $0.0001 par value; authorized – 750,000,000 shares Issued and outstanding – 60,000,000 shares
    6,000       6,000  
Paid in capital
    24,000       24,000  
Deficit accumulated during the development stage
    (110,041 )     (85,453 )
                 
Total stockholders’ deficit
    (80,041 )     (55,453 )
                 
Total liabilities and stockholders’ deficit
  $ 7     $ 90  

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

 
4

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
                               
    
 
 
 
Three Months
Ended
January 31,
 2010
   
 
 
 
Three Months
Ended
January 31,
 2009
   
 
 
 
Six Months
Ended
January 31,
 2010
   
 
 
 
Six Months
Ended
January 31,
 2009
   
Cumulative
Amounts
From
Inception on
July 8, 2003
To
January 31,
 2010
 
                                
REVENUES
  $ -     $ -     $ -     $ -     $ 387  
                                         
EXPENSES
                                       
Accounting and audit
    2,798       1,904       8,375       5,414       32,296  
General and Administrative
    7,619       52       7,744       115       22,286  
Legal
    4,104       2,655       6,269       5,703       39,510  
Registration and filing
    -       329       750       650       5,285  
Transfer agent
    225       145       450       145       3,005  
Mineral exploration costs
    -       -       1,000       806       5,531  
Impairment on mineral property (Note 3)
    -       -       -       -       875  
Oil and gas property operating costs
    -       -       -       -       1,310  
Loss on disposal of oil and gas
    -       -       -       -       330  
                                         
      (14,746 )     (5,085 )     (24,588 )     (12,833 )     (110,428 )
                                         
Provision for Income Taxes
    -       -       -       -       -  
                                         
Net loss
  $ (14,746 )   $ (5,085 )   $ (24,588 )   $ (12,833 )   $ (110,041 )
                                         
Net Loss Per Common Share
                                       
Basic and Diluted
  $ (0.001 )   $ (0.001 )   $ (0.001 )   $ (0.001 )   $ (0.002 )
                                         
Weighted average number of common shares outstanding
                                       
Basic and Diluted
    60,000,000       60,000,000       60,000,000       60,000,000          

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

 
5

 

HOMELAND RESOURCES LTD.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
                   
   
Common Stock
         
Deficit
Accumulated
 
   
Number
of Shares
   
 
Amount
   
Paid in 
Capital
   
During the
Development
Stage
 
                         
Balance, July 8, 2003
    -     $ -     $ -     $ -  
(Date of incorporation)
                               
                                 
Loss for the period
    -       -       -       -  
                                 
Balance, July 31, 2003
    -       -       -       -  
                                 
Issuance of common stock for cash at $0.005 per share:
                               
August 2003
    30,000,000       3,000       12,000       15,000  
                                 
Net (loss) for the year
    -       -       -       (1,731 )
                                 
Balance, July 31, 2004
    30,000,000       3,000       12,000       13,269  
                                 
Issuance of common stock for cash at $0.005 per share:
                               
August 2004
    20,650,000       2,065       8,260       10,325  
May 2005
    9,350,000       935       3,740       4,675  
                                 
Net (loss) for the year
    -       -       -       (7,890 )
                                 
Balance, July 31, 2005
    60,000,000       6,000       24,000       20,379  
                                 
Net (loss) for the year
    -       -       -       (2,846 )
                                 
Balance, July 31, 2006
    60,000,000       6,000       24,000       17,533  
                                 
Net (loss) for the year
    -       -       -       (21,884 )
                                 
Balance, July 31, 2007
    60,000,000       6,000       24,000       (4,351 )
                                 
Net (loss) for the year
    -       -       -       (29,576 )
                                 
Balance, July 31, 2008
    60,000,000       6,000       24,000       (33,927 )
                                 
Net (loss) for the year
    -       -       -       (21,526 )
                                 
Balance, July 31, 2009
    60,000,000       6,000       24,000       (55,453 )
                                 
Net (loss) for the period
    -       -       -       (24,588 )
                                 
Balance, January 31, 2010
    60,000,000     $ 6,000     $ 24,000     $ (80,041 )
 The accompanying notes are an integral part of these financial statements.

 
6

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
                   
     
Six Months
Ended
January 31,
 2010
     
Six Months
Ended
January 31,
 2009
   
Cumulative
Amounts
From
Inception
on July 8,
2003
To
January 31,
 2010
 
                   
OPERATING ACTIVITIES
                 
Net loss
  $ (24,588 )   $ (12,833 )   $ (110,041 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Impairment on mineral property
    -       -       875  
Loss on disposal of interest in oil and gas property
    -       -       330  
                         
Change in non-cash working capital items:
                       
Decrease in prepaids
    -       -       -  
Increase in accounts payable and accrued liabilities
    24,505       12,799       80,048  
                         
Net cash used in operating activities
    (83 )     (34 )     (28,788 )
                         
INVESTING ACTIVITIES
                       
Purchase of interest in oil and gas property
    -       -       (3,830 )
Disposal of interest in oil and gas property
    -       -       3,500  
Purchase of undeveloped mineral property
    -       -       (876 )
                         
Net cash used in investing activities
    -       -       (1,206 )
                         
FINANCING ACTIVITIES
                       
Sale of common stock
    -       -       30,000  
                         
Net cash provided by financing activities
    -       -       30,000  
                         
Net increase (decrease) in cash
    (83 )     (34 )     6  
                         
Cash, beginning of periods
    89       53       -  
                         
Cash, end of periods
  $ 6     $ 19     $ 6  

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

 
7

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2010
(Unaudited)
 
NOTE 1 – ORGANIZATION

Homeland Resources Ltd. (the Company) was incorporated under the laws of the State of Nevada on July 8, 2003 and is considered a development stage company and a mining company in the exploration stage. The Company’s principal activities since inception have been the acquisition of a mineral property in the State of New Mexico.

The accompanying unaudited interim financial statements included herein were prepared from the records of the Company in accordance with Generally Accepted Accounting Principles in the United States. In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary to provide a fair statement of the results of operations and financial position for the interim periods. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended July 31, 2009.

The results of operations for the six months ended January 31, 2010 are not necessarily indicative of the results that may be expected for the year ending July 31, 2010.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern, which contemplates the realization of assets and extinguishment of liabilities in the normal course of business. As shown in the accompanying balance sheet the Company has accumulated a deficit of $110,041 through January 31, 2010, current liabilities exceeded current assets by $80,042. As of January 31, 2010, the Company has not commenced principal operations. These factors among others may indicate that the Company may be unable to continue in existence. The Company's financial statements do not include any adjustments related to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company's ability to establish itself as a going concern is dependent upon its ability to obtain additional financing, in order to commence exploration activities on its mining property and ultimately, to achieve profitable operations. Management believes that they can be successful in obtaining equity financing which will enable the Company to continue in existence and establish itself as a going concern.

NOTE 3 - UNDEVELOPED MINERAL PROPERTY

During the year ended July 31, 2004, the Company acquired six unpatented lode mining claims. The Company must incur annual assessment work of $100 for each claim or pay an annual maintenance fee of $140 per claim. These claims are located in western Luna County, New Mexico and are collectively known as the Home Ranch Prospect.

No exploration efforts have been conducted on the Company’s mineral property and, accordingly, the ultimate recovery of the Company’s investment in mineral property is dependent upon the discovery of commercially profitable ore reserves through future exploration efforts and the subsequent development or sale of such reserves.

Due to the Company’s lack of working capital, its ability to explore for minerals on these claims has become economically non-feasible. Therefore, any future cash flows from these claims are uncertain as to amount and timing.  The Company recorded an impairment loss of $875 during the year ended July 31, 2009 to write-down the property to a nominal value of $1.

 
8

 

HOMELAND RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2010
(Unaudited)
 
NOTE 4 – OIL AND GAS PROPERTY

State Red House #4 Project

The Company had a 10% working interest in the Vector Exploration Corporation State Red House #4 Project for a total buy-in cost of $833 plus dry hole costs in Noble County, Oklahoma. The Company’s working interest included leasehold interest, well bores, geological expenses, brokerage costs and overhead. During the year ended July 31, 2005, it sold its interest for $3,500 resulting in a $330 loss on the disposition which is recognized on the statements of operation.

NOTE 5 – SUBSEQUENT EVENTS

Subsequent to January 31, 2010, the Company:

  
i)
 Amended and replaced Article I, Section 10 of its bylaws.

ii) 
Decreased the number of authorized common stock to 500,000,000 shares with a par value of $0.0001 per share.

iii)
Increased the number of authorized preferred stock to 250,000,000 shares with a par value of $0.0001 per share. Of this amount, 10,000,000 shares of preferred stock will be designated as Series A Preferred Stock, with a par value of $0.0001 per share.

 
9

 

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

General

We are an exploration stage company engaged in the acquisition and exploration of mineral properties.  We own six mineral claims, the HR#1 through HR#6 Claims (the “HR Claims”), which collectively comprise the Home Ranch Prospect described below.  Further exploration of our mineral claims is required before a final evaluation as to the economic and legal feasibility of any of our mineral claims can be completed.  We cannot assure you that a commercially viable mineral deposit exists on our mineral claims.  Our plan of operations is to carry out exploration work on our mineral claims in order to ascertain whether our claims possess commercially exploitable quantities of gold, silver, copper and/or molybdenum.  We cannot provide assurance to investors that our mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on such work concludes economic feasibility.
 
In March 2004, we acquired a 100% interest in leases on the HR Claims, which are unpatented lode mining claims on federal minerals administered by the Bureau of Land Management, located in the Home Ranch Prospect, Luna County, New Mexico.  We obtained the HR Claims for filing fees of $666 plus staking expenses of $550.  The Home Ranch Prospect consists of the HR#1 through HR#6 mineral claims.  Unpatented claims are mining claims for which the holder has no patent, or document that conveys title.  A lode is a mineral deposit in consolidated rock as opposed to a placer deposit, which is a deposit of sand or gravel that contains particles of gold, ilmenite, gemstones, or other heavy minerals of value.

Results of Operations

Three months ended January 31, 2010 compared to the three months ended January 31, 2009.

We had no revenues during the three months ended January 31, 2010 or 2009.  During the three months ended January 31, 2010, we incurred expenses of $14,746, compared with $5,085 during the three months ended January 31, 2009, an increase of $9,661.  The increase in our expenses was attributable primarily to an increase in our general and administrative expenses.

Six Months ended January 31, 2010 compared to January 31, 2009

We had no revenues during the six months ended January 31, 2010 or 2009.  During the six months ended January 31, 2009, we incurred expenses of $24,588, compared with $12,833 during the six months ended January 31, 2009, an increase of $11,755.

Liquidity and Capital Resources

As of January 31, 2010, we had cash of $6, compared to cash of $89 as of July 31, 2009.  Our working capital deficit at January 31, 2010 was $80,042, compared to $55,454 as of July 31, 2009.  The increase in our working capital deficit was due primarily to the increase in our expenses associated with our ongoing filing obligations with the Securities and Exchange Commission.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of January 31, 2010.

Going Concern

In its report prepared in connection with our 2009 financial statements, our independent registered public accounting firm included an explanatory paragraph stating that, because we had an accumulated deficit of $85,453 and a working capital deficit of $55,454 at July 31, 2009, there was substantial doubt about our ability to continue as a going concern.  At January 31, 2010, our accumulated deficit was $110,041 and our working capital deficit was $80,042.  Our continued existence will depend in large part upon our ability to raise sufficient capital through debt and equity offerings.  Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
10

 

Summary of Significant Accounting Policies

Mineral Property.  Our mineral property consists of leases on unpatented lode mining claims located in New Mexico. Mineral exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and remove overburden to initially expose the ore body, are capitalized.  Such costs and estimated future development costs are amortized using a unit-of-production basis over the estimated life of the ore body. Ongoing development expenditures to maintain production are charged to operations as incurred.

Significant expenditures directly related to the acquisition of exploration interests are capitalized. If a mineable ore body is discovered, such costs are amortized using a unit-of-production method. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined the property has no future economic value.

Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases and oral statements made by our officials to analysts and shareholders in the course of presentations about the Company, constitute “forward-looking statements”.   Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements.  Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes; (3) the relative stability of the debt and equity markets; (4) government regulations particularly those related to the natural resources industries; (5) required accounting changes; (6) disputes or claims regarding our property interests; and (7) other factors over which we have little or no control.

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is 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 by us in the reports that we file or submit under the Act is accumulated and communicated to our sole officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Rule 15d-15 under the Exchange Act, requires us to carry out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2010, being the date of our most recently completed fiscal quarter end.  This evaluation was implemented under the supervision and with the participation of our sole officer, Armando Garcia.  Based on this evaluation, Mr. Garcia concluded that the design and operation of our disclosure controls and procedures are not effective since the following material weaknesses exist:
 
 
·
We rely on external consultants for the preparation of our financial statements and reports.  As a result, our sole officer may not be able to identify errors and irregularities in the financial statements and reports.
 
 
·
We have a sole officer who is also the sole director.  Therefore, there is an inherent lack of segregation of duties and a limited independent governing board.
 
11

 
 
·
We rely on an external consultant for administration functions, some of which do not have standard procedures in place for formal review by our sole officer

 Changes in Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls during our last fiscal quarter, our sole officer has concluded that there were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended January 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.
Legal Proceedings

None.

Item 1A.
Risk Factors

Not required for smaller reporting companies.

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

None.

Item 3.
Defaults Upon Senior Securities

None.

Item 4.
Removed and Reserved

Not applicable.

Item 5.
Other Information

Not applicable
 
Item 6.
Exhibits
 
Regulation
S-K
Number
 
Exhibit
3.1
 
Articles of Incorporation (1)
3.2
 
Amendment to Articles of Incorporation (1)
3.3
 
Bylaws (1)
3.4
 
Certificate of Amendment to Articles of Incorporation (2)
3.5
 
Amended and Restated Bylaws (2)
4.1
 
Certificate of Designation of Rights, Preferences, and Privileges For Series A Preferred Stock (2)
10.1
 
Notice of Mining Claims HR #1-6, recorded by Luna County, New Mexico, on March 24, 2004 (1)
10.2
 
Confirmation of Agreement with Leroy Halterman dated August 1, 2007 (1)
10.3
 
Loan Commitment Letter from Wellington Financial Corporation dated August 1, 2007 (1)
10.4
 
Notice of Intent to Hold the HR #1-6 Lode Mining Claims, filed with the Bureau of Land Management on August 15, 2007 (1)
10.5
 
Notice of Intent to Hold the HR #1-6 Lode Mining Claims recorded by Luna County, New Mexico, on August 17, 2007 (1)
31.1
 
Rule 15d-14(a) Certification of Armando Garcia
32.1
 
Certification of Armando Garcia Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 
12

 
 
 
(1)
Incorporated by reference to the exhibits to the registrant’s registration statement on Form SB-1 filed November 19, 2007, file number 333-147501.
 
  
(2)
Incorporated by reference to the exhibits to the registrant’s current report on Form 8-K filed February 8, 2010, file number 333-147501.

SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
HOMELAND RESOURCES LTD.
   
(Registrant)
       
Date:
March 16, 2010
By:
/s/ Armando Garcia
     
Armando Garcia,
     
President, Secretary, Treasurer
     
 (principal executive and financial officer)

 
13