Idaho Copper Corp - Quarter Report: 2008 September (Form 10-Q)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended September 30, 2008

For the transition period from                      to                     

Commission File No. 333-108715

G2 VENTURES, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)

(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.    Yes  ¨    No  x

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

Large 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).

Yes  ¨    No  x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ¨    No  ¨

The number of shares outstanding of the Issuer’s Common Stock as of November 11, 2008 was 4,700,000.

Table of Contents

PART I—FINANCIAL INFORMATION

In the opinion of management, the accompanying unaudited financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

Table of Contents

G2 VENTURES, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

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

3

Table of Contents

G2 VENTURES, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENTS OF OPERATIONS

FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 AND

FOR THE PERIOD FROM SEPTEMBER 26, 2002 (INCEPTION) THROUGH SEPTEMBER 30, 2008

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

4

Table of Contents

G2 VENTURES, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR PERIOD FROM SEPTEMBER 26, 2002 (INCEPTION) THROUGH SEPTEMBER 30, 2008

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

5

Table of Contents

G2 VENTURES, INC.

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED STATEMENTS OF CASH FLOWS

FOR NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 AND

FOR THE PERIOD FROM SEPTEMBER 26, 2002 (INCEPTION) THROUGH SEPTEMBER 30, 2008

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

6

Table of Contents

G2 VENTURES, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED NOTES TO FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited financial statements of G2 Ventures, Inc., a Texas corporation (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X for the three and nine month periods ended September 30, 2008 and 2007 and reflect, in the opinion of management, all adjustments which are of a normal and recurring nature necessary for a fair presentation of the results for such periods. The foregoing financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to financial statements for the year ended December 31, 2007 included in the Company’s Form S-1/A filed with the Securities and Exchange Commission on May 8, 2008. The interim unaudited financial statements should be read in conjunction with the annual financial statements and accompanying notes. Operating results for the three and nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.

NOTE 2 – RELATED PARTIES

During the three and nine month periods ended September 30, 2008 and the period September 26, 2002 (inception) through September 30, 2008, Gust Kepler, the Company’s sole officer, director, employee, and major stockholder, made loans to the Company of $2,480, $30,568, and $141,318 respectively, while we made repayments to Mr. Kepler of $0, $0, and $1,000 respectively. The loans are non-interest bearing, unsecured, and due upon demand, as funds become available. In 2003, Mr. Kepler forgave $17,796 of the loans which amount was credited to additional paid in capital.

NOTE 3 – GOING CONCERN

The Company has been a development stage company and has incurred net operating losses of $182,834 since inception (September 26, 2002). The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business. Due to the start-up nature of the Company’s business, the Company expects to incur losses as it expands. To date, the Company’s cash flow requirements have been primarily met by debt and equity financings. The Company has raised additional funds through a private equity investment in order to begin its business operations, but there is no assurance that such additional funds will be available for the Company to finance its operations should the Company be unable to realize profitable operations. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Under our current Exclusive Recording Artist Agreements with two musical artists, we are obligated to pay $25,000 to each artist as an advance for recordings (the “Recording Advances”). During September 2008 we successfully raised the minimum amount from our initial public offering (the “IPO”).

7

Table of Contents

Management believes that the proceeds from our IPO will provide the Company with sufficient funds to meet operating requirements, including the Recording Advances, for the subsequent twelve-month period. As of September 30, 2008, no recording advances have been made and no recordings have begun.

General

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report. This information should also be read in conjunction with the information contained in our Form S-1/A filed with the Securities and Exchange Commission (“SEC”) on May 8, 2008, including the audited financial statements and notes included therein. The reported results will not necessarily reflect future results of operations or financial condition.

Caution Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements”, as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar words or expressions that, by their nature, refer to future events.

In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential,” or “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements in an effort to conform these statements to actual results.

8

Table of Contents

Overview

We are a thinly capitalized independent record label that has entered into Exclusive Recording Artist Agreements (“Recording Agreements”) with two musical artists. We intend to raise capital through our IPO to continue pursuit of our business plan to (i) produce and create master recordings of the artists’ work we have under contract and (ii) either sell or license the recordings to established record labels for distribution. If we are successful in marketing our artists’ master recordings, we intend to produce and create additional master recordings for them and use this accomplishment to entice additional artists to enter into similar recording agreements.

Liquidity

Historical Sources of Liquidity

Historically, operations have primarily been funded by loans from Gust Kepler, our sold officer, director and employee. All of the loans from Mr. Kepler are non-interest bearing, unsecured, and due on demand, and are subject to certain restrictions on use of proceeds received from the sale of our securities in the IPO. Mr. Kepler is under no obligation to continue to make loans to the Company to fund its operations. On April 1, 2003, Mr. Kepler forgave $17,796 of such loans which amount was credited to additional paid in capital.

On September 14, 2006, Mr. Kepler and the Company entered into an Agreement pursuant to which (i) it was acknowledged that the Company owed Mr. Kepler $34,615.08 for loans to the Company through June 30, 2006, and (ii) Mr. Kepler agreed that he would not receive any repayment of that amount until 1,500,000 shares of the Company’s Common Stock had been sold in the IPO. Subsequently, the Company and Mr. Kepler made a verbal agreement that once the maximum of 1,500,000 shares were sold under the IPO, Mr. Kepler would be paid $15,000 as a partial payment toward the total loans outstanding.

On June 30, 2008, Mr. Kepler and the Company entered into an Amended Agreement pursuant to which (i) it was acknowledged that the Company owed Mr. Kepler $120,042 for loans to the Company through the date of the Amended Agreement, and (ii) Mr. Kepler agreed that once 1,500,000 shares of the Company’s Common Stock had been sold pursuant to the IPO, he would only receive a partial payment of $15,000 toward the outstanding loan balance, with the remaining balance to be repaid through revenues as they become available.

As of September 30, 2008, $17,796 of the loans made by Mr. Kepler have been forgiven and credited to additional paid in capital.

External Sources of Liquidity

Registration of the IPO (or the “Offering”) became effective on May 13, 2008 under which we offered a minimum of 1,200,000 and a maximum of 1,500,000 shares of our Common Stock on a self-underwritten basis at the price of $0.10 per share. Our Common Stock is not listed on any exchange. The shares are being offered and sold by the Company through Mr. Kepler. Our officers, directors, and affiliates will not purchase shares to enable the Company to reach the minimum or maximum amounts of this offering. The Offering terminates on November 9, 2008, however the Company has decided to extended the Offering an additional 90 days. As of September 30, 2008 proceeds from the Offering totaled $120,000 (the minimum amount) and with the aforementioned extension, the Company hopes to reach the maximum amount of $150,000, however there are no assurances that the amount will be attained.

9

Table of Contents

Since we successfully raised the minimum of $120,000 under the offering, management believes that the net proceeds will provide the Company with sufficient funds to meet operating requirements for the subsequent twelve-month period.

Internal Sources of Liquidity

Assuming a successful IPO, we expect to fulfill our business plan and generate revenues pursuant to our Recording Agreements from royalties derived from licensing or distribution agreements covering the reproduction, marketing and sale of the master recordings we produce. We also expect to generate revenues from management fees based on payments received by each artist for (i) live performances, (ii) derivative uses of their work, including soundtracks and music videos, (iii) the sale or license of their original music to other artists, and (iv) advertisements. Under our current Recording Agreements, we will generally receive between 33.3% (for foreign sales) and 80% (for domestic sales) of the total royalty amount generated by master recordings. Our percentage decreases in relationship to higher royalty rates and advances negotiated with record labels that license the master recordings. Based on current retail pricing of recordings that range between $13.00 and $16.00, we anticipate gross royalties ranging from $0.26 to $1.12 per recording with our portion of that sum approximating $0.21 to $0.37 per recording.

Pursuant to our two current Recording Agreements, we will produce a master album for each artist during an initial nine-month period and we will bear all costs of production. We are granted an option for an additional three albums from each artist. After recovering production costs, we will pay the artists royalties on sale of the albums of up to 20% for domestic sales and up to 66 2/3% for foreign sales. These Recording Agreements terminate on September 8, 2008 and December 31, 2008 unless extended.

In addition to royalties and management fees received pursuant to our Recording Agreements, we expect to earn revenues through talent management fees charged to artists for whom we do not produce recordings. We expect these fees to generate revenues ranging from five percent (5%) to fifteen percent (15%) of the artist’s revenues for live performances, personal appearances, and the sale or license of the artist’s publishing rights for work recorded by other artists during the term of the agreement. We also intend to generate revenues through personal management contracts negotiated with future artists who want us to produce and market their recordings or assist them in arranging or booking live performances.

Capital Resources

Material Commitments for Expenditures

Under our current Recording Agreements, we are obligated to pay $25,000 to each of our artists as an advance for recordings. We anticipate paying these advances with proceeds from our IPO. In the event that we successfully complete our IPO, management believes that the proceeds will provide us with sufficient funds to meet our operating requirements for the subsequent twelve-month period.

Results of Operations

Registration of the IPO became effective with the SEC on May 13, 2008. Certain proceeds from the IPO will be used to pay advances to our recording artists and pay for the costs of CD reproduction for marketing purposes. Assuming a successful IPO, we expect to generate revenues from royalties derived from licensing or distribution agreements covering the reproduction, and from marketing and sale of the master recordings we produce under our Recording Agreements. We also expect to generate revenues from management fees under agreements with our recording artists based on payments received by them for (i) live performances, (ii) derivative uses of their work, including soundtracks and music videos, (iii) the sale or license of their original music to other artists, and (iv) advertisements. Due to the Company’s inability to raise sufficient capital to date, no recording advances have been made and no recordings have begun.

10

Table of Contents

Material Changes in Financial Condition and Results of Operations

As of September 30, 2008, the Company’s cash assets were $120,502, compared to $529 at December 31, 2007. Accounts payable increased $5,924 from $10,100 at December 31, 2007 to $16,024 at September 30, 2008. Stockholder advances increased from $91,954 at December 31, 2007 to $122,522 at September 30, 2008, reflecting additional loans from Gust Kepler, our sole officer, director, employee and majority shareholder, in the aggregate principal amount of $30,568.

Comparison of Three Month Periods Ended September 30, 2008, and September 30, 2007

No revenues were recorded during the three months ended September 30, 2008 and 2007. Operating expenses during the three months ended September 30, 2008 and 2007 were comprised entirely of general and administrative expenses. During the three months ended September 30, 2008, total general and administrative expenses totaled $5,326. Expenses totaling $1,635 were incurred during the same period in 2007. This increase is due to the increase in fees for legal services, accounting services, and financial printing services incurred in connection with our IPO.

Comparison of Nine Month Periods Ended September 30, 2008, and September 30, 2007

No revenues were recorded during the nine months ended September 30, 2008 and 2007. Operating expenses during the nine months ended September 30, 2008 and 2007 were comprised entirely of general and administrative expenses. Total general and administrative expenses of $36,519 for the nine months ended September 30, 2008 increased by $24,182 or 196% over the same period in 2007. This increase is due to the increase fees for legal services, accounting services, and financial printing services incurred in connection with our IPO.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Our Company is a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and, as such, is not required to provide the information required under this item.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms and is accumulated and communicated to Gust Kepler, our Chief Executive Officer and principal financial officer, as appropriate, in order to allow timely decisions in connection with required disclosure.

Evaluation of Disclosure Controls and Procedures

Mr. Kepler has evaluated the effectiveness of the design and operation of our Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) as of the end of the period covered by this quarterly report. Based on such evaluation, he has concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act are recorded, processed, summarized and reported, as and when required.

11

Table of Contents

Changes in Internal Controls

During the nine months ended September 30, 2008, there were no significant changes in internal controls of the Company, or other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II—OTHER INFORMATION

None.

None.

None.

None.

None.

12

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATE: November 12, 2008

13