LegacyXChange, Inc. - Annual Report: 2009 (Form 10-K)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
____________________________
FORM
10-K
____________________________
x ANNUAL REPORT UNDER
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the
fiscal year ended October 31, 2009
Commission
File # 333-148925
BURROW
MINING, INC.
(Exact
name of registrant as specified in its charter)
Nevada
(State
or other jurisdiction of incorporation or organization)
10-06212019
(IRS
Employer Identification Number)
17177
64A Avenue, Surrey, BC V3S 1Y6
(Address
of principal executive offices)
604-527-0098
(Registrant’s
telephone number)
Securities
registered pursuant to section 12(b) of the Act:
None.
Securities
registered pursuant to section 12(g) of the Act:
Common
Stock, Par Value $0.001 per share
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. o Yes þ No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: o Yes þ No
Indicate
by check mark whether the registrant(1) has filed all reports required 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 day. þ Yes o No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o
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 o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
(Do not check if a smaller reporting company)
|
Smaller
reporting company þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). þ Yes o No
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of the last
business day of the registrant’s most recently completed fiscal year end. $390,000 based upon the last sales
price of our shares.
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date. 7,900,000 shares of common stock
issued and outstanding as of January 29, 2010.
Documents
incorporated by reference: None.
Table
of Contents
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Item
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Page
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Item 1.
|
Business
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3
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|
Item 1A.
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Risk
Factors
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3
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Item 1B.
|
Unresolved Staff
Comments
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3
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Item 2.
|
Properties
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3
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Item 3.
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Legal
Proceedings
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4
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Item 4.
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Submission of Matters to a Vote
of Security Holders
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4
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|
Item 5.
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Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of
Securities
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4
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Item 6.
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Selected Financial
Data
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5
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Item 7.
|
Management’s Discussion and
Analysis of Financial Condition and Results of Operations
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5
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Item 7A.
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Quantitative and Qualitative
Disclosures About Market Risk
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6
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Item 8.
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Financial Statements and
Supplementary Data
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7
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Item 9.
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Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure
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16
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Item
9A(t).
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Controls
and Procedures
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16
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Item 9B.
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Other
Information
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17
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Item 10.
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Directors, Executive Officers and
Corporate Governance
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17
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Item 11.
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Executive
Compensation
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18
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Item 12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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19
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Item 13.
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Certain Relationships and Related
Transactions and Director Independence
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20
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Item 14.
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Principal Accountant Fees and
Services
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21
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Item 15.
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Exhibits and Financial Statement
Schedules
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21
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SIGNATURES
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23
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2
PART
I
Item
1. Business
DESCRIPTION OF
BUSINESS
Business
Development
We
commenced operations as an exploration stage company. During the fiscal
year ended October 31, 2007, we held an interest in one mineral claim known as
the Stikine Asianada property, which was located in the Liard Mining
Division of northwestern British Columbia. However, we were unable to
keep the mineral claim in good standing due to lack of funding and were
unsuccessful in raising additional funding in order to restake the claims
comprising the Stikine Asianada property. Our interest in it expired
on September 18, 2008.
We are
currently reviewing potential acquisitions in the resource and non-resource
sectors. However, there are no guarantees that we will be able to reach any
agreement to acquire such assets.
Employees
We have
no employees as of the date of this annual report other than our two
directors.
Research
and Development Expenditures
We have
not incurred any research or development expenditures since our
incorporation.
Subsidiaries
We do not
have any subsidiaries.
Patents
and Trademarks
We
do not
own, either legally or beneficially, any patents or trademarks.
Dependence
on Major Customers
We have
no customers.
Item
1A. Risk
Factors
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.
Item
1B. Unresolved Staff
Comments
None.
Item
2. Properties
We do not
own or lease any property.
3
Item
3. Legal
Proceedings
There are
no legal proceedings pending or threatened against us.
Item
4. Submission of
Matters to a Vote of Security Holders
No
matters were submitted to a vote of our security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.
PART
II
Item
5. Market for
Registrant’s Common Equity, Related Stock Matters and Issuer Purchases of
Securities
Market
Information
Our
shares of common stock are quoted for trading on the OTC Bulletin Board under
the symbol BURW. However, no trades of our shares of common stock have
occurred through the facilities of the OTC Bulletin Board to the date of this
annual report.
Holders
As of
January 29, 2009, there are 30 holders of our common stock.
Dividends
There are
no restrictions in our articles of incorporation or bylaws that prevent us from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us
from declaring dividends where, after giving effect to the distribution of the
dividend:
1. we
would not be able to pay our debts as they become due in the usual course of
business; or
2. our
total assets would be less than the sum of our total liabilities plus the amount
that would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
We have
not declared any dividends, and we do not plan to declare any dividends in the
foreseeable future.
Securities
authorized for issuance under equity compensation plans
We have
no compensation plans under which our equity securities are authorized for
issuance.
Performance
graph
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this
item.
4
Recent sales of unregistered securities
None.
Issuer
Repurchases of Equity Securities
None.
Item
6. Selected
Financial Data.
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.
Item
7. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
Forward-looking
statements
This
report contains "forward-looking statements"
relating to us which represent our current expectations or beliefs, including
statements concerning our operations, performance, financial condition and
growth. For this purpose, any statement contained in this report that are
not statements of historical fact are forward-looking statements. Without
limiting the generality of the foregoing, words such as "may", "anticipation", "intend", "could", "estimate", or "continue" or the negative or
other comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainties, such as credit losses, dependence on management and key personnel
and variability of quarterly results, our ability to continue our growth
strategy and competition, certain of which are beyond our control. Should
one or more of these risks or uncertainties materialize or should the underlying
assumptions prove incorrect, actual outcomes and results could differ materially
from those indicated in the forward-looking statements.
The
following discussion and analysis should be read in conjunction with the
information set forth in our audited financial statements for the period ended
October 31, 2009.
Plan
of Operation
Our plan
of operation for the twelve months following the date of this annual report is
to continue to review other potential acquisitions in the resource and
non-resource sectors. Currently, we are in the process of completing due
diligence reviews of several business opportunities. We expect that these
reviews could cost us a total of $20,000 in the next 12 months.
As well,
we anticipate spending an additional $20,000 on administrative fees, including
fees we will incur in complying with reporting obligations. Total
expenditures over the next 12 months are therefore expected to be
$40,000.
We do not
currently have enough funds on hand to cover our anticipated expenses for the
next 12 months. We anticipate that additional funding will be required in
the form of equity financing from the sale of our common stock or from director
loans. However, we do not have any arrangements in place for any future
equity financing.
5
Results of Operations
We did
not earn any revenues for the year ended October 31, 2009. We incurred
operating expenses in the amount of $17,603 for the year ended October 31, 2009,
compared to $25,228 for the year ended October 31, 2008. These
expenses consisted of bank charges and interest of $153, office expenses of
$3,450, professional fees of $8,400, mineral property costs of $2,500 and
transfer and filing fees of $3,100. At October 31, 2009, we had assets of
$2,193 ($7,796 – October 31, 2008) consisting of cash and we had total
liabilities recorded at $32,000 ($Nil - October 31, 2008). These consisted
of loans from a related party.
We have
not attained profitable operations and are depending on obtaining financing to
continue to search for a new acquisition. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
going concern.
We have
had no operating revenues since our inception on December 11, 2006 through
October 31, 2009, and have incurred operating expenses in the amount of $54,807
for the same period. Our activities have been financed from the proceeds of
share subscriptions and director loans.
For the
period from inception on December 11, 2006 through October 31, 2009, we have
incurred bank charges and interest of $375, office expenses of $5,034, mineral
property costs of $10,000 professional fees of 23,598, transfer and filing fees
of $15,800.
During
the year ended October 31, 2009, we incurred a net loss of $(17,603), which
resulted in an accumulated deficit of $(54,807).
Our
financial statements are prepared in accordance with U.S. generally accepted
accounting principles. We have expensed all development costs related to
our establishment.
Liquidity
and Capital Resources
We had
cash of $2,193 as of October 31, 2009, compared to a cash position of $7,796 at
October 31, 2008. Since inception through to and including October 31,
2009, we have raised $25,000 through private placements of our common shares and
we have received contributed capital by related parties of $32,000.
We expect
to run at a loss for at least the next twelve months. We have no agreements for
additional financing and cannot provide any assurance that additional funding
will be available to finance our operations on acceptable terms in order to
enable us to complete our plan of operations. There are no assurances that
we will be able to achieve further sales of our common stock or any other form
of additional financing. If we are unable to achieve the financing
necessary to continue our plan of operations, then we will not be able to
continue our exploration of our mineral claims and our venture will
fail.
Off-balance
sheet arrangements
We have
no off-balance sheet arrangements including arrangements that would affect our
liquidity, capital resources, market risk support and credit risk support or
other benefits.
Item
7A. Quantitative and
Qualitative Disclosures About Market Risk.
We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.
6
Item 8. Financial Statements and
Supplementary Data.
BURROW
MINING INC.
(An
Exploration Stage Company)
FINANCIAL
STATEMENTS
OCTOBER
31, 2009
|
BALANCE
SHEETS
|
|
|
STATEMENTS
OF OPERATIONS
|
|
|
STATEMENT
OF STOCKHOLDERS’ EQUITY
|
|
|
STATEMENTS
OF CASH FLOWS
|
|
|
NOTES
TO THE FINANCIAL STATEMENTS
|
7
BURROW
MINING INC.
(An
Exploration Stage Company)
Balance
Sheets
|
Assets
|
||||||||
|
October
31,
|
October
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Current
Assets
|
||||||||
|
Cash
|
$ | 2,193 | $ | 7,796 | ||||
|
Total
Assets
|
$ | 2,193 | $ | 7,796 | ||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ | - | $ | - | ||||
|
Loans
from related party
|
32,000 | 20,000 | ||||||
|
Total
Current Liabilities
|
32,000 | 20,000 | ||||||
|
Stockholders’
Equity
|
||||||||
|
Capital stock Authorized:
75,000,000 common shares with a par value of $0.001
|
||||||||
|
Issued
and outstanding:
7,900,000 common shares
|
7,900 | 7,900 | ||||||
|
Additional
paid-in-capital
|
98,100 | 98,100 | ||||||
|
Share
subscription receivable
|
(81,000 | ) | (81,000 | ) | ||||
|
Deficit
accumulated during the exploration stage
|
(54,807 | ) | (37,204 | ) | ||||
|
Total
stockholders’ equity
|
(29,807 | ) | (12,204 | ) | ||||
|
Total
liabilities and stockholders’ equity
|
$ | 2,193 | $ | 7,796 | ||||
|
Nature and continuance of
operations (Note 1)
|
||||||||
See Accompanying Notes
8
BURROW
MINING INC.
(An
Exploration Stage Company)
Statements
of Operations
|
Year
Ended
October
31, 2009
|
Year
Ended
October
31, 2008
|
Cumulative
from
December
11, 2006 (Inception) to
October
31, 2009
|
||||||||||
|
Bank
charges and interest
|
$ | 153 | $ | 152 | $ | 375 | ||||||
|
Office
expenses
|
3,450 | 1,073 | 5,034 | |||||||||
|
Mineral
property
|
2,500 | - | 10,000 | |||||||||
|
Professional
fees
|
8,400 | 11,403 | 23,598 | |||||||||
|
Transfer
and filing fees
|
3,100 | 12,000 | 15,800 | |||||||||
|
Net
loss
|
$ | (17,603 | ) | $ | (25,228 | ) | $ | (54,807 | ) | |||
|
Loss
per share – Basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
|
Weighted
Average Number of Common Shares Outstanding
|
7,900,000 | 7,900,000 | ||||||||||
See Accompanying Notes
9
BURROW
MINING INC.
(An
Exploration Stage Company)
Statements
of Operations
|
Number
of
Common
Shares
|
Par
Value
|
Additional
Paid-in-
Capital
|
Deficit
accumulated
During
the exploration stage
|
Total
|
||||||||||||||||
|
December
18, 2006
|
||||||||||||||||||||
|
Subscribed
for cash at $0.001
|
4,000,000 | $ | 4,000 | $ | - | $ | - | $ | 4,000 | |||||||||||
|
January
26, 2007
|
||||||||||||||||||||
|
Subscribed
for cash at $0.001
|
2,000,000 | 2,000 | - | 2,000 | ||||||||||||||||
|
February
27, 2007
|
||||||||||||||||||||
|
Subscribed
for cash at $0.01
|
700,000 | 700 | 6,300 | 7,000 | ||||||||||||||||
|
March
22, 2007
|
||||||||||||||||||||
|
Subscribed
for cash at $0.01
|
300,000 | 300 | 2,700 | 3,000 | ||||||||||||||||
|
March
30, 2007
|
||||||||||||||||||||
|
Subscribed
for cash at $0.1
|
900,000 | 900 | 89,100 | 90,000 | ||||||||||||||||
|
Net
loss
|
(11,976 | ) | (11,976 | ) | ||||||||||||||||
|
Share
subscriptions receivable
|
(81,000 | ) | ||||||||||||||||||
|
Balance,
October 31, 2007
|
7,900,000 | $ | 7,900 | $ | 98,100 | $ | (11,976 | ) | $ | 13,024 | ||||||||||
|
Net
loss
|
(25,228 | ) | (25,228 | ) | ||||||||||||||||
|
Balance,
October 31, 2008
|
7,900,000 | $ | 7,900 | $ | 98,100 | $ | (37,204 | ) | $ | (12,204 | ) | |||||||||
|
Net
loss
|
(17,603 | ) | (17,603 | ) | ||||||||||||||||
|
Balance,
October 31, 2009
|
7,900,000 | $ | 7,900 | $ | 98,100 | $ | (54,807 | ) | $ | (29,807 | ) | |||||||||
See
Accompanying Notes
10
BURROW
MINING INC.
(An
Exploration Stage Company)
Statements
of Cash Flows
|
Year
Ended
October
31, 2009
|
Year
Ended
October
31, 2008
|
Cumulative
from
December
11, 2006 (Inception) to
October
31, 2009
|
||||||||||
|
Cash
flows from operating activities
|
||||||||||||
|
Net
loss
|
$ | (17,603 | ) | $ | (25,228 | ) | $ | (54,807 | ) | |||
|
Adjustments
to reconcile net loss to net cash
|
||||||||||||
|
Accounts
payable and accrued liabilities
|
- | - | - | |||||||||
|
Net
cash used in operations
|
(17,603 | ) | (25,228 | ) | (54,807 | ) | ||||||
|
Cash
flows from financing activities
|
||||||||||||
|
Loans
from related party
|
12,000 | 20,000 | 32,000 | |||||||||
|
Shares
subscribed for cash
|
- | 25,000 | ||||||||||
|
Net
cash provided by financing activities
|
12,000 | 20,000 | 57,000 | |||||||||
|
Net
increase (decrease) in cash
|
5,603 | (5,228 | ) | 2,193 | ||||||||
|
Cash
beginning
|
7,796 | 13,024 | - | |||||||||
|
Cash
ending
|
$ | 2,193 | $ | 7,796 | $ | 2,193 | ||||||
|
Supplemental
cash flow information:
|
||||||||||||
|
Cash
paid for:
|
||||||||||||
|
Interest
|
$ | - | $ | - | $ | - | ||||||
|
Taxes
|
$ | - | $ | - | $ | - | ||||||
See Accompanying Notes
11
BURROW
MINING INC.
(An
Exploration Stage Company)
Notes To
The Financial Statements
October
31, 2009
|
1.
|
NATURE
AND CONTINUANCE OF OPERATIONS
|
|
Burrow
Mining Inc. the Company”) was incorporated under the laws of State of
Nevada, U.S. on December 11, 2006, with an authorized capital of
75,000,000 common shares with a par value of $0.001. The
Company’s year end is the end of October. The Company is in the
exploration stage of its resource business. During the year
ended October 31, 2007, the Company commenced operations by issuing shares
and acquiring a mineral property located in British
Columbia. The Company has not yet determined whether this
property contains reserves that are economically
recoverable. The recoverability of costs incurred for
acquisition and exploration of the property will be dependent upon the
discovery of economically recoverable reserves, confirmation of the
Company’s interest in the underlying property, the ability of the Company
to obtain necessary financing to satisfy the expenditure requirements
under the property agreement and to complete the development of the
property and upon future profitable production or proceeds for the sale
thereof.
These
financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable
future. The Company has incurred losses since inception
resulting in an accumulated deficit of $54,807 as at October 31, 2009 and
further losses are anticipated in the development of its business raising
substantial doubt about the Company’s ability to continue as a going
concern. The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the future
and/or to obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve
months with existing cash on hand and loans from directors and or private
placement of common stock.
|
|
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
| Basis of
Presentation
The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America
and are presented in US dollars.
Exploration Stage
Company
The
Company complies with the Financial Accounting Standards Board Statement
No. 7, its characterization of the Company as an exploration stage
enterprise.
Mineral
Interests
Mineral
property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are
quantified. To date the Company has not established any proven
or probable reserves on its mineral properties. The Company has
adopted the provisions of SFAS No. 143 “Accounting for Asset Retirement
Obligations” which establishes standards for the initial measurement and
subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long-lived tangible assets arising from
the acquisition, construction or development and for normal operations of
such assets. As at October 31, 2009, any potential costs relating to the
retirement of the Company’s mineral property interest has not yet been
determined.
Use of Estimates and
Assumptions
The
preparation of financial statements in conformity with generally accepted
accounting principles 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 period. Actual results could differ from those
estimates.
|
12
BURROW
MINING INC.
(An
Exploration Stage Company)
Notes To
The Financial Statements
October
31, 2009
| 2. |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
Foreign Currency
Translation
The
financial statements are presented in United States dollars. In
accordance with Statement of Financial Accounting Standards No. 52,
“Foreign Currency Translation”, foreign denominated monetary assets and
liabilities are translated into their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet
date. Non monetary assets and liabilities are translated at the
exchange rates prevailing on the transaction date. Revenue and expenses
are translated at average rates of exchange during the
year. Gains or losses resulting from foreign currency
transactions are included in results of operations.
Fair Value of
Financial Instruments
The
carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management’s opinion
the Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments.
Environmental
Costs
Environmental
expenditures that relate to current operations are expensed or capitalized
as appropriate. Expenditures that relate to an existing
condition caused by past operations, and which do not contribute to
current or future revenue generation, are expensed. Liabilities
are recorded when environmental assessments and/or remedial efforts are
probable, and the cost can be reasonably estimated. Generally,
the timing of these accruals coincides with the earlier of completion of a
feasibility study or the Company’s commitments to plan of action based on
the then known facts.
Income
Taxes
The Company follows the liability method of accounting for
income taxes. Under this method, deferred income tax assets and
liabilities are recognized for the estimated tax consequences attributable
to differences between the financial statement carrying values and their
respective income tax basis (temporary differences). The effect
on deferred income tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
At
October 31, 2009, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
Basic and Diluted Loss
Per Share
The Company computes loss per share in accordance with SFAS
No. 128, “Earnings per Share” which requires presentation of both basic
and diluted earnings per share on the face of the statement of operations.
Basic loss per share is computed by dividing net loss available to common
shareholders by the weighted average number of outstanding common shares
during the period. Diluted loss per share gives effect to all dilutive
potential common shares outstanding during the period. Dilutive
loss per share excludes all potential common shares if their effect is
anti-dilutive.
The
Company has no potential dilutive instruments and accordingly basic loss
and diluted loss per share are
equal.
|
13
BURROW
MINING INC.
(An
Exploration Stage Company)
Notes To
The Financial Statements
October
31, 2009
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
|
|
|
Stock-based
Compensation
In
December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”, which
replaced SFAS No. 123, “Accounting for Stock-Based Compensation” and
superseded APB Opinion No. 25, “Accounting for Stock Issued to Employees”.
In January 2005, the Securities and Exchange Commission (“SEC”)
issued Staff Accounting Bulletin (“SAB”) No. 107, “Share-Based
Payment”, which provides supplemental implementation guidance for SFAS
No. 123R. SFAS No. 123R requires all share-based payments to
employees, including grants of employee stock options, to be recognized in
the financial statements based on the grant date fair value of the award.
SFAS No. 123R was to be effective for interim or annual reporting periods
beginning on or after June 15, 2005, but in April 2005 the SEC issued a
rule that will permit most registrants to implement SFAS No. 123R at the
beginning of their next fiscal year, instead of the next reporting period
as required by SFAS No. 123R. The pro-forma disclosures previously
permitted under SFAS No. 123 no longer will be an alternative to financial
statement recognition. Under SFAS No. 123R, the Company must determine the
appropriate fair value model to be used for valuing share-based payments,
the amortization method for compensation cost and the transition method to
be used at date of adoption.
The
transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of
the beginning of the year of adoption or for all periods presented. The
prospective method requires that compensation expense be recorded for all
unvested stock options and restricted stock at the beginning of the first
quarter of adoption of SFAS No. 123R, while the retroactive methods would
record compensation expense for all unvested stock options and restricted
stock beginning with the first period restated. The Company adopted the
modified prospective approach of SFAS No. 123R for the year ended October
31, 2007. The Company did not record any compensation expense
for the period ended October 31, 2009 because there were no stock options
outstanding prior to the adoption or at October 31, 2009.
Recent Accounting
Pronouncements
In
February 2006, the FASB issued SFAS No. 155, “Accounting for Certain
Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and
140”, to simplify and make more consistent the accounting for certain
financial instruments. SFAS No. 155 amends SFAS No. 133, “Accounting for
Derivative Instruments and Hedging Activities”, to permit fair value
re-measurement for any hybrid financial instrument with an embedded
derivative that otherwise would require bifurcation, provided that the
whole instrument is accounted for on a fair value basis. SFAS No. 155
amends SFAS No. 140, “Accounting for the Impairment or Disposal of
Long-Lived Assets”, to allow a qualifying special-purpose entity to hold a
derivative financial instrument that pertains to a beneficial interest
other than another derivative financial instrument. SFAS No. 155 applies
to all financial instruments acquired or issued after the beginning of an
entity's first fiscal year that begins after September 15, 2006, with
earlier application allowed. This standard is not expected to have a
significant effect on the Company’s future reported financial position or
results of operations.
In
March 2006, the FASB issued SFAS No. 156, "Accounting for
Servicing of Financial Assets, an amendment of FASB Statement No. 140,
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". This statement requires all
separately recognized servicing assets and servicing liabilities be
initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in
fair value reflected in earnings or the amortization and impairment
requirements of Statement No. 140. The subsequent measurement of
separately recognized servicing assets and servicing liabilities at fair
value eliminates the necessity for entities that manage the risks inherent
in servicing assets and servicing liabilities with derivatives to qualify
for hedge accounting treatment and eliminates the characterization of
declines in fair value as impairments or direct write-downs. SFAS No.
156 is effective for an entity's first fiscal year beginning after
September 15, 2006. This adoption of this statement is not
expected to have a significant effect on the Company’s future reported
financial position or results of
operations.
|
14
BURROW
MINING INC.
(An
Exploration Stage Company)
Notes To
The Financial Statements
October
31, 2009
|
3.
|
MINERAL
INTERESTS
|
|
On
May 27, 2007, the Company entered into a mineral property purchase
agreement to acquire a 100% interest in one mineral claim located at
British Columbia for total consideration of $7,500.
The
mineral interest is held in trust for the Company by the vendor of the
property. Upon request from the Company the title will be recorded in the
name of the Company with the appropriate mining
recorder.
|
|
|
4.
|
COMMON
STOCK
|
|
The
total number of common shares authorized that may be issued by the Company
is 75,000,000 shares with a par value of one tenth of one cent ($0.001)
per share and no other class of shares is authorized.
During
the year ended October 31, 2007, the Company issued 7,900,000 shares of
common stock for total cash proceeds of $106,000. The Company
has received $25,000, and thereof there are share subscription receivable
of $81,000 as at October 31, 2009. At October 31, 2009, there
were no outstanding stock options or warrants.
|
|
|
5.
|
INCOME
TAXES
|
|
As
of October 31, 2009, the Company had net operating loss carry forwards of
approximately $54,807 that may be available to reduce future years’
taxable income through 2027. Future tax benefits which may arise as a
result of these losses have not been recognized in these financial
statements, as their realization is determined not likely to occur and
accordingly, the Company has recorded a valuation allowance for the
deferred tax asset relating to these tax loss
carry-forwards.
|
15
Item
9. Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure.
There
have been no changes in and disagreements with our accountants on accounting and
financial disclosure from the inception of our company through to the date of
this Report.
Item
9A(t). Controls and
Procedures.
(a)
Evaluation of disclosure
controls and procedures
Based
upon an evaluation of the effectiveness of our disclosure controls and
procedures performed by our management, with participation of our Chief
Executive Officer and our Chief Accounting Officer as of the end of the period
covered by this report, our Chief Executive Officer and our Chief Accounting
Officer concluded that our disclosure controls and procedures have been
effective in ensuring that material information relating to us, is made known to
the certifying officers by others within our company during the period covered
by this report.
As used
herein, “disclosure controls
and procedures” mean controls and other procedures of our company that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission’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
Securities Exchange Act is accumulated and communicated to our management,
including our principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
(b)
Management’s Report on
Internal Control Over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rule 13a-15(f)
under the Securities Exchange
Act of 1934. Under the supervision and with the participation of
our Chief Executive Officer and our Chief Accounting Officer, we conducted an
evaluation of the effectiveness of our control over financial reporting based on
the framework in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our
evaluation under the framework, management has concluded that our internal
control over financial reporting was effective as of October 31,
2009.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report.
(c)
Changes in Internal
Control over Financial Reporting
There
have not been any changes in our internal controls or in other factors that
occurred during our last fiscal year ended October 31, 2009 that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.
16
Item 9B. Other Information.
None.
PART
III
Item
10. Directors,
Executive Officers and Corporate Governance.
Our
executive officers and directors and their respective ages as of the date of
this annual report are as follows:
Directors:
| Name of Director | Age | |
| Cathy M.T. Ho | 28 | |
| Heather M.T. Ho | 28 | |
| Executive Officers: | ||
| Name of Director | Age | Office |
| Cathy M.T. Ho | 28 | President, Chief Executive Officer |
| Heather M.T. Ho | 28 | Secretary and Treasurer |
Biographical
information
Set forth
below is a brief description of the background and business experience of our
executive officer and directors for the past five years.
Ms. Cathy
M.T. Ho has acted as our President and C.E.O. since our incorporation on
December 11, 2006. Since December 11, 2006, Ms. Cathy M.T. Ho has been a fitness
consultant and helps people achieve their fitness goals. Prior to her
Directorship with the Company, she was an assistant manager to an all womens gym
from September, 2003 to January, 2006. Her obligations were on a day to day
basis, assisting managers and dealing with mainly customer service
issues. She did some personal training at Fitcity For Women, but her
main focus was assisting the manager with managerial tasks. Presently
she is an employee with Fitness World and has been for over two years and
creates specialized programs for clients to help them achieve their own fitness
success. She is now, presently the assistant manager at Fitness
World.
Ms. Cathy
M.T. Ho intends to devote 30% of her business time to our affairs.
Ms.
Heather M.T. Ho has acted as our Treasurer, Secretary, and as a director since
January 2, 2007. In 2001 to 2003 she worked as a receiving clerk with
David L. Jones, wherein she was responsible for data entry, data receiving,
accounts payable and receivables. Heather attended Capilano College
in 2003, where she completed the Legal Assistant Certificate program. Since
completing her certificate as a Legal Assistant in Corporate Law in 2003, she
has been providing legal assistance to various law firms carrying out daily
tasks for assigned lawyers and other duties such as organizing files/file
opening and closing, drafting legal documents and filing.
Ms.
Heather M.T. Ho intends to devote 25% of her business time to our
affairs.
17
Significant Employees and Consultants
We have
no significant employees other than the officers and directors described
above.
Conflicts
of Interest
We do not
have any written procedures in place to address conflicts of interest that may
arise between our business and the future business activities of Ms. Ho or Ms.
Ho.
Audit
Committee Financial Expert
We do not
have a financial expert serving on an audit committee as we do not have an audit
committee because our board of directors has determined that as a start-up
exploration company with no revenues it would be too expensive to have
one.
Role and Responsibilities of the
Board
The Board
of Directors oversees the conduct and supervises the management of our business
and affairs pursuant to the powers vested in it by and in accordance with the
requirements of the Revised
Statutes of Nevada. The Board of Directors holds regular meetings to
consider particular issues or conduct specific reviews whenever deemed
appropriate.
Our Board
of Directors considers good corporate governance to be important to our
effective operations. Our directors are elected at the annual meeting of the
stockholders and serve until their successors are elected or appointed.
Officers are appointed by the Board of Directors and serve at the
discretion of the Board of Directors or until their earlier resignation or
removal.
As we
have only one director and executive officer, there are no arrangements or
understandings pursuant to which a director or executive officer was selected to
be a director or executive officer.
Code
of Ethics
We have
adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of
the Securities Exchange Act of
1934. The Code of Ethics applies to directors and senior officers, such
as the principal executive officer, principal financial officer, controller, and
persons performing similar functions. The Code of Ethics is attached to this
report as an exhibit.
Item
11. Executive
Compensation.
Summary
Compensation Table
The table
below summarizes all compensation awarded to, earned by, or paid to our
executive officers for all services rendered in all capacities to us for the
period from our inception through the fiscal period ended September 30, 2007 and
for the fiscal year ended October 31, 2009.
18
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation
($)
|
Change
in
Pension
Value and Nonqualified Deferred Compensation
($)
|
All
Other Compensation
($)
|
Total
($)
|
|
Cathy M.T. Ho,
President, CEO, and Director
|
2009
2008
2007
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
|
Heather M.T. Ho, Secretary, Treasurer and
Director
|
2009
2008
2007
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
|
(1)
Ms. Cathy M.T. Ho was appointed as President, CEO, and a Director on
December 11, 2006.
|
|
(2)
Ms. Heather M.T. Ho was appointed as Secretary, Treasurer and a Director
on December 11, 2006.
|
Option/SAR
Grants
We made
no grants of stock options or stock appreciation rights to our directors and
officers during the period from our inception on December 11, 2006 through the
fiscal period ending October 31, 2009.
Compensation
of Directors
Our
directors do not receive salaries for serving as directors.
Employment
contracts and termination of employment and change-in-control
arrangements
There are
no employment agreements between our company and either of Cathy M.T. Ho or
Heather M.T. Ho. We do not pay either Ms. Ho or Ms. Ho any amount for
acting as director of the Company.
Item
12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
The
following table sets forth certain information regarding the beneficial
ownership of our common stock, as of the date of this filing, by (i) each person
(including any group) who is known by us to beneficially own more than 5% of any
class of the voting securities of our company; (ii) each of our directors, and
(iii) officers and directors as a group.
Each
common share entitles the holder thereof to one vote in respect of any matters
that may properly come before our stockholders. To the best of our knowledge,
there exist no arrangements that could cause a change in voting control of our
company. Unless otherwise indicated, the persons named below have sole voting
and investment power with respect to all shares beneficially owned by them,
subject to community property laws where applicable.
19
|
Title
of Class
|
Name
and Address Of Owner
|
Relationship
to Company
|
Number
of Shares
|
Percent
Owned
(1)
|
|
Common
Stock
|
Cathy
M.T. Ho
7892
Cumberland St.
Burnaby,
BC
|
President,
CEO and Director
|
2,000,000
|
25.3%
|
|
Common
Stock
|
Heather
M.T. Ho
778
Fort Street
Victoria,
BC
V8W
1H2
|
Secretary,
Treasurer and Director
|
2,000,000
|
25.3%
|
|
Common
Stock
|
All
directors and executive officers as a group (one
individual)
|
4,000,000
|
50.6%
|
(1) The
percent ownership of class is based on 7,900,000 shares of common stock issued
and outstanding as of the date of this report.
Under the
rules of the Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a
security if he or she, directly or indirectly, has or shares the power to vote
or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security. Accordingly, more than one person
may be deemed to be a beneficial owner of the same security. A person is also
deemed to be a beneficial owner of any security, which that person has the right
to acquire within 60 days, such as options or warrants to purchase our common
stock.
Item
13. Certain
Relationships and Related Transactions and Director Independence.
Transactions with related
persons
Except as
disclosed below, none of the following parties has, since our inception, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect
us:
· any of
our directors or executive officers;
· any
person proposed as a nominee for election as a director;
· any
person who beneficially owns, directly or indirectly, shares carrying more than
5% of the voting rights attached to our outstanding shares of common
stock;
· any
child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of
any of the foregoing persons; or
· any
person sharing the household of any director, executive officer, nominee for
director or 5% shareholder of our company.
20
Item 14. Principal Accountant Fees and Services.
Our
principal accountants, George Stewart, LLP., rendered invoices to us during the
fiscal periods indicated for the following fees and services:
|
Fiscal year
ended
|
Fiscal year
ended
|
|||||||
|
October 31,
2009
|
October 31,
2008
|
|||||||
|
Audit Fees
|
$ | 13,800 | $ | 5,000 | ||||
|
Audit Related
Fees
|
- | - | ||||||
|
Tax Fees
|
- | - | ||||||
|
All Other
Fees
|
- | - | ||||||
Audit
fees consist of fees related to professional services rendered in connection
with the audit of our annual financial statements and the review of the
financial statements included in each of our quarterly reports on Form
10-Q.
Our
policy is to pre-approve all audit and permissible non-audit services performed
by the independent accountants. These services may include audit services,
audit-related services, tax services and other services. Under our audit
committee’s policy, pre-approval is generally provided for particular services
or categories of services, including planned services, project based services
and routine consultations. In addition, we may also pre-approve particular
services on a case-by-case basis. We approved all services that our
independent accountants provided to us in the past three fiscal
years.
PART
IV
Item
15. Exhibits
Financial Statement Schedules.
(a) Financial
Statements
The
following documents are filed under “Item 8. Financial Statements and
Supplementary Data,” pages F-1 through F-14, and are included as part of
this report:
Financial
Statements for the fiscal year ended October 31, 2009
Report of
Independent Registered Public Accounting Firm
Balance
Sheets
Statements
of Operations
Statement
of Stockholders’ Equity (Deficit)
Statements
of Cash Flows
Notes to
Financial Statements
(b) Exhibits
The
exhibits required to be attached by Item 601 of Regulation S-K are listed in the
Index to Exhibits on page 15 of this report, and are incorporated herein by this
reference.
21
(c) Financial
Statement Schedules
We are
not filing any financial statement schedules as part of this report as such
schedules are either not applicable or the required information is included in
the financial statements or notes thereto.
INDEX TO
EXHIBITS
|
Number
|
Exhibit
Description
|
|
3.1
*
|
Articles of Incorporation
(1)
|
|
3.2
*
|
Bylaws (1)
|
|
31.1
|
Certificate
of principal executive officer and principal financial officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certificate
of principal executive officer and principal financial officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certificate of
principal executive officer and principal financial officer
pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
|
32.2
|
Certificate
of principal executive officer and principal financial officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
22
SIGNATURES
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.
BURROW
MINING, INC.
/s/ Cathy M.T.
Ho
Cathy
M.T. Ho
President,
Chief Executive Officer and Director
January
25, 2010
Pursuant
to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
/s/ Cathy M.T.
Ho
Cathy
M.T. Ho
President,
Chief Executive Officer and Director
January
25, 2010
23