UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(X )         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

 

 

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

 

 

BUKA VENTURES INC.

 (Exact name of registrant as specified in its charter)

 

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X] No

 

Indicate by check mark whether the registrant 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

[  ]  YES   [ X ]  NO

 

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

 

Large accelerated filer   [   ]                                                                                     Accelerated filer        [   ]

 

Non-accelerated filer     [   ]  (Do not check if a small reporting company)             Small 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 PROCEDING FIVE YEARS

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 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 □ 

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

September 10, 2013: 46,500,000 common shares.

 

 

 

INDEX

 

                                                 

 

 

 

 

PART 1 – FINANCIAL INFORMATION

                                                                                                                                                             

 

ITEM 1.   FINANCIAL STATEMENTS

                                                                                                                                                             

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on February 1, 2013. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ending October 31, 2013.

 

 

 

BUKA VENTURES INC.

(Pre-Exploration Stage Company)

Condensed Financial Statements

July 31, 2013

(Unaudited)

 

                         

 

 

 

BUKA VENTURES INC.

(Pre-Exploration Stage Company)

CONDENSED BALANCE SHEETS

 

 

 

 

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

 

 

 

 

 

 

BUKA VENTURES INC.

(Pre-Exploration Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

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

 

 

 

 

 

 

BUKA VENTURES INC.

(Pre-Exploration Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

 (Unaudited) 

 

BUKA VENTURES INC.

(Pre-Exploration Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

July 31, 2013

(Unaudited)

 

1.         ORGANIZATION AND BASIS OF PRESENTATION

 

The Company, Buka Ventures Inc., was incorporated under the laws of the State of Nevada on March 15, 2007 with the authorized capital stock of 750,000,000 shares at $0.001 par value. 

 

The Company was organized for the purpose of acquiring and developing mineral properties.  At the report date mineral claims, with unknown reserves, had been acquired.  The Company has not established the existence of a commercially minable ore deposit and therefore has not reached the exploration stage and is considered to be in the pre-exploration stage.

 

The interim financial statements for the nine months ended July 31, 2013 and 2012 are unaudited. These financial statements are prepared in accordance with requirements for unaudited interim periods, and consequently do not include all disclosures required to be in conformity with accounting principles generally accepted in the United States of America. The results of operations for the interim periods are not necessarily indicative of the results for the full year. In management's opinion all adjustments necessary for a fair presentation of the Company's financial statements are reflected in the interim periods included, and are of a normal recurring nature. These interim financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K, for the year ended October 31, 2012, as filed with the SEC.

  

 

2.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Accounting Method

 

The Company recognizes income and expenses based on the accrual method of accounting.

 

Dividend Policy

 

The Company has not yet adopted a policy regarding payment of dividends.

 

            Basic and Diluted Net Income (loss) Per Share

 

            Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were no dilutive common stock equivalents outstanding at July 31, 2013.

 

Foreign Currency

 

The books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency. Transactions denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statement of Operations:

 

 

 

 

  

Revenue Recognition

 

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

             

            Income Taxes

             

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed.   An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

 

            Impairment of Long-lived Assets

 

            The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable.   When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.

 

Advertising and Market Development

 

The company expenses advertising and market development costs as incurred. There were no advertising or market development costs for the nine months ended July 31, 2013 and 2012.

 

Financial Instruments

 

            The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

 

Estimates and Assumptions

 

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.

             

             Statement of Cash Flows

 

 

            For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

 

            Mineral Property Acquisition and Exploration Costs

 

Mineral property acquisition costs are initially capitalized when incurred. These costs are then assessed for impairment when factors are present to indicate the carrying costs may not be recoverable. Mineral exploration costs are expensed when incurred.

 

            Environmental Requirements

 

            At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

 

Recent Accounting Pronouncements

 

The Company does not expect that the adoption of recent accounting pronouncements will have a material impact on its financial statements.

 

3.         ACQUISITION OF MINERAL CLAIM

 

            On May 1, 2007, the Company acquired the Sigatoka Gold Claim located in the Republic of Fiji from Omega Ventures Inc., an unrelated company, for the consideration of $5,000.  The Sigatoka Gold Claim is located 24 kilometers north of the city of Lautoka, Fiji.  Under Fijian law, the claim remains in good standing as long as the Company has an interest in it.   There is no annual maintenance fee or minimum exploration work required on the Claim.

 

As of October 31, 2007, the Company determined the $5,000 mineral property acquisition cost was impaired, and recorded a related impairment loss in the statement of operations.

 

4.         SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

 

During the nine month period ended July 31, 2013 one of the directors made advances to the Company in the amount of $165, for payment of operating expenses, and was repaid $20,000 for previous advances.

 

Two officers-directors have acquired 57% of the common stock issued, have made net advances to the Company of $198 and have made contributions to capital of $24,800 in the form of expenses paid for the Company. The advances are non-interest bearing, unsecured, and payable on demand.

 

5.         CAPITAL STOCK

 

On October 31, 2007 one of the Company’s directors received 5,000,000 common shares at a price of $0.001 per share for reimbursement of expenses paid by him for the Company in the amount of $5,000.

 

On October 31, 2008 the Company issued to its officers and directors 40,500,000 common shares at $0.001 per share for a cash consideration of $40,500.

 

Under an effective registration statement, the directors and officers sold 20,000,000 common shares to other investors in March 2009.

 

 

On February 14, 2012, the Company issued 1,000,000 common shares to one of its directors at a price of $0.07 per share, for total consideration of $70,000.

 

6.         GOING CONCERN

 

The Company intends to seek business opportunities that will provide a profit.  However, the Company does not have the working capital necessary to be successful in this effort and to service its debt, which raises substantial doubt about its ability to continue as a going concern.

 

Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional advances from related parties, and equity funding, which will enable the Company to operate for the coming year.

 

 

 

 

 

 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis should be read in conjunction with Buka Ventures Inc. (“Buka”, “we” or “us”) financial statements and the notes related thereto. The discussion of results, causes and trends should not be construed to infer conclusions that such results, causes or trends necessarily will continue in the future.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

 

Forward Looking Statements

 

This Form 10-Q contains "forward-looking statements" that involve risks and uncertainties. The use of words such as "anticipate", "expect", "intend", "plan", "believe", "seek" and "estimate", and variations of these words and similar expressions to identify such forward-looking statements. Our actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the "Risk Factors" section and elsewhere in this Form 10-Q. These forward-looking statements address, among others, such issues as:

 

 

These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties, which could cause our actual results, performance and financial condition to differ materially from our expectation.

 

Consequently, these cautionary statements qualify all of the forward-looking statements made in this Form 10-Q. We cannot assure you that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they would have the expected effect on us or our business or operations.

 

Our Business

 

We were incorporated in the State of Nevada on March 15, 2007.   We are a start-up, pre-exploration stage company engaged in the search for gold and related minerals.  We do not have any subsidiaries, affiliated companies or joint venture partners.   We have no mining operations and have no revenues.  We have incurred losses since inception and without the financial help of one of directors we would have no funds to continue operations. 

 

We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups Act.

 

We shall continue to be deemed an emerging growth company until the earliest of:

 

 

(A) the last day of our fiscal year during which had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

 

(B) the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities to an effective registration statement under this title;

 

(C) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

 

(D) the date on which we are deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.

 

As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.

 

Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

 

As an emerging growth company we are exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

 

We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.

 

 Our sole asset, other than cash and prepaid expenses, is a 100% interest in the Sigatoka Gold claim located in the Republic of Fiji.  We acquired the Sigatoka Gold claim for the sum of $5,000 from an unrelated third party on May 1, 2007.  We own no property other than the Sigatoka Gold claim.  We engaged Thomas Raju, a Geological Consultant, to explore and summarize the exploration potential of the Sigatoka Gold claim and to make recommendations.  Under the study, it was recommended that a mineral exploration program consisting of air photo interpretation, geological mapping, geochemical soil sampling and geophysical surveying be conducted at the Sigatoka Gold claim and to identify targets for diamond drilling if warranted.  The cost for this mineral exploration program is estimated to cost of FJD $37,700 (US$20,285).   This exploration program was completed by Thomas Solanki, Professional Geologist, in November 2011.

 

There is no assurance that a commercially viable mineral deposit or reserve exists at our mineral claim or may exist until sufficient and appropriate exploration is completed and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of a substantial amount of capital, capital which we do not currently have and may never be able to raise.

 

We have no full-time employees and our management devotes a percentage of their time to the affairs of our company.

 

Our administrative office is located at 21 Luke Street, Vatuwaqa, Suva, Fiji .  Our telephone number is 679-331-3255.   We do not maintain a web site.  

 

PLAN OF OPERATIONS

 

 

Our estimate of expenses for the next 12 months is outlined below.

 

   

We do not intend to hire any employees at this time. All of the work on the Sigatoka Gold Claim will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying and exploration.   In undertaking the exploration program recommended by Thomas Raju, we engaged the services to Thomas Solanki, Professional Geologist, who undertook the exploration work on the Sigatoka Gold Claim.

 

Limited Operating History; Need for Additional Capital

 

 There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

 

To become profitable and competitive, we must conduct the research and exploration of our properties before we start production of any minerals we may find.

At present, we do not have enough cash on hand to cover expenses for the next 12 months. We anticipate needing a minimum of $44,000 to meet our working capital commitments for the next 12 months. 

While the officers and directors have generally indicated a willingness to provide services and financial contributions if necessary, there are presently no agreements, arrangements, commitments, or specific understandings, either verbally or in writing, between the officers and directors and Buka Ventures, Inc.  

If we are unable to meet our needs for cash from either loans, or possible alternative sources, then we may be unable to continue, develop, or expand our operations.

 

We have no plans to undertake any product research and development during the next twelve months.  There are also no plans or expectations to acquire or sell any plant or plant equipment.

There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

 

To become profitable and competitive, we must conduct the research and exploration of our properties before we start production of any minerals we may find.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

 

RESULTS OF OPERATIONS

 

Foreign Currency and Exchange Rates  

 

Our mineral property is located in the Republic of Fiji.  However costs expressed in the geological report on the Claim are expressed in United States Dollars.   Any work to be conducted at the Claim is expected to be paid in Fijian dollars.  The functional currency is considered to be US dollars.

 

Results of Operations for the three and nine months ended July 31, 2013 and 2012

 

Our net loss for the three months ended July 31, 2013 was $3,680 compared to a net loss $9,671 during the three months ended July 31, 2012.  Our net loss for the nine months ended July 31, 2013 was 16,575 compared to a net loss of 25,725 during the nine months ended July 31, 2012.  Our net loss for the three and nine months ended July 31, 2013 and July 31, 2012 represents various expenses incurred such as payment to our independent accountants, office expenses, consulting, and transfer agent fees, as follows:

 

 

 

 

Liquidity and Capital Resources

 

Working Capital

 

 

Cash Flows

 

 

As at July 31, 2013, we had $1,439 cash on hand and a prepaid expense of $2,500, with current liabilities of $2,539, representing a working capital position of $1,400.  During the nine months ended July 31, 2013 our company paid back to related parties $19,835 thereby reducing the amount owed to related parties to $198.

 

Stockholders' equity decreased 16,575 from $17,975 as of October 31, 2012 to $1,400 as of July 31, 2013.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the nine month period ended July 31, 2013, net cash flows used in operating activities was $32,665 consisting of a net loss of $16,575 and changes in operating assets and liabilities of 16,090.  Net cash flows used in operating activities was $20,919 for the nine month period ended July 31, 2012 consisting of a net loss of $25,725 which was offset by changes in operating liabilities of $4,806.

 

Cash Flows from Financing Activities

 

We have financed our operations primarily from either advances from directors or the issuance of equity and debt instruments.  For the nine months ended July 31, 2013, we had net payments to related parties of $19,835.  For the nine months ended July 31, 2012, we generated cash flows from net advances from related parties of $5,058 and proceeds from the issuance of common stock of $70,000. For the period from inception on March 15, 2007 through July 31, 2013, net cash provided by financing activities was $110,698 primarily due to the issuance of common shares for cash of $110,500.

 

 

Cash Flows from Investing Activities

 

For the nine months ended July 31, 2013 and 2012, we did not use any cash flows for investing activities.  For the period from inception on March 15, 2007 through July 31, 2013, net cash used in investing activities was $5,000.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a wide variety of estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) the reported amounts of expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 2 of the Notes to the Financial Statements, and several of those critical accounting policies are as follows:

 

Mineral Property Acquisition and Exploration Costs

 

Mineral property acquisition costs are initially capitalized when incurred.  These costs are then assessed for impairment when factors are present to indicate the carrying costs may not be recoverable.  Mineral exploration costs are expensed when incurred.

 

Impairment of Long-lived Assets

 

Our company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable.   When our company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.

 

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Short and long-term Trend Liabilities

            We are unaware of any known trends, events or uncertainties that have or are reasonably likely to have a material impact on our business either in the long-term or long-term liquidity which have not been disclosed under Risk Factors noted below.

Internal and External Sources of Liquidity

 

There are no material internal or external sources of liquidity.

Known Trends, Events or Uncertainties having an Impact on Income

Since we are in the start-up stage and the Sigatoka Gold Claim has not produced any income, there is a chance that it never will.  We do not know of any trends, events or uncertainties that are reasonably expected to have a material impact on income in the future.

Dividend Policy

 

We have never declared or paid any cash dividends or distributions on our common stock.   We currently intend to retain our future earnings to support operations and to finance future growth and expansion and, therefore, do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

Compensation Plans

 

As of July 31, 2013 and up to the date of this Form 10-Q, we have no shares of our common stock that are issued under compensation plans approved by our shareholders.

 

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

ITEM 4.          CONTROLS AND PROCEDURES

 

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and chief financial officer (our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer) and chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

Material Weaknesses

Our directors have assessed the effectiveness of our internal control over financial reporting as of the Evaluation Date and identified the following material weaknesses:

 

 

1.                  Certain entity level controls establishing a “tone at the top” were considered material weaknesses. As of July 31, 2013, our audit committee did not have an independent “expert” on it who could advise our Board as to financial matters.   In addition, there was no policy on fraud.  A whistleblower policy is not necessary given the small size of the organization.

 

2.                  Due to the significant number and magnitude of out-of-period adjustments identified during the first quarter closing process, our Directors have concluded that the controls over the quarter-end financial reporting process were not operating effectively. A material weakness in the quarter-end financial reporting process could result in us not being able to meet our regulatory filing deadlines and, if not remediated, has the potential to cause a material misstatement or to miss a filing deadline in the future. Our directors overriding of existing controls is possible given the small size of the organization and lack of personnel.

 

3.                  There is no system in place to review and monitor internal control over financial reporting. We maintain an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

Changes in Internal Control over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART 11 – OTHER INFORMATION

 

ITEM 1.          LEGAL PROCEEDINGS

 

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A        RISK FACTORS

 

An investment in our common stock involves an exceptionally high degree of risk and is extremely speculative. In addition to the other information regarding Buka Ventures contained in this Form 10-Q, you should consider many important factors in determining whether to purchase the shares in our Company. The following risk factors reflect the potential and substantial material risks which could be involved if you decide to purchase shares in our Company.

 

Risks Associated with Our Business

 

We have no revenues, lack profitable operations, and have incurred losses which we expect to continue into the future.

  

            We were incorporated in 2007 and have not yet conducted any exploration activities.  We have no revenues. We have no exploration history upon which you can evaluate the likelihood of our future success or failure.  Our operations are not profitable and our net loss from inception to July 31, 2013 is $138,900.  Based upon current plans, we expect to incur operating losses in future periods in connection with our exploration and evaluation of our mining claim.  

 

 

We need to raise capital to complete the first phase of our evaluation and for operating expenses.  If we are unable to raise capital, we will not be able to undertake exploration activities.

 

            We estimate that, with funding committed by our management, we have sufficient cash to continue operations for twelve months provided we only carry out the initial exploration activity recommended by our consultant.  We are in the pre-exploration stage. If the results of our initial exploration activities are positive, we intend to initiate further exploration activities.   We will need to raise additional capital to undertake further exploration activities.  No assurance can be given that we are successful in raising additional capital.  You may be investing in a company that will not have the funds necessary to conduct any meaningful exploration activity due to our inability to raise additional capital.  If that occurs we will have to delay or cease our exploration activity which may result in the loss of your investment.

  

We have no known ore reserves and we cannot guarantee that we will find any gold and/or other valuable mineralization or, if we find gold and/or valuable mineralization, that it may be economically extracted.  If we fail to find any gold and/or other valuable mineralization or if we are unable to find gold and/or valuable mineralization that may be economically extracted, we will have to cease operations.

 

We have no known ore reserves. Even if we find gold and/or other valuable mineralization we cannot guarantee that any gold and/or other valuable mineralization will be of sufficient quantity so as to warrant recovery.  Additionally, even if we find gold and/or other valuable mineralization in sufficient quantity to warrant recovery, we cannot guarantee that the ore will be recoverable. Finally, even if any gold and/or other valuable mineralization is recoverable, we cannot guarantee that this can be done at a profit. Failure to locate gold deposits in economically recoverable quantities will cause us to cease operations.   Our ability to achieve profitability and positive cash flow in the future is dependent upon:

 

 

Because we are a small company, have limited capital and have only one claim, we will be limited in our exploration costs.  

 

            The possibility of development of and production from our mining claim depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified professional engineers and geologists.  We are a small company and do not have much capital.  We must limit our exploration activity which may adversely affect our ability to find ore reserves since we do not have the capital that other larger companies may have to find ore.  Further, because of our limited capital we can afford to explore only one mining claim which increases our risk due to lack of diversification.

  

Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not contain any reserves, and any funds spent on exploration will be lost.

 

            Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our sole property, the Sigatoka Gold Claim, does not contain any reserves, and any funds spent on exploration will be lost. If we cannot raise further funds as a result, we may have to suspend or cease operations entirely which would result in the loss of your investment.

 

Even with positive results during exploration, the Sigatoka Gold Claim might never be put into commercial production due to inadequate tonnage, low metal prices or high extraction costs.

 

 

                        We might be successful, during future exploration programs, in identifying a source of minerals of good grade but not in the quantity, the tonnage, required to make commercial production feasible.  If the cost of extracting any minerals that might be found on the Sigatoka Gold Claim is in excess of the selling price of such minerals, we would not be able to develop the claim.  Accordingly even if ore reserves were found on the Sigatoka Gold Claim, without sufficient tonnage we would still not be able to economically extract the minerals from the claim in which case we would have to abandon the Sigatoka Gold Claim and seek another mineral property to develop, or cease operations altogether.

 

            Mineral exploration and development activities are inherently risky. If such an adverse event were to occur it may result in a loss of your investment.

 

                        The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately developed into production.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  The Sigatoka Gold Claim, our sole property, does not have a known body of commercial ore. Should our mineral claim be found to have commercial quantities of ore, we would be subject to additional risks respecting any development and production activities. Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in extraction operations and the conduct of exploration programs. We do not carry liability insurance with respect to our mineral exploration operations and we may become subject to liability for damage to life and property, environmental damage, cave-ins or hazards. There are also physical risks to the exploration personnel working in the rugged terrain of our claim. Previous mining exploration activities may have caused environmental damage to the Sigatoka Gold Claim. It may be difficult or impossible to assess the extent to which such damage was caused by us or by the activities of previous operators, in which case, any indemnities and exemptions from liability may be ineffective.

 

Because our officers and directors do not have technical training or experience in starting and operating an exploration company nor in managing a public company, we will have to hire qualified personnel to fulfill these functions. If we lack funds to retain such personnel, or cannot locate qualified personnel, we may have to suspend or cease exploration activity or cease operations which will result in the loss of your investment.

 

            None of our management team has experience exploring for minerals, starting and operating a mineral exploration company, nor do they have training in these areas.  As a result their decisions and choices may not take into account standard managerial approaches mineral exploration companies commonly use. Consequently our ultimate financial success could suffer irreparable harm due to certain of management's lack of experience.  Additionally, our officers and directors have no direct training or experience in managing and fulfilling the regulatory reporting obligations of a ‘public company’ like Buka Ventures.   We will have to hire professionals to undertake these filing requirements for Buka Ventures and this will increase the overall cost of operations.

 

Because our officers and directors have other outside business activities and may not be in a position to devote a majority of their time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions of exploration.  

 

            Our President will be devoting only 15% of his time, approximately 24 hours per month, to our business.  Our Chief Financial Officer and Secretary-Treasurer will be devoting only approximately 10% of his time, or 16 hours per month to our operations. As a consequence of the limited devotion of time to the affairs of our company expected from management, our business may suffer.  For example,  because our officers and directors have other outside business activities and may not be in a position to devote a majority of their time to our exploration activity, our exploration activity may be sporadic or may be periodically interrupted or suspended.  

 

 

Currency conversion control could adversely affect our operations and profitability.

 

Our financial statements are reported in U.S. dollars.  We intend to conduct  exploration activity at our mining claim in Fiji.  Accordingly, our company’s value of its assets and reporting of its operations may be adversely affected by negative changes in the exchange rate of the Fijian against the U.S. dollar or other currencies.

 

Risks Associated with our Shares.

 

Our officers and directors own a substantial amount of our common stock and will have substantial influence over our operations.

 

            Our directors and officers as at July 31, 2013 own 26,500,000 shares of common stock representing 57% of our outstanding shares.  They purchased their shares for $0.001 per share.  The directors and officers registered for resale 20,000,000 of their shares under an effective registration statement.  They have sold the above mentioned registered shares.   On February 14, 2012, one of the directors made a private placement to our company whereby we issued 1,000,000 common shares at a price of $0.007 per share for a total amount of $70,000.   This resulted in the directors and officers owning 26,500,000 common shares representing 57% of our outstanding shares.  Even with this sale of shares, they have substantial influence over our operations and can effect certain corporate transaction without further shareholder approval.  This concentration of ownership may also have the effect of delaying or preventing a change in control.

 

 We will need to sell additional shares of common stock for additional capital for our operations that will result in ownership dilution to our existing shareholders. 

 

            We need to raise additional capital through the sale of our common stock.  This will result in ownership dilution to our shareholders whereby their percentage ownership interest in our company is reduced.  The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.

 

Penny Stock Regulations Affect Our Stock Price, Which May Make It More Difficult For Investors To Sell Their Stock.

 

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the SEC. Penny stocks generally are equity securities with a price per share of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Our securities are subject to the penny stock rules, and investors may find it more difficult to sell their securities.

 

ITEM 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

 

                                    None

 

ITEM 3.          DEFAULTS UPON SENIOR SECURITIES

 

                                    None

 

ITEM 4.          MINING SAFETY DISCLOSURES

 

                                    Not applicable

 

ITEM 5.          OTHER INFORMATION

 

                                    None

 

ITEM 6.          EXHIBITS

 

The following exhibits are included as part of this report by reference:

 

101.INS XBRL Instant Document (*)

101 SCH XBRL Taxonomy Extension Schema Document (*)

101 CAL XBRL Taxonomy Extension Calculation Linkbase Document (*)

101 LAB XBRL Taxonomy Extension Labels Linkbase Document (*)

101 PRE XBRL Taxonomy Extension Presentation Linkbase Document (*)

101 DEF XBRL Taxonomy Extension Definition Linkbase Document (*)

 

(*)  Filed herewith

 

 

 

SIGNATURES

 

 

Pursuant to the requirements 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.