QUANTUM ENERGY INC. - Quarter Report: 2009 November (Form 10-Q)
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 SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended November 30, 2009
OR
o TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from __________ to __________
Commission
File Number: 333-118138
Quantum
Energy, Inc.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
98-0428608
|
||||
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
7250
NW Expressway Suite 260
OKLAHOMA
CITY, OK, 73132
(Address
of principal executive offices)
(405)
728-3800
(Registrant’s
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve 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 o
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 o No
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 Smaller
reporting company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes o No x
At
January 7, 2010 there were 47,000,000 shares of the Registrant’s Common Stock
outstanding.
PART
1. FINANCIAL INFORMATION
ITEM
I. FINANCIAL STATEMENTS
QUANTUM
ENERGY, INC.
(An
Exploration Stage Company)
INTERIM
FINANCIAL STATEMENTS
November
30, 2009
|
Page
|
|
|
Financial
Statements:
|
F-1
|
|
Condensed Balance
Sheets
|
F-2
|
|
Condensed Statements of
Operations
|
F-3
|
|
Condensed Statements of Cash
Flow
|
F-4
|
|
Notes to Interim Financial
Statements
|
F-5
|
See
Accompanying Notes
QUANTUM
ENERGY, INC.
INTERIM
BALANCE SHEETS
(Stated
in US Dollars)
|
November
30,
|
February
28,
|
|
|
2009
|
2009
|
|
|
ASSETS
|
(Unaudited)
|
|
|
Current
assets
|
||
|
Cash
and cash equivalents
|
$ 828
|
$ 1,036
|
|
|
||
|
Other
assets
|
|
|
|
Other
equipment, net of accumulated depreciation of $4,865
|
197
|
787
|
|
|
||
|
TOTAL
ASSETS
|
$ 1,025
|
$ 1,823
|
|
LIABILITIES AND STOCKHOLDERS’
(DEFICIT)
|
||
|
Current
liabilities
|
||
|
Accounts payable and accrued
liabilities
|
$ 550,831
|
$ 442,384
|
|
Promissory
notes payable
|
2,017,708
|
2,017,708
|
|
Due
to related party
|
20,250
|
20,250
|
|
Total
current liabilities
|
2,588,789
|
2,480,342
|
|
Common
stock issuance liability
|
762,500
|
762,500
|
|
Total
liabilities
|
3,351,289
|
3,242,842
|
|
Stockholders’
(deficit)
|
||
|
Common
stock, par value $0.001 per share:
|
||
|
75,000,000
shares authorized: 47,000,000
|
||
|
Shares
issued and outstanding, respectively
|
47,000
|
47,000
|
|
Additional
paid-in capital
|
1,685,913
|
1,685,913
|
|
Retained
(deficit)
|
(5,083,177)
|
(4,973,932)
|
|
Total
stockholders’ (deficit)
|
(3,350,264)
|
(3,241,019)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
|
$ 1,025
|
$ 1,823
|
F-
1
SEE
ACCOMPANYING NOTES
QUANTUM
ENERGY, INC.
INTERIM
STATEMENTS OF OPERATIONS
For the
nine months ended November 30, 2009 and 2008
(Stated
in US Dollars)
(Unaudited)
|
Three
months ended
|
Nine
months ended
|
|||
|
November
30,
|
November
30,
|
|||
|
2009
|
2008
|
2009
|
2008
|
|
|
Net
oil and gas revenue
|
$ -
|
$ -
|
$ -
|
$ -
|
|
|
|
|||
|
Operating
expenses
|
||||
|
Amortization,
depletion and depreciation
|
472
|
296
|
591
|
557
|
|
Management
fees
|
-
|
7,500
|
3,000
|
23,900
|
|
Marketing
|
-
|
427
|
-
|
9,043
|
|
Office and
administration
|
58
|
386
|
836
|
2,492
|
|
Professional
fees
|
2,947
|
12,496
|
16,830
|
41,130
|
|
Total
operating expenses
|
3,477
|
21,105
|
21,257
|
77,122
|
|
Net
loss before other income (expenses)
|
(3,477)
|
(21,105)
|
(21,257)
|
(77,122)
|
|
Other
items
|
||||
|
Interest
expense
|
(26,447)
|
(25,953)
|
(79,923)
|
(77,877)
|
|
Currency
translation
|
(1,879)
|
4,619
|
(8,065)
|
6,227
|
|
Total
other income (expenses)
|
(28,326)
|
(21,334)
|
(87,988)
|
(71,650)
|
|
Net
loss
|
(31,803)
|
(42,449)
|
$ (109,245)
|
$
(148,772)
|
|
Basic
and diluted loss per share
|
$ (0.00)
|
$ (0.00)
|
$ (0.00)
|
$ (0.00)
|
|
Weighted
average number of shares outstanding
|
47,000,000
|
47,000,000
|
47,000,000
|
47,000,000
|
F-2
SEE
ACCOMPANYING NOTES
QUANTUM
ENERGY, INC.
IMTERIM
STATEMENTS OF CASH FLOWS
For the
nine months ended November 30, 2009 and 2008
(Stated
in US Dollars)
(Unaudited)
|
Nine
months ended
|
||||
|
November
30,
|
||||
|
2009
|
2008
|
|||
|
Operating
Activities
|
||||
|
Net loss
|
$ (109,245)
|
$ (148,772)
|
||
|
Adjustment
to reconcile net loss to net cash used by operating
activities
|
||||
|
Amortization,
depreciation and depletion
|
591
|
557
|
||
|
Changes
in operating assets and liabilities
|
||||
|
Prepaid
expenses
|
-
|
2,500
|
||
|
Accounts
payable and accrued liabilities
|
108,446
|
76,358
|
||
|
Related
party payable
|
-
|
7,950
|
||
|
Cash
(used in) operating activities
|
(208)
|
(61,407)
|
||
|
Financing
Activities
|
||||
|
Promissory
notes payable
|
-
|
22,948
|
||
|
Cash
provided by financing activities
|
-
|
22,948
|
||
|
Decrease
in cash during the period
|
(208)
|
(38,459)
|
||
|
Cash,
beginning of the period
|
1,036
|
40,823
|
||
|
Cash,
end of the period
|
$ 828
|
$ 2,364
|
||
|
Supplemental
disclosure of cash flow information:
|
||||
|
Cash
paid for income tax purposes
|
$ -
|
$ -
|
||
|
Cash
paid for interest
|
$ -
|
$ -
|
||
F-3
SEE
ACCOMPANYING NOTES
QUANTUM
ENERGY, INC.
STATEMENT
OF STOCKHOLDERS’ (DEFICIT)
For the
nine months ended November 30, 2009
(Stated
in US Dollars)
(Unaudited)
|
Common
Shares
|
Paid
- in
|
Accumulated
|
|||
|
Number
|
Par
Value
|
Capital
|
(Deficit)
|
Total
|
|
|
Balance,
February 28, 2009
|
47,000,000
|
47,000
|
1,685,913
|
(4,973,932)
|
(3,241,019)
|
|
Loss
for the period
|
-
|
-
|
-
|
(109,245)
|
(109,245)
|
|
Balance,
November 30, 2009
|
47,000,000
|
$
47,000
|
$
1,685,913
|
(5,083,177)
|
(3,350,264)
|
F-4
QUANTUM
ENERGY, INC.
NOTES TO
THE INTERIM FINANCIAL STATEMENTS
November
30, 2009
(Stated
in US Dollars)
(Unaudited)
Note
1 Basis of
Presentation of Interim Financial Statements
While the
information presented in the accompanying interim nine-month financial
statements is unaudited, it includes all adjustments which are, in the opinion
of management, necessary to present fairly the financial position, results of
operations and cash flows for the interim period presented. All adjustments are
of a normal recurring nature. Except as disclosed below, these interim financial
statements follow the same accounting policies and methods of their application
as Quantum Energy, Inc.’s (“the Company’s”) audited February 28, 2009 annual
financial statements.
The
results of operations for the nine-month period ended November 30, 2009, are not
necessarily indicative of the results to be expected for the year ending
February 28, 2010.
These
unaudited interim financial statements should be read in conjunction with the
February 28, 2009 audited financial statements of the Company.
Note
2 Nature
and Continuance of Operations
|
a)
|
Organization
|
Boomers
Cultural Development Inc. (“the Company”) was incorporated in the State of
Nevada, United States of America, on February 5, 2004. On May 18,
2006, the name of the Company was changed from Boomers Cultural Development Inc.
to Quantum Energy, Inc.
|
b)
|
Going
Concern
|
|
|
These
financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which
assumes that the Company will be able to meet its obligations and continue
its operations for its next fiscal year. Realization values may
be substantially different from carrying values as shown and these
financial statements do not give effect to adjustments that would be
necessary to the carrying values and classification of assets and
liabilities should the Company be unable to continue as a going
concern. At November 30, 2009, the Company had not yet achieved
profitable operations, has accumulated losses of ($5,083,177) since its
inception, has a working capital deficiency of $2,587,961 and expects to
incur further losses in the development of its business, all of which
casts substantial doubt about the Company’s ability to continue as a going
concern. The Company’s ability to continue as a going concern
is dependent upon its ability to generate future profitable operations
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 has no formal plan in place to address this
concern but considers that the Company will be able to obtain additional
funds by equity financing and/or related party advances, however there is
no assurance of additional funding being
available.
|
The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates, which have been made using careful judgment.
Actual results may vary from these estimates.
F-5
QUANTUM
ENERGY, INC.
NOTES TO
THE INTERIM FINANCIAL STATEMENTS
November
30, 2009
(Stated
in US Dollars)
(Unaudited)
Note
2 Significant
Accounting Policies
The
financial statements have, in management’s opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
|
a)
|
Cash
and Cash Equivalents
|
For
purposes of the balance sheet and the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with maturity of three
months or less to be cash equivalents. As of November 30, 2009, the Company had
no cash equivalents
|
b)
|
Foreign
Currency Translation
|
The
Company’s uses the U.S. dollar as its reporting currency for consistency with
registrants of the Securities and Exchange Commission (“SEC”) and in accordance
with the SFAS No. 52. Transactions in Canadian dollars are translated into U.S.
dollars as follows:
|
i)
|
monetary
items at the rate prevailing at the balance sheet
date;
|
|
ii)
|
non
monetary items at the historical exchange
rate;
|
|
iii)
|
revenue
and expenses at the average rate in effect during the
period.
|
Gains and losses are recorded in the
statement of operations.
|
c)
|
Other
Equipment
|
Other
equipment is recorded at cost. Depreciation of computer equipment is
at a rate of 30% per annum, on a straight-line basis. Depreciation of
office equipment is at a rate of 20% per annum, on a straight-line
basis.
|
d)
|
Basic
and Diluted Loss Per Share
|
In
accordance with SFAS No. 128 – “Earnings per Share”, the basic loss per common
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding. Diluted loss
per common share is computed similar to basic loss per common share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive. At November 30,
2009, the Company had no stock equivalents that were anti-dilutive and excluded
in the earnings per share computation.
|
e)
|
Financial
Instruments
|
The
carrying value of the Company’s financial instruments consisting of cash,
accounts payable, accrued liabilities and notes payable approximate their fair
value due to the short term maturity of such instruments. Unless
otherwise noted, it is management’s opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these financial
statements.
F-6
SEE
ACCOMPANYING NOTES
QUANTUM
ENERGY, INC.
NOTES TO
THE INTERIM FINANCIAL STATEMENTS
November
30, 2009
(Stated
in US Dollars)
(Unaudited)
Note
2 Significant
Accounting Policies (continued)
Recent Accounting
Pronouncements
On
December 12, 2007, the Financial Accounting Standards Board ratified the
consensus reached by the Emerging Issues Task Force on Issue No. 07-01
“Accounting for Collaborative Arrangements”. This issue will be effective for
the fiscal year beginning January 1, 2009. This pronouncement is not expected to
have a material impact on the Company’s financial statements.
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS 157),
which provides expanded guidance for using fair value to measure assets and
liabilities. SFAS 157 establishes a hierarchy for data used to value assets and
liabilities at fair value, the information used to measure fair value, and the
effect of fair value measurements on earnings. Implementation of SFAS 157 was
required on January 1, 2008 for financial assets and liabilities, as well as
other assets and liabilities that are carried at fair value on a recurring basis
in financial statements. FASB Financial Staff Position No. FAS 157-2 deferred
implementation for other non-financial assets and liabilities for one year.
Examples of non-financial assets and liabilities are asset retirement
obligations and non-financial assets and liabilities initially measured at fair
value in a business combination. The adoption of SFAS 157 did not have a
material impact on the financial statements.
The
Financial Accounting Standards Board revised Statement of Financial Accounting
Standards No. 141 (Revised 2007) “Business Combinations” (SFAS 141R) in 2007.
The revision broadens the application of SFAS 141 to cover all transactions and
events in which an entity obtains control over one or more other businesses.
This standard requires that transaction costs related to business combinations
be expensed rather than be included in the acquisition cost. This Statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The impact of this standard will be on the fair value
recorded for future business combinations after adoption.
On
February 2007, the Financial Accounting Standards Board issued Statement No. 159
“The Fair Value Option for Financial Assets and Financial Liabilities –
Including an amendment of FASB Statement No. 115”. The fair value option
established by this statement permits all entities to choose to measure eligible
items at fair value at specified election dates. Companies are required to
report unrealized gains and losses on items for which the fair value option has
been elected in earnings at each subsequent reporting date. This Statement is
effective as of the beginning of an entity’s first fiscal year that begins after
November 15, 2007. It does not affect any existing accounting literature that
requires certain assets and liabilities to be carried at fair value. The Company
has not elected the fair value option for any eligible items.
In
December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 160 “Noncontrolling Interest in Consolidated
Financial Statements – an Amendment of ARB 51” (SFAS 160). SFAS 160 clarifies
that a noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. It also requires consolidated net income to be reported at
amounts that include the amounts attributable to both parent and the
noncontrolling interest, and requires disclosure, on the face of the
consolidated statement of income, of the amounts of consolidated net income
attributable to the parent and to the noncontrolling interest. SFAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Adoption of this standard does not have
a material impact on the Company’s financial statements.
F-7
SEE
ACCOMPANYING NOTES
QUANTUM
ENERGY, INC.
NOTES TO
THE INTERIM FINNCIAL STATEMENTS
November
30, 2009
(Stated
in US Dollars)
Note
2 Significant
Accounting Policies (continued)
Recent Accounting
Pronouncements (continued)
In March
2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 161 “Disclosures about Derivative Instruments and
Hedging Activities – An Amendment of FASB Statement No. 133” (SFAS 161), that
requires new and expanded disclosures regarding hedging activities. These
disclosures include, but are not limited to, a prescribed tabular presentation
of derivative data; financial statement presentation of fair values on a gross
basis, including those that currently qualify for netting under FASB
Interpretation No. 39’ and specific footnote narrative regarding how and why
derivatives are used. The disclosures are required in all interim and annual
reports. SFAS 161 is effective for fiscal and interim periods beginning after
November 15, 2008.
On
December 31, 2008, the SEC published the final rules and interpretations
updating its oil and gas reporting requirements. Many of the revisions are
updates to definitions in the existing oil and gas rules to make them consistent
with the petroleum resource management system, which is a widely accepted
standard for the management of petroleum resources that was developed by several
industry organizations. Key revisions include the ability to include
nontraditional resources in reserves, the use of new technology for determining
reserves, permitting disclosure of probable and possible reserves, and changes
to the pricing used to determine reserves in that companies must use a 12-month
average price. The average is calculated using the first-day-of-the-month price
for each of the 12 months that make up the reporting period. The SEC will
require companies to comply with the amended disclosure requirements for
registration statements filed after January 1, 2010, and for annual reports for
fiscal years ending on or after December 15, 2009. Early adoption is not
permitted. The Company is currently evaluating the impact that the adoption will
have on the financial statements.
F-
8
SEE
ACCOMPANYING NOTES
ITEM
2. MANAGEMENT’S DISCUSSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
Unless
the context otherwise requires, all preferences to “Quantum,” “our,” “us,” “we”
and the “Company” refer to Quantum Energy, Inc. and its subsidiaries, as a
combined entity.
We were
incorporated on February 5, 2004, in the State of Nevada. Our principal
executive offices are located at 7250 NW Expressway, Suite 260, Oklahoma City,
OK. Our telephone number is (405) 728-3800.
Starting
in May of 2006, we decided to embark on a new business path in oil and gas
exploration and acquisitions. We acquired interests in numerous oil and gas
properties in the Barnett Shale area of West Texas. Our business strategy is to
acquire interest in the properties of, and working interests in the production
owned by, established oil and gas production companies, whether public or
private, in the United States oil producing areas. We believe such opportunities
exist in the United States. We also believe that these opportunities have
considerable future potential for the development of additional oil reserves.
Such new reserves might come from the development of existing but as yet
undeveloped reserves as well as from future success in exploration.
Barnett
Shale Developments; after the initial success of the Barnett Shale leases, the
production program in the Barnett Shale area encountered substantial
difficulties. Numerous wells throughout this extensive area experienced
production difficulties. In addition to the production problems was the severe
drop in natural gas prices. All of the wells in which the Company had interests
were suspended and all marginal wells have been capped, resulting in the Company
abandoning the Company’s interest in the Barnett Shale area
When and
if funding becomes available, we plan to acquire high-quality oil and gas
properties, primarily "proven producing and proven undeveloped reserves." We
will also explore low-risk development drilling and work-over opportunities with
experienced, well-established operators.
Results
of Operations
Three
months ended November 30, 2009 compared to three months ended November 30,
2008
Revenues
for the three months ended November 30, 2009 and November 30, 2008 were
$nil.
Operating
expenses totaled $3,447 for the three months ended November 30, 2009 as compared
to operating expenses of $21,105 for the three months ended November 30, 2008.
This was a decrease of $17,658 or 84%. This decrease was primarily due to a
decrease in management fees, professional fees, office and administration
expenses and marketing costs incurred by the Company.
Interest
expense for the three months ended November 30, 2009 was $26,447 as compared to
interest expenses of $25,963 for the three months ended November 30, 2008. This
was an increase of $484 and consistent with the interest calculations computed
on funds from the date the funds were received.
The net
loss for the three months ended November 30, 2009 was $31,803 as compared to
$42,449 for the three months ended November 30, 2008. The decrease in losses for
the three months ended November 30, 2009 was due to the decrease in operating
expenses.
Nine
months ended November 30, 2009 compared to nine months ended November 30,
2008
Revenues
for the nine months ended November 30, 2009 and November 30, 2008 were
$nil.
Operating
expenses totaled $21,257 for the nine months ended November 30, 2009 as compared
to operating expenses of $77,122 for the nine months ended November 30, 2008.
This was a decrease of $55,865 or 72%. This decrease was primarily due to a
decrease in management fees, professional fees, office and administration
expenses and marketing costs incurred by the Company.
10
Interest
expense for the nine months ended November 30, 2009 was $79,923 as compared to
interest expenses of $77,877 for the nine months ended November 30, 2008. This
was an increase of $2,046 and consistent with the interest calculations computed
on funds from the date the funds were received.
The net
loss for the nine months ended November 30, 2009 was $109,245 as compared to
$148,772 for the nine months ended November 30, 2008. The decrease in losses for
the nine months ended November 30, 2009 was due to the decrease in operating
expense.
Liquidity
and Capital Resources
Total
current assets as of November 30, 2009 were $828 as compared to $1,036 as of
February 29, 2009, all in cash. Additionally, we had a shareholders’ deficit in
the amount of $3,350,264 as of November 30, 2009 as compared to $3,241,019 as of
February 28, 2009, a direct result of the Company not obtaining sufficient
revenues.
The
Company had a negative cash flow of $208 from operating activities for nine
months ended November 30, 2009, as compared to a negative cash flow of $61,407
for the nine months ended November 30, 2008, a decrease in cash outflow of
approximately 99%. This was the result of a decrease in our net loss for the
period, partially offset by an increase in our accounts payable and accrued
liabilities.
There was
no cash inflow from financing activities.
The
on-going negative cash flow from operations raises substantial doubt about our
ability to continue as a going concern. The Company’s ability to continue as a
going concern is dependent on the ability to raise additional capital and
implement its business plan.
The
Company has not attained profitable operations and will require additional
funding in order to cover the anticipated professional fees and general
administrative expenses and to proceed with the anticipated investigation to
identify and purchase new mineral properties worthy of exploration or any other
business opportunities that may become available to it. The Company anticipates
that additional funding will be required in the form of equity financing from
the sale of common stock. However, the Company cannot provide investors with any
assurance that sufficient funding from the sale of common stock to fund the
purchase and the development of any future projects can be obtained. The Company
believes that debt financing will not be an alternative for funding future
corporate programs. The Company does not have any arrangements in place for any
future equity financings.
As of
November 30, 2009 the Company had a working capital deficiency of $2,587,961 as
compared to $2,479,306 as of February 28, 2009. A major portion of debt is
attributed to payments made for mineral properties, and operating
deficiency.
At
November 30, 2009 there was no bank debt.
Off-Balance
Sheet Arrangements
There are
no 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 stockholders.
Going
Concern
The
Company has not attained profitable operations and is dependent upon obtaining
financing to pursue its business objectives. For these reasons, the Company’s
auditors stated in their report on the Company’s audited financial statements
that they have substantial doubt the Company will be able to continue as a going
concern without further financing.
The
Company may continue to rely on equity sales of the common shares in order to
continue to fund the Company’s business operations. Issuances of additional
shares will result in dilution to existing stockholders. There is no assurance
that the Company will achieve any additional sales of the equity securities or
arrange for debt or other financing to fund planned business
activities.
11
|
|
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
|
|
Not
applicable.
|
ITEM
4. CONTROLS AND PROCEDURES.
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
time periods specified by the Securities and Exchange Commission’s rules and
forms, and that information is accumulated and communicated to our management,
including our principal executive and principal financial officer (whom we refer
to in this periodic report as our Certifying Officer), as appropriate to allow
timely decisions regarding required disclosure. Our management evaluated, with
the participation of our Certifying Officer, the effectiveness of our disclosure
controls and procedures as of November 30, 2009, pursuant to Rule 13a-15(b)
under the Securities Exchange Act. Based upon that evaluation, our Certifying
Officer concluded that, as of November 30, 2009, our disclosure controls and
procedures were effective.
Changes
in Internal Controls
There
were no changes in our internal control over financial reporting that occurred
during the quarter ended November 30, 2009, that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
12
PART
II
Item
1. Legal Proceedings.
We are
not currently a party to any legal proceedings and, to our knowledge, no such
proceedings are threatened or contemplated.
Item
1.A. Risk Factors
Not
applicable.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item
3. Defaults upon Senior Securities.
None.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
Item
5. Other Information.
None.
Item
6. Exhibits
|
Exhibit No.
|
Description of Exhibit
|
|
31.1
|
Rule
13a-14 Certification of Chief Executive Officer and Chief Financial
Officer
|
|
32.1
|
Section
1350 Certification of Chief Executive Officer and Chief
Financial Officer
|
SIGNATURES
In accordance with the requirements of
the Exchange Act, the registrant caused this report to signed on its behalf by
the undersigned, thereunto duly authorized.
Quantum
Energy, Inc.
By: /s/
Sharon
Farris
Sharon
Farris
President
and Chief Executive Officer (acting principal financial officer)
Date: January
13, 2010