TRxADE HEALTH, INC - Quarter Report: 2008 September (Form 10-Q)
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
Quarterly
Report Under Section 13 or 15 (d) of
Securities
Exchange Act of 1934
For the
quarterly period ended September 30, 2008
Commission
File Number: 333-143767
BLUEBIRD EXPLORATION
COMPANY
(Exact
Name of Issuer as Specified in Its Charter)
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Delaware
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1000
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N/A
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State
of Incorporation
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Primary
Standard Industrial
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I.R.S.
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Employer
Classification
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Identification
No.
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Code
Number #
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Bluebird
Exploration Company
209-3608
Deercrest Drive
North
Vancouver, BC V7G2S8
Telephone:
604-488-7608
(Address
and Telephone Number of Issuer's Principal Executive Offices)
The
Company Corporation
2711
Centerville Road, Suite 400
Wilmington,
Delaware 19808
Telephone:
302-636-5440
Facsimile:
302-636-5454
(Name,
Address, and Telephone Number of Agent)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yesx Noo
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 | Non-Accelerated Filer o |
| (Do not check if a smaller reporting company) | |
| 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 x NO
o
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check
whether the registrant filed all documents and reports required to be filed by
Section 12, 13, 15(d) of the Exchange Act after the distribution of the
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
at the latest practicable date. As of November 12, 2008, the registrant had
13,220,000 shares of common stock, $0.0001 par value, issued and
outstanding.
Transitional
Small Business Disclosure Format (Check one): YESo NOx
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PART
I - FINANCIAL INFORMATION - UNAUDITED
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Item
1.
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INTERIM
BALANCE SHEETS
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3
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INTERIM
STATEMENTS OF OPERATIONS
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4
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INTERIM
STATEMENT OF STOCKHOLDERS’ EQUITY
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5
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INTERIM
STATEMENTS OF CASH FLOWS
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6
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NOTES
TO INTERIM FINANCIAL STATEMENTS
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7
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Item
2.
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Management's
Discussion and Analysis of Financial Condition and Plan
of Operations
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10
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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12
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Item
4.
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Controls
and Procedures
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13
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PART
II - OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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15
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Item
2.
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Unregistered Sales
of Equity Securities and Use of Proceeds
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15
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Item
3.
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Defaults
Upon Senior Securities
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15
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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15
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Item
5.
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Other
Information
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15
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Item
6.
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Exhibit
and Reports on Form 8-K
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15
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PART I -
FINANCIAL INFORMATION
Item
1. Financial Statements (Unaudited- Prepared by
Management)
THIS
REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES
SUCH AS THE DEPENDENCE OF THE COMPANY ON FUNDING AND THE ADEQUACY OF CASH FLOWS.
THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE ELSEWHERE IN THIS
REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
1
Bluebird
Exploration Company
(An
Exploration Stage Company)
INTERIM
FINANCIAL STATEMENTS
SEPTEMBER
30, 2008
(Unaudited-Prepared
by Management)
INTERIM
BALANCE SHEETS
INTERIM
STATEMENTS OF OPERATIONS
INTERIM
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
INTERIM
STATEMENTS OF CASH FLOWS
NOTES
TO THE INTERIM FINANCIAL STATEMENTS
2
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
INTERIM
BALANCE SHEETS
(Unaudited-Prepared
by Management)
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September
30, 2008
(Unaudited)
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December
31,
2007
(Audited)
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|||||||
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ASSETS
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||||||||
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CURRENT
ASSETS
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||||||||
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Cash
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$ | 270 | $ | 1,771 | ||||
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TOTAL ASSETS
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$ | 270 | $ | 1,771 | ||||
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LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
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||||||||
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CURRENT
LIABILITIES
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||||||||
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Accounts
payable and accrued liabilities
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$ | 11,840 | $ | 15,118 | ||||
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Loan payable (Note
8)
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19,333 | - | ||||||
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Due to related party (Note
6)
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5,131 | 5,166 | ||||||
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TOTAL LIABILITIES
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36,304 | 20,284 | ||||||
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STOCKHOLDERS’
EQUITY (DEFICIT )
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||||||||
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Capital stock (Note
5)
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||||||||
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Authorized
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||||||||
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75,000,000 shares of common
stock, $0.0001 par value,
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||||||||
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Issued and
outstanding
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||||||||
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13,220,000 (December 31, 2007–
13,220,000) shares of common stock
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132 | 132 | ||||||
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Additional paid-in
capital
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18,968 | 18,968 | ||||||
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Deficit accumulated during the
exploration stage
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(55,134 | ) | (37,613 | ) | ||||
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Total Equity
(Deficit)
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(36,034 | ) | (18,513 | ) | ||||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)
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$ | 270 | $ | 1,771 | ||||
The
accompanying notes are an integral part of these interim financial
statements
3
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
INTERIM
STATEMENTS OF OPERATIONS
(Unaudited-
prepared by Management)
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Three
months
ended
September
30, 2008
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Three
months ended
September
30, 2007
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Nine
months
ended
September
30, 2008
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Nine
months ended
September
30, 2007
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Cumulative
results of operations from
July
15,
2005
(date of
inception)
to
September
30, 2008
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||||||||||||||||
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EXPENSES
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Exploration &
development
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$ | - | $ | - | $ | - | $ | (3,415 | ) | $ | (3,415 | ) | ||||||||
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Office and
general
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(1,088 | ) | (1,735 | ) | (4,751 | ) | (2,346 | ) | (17,539 | ) | ||||||||||
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Professional fees
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(2,890 | ) | (5,521 | ) | (12,770 | ) | (13,827 | ) | (34,180 | ) | ||||||||||
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NET
AND COMPREHENSIVE LOSS
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$ | (3,978 | ) | $ | (7,256 | ) | $ | (17,521 | ) | $ | (19,588 | ) | $ | (55,134 | ) | |||||
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BASIC
AND DILUTED
NET
LOSS PER SHARE
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
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WEIGHTED
AVERAGE
NUMBER
OF COMMON
SHARES
OUTSTANDING
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13,220,000 | 13,220,000 | 13,220,000 | 13,220,000 | ||||||||||||
The
accompanying notes are an integral part of these interim financial
statements
4
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
INTERIM
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited-Prepared
by Management)
FROM
INCEPTION (July 15, 2005) TO SEPTEMBER 30, 2008
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Additional
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Deficit
Accumulated During the
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|||||||||||||||||||
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Common
Stock
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Paid-in
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Exploration
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||||||||||||||||||
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Number
of shares
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Amount
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Capital
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Stage
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Total
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||||||||||||||||
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Balance,
July 15, 2005 (Date of Inception)
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- | $ | - | $ | - | $ | - | $ | - | |||||||||||
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Common
stock issued for cash at $0.0003 per share
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||||||||||||||||||||
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-
September 30, 2005
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10,000,000 | 100 | 2,900 | - | 3,000 | |||||||||||||||
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Net
loss for the period
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- | - | - | (702 | ) | (702 | ) | |||||||||||||
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Balance,
December 31, 2005
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10,000,000 | 100 | 2,900 | (702 | ) | 2,298 | ||||||||||||||
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Common
stock issued for cash @ $0.005 per share
-
December 14, 2006
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3,220,000 | 32 | 16,068 | - | 16,100 | |||||||||||||||
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Net
loss for the year
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- | - | - | (8,725 | ) | (8,725 | ) | |||||||||||||
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Balance,
December 31, 2006
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13,220,000 | 132 | 18,968 | (9,427 | ) | 9,673 | ||||||||||||||
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Net
loss for the year
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- | - | - | (28,186 | ) | (28,186 | ) | |||||||||||||
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Balance,
December 31, 2007
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13,220,000 | 132 | 18,968 | (37,613 | ) | (18,513 | ) | |||||||||||||
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Net
loss for the period ended September 30, 2008
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- | - | - | (17,521 | ) | (17,521 | ) | |||||||||||||
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Balance,
September 30, 2008
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13,220,000 | $ | 132 | $ | 18,968 | $ | (55,134 | ) | $ | (36,034 | ) | |||||||||
All share
amounts have been restated to reflect the 10 to1 forward split in December
2006.
The
accompanying notes are an integral part of these interim financial
statements
5
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
INTERIM
STATEMENTS OF CASH FLOWS
(Unaudited-Prepared
by Management)
|
Three
months
ended
September
30, 2008
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Three
months
ended
September
30, 2007
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Nine
months
ended
September
30, 2008
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Nine
months ended
September
30, 2007
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Cumulative
results of operations from inception (July 15, 2005) to September 30,
2008
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||||||||||||||||
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Cash
Flows From Operating Activities
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||||||||||||||||||||
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Net loss
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$ | (3,978 | ) | $ | (7,256 | ) | $ | (17,521 | ) | $ | (19,588 | ) | $ | (55,134 | ) | |||||
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Change in non-cash working
capital
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||||||||||||||||||||
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-accounts payable and accrued liabilities
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3,510 | (4,147 | ) | (3,278 | ) | 4,160 | 11,840 | |||||||||||||
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Net
Cash Used In Operating Activities
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(468 | ) | (11,403 | ) | (20,799 | ) | (10,761 | ) | (43,294 | ) | ||||||||||
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Cash
Flows From Investing Activity
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- | - | - | - | - | |||||||||||||||
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Cash
Flows From Financing Activities
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||||||||||||||||||||
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Proceeds from sale of common
stock
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- | - | - | - | 19,100 | |||||||||||||||
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Related party
advance
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(35 | ) | 4,666 | (35 | ) | 4,666 | 5,131 | |||||||||||||
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Loan Advancement
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- | - | 19,333 | - | 19,333 | |||||||||||||||
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Net
Cash Provided By Financing Activities
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(35 | ) | 4,666 | 19,298 | 4,666 | 43,564 | ||||||||||||||
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Net
Increase (Decrease) In Cash
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(503 | ) | (6,737 | ) | (1,501 | ) | (10,762 | ) | 270 | |||||||||||
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Cash,
Beginning Of Period
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773 | 9,148 | 1,771 | 13,173 | - | |||||||||||||||
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Cash,
End Of Period
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$ | 270 | $ | 2,411 | $ | 270 | $ | 2,411 | $ | 270 | ||||||||||
| Supplemental cash flow information. | ||||||||||||||||||||
| Cash paid for: | ||||||||||||||||||||
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Interest
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$ |
- | $ | - | $ | - | $ | - | $ | - | ||||||||||
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Income
taxes
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
The
accompanying notes are an integral part of these interim financial
statements
6
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BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
NOTES
TO THE INTERIM FINANCIAL STATEMENTS
SEPTEMBER
30, 2008
(Unaudited
- Prepared by Management)
|
NOTE
1 – NATURE OF CONTINUANCE OF OPERATIONS
Bluebird
Exploration Company (“the Company”) was incorporated in the State of Delaware on
July 15, 2005. The Company is an Exploration Stage Company. The Company had
acquired an option on a mineral property located in the Nelson Mining Division,
British Columbia, Canada, and had not yet determined whether this property
contains reserves that are economically recoverable.
The
Company has been in the exploration stage since its formation and has not yet
realized any revenues from its planned operations. The Company was formed for
the purpose of acquiring exploration and development stage natural resources
properties. The Company has not commenced business
operations.
These
financial statements have been prepared on a going concern basis. The Company
has incurred losses since inception resulting in an accumulated deficit of
$55,134 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. Its ability to continue as a going concern is dependent upon the
ability of the Company to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligation and repay its liabilities
arising from normal business operations when they come due. Management has plans
to seek additional capital through a private placement and public offering of
its common stock. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts of classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
The
Company filed an SB-2 registration statement with the United States Securities
and Exchange Commission to register 3,220,000 shares of common stock for sale.
This was accepted. The effective date was July 9, 2007.
NOTE
2 – BASIS OF PRESENTATION
These
interim financial statements have been prepared in accordance with U.S.
generally accepted accounting principles for financial information and with the
instructions to Form 10-Q and Item 310(b) of Regulation S. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three months ended September 30, 2008 are not necessarily
indicative of the results that may be expected for any interim period or an
entire year. The Company applies the same accounting policies and methods in its
interim financial statements as those in the most recent audited annual
financial statements, except as noted in note 3.
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities”. This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company adopted SFAS No. 159
effective January 1, 2008.
7
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
NOTES
TO THE INTERIM FINANCIAL STATEMENTS
|
SEPTEMBER
30, 2008
(Unaudited-Prepared
by Management)
|
NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS (continued)
In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements”
("SFAS No. 157"). SFAS 157 establishes framework for measuring fair value and
expands disclosures about fair value measurements. The changes to current
practice resulting from the application of this statement relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. The statement is
effective for fiscal years beginning after November 15, 2007 and periods within
those fiscal years. The Company adopted SFAS No. 157 effective January 1,
2008.
The
Financial Accounting Standards Board has issued SFAS No. 155 “Accounting for Certain Hybrid
Financial Instruments an amendment of FASB Statements No. 133 and
140” and No. 156 “Accounting for Servicing of
Financial Assets – an amendment of FASB Statement No.140”, but they are
not expected to have a material effect on the Company’s results of operations or
financial position.
The
adoption of these new pronouncements did not have a material effect on the
Company’s financial position or results of operations.
NOTE
4 – NATURAL RESOURCE PROPERTIES and RELATED EXPLORATION
EXPENSES
As of
September 30, 2008, the Company has lost its option to purchase two mineral
claims identified by Tenure Numbers 512465 and 512466 pursuant to the option to
purchase agreement dated August 4, 2006 and amended September 25, 2007. The
Company had obtained the option to acquire a right to a 100% undivided right,
title and interest in a mineral claim in the Nelson Mining Division of British
Columbia, Canada by incurring exploration expenditures of at least $6,666
($7,000 CDN) by September 30, 2008 and a further $23,808 ($25,000 CDN) by
September 30, 2009. Upon the exercise of the option, the Company had
agreed to pay the vendor, commencing January 1, 2010 the sum of $23,808 ($25,000
CDN) per annum for so long as the Company, or its permitted assigns, held any
interest in the claims. All obligations are in Canadian
dollars.
The
Company failed to expend the required proceeds by September 30, 2008 and has a
result the agreement is in default.
NOTE
5– CAPITAL
STOCK
On
September 30, 2005, the Company issued 10,000,000 common shares at $0.0003 for
total cash proceeds of $3,000 to the president and director of the
Company.
On
December 14, 2006, the Company issued 3,220,000 common shares at $0.005 for
total proceeds of $16,100.
On
December 19, 2006 the Company split its shares on a ten for one basis. All
references in these financial statements to a number of shares, price and
weighted average number of common shares outstanding prior to the forward split
have been adjusted to record the effect of the forward split on a retroactive
basis.
As at
September 30, 2008 and December 31, 2007 there were no outstanding stock options
or warrants.
8
BLUEBIRD
EXPLORATION COMPANY
(An
Exploration Stage Company)
NOTES
TO THE INTERIM FINANCIAL STATEMENTS
|
SEPTEMBER
30, 2008
(Unaudited-Prepared
by Management)
|
NOTE 6– RELATED PARTY
TRANSACTIONS
As
described in Note 4 the Company entered into an option to purchase agreement
with its former President on August 4, 2006 and amended September 25, 2007, this
agreement was in default at September 30, 2008 and the Company has lost its
option. The option agreement, if exercised, provided for annual
payments of $23,808 ($25,000 CDN) commencing January 1, 2010.
As of
September 30, 2008 the Company received advances from a director of the Company
in the amount of $5,131. The amount due to the related party is
unsecured and non-interest bearing with no terms of repayment.
These
transactions have been recorded at the exchange amount, being the amount of
consideration agreed to by the parties.
NOTE
7 – INCOME TAXES
The
Company has adopted FASB No. 109 and FIN 48 for reporting purposes. As of
September 30, 2008 the Company had net operating loss carry forwards of
approximately $55,134 that may be available to reduce future years’ taxable
income and will expire beginning in 2025. Availability of loss usage is subject
to change of ownership limitations under Internal Revenue Code 382. 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
future tax loss carry-forwards.
NOTE
8 – LOAN PAYABLE
On April
23, 2008 a shareholders loan in the amount of $ 19,333 US ($20,000 Canadian) was
deposited into the bank account of the Company. This is an unsecured demand loan with
no interest payable, and no fixed terms of repayment, accordingly fair value can
not be reliably determined.
NOTE
9 – FINANCIAL
INSTRUMENTS
At
September 30, 2008 the Company had the following financial liabilities in
Canadian dollars:
|
US
equivalent
|
Canadian
Dollars
|
|||||||
|
Accrued
liabilities
|
$
|
6,261
|
$
|
6,575
|
||||
|
Loan
payable
|
$
|
19,046
|
$
|
20,000
|
||||
9
Item 2. Management's Discussion and
Analysis of Financial Condition and Plan of Operations.
Description
Of Business
Since our
inception it was our intent to commence operations as an exploration stage
company engaged in mineral exploration. Up until September 30, 2008
we had owned an option to acquire an undivided 100% beneficial interest in two
mineral claims identified by Tenure Numbers 512465 and 512466 located 9
kilometers due south of Nelson, British Columbia, Canada, in the Nelson Mining
Division. The Option Agreement entered into by the Company on August
4, 2006, and amended September 25, 2007, by and between Mr. Peter Lawrence
Wells, officer and director, who had the sole beneficial ownership of the
claims. Mr. Wells granted the Company the exclusive right and option
to acquire an undivided 100% of the right, title and interest in and to the
claims contingent upon the Company incurring exploration costs on the claims of
a minimum $7,000 CDN on or before September 30, 2008.
The
Company failed to incur the required exploration expense on the claims and as of
September 30, 2008 has no interest or option to acquire the above described
claims.
Effective
August 25, 2008, Peter Wells resigned as a member of the Board of Directors,
President and Chief Executive Officer, Principal Financial Officer, Secretary
and Treasurer of the Company. Mr. Wells resigned for personal reasons and has no
disputes or disagreements with the Company.
Effective
August 25, 2008, Mark Fingarson accepted an appointment by the Board of
Directors of the Company to act as a member of the Board of Directors, and serve
as the Company’s President and Chief Executive Officer, Principal Financial
Officer, Secretary and Treasurer, until his successor is duly qualified and
elected or appointed.
Mr.
Fingarson, age 52, is an entrepreneur who has been involved in the field of
corporate security for the past 30 years. Since 1993, Mr. Fingarson has served
as the President and CEO of Alfa Security, Inc. of Toronto, Canada, a
private company specializing in corporate security, FOBS, keyless entry and
personnel monitoring.
Mr.
Fingarson’s appointment was made in connection with an arrangement between him
and Mr. Wells pursuant to which Mr. Fingarson’s purchased 10,000,000 shares of
the Company’s common stock in a private transaction from Mr. Wells. Mr.
Fingarson does not have any agreement, arrangement or interested transaction
with the Company.
10
Plan
Of Operation
To date,
the Company has not been successful in raising adequate funding to conduct any
operations. In fact, over the course of the previous three months the
Company has been required to take advances from a director of the Company in the
amount of $5,131 USD. In addition, on April 23, 2008 a shareholders
loan in the amount of $19,333 US ($20,000 Canadian) was deposited into the bank
account of the Company. This is an unsecured demand loan with no interest
payable, and no fixed terms of repayment, accordingly fair value can not be
reliably determined. These funds were required by the Company in
order to pay the expenses relating to maintaining its status as a reporting
company with the Securities and Exchange Commission (“SEC”).
As of
September 30, 2008, the Company failed to expend the required proceeds necessary
to maintain its option to acquire the mineral claims identified by Tenure
Numbers 512465 and 512466 (described above). In order to enhance
shareholder value the Company may seek other business opportunities in the
future. As such the Company’s future is highly speculative and fully
dependant upon obtaining financing, which it has previously been unsuccessful
with.
Liquidity
and Capital Resources
As of
September 30, 2008, we have $270 of cash available. We have current
liabilities of $36,304. From the date of inception (July 15, 2005) to
September 30, 2008 the Company has recorded a net loss of $55,134, which were
expenses relating to the initial development of the Company, filing its
Registration Statement on Form SB-2 (deemed effective July 9,
2007), and expenses relating to maintaining reporting company status
with the Securities and Exchange Commission. We will require
additional capital investments or borrowed funds to meet cash flow projections
and carry forward our business objectives. There can be no guarantee or
assurance that we can raise adequate capital from outside sources to fund the
new proposed business direction.
On April
23, 2008, the Company received proceeds in the amount of $19,333, which was the
result of a non-secured shareholder loan. Within the third quarter of
2008 the Company received a non-secured loan from a director in the amount of
$5,166. However, the failure to secure additional adequate outside funding
immediately or within the next 30-60 days would likely result in our business to
fail and result in a complete loss of any funds invested in the common
stock.
The
Company’s common stock is approved for quotation on the Over-The-Counter
Bulletin Board (OTCBB) under the ticker symbol BBXP. However, to date
there has been no trades of its common stock. There can be no guarantee or
assurance that a market will ever develop for the Company’s common stock.
Failure to create a market for the Company’s common stock would result a
complete loss of any investment made into the Company.
11
Off-Balance
Sheet Arrangements
As of the
date of this Quarterly Report the Company does not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on the Company's financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors. The term "off-balance sheet
arrangement" generally means any transaction, agreement or other contractual
arrangement to which an entity unconsolidated with the Company is a party, under
which the Company has (i) any obligation arising under a guarantee contract,
derivative instrument or variable interest; or (ii) a retained or contingent
interest in assets transferred to such entity or similar arrangement that serves
as credit, liquidity or market risk support for such assets.
Product
Research and Development
The
Company does not anticipate any costs or expenses to be incurred for product
research and development within the next twelve months.
Employees
There are
no employees of the Company, excluding the current President and Director, Mark
Fingarson, of the corporation.
Item
3. Quantitative and Qualitative Disclosures About Market Risk
Not
Applicable.
12
Item
4. Controls and Procedures
We
maintain disclosure controls and procedures, which are designed to ensure that
information required to be disclosed in the reports we file or submit under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to our management,
including our President and Chief Executive Officer, who also acts as our
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure.
The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting, as required by
Sarbanes-Oxley (SOX) Section 404 A. The Company's internal control over
financial reporting is a process designed under the supervision of the Company's
Chief Executive Officer and Chief Financial Officer to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of the Company's financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.
As of
September 30, 2008 management assessed the effectiveness of the Company's
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in SEC guidance on
conducting such assessments. Based on that evaluation, they concluded that,
during the period covered by this report, such internal controls and procedures
were not effective to detect the inappropriate application of US GAAP rules as
more fully described below. This was due to deficiencies that existed in the
design or operation of our internal control over financial reporting that
adversely affected our internal controls and that may be considered to be
material weaknesses.
The
matters involving internal controls and procedures that the Company's management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee and
lack of a majority of outside directors on the Company's board of directors,
resulting in ineffective oversight in the establishment and monitoring of
required internal controls and procedures; (2) inadequate segregation of duties
consistent with control objectives; (3) insufficient written policies and
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure requirements; and (4)
ineffective controls over period end financial disclosure and reporting
processes. The aforementioned material weaknesses were identified by the
Company's Chief Financial Officer in connection with the review of our financial
statements as of September 30, 2008 and communicated the matters to our
management.
Management
believes that the material weaknesses set forth in items (2), (3) and (4) above
did not have an affect on the Company's financial results. However, management
believes that the lack of a functioning audit committee and lack of a majority
of outside directors on the Company's board of directors, may result in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures.
13
We are
committed to improving our financial organization. As part of this commitment,
we will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to the Company: i)
Appointing one or more outside directors to our board of directors who shall be
appointed to the audit committee of the Company resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and
monitoring of required internal controls and procedures; and ii) Preparing and
implementing sufficient written policies and checklists which will set forth
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure
requirements.
Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on the
Company's Board. In addition, management believes that preparing and
implementing sufficient written policies and checklists will remedy the
following material weaknesses (i) insufficient written policies and procedures
for accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements; and (ii) ineffective
controls over period end financial close and reporting processes. Further,
management believes that the hiring of additional personnel who have the
technical expertise and knowledge will result in proper segregation of duties
and provide more checks and balances within the department. Additional personnel
will also provide the cross training needed to support the Company if personnel
turn over issues within the department occur. This coupled with the appointment
of additional outside directors will greatly decrease any control and procedure
issues the Company may encounter in the future.
We will
continue to monitor
and evaluate the effectiveness of
our internal controls and procedures and our internal controls over
financial reporting on an ongoing basis and
are committed to
taking further action and implementing
additional enhancements or improvements, as necessary and as funds
allow.
Changes
In Internal Controls.
Effective
August 25, 2008, Peter Wells resigned as a member of the Board of Directors,
President and Chief Executive Officer, Principal Financial Officer, Secretary
and Treasurer of the Company. Mr. Wells resigned for personal reasons and has no
disputes or disagreements with the Company.
Effective
August 25, 2008, Mark Fingarson accepted an appointment by the Board of
Directors of the Company to act as a member of the Board of Directors, and serve
as the Company’s President and Chief Executive Officer, Principal Financial
Officer, Secretary and Treasurer, until his successor is duly qualified and
elected or appointed.
14
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
The
Company is not a party to any pending legal proceedings, and no such proceedings
are known to be contemplated.
No
director, officer, or affiliate of the Company and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
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 Vote of Security Holders
None.
Item
5. Other Information
None.
Item 6.
Exhibits
3.1 Articles
of Incorporation*
3.2 By-Laws*
31.1 Rule
13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer and Chief
Financial Officer
32.1
Section 1350 Certification of Chief Executive Officer and Chief Financial
Officer
*Filed
previously as an exhibit to the Company’s registration statement with the
Commission on June 15, 2007.
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
Bluebird
Exploration Company.
|
||
|
Dated:
November 19, 2008
|
/s/ Mark
Fingarson
|
|
|
Mark
Fingarson
|
||
|
Chief
Executive Officer and
|
||
|
Chief
Financial Officer
|
||
15