VNUE, Inc. - Quarter Report: 2009 February (Form 10-Q)
SECURITIES
AND EXCHANGE COMMISSION
Washington, DC
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 February
28, 2009
[
] 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 333-149612
BUCKINGHAM
EXPLORATION INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
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98-054-3851
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
1978
Vine Street, Suite 502
Vancouver,
British Columbia V6K 4S1 Canada
(Address
of principal executive offices)
(604)
737-0203
(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) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was require to file such reports), and (2)
has been subject to such filing requirements for the past 90
days. Yes þ 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 definition of
“large accelerated filer”, “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated
filer o Accelerated
filer o Non-accelerated
filer o Smaller reporting company þ
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No
þ
APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS:
Check whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes o No o
APPLICABLE ONLY TO
CORPORATE ISSUERS
As
of May 14, 2009 the
registrant’s outstanding common stock consisted of 44,012,250
shares.
Table
of Contents
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PART I – FINANCIAL INFORMATION
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3
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6
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PART II –
OTHER INFORMATION
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6
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7
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7
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7
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7
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7
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1
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
The unaudited interim
consolidated financial statements of Buckingham Exploration Inc. (the “Company”,
“Buckingham”, “we”, “our”, “us”) follow. All currency references in this report
are in US dollars unless otherwise noted.
Buckingham
Exploration Inc.
(An Exploration
Stage Company)
February 28,
2009
(Expressed in US
dollars)
(unaudited)
|
|
|
|
F-1
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|
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F-2
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|
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F-3
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F-4
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2
Buckingham
Exploration Inc.
(An Exploration
Stage Company)
Period Ended
February 28, 2009
(Expressed in US
dollars)
(unaudited)
|
February
28, 2009
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May
31, 2008
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|||||||||||
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(unaudited)
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($)
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|||||||||||
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($)
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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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6,188 | 10,969 | ||||||||||
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Other
receivables
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5,264 | 11,029 | ||||||||||
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Prepaid
expenses and deposits (Note 3)
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5,761 | 143,003 | ||||||||||
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Total Current
Assets
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17,213 | 165,001 | ||||||||||
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Property and
Equipment (Note 5)
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19,242 | 46,605 | ||||||||||
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Total
Assets
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36,455 | 211,606 | ||||||||||
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LIABILITIES
AND STOCKHOLDERS’ DEFICIT
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||||||||||||
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Current
Liabilities
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||||||||||||
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Accounts
payable
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73,415 | 66,047 | ||||||||||
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Accrued
liabilities
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66,381 | 9,466 | ||||||||||
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Loan payable
(Note 6)
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- | 150,000 | ||||||||||
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Total Current
Liabilities
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139,796 | 225,513 | ||||||||||
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Secured
convertible debentures (Note 9)
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402,776 | - | ||||||||||
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Total
Liabilities
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542,572 | 225,513 | ||||||||||
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Commitments
and Contingencies (Note 14)
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||||||||||||
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Stockholders’
Deficit
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||||||||||||
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Preferred
Stock, 20,000,000 shares authorized, $0.0001 par value,
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||||||||||||
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NIL issued
and outstanding
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- | - | ||||||||||
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Common Stock,
80,000,000 shares authorized, $0.0001 par value
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||||||||||||
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44,012,250
and 43,762,250 shares issued and outstanding, respectively
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4,401 | 4,376 | ||||||||||
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Additional
Paid-in Capital
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6,479,730 | 6,421,538 | ||||||||||
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Deficit
Accumulated During the Exploration Stage
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(6,990,248 | ) | (6,439,821 | ) | ||||||||
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Total
Stockholders’ Deficit
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(506,117 | ) | (13,907 | ) | ||||||||
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Total
Liabilities and Stockholders’ Deficit
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36,455 | 211,606 | ||||||||||
The
accompanying notes are an integral part of these financial
statements
F-1
Buckingham
Exploration Inc.
(An Exploration
Stage Company)
Period Ended
February 28, 2009
(Expressed in US
dollars)
(unaudited)
|
For
Three Months
Ended
February 28, 2009
$
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For
Three Months
Ended
February 29, 2008
$
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For
Nine Months
Ended
February 28, 2009
$
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For
Nine Months
Ended
February 29, 2008
$
|
Accumulated
from April 4, 2006 (Date of Inception) to February
28,
2009
$
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||||||||||||||||
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Revenue
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- | - | - | - | - | |||||||||||||||
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Expenses
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||||||||||||||||||||
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Amortization
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1,283 | 6,327 | 6,990 | 14,291 | 21,438 | |||||||||||||||
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General and
administrative
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64,650 | 188,414 | 342,784 | 749,971 | 1,616,042 | |||||||||||||||
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Impairment of
mineral property costs (Note 4)
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- | 1,710,000 | - | 3,185,000 | 4,530,125 | |||||||||||||||
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Mineral
property costs
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- | - | 63,870 | 333,652 | 385,920 | |||||||||||||||
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Professional
fees
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25,550 | 18,745 | 89,218 | 133,718 | 377,852 | |||||||||||||||
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Total
Expenses
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91,483 | 1,923,486 | 502,862 | 4,416,632 | 6,931,377 | |||||||||||||||
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Other
(Income) Expenses
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||||||||||||||||||||
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Interest
income
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- | (362 | ) | (74 | ) | (1,459 | ) | (2,275 | ) | |||||||||||
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Miscellaneous
income
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(1,468 | ) | - | (1,468 | ) | - | (1,468 | ) | ||||||||||||
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Interest
expense
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12,430 | - | 26,897 | 3,391 | 34,224 | |||||||||||||||
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Accretion of
convertible debenture discount
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8,270 | - | 14,332 | - | 14,332 | |||||||||||||||
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Loss on
disposal of property and equipment
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7,878 | - | 7,878 | - | 14,058 | |||||||||||||||
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Net Loss for
the period
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(118,593 | ) | (1,923,124 | ) | (550,427 | ) | (4,418,564 | ) | (6,990,248 | ) | ||||||||||
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Net Loss Per
Share – Basic and Diluted
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(0.00 | ) | (0.05 | ) | (0.01 | ) | (0.11 | ) | - | |||||||||||
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Weighted
Average Shares Outstanding
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43,962,250 | 42,146,536 | 40,464,316 | 40,992,074 | - | |||||||||||||||
The
accompanying notes are an integral part of these consolidated financial
statements
F-2
Buckingham
Exploration Inc.
(An Exploration
Stage Company)
Period Ended
February 28, 2009
(Expressed in US
dollars)
(unaudited)
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For
Nine Months
Ended February
28, 2009
$
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For
Nine Months
Ended
February 29, 2008
$
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Accumulated
from April 4, 2006 (Date of Inception) to
February
28, 2009
$
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||||||||||||
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Operating
Activities
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||||||||||||||
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Net loss for
the period
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(550,427 | ) | (4,418,564 | ) | (6,990,248 | ) | ||||||||
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Adjustments
to reconcile net loss to net cash used in operating
activities
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||||||||||||||
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Accretion of convertible debenture
discount
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14,332 | - | 14,332 | |||||||||||
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Amortization
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6,989 | 14,291 | 21,437 | |||||||||||
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Common shares issued (cancelled) for
services
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(53,339 | ) | - | (21,339 | ) | |||||||||
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Impairment of mineral property
costs
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- | 3,185,000 | 4,530,125 | |||||||||||
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Loss on disposal of property and
equipment
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7,878 | - | 14,058 | |||||||||||
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Foreign
exchange loss
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7,597 | - | 7,597 | |||||||||||
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Stock-based
compensation
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91,484 | 155,592 | 579,394 | |||||||||||
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Changes in
operating assets and liabilities
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||||||||||||||
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Bank indebtedness
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- | - | - | |||||||||||
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Accounts payable and accrued
liabilities
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64,283 | 69,415 | 139,796 | |||||||||||
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Other receivables
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- | - | (12,083 | ) | ||||||||||
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Other receivables
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5,765 | 13,084 | (5,264 | ) | ||||||||||
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Prepaid expenses
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45,758 | (1,100 | ) | 44.334 | ||||||||||
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Net Cash Used
in Operating Activities
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(359,680 | ) | (982,282 | ) | (1,677,861 | ) | ||||||||
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Investing
Activities
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||||||||||||||
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Acquisition of mineral
properties
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- | (1,685,000 | ) | (2,230,125 | ) | |||||||||
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Acquisition of property and
equipment
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- | (84,733 | ) | (84,733 | ) | |||||||||
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Proceeds of disposal of property and
equipment
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12,495 | - | 29,995 | |||||||||||
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Net Cash Used
in Investing Activities
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12,495 | (1,769,733 | ) | (2,284,863 | ) | |||||||||
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Financing
Activities
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||||||||||||||
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Advances from
(to) a related party
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142,404 | (12,083 | ) | 154,487 | ||||||||||
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Proceeds from
note payable
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- | - | 23,362 | |||||||||||
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Repayment of
note payable
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- | (23,362 | ) | (23,362 | ) | |||||||||
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Proceeds from
loans payable
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225,000 | - | 375,000 | |||||||||||
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Repayment of
loans payable
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(25,000 | ) | - | (25,000 | ) | |||||||||
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Proceeds from
the issuance of common stock
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- | 2,525,000 | 3,661,575 | |||||||||||
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Proceeds from
common stock subscription
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- | 15,000 | 10,350 | |||||||||||
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Share
issuance costs
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- | (207,500 | ) | (207,500 | ) | |||||||||
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Net Cash
Provided by Financing Activities
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342,404 | 2,297,055 | 3,968,912 | |||||||||||
| - | - | - | ||||||||||||
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(Decrease)
Increase In Cash
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(4,781 | ) | (454,960 | ) | 6,188 | |||||||||
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Cash -
Beginning of Period
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10,969 | 456,274 | – | |||||||||||
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Cash – End of
Period
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6,188 | 1,314 | 6,188 | |||||||||||
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Non-Cash
Investing and Financing Activities:
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||||||||||||||
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Convertible
debt issued to settle loans payable
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350,000 | - | 350,000 | |||||||||||
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Convertible
debt issued to settle related party advances
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150,000 | - | 150,000 | |||||||||||
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Common stock
issued for mineral property acquisitions
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- | 3,000,000 | 3,800,000 | |||||||||||
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Common stock
issued for finders fee
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- | - | 100,000 | |||||||||||
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Common shares
issued for services
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15,000 | - | 172,000 | |||||||||||
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Supplemental
Disclosures
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||||||||||||||
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Interest paid
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14,569 | 3,391 | 21,897 | |||||||||||
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Income tax paid
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- | - | - | |||||||||||
The
accompanying notes are an integral part of these consolidated financial
statements
F-3
Buckingham
Exploration Inc. (the “Company”) was incorporated in the State of Nevada on
April 4, 2006. The Company is an Exploration Stage Company, as defined by
Statement of Financial Accounting Standard (“SFAS”) No.7 “Accounting and
Reporting for Development Stage Enterprises”. The Company’s principal business
is the acquisition and exploration of mineral resources. The Company has not
presently determined whether its properties contain mineral reserves that are
economically recoverable.
These consolidated
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has never generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at February 28, 2009, the Company has an accumulated deficit of $6,990,248.
These factors raise substantial doubt regarding the Company’s ability to
continue as a going concern. These financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
The Company’s plans
for the next twelve months are to focus on the exploration of its mineral
properties in British Columbia and Colorado and estimates that cash requirements
of approximately $4,425,000 will be required for exploration and administration
costs and to fund working capital. There can be no assurance that the Company
will be able to raise sufficient funds to pay the expected expenses for the next
twelve months.
The Company
currently trades on the OTCBB under the symbol ‘BUKX.OB’.
2.
Summary of
Significant Accounting Policies
|
a)
|
Basis of
Presentation and Consolidation
|
These consolidated
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The consolidated financial statements include the
financial statements of the Company and its’ wholly-owned subsidiaries, Hyde
Park Uranium, Inc and Alpha Beta Uranium, Inc. All intercompany
balances and transactions have been eliminated. The Company’s fiscal
year-end is May 31.
|
b)
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Interim
Consolidated Financial Statements
|
The interim
unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Securities and Exchange
Commission (“SEC”) Form 10-Q. They do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Therefore, these financial statements should be read in
conjunction with the Company’s audited consolidated financial statements and
notes thereto for the year ended May 31, 2008, included in the Company’s Annual
Report on Form 10-K filed on September 15, 2008 with the SEC.
The consolidated
financial statements included herein are unaudited; however, they contain all
normal recurring accruals and adjustments that, in the opinion of management,
are necessary to present fairly the Company’s consolidated financial position at
February 28, 2009 and May 31, 2008, and the consolidated results of its
operations and consolidated cash flows for the nine months ended February 28,
2009 and February 29, 2008. The results of operations for the nine months ended
February 28, 2009 are not necessarily indicative of the results to be expected
for future quarters or the full year.
F-4
2.
Summary of
Significant Accounting Policies (continued)
|
(c)
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Use of
Estimates
|
The preparation of
these consolidated financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The Company
regularly evaluates estimates and assumptions related to long lived assets,
donated expenses, stock-based compensation expense, and deferred income tax
asset allowances. The Company bases its estimates and assumptions on current
facts, historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Company’s estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.
|
(d)
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Property and
Equipment
|
Property and
equipment comprised of office furniture and motor vehicles are recorded at cost
and amortized using the declining balance method at 25% per annum.
|
(e)
|
Basic and
Diluted Net Income (Loss) Per Share
|
The Company
computes net income (loss) per share in accordance with SFAS No. 128, "Earnings
per Share". SFAS No. 128 requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is
anti-dilutive.
|
(f)
|
Comprehensive
Loss
|
SFAS No. 130,
“Reporting Comprehensive Income,” establishes standards for the reporting and
display of comprehensive loss and its components in the financial statements. As
at February 28, 2009 and 2008 the Company has no items that represent a
comprehensive loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.
|
(g)
|
Cash and Cash
Equivalents
|
The Company
considers all highly liquid instruments with maturity of three months or less at
the time of issuance to be cash equivalents.
|
(h)
|
Mineral
Property Costs
|
The Company has
been in the exploration stage since its inception on April 4, 2006 and has not
yet realized any revenues from its planned operations. It is primarily engaged
in the acquisition and exploration of mining properties. Mineral property
exploration costs are expensed as incurred. Mineral property acquisition costs
are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible
or Intangible Assets”. The Company assesses the carrying costs for
impairment under SFAS 144, “Accounting for Impairment or Disposal of Long Lived
Assets” at each fiscal quarter end. When it has been determined that a mineral
property can be economically developed as a result of establishing proven and
probable reserves, the costs then incurred to develop such property, are
capitalized. Such costs will be amortized using the units-of-production method
over the estimated life of the probable reserve. If mineral properties are
subsequently abandoned or impaired, any capitalized costs will be charged to
operations.
F-5
2.
Summary of
Significant Accounting Policies (continued)
|
(h)
|
Asset
Retirement Obligations
|
The Company records
the fair value of an asset retirement obligation as a liability for closure and
removal costs associated with the legal obligations upon retirement or removal
of any tangible long-lived assets that result from the acquisition,
construction, development and/or normal use of assets in accordance with
Statements of Financial Accounting Standards No. 143, "Accounting for Asset
Retirement Obligations". The initial recognition of any liability will be
capitalized as part of the asset cost and depreciated over its estimated useful
life. To date, the Company has not incurred any asset retirement
obligations.
|
(i)
|
Long-Lived
Assets
|
In accordance with
SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”,
the Company tests long-lived assets or asset groups for recoverability when
events or changes in circumstances indicate that their carrying amount may not
be recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life. Recoverability is assessed based on the carrying amount of the asset and
its fair value which is generally determined based on the sum of the
undiscounted cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain instances. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.
|
(j)
|
Financial
Instruments
|
SFAS No. 157 “Fair
Value Measurements” requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. SFAS No.
157 establishes a fair value hierarchy based on the level of independent,
objective evidence surrounding the inputs used to measure fair value. A
financial instrument’s categorization within the fair value hierarchy is based
upon the lowest level of input that is significant to the fair value
measurement. SFAS No. 157 prioritizes the inputs into three levels that may be
used to measure fair value:
Level
1
Level 1 applies to
assets or liabilities for which there are quoted prices in active markets for
identical assets or liabilities.
Level
2
Level 2 applies to
assets or liabilities for which there are inputs other than quoted prices that
are observable for the asset or liability such as quoted prices for similar
assets or liabilities in active markets; quoted prices for identical assets or
liabilities in markets with insufficient volume or infrequent transactions (less
active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable
market data.
Level
3
Level 3 applies to
assets or liabilities for which there are unobservable inputs to the valuation
methodology that are significant to the measurement of the fair value of the
assets or liabilities.
The Company’s
financial instruments consist principally of cash, other receivables, accounts
payable and secured convertible debentures. Pursuant to SFAS No. 157, the fair
value of our cash equivalents is determined based on “Level 1” inputs, which
consist of quoted prices in active markets for identical assets. The Company
believes that the recorded values of all of the other financial instruments
approximate their current fair values because of their nature and respective
maturity dates or durations.
F-6
2.
Summary of
Significant Accounting Policies (continued)
|
(k)
|
Income
Taxes
|
The Company
accounts for income taxes using the asset and liability method in accordance
with SFAS No. 109, “Accounting for Income Taxes”. The asset and liability method
provides that deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary differences between the financial
reporting and tax bases of assets and liabilities, and for operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are measured using
the currently enacted tax rates and laws that will be in effect when the
differences are expected to reverse. The Company records a valuation allowance
to reduce deferred tax assets to the amount that is believed more likely than
not to be realized.
|
(l)
|
Stock-Based
Compensation
|
The Company records
stock-based compensation in accordance with SFAS 123(R), “Share-Based Payments,”
which requires the measurement and recognition of compensation expense based on
estimated fair values for all share-based awards made to employees and
directors, including stock options. In March 2005, the Securities and Exchange
Commission issued SAB 107 relating to SFAS 123(R). The Company applied the
provisions of SAB 107 in its adoption of SFAS 123(R).
SFAS 123(R)
requires companies to estimate the fair value of share-based awards on the date
of grant using an option-pricing model. The Company uses the Black-Scholes
option-pricing model as its method of determining fair value. This model is
affected by the Company’s stock price as well as assumptions regarding a number
of subjective variables. These subjective variables include, but are not limited
to the Company’s expected stock price volatility over the term of the awards,
and actual and projected employee stock option exercise behaviors. The value of
the portion of the award that is ultimately expected to vest is recognized as an
expense in the statement of operations over the requisite service
period.
All transactions in
which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.
|
(m)
|
Foreign
Currency Translation
|
The Company’s
functional and reporting currency is the United States dollar. Monetary assets
and liabilities denominated in foreign currencies are translated in accordance
with SFAS No. 52 “Foreign
Currency Translation”, using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on settlement of foreign currency
denominated transactions or balances are included in the determination of
income. Foreign currency transactions are primarily undertaken in Canadian
dollars. The Company has not, to the date of these financials statements,
entered into derivative instruments to offset the impact of foreign currency
fluctuations.
|
(n)
|
Recent
Accounting Pronouncements
|
In May 2008, the
Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The
Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles in the United States. It is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles”. The adoption of this statement is not expected
to have a material effect on the Company’s financial statements.
|
(o)
|
Recent
Accounting Pronouncements
(continued)
|
In March 2008, the
Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures
about Derivative Instruments and Hedging Activities – an amendment to FASB
Statement No. 133”. SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years beginning after November 15, 2008, with early
adoption encouraged. The adoption of this statement is not expected to have a
material effect on the Company’s financial statements.
F-7
In December 2007,
the Financial Accounting Standards Board (FASB) issued SFAS No. 141R, “Business
Combinations”. This statement replaces SFAS 141 and defines the acquirer in a
business combination as the entity that obtains control of one or more
businesses in a business combination and establishes the acquisition date as the
date that the acquirer achieves control. SFAS 141R requires an acquirer to
recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree at the acquisition date, measured at their fair values
as of that date. SFAS 141R also requires the acquirer to recognize contingent
consideration at the acquisition date, measured at its fair value at that date.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008, and earlier adoption is
prohibited. The adoption of this statement is not expected to have a material
effect on the Company's financial statements.
In December 2007,
the Financial Accounting Standards Board (FASB) issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial Statements Liabilities –an
Amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting
and reporting standards for the Noncontrolling interest in a subsidiary and for
the deconsolidation of a subsidiary. This statement is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008, and earlier adoption is prohibited. The adoption of this
statement is not expected to have a material effect on the Company's future
financial statements.
In June 2008,
the FASB issued FASB Staff Position Emerging Issues Task Force
(EITF) No. 03-6-1, determining whether instruments granted in
share-based payment transactions are participating securities (“FSP EITF No.
03-6-1”). Under FSP EITF No. 03-6-1, unvested share-based payment
awards that contain rights to receive nonforfeitable dividends (whether paid or
unpaid) are participating securities, and should be included in the two-class
method of computing EPS. FSP EITF No. 03-6-1 is effective for fiscal years
beginning after December 15, 2008, and interim periods within those years,
and is not expected to have a significant impact on the Company’s financial
statements.
|
(p)
|
Reclassification
|
Certain
reclassifications have been made to the prior period’s financial statements to
conform to the current period’s presentation.
3.
Prepaid
expenses
|
a)
|
During the
year ended May 31, 2008, the Company entered into a consulting agreement
on April 18, 2008 for a one year period. Pursuant to this agreement, the
Company issued 50,000 common shares at $0.89 per common share with a fair
value of $44,500. As at February 28, 2009, $4,689 is included in prepaid
expenses.
|
|
b)
|
During the
period ended February 28, 2009, the Company has prepaid rent of
$1,073.
|
4.
Mineral
Property
On August 8, 2006,
the Company acquired a 100% interest in two mineral claims located in the
Northwest Territories for consideration of $245,125 payable as to $45,125
(CDN$50,000) cash, and 2,000,000 common shares, with a fair value of $200,000.
The mineral claims are subject to a 2% net smelter return. The Company has the
option to acquire up to an additional 1% of the net smelter royalty for proceeds
of $902,500 throughout the life of the agreement. As it has not been determined
whether there are proven or probable reserves on the property, the Company has
recognized an impairment loss of $245,125 of mineral property acquisition costs
for the year ended May 31, 2007. Subsequently it was determined that it was in
best interests of the company to abandon the two claims and not pursue delivery
of legal title.
On May 9, 2007, the
Company entered into a purchase agreement with Pikes Peak Resources, Inc.
(Pikes), a British Columbia corporation, for the acquisition of 29 unpatented
mining claims located in Teller County, Colorado. The purchase consideration for
the claims is $1,000,000, payable as to $500,000 cash and the issuance of
5,000,000 common shares of the Company with a fair value of $500,000. Pikes will
also receive net returns royalty of 2% of the proceeds of minerals mined and
sold from the claims. The Company will also reimburse $3,700 to Pikes for the
costs of locating the claims. The Company has an option to purchase the royalty
for $1,000,000 as adjusted for inflation. The Company has also agreed to buy
back shares of common stock from Pikes at prevailing market price up to $150,000
for any taxes payable by Pikes as a result of the transaction. Pikes shall also
have the option to repurchase the claims upon abandonment by the Company. As it
has not been determined whether there are proven or probable reserves on the
property, the Company has recognized an impairment loss of $Nil (2007:
$1,100,000) of mineral property acquisition costs for the year ended May 31,
2008.
F-8
On July 27, 2007,
the Company entered into an exploration agreement with an option to purchase a
property known as High Park Trails Ranch in Teller County, Colorado. The
property adjoins the Company’s High Park Uranium Project. Pursuant to the terms
of the Option Agreement, the Company must make an option payment of $100,000 to
acquire the surface and mineral estates over 265 acres (paid on July 27, 2007),
with a further payment of $2,900,000 at the end of a twelve month period to
exercise the non-exclusive option to purchase the property. During the option
period, the Company has full access to the property to conduct an exploration
and drill program to ascertain whether it wishes to exercise its option. The
Company must also pay the Seller a production royalty of approximately 5% of the
net returns generated by the Company from the exploration of the property. As it
has not been determined whether there are proven or probable reserves on the
property, the Company has recognized an impairment loss of $100,000 of mineral
property acquisition costs for the year ended May 31, 2008. Subsequent to the
year end, the company has decided not to pursue any further exploration of the
property.
On August 27, 2007,
the Company entered into an exclusive option agreement with Proteus Mining
Limited (“Proteus”) for the acquisition of 939 unpatented lode mining claims
located in Colorado. Proteus will also receive net returns royalty of 2% of the
proceeds of minerals mined and sold from the claims. As at November 30, 2007,
the Company has made payments of $1,375,000 relating to the acquisition of the
mining claims. On January 21, 2008, the agreement was amended to acquire 419
unpatented lode mining claims and in exchange for an additional $210,000 and the
issuance of 3,000,000 common shares of the Company. The Company issued 3,000,000
common shares with a fair value of $1,500,000 (Refer to Note 8(f)). As it has
not been determined whether there are proven or probable reserves on the
property, the Company has recognized an impairment loss of $3,085,000 of mineral
property acquisition costs for the year ended May 31, 2008.
5.
Property and Equipment
|
Cost
|
Accumulated
Amortization
|
Net
Book Value
February
28, 2009
|
Net
Book Value
May
31, 2008
|
|||||||||||||
|
$
|
$
|
$
|
$
|
|||||||||||||
|
Office
furniture and equipment
|
29,142 | 9,900 | 19,242 |
|
23,426 | |||||||||||
|
Motor
Vehicles
|
- | - | - | 23,179 | ||||||||||||
| 29,142 | 9,900 | 19,242 | 46,605 | |||||||||||||
6. Loan
Payable
The Company
received operating loans in the amount of $375,000 pursuant to loan agreements.
The loans bear interest of 1% per month and are payable on demand. On September
4, 2008 $25,000 was repaid and on September 24, 2008 the balance of $350,000 was
converted into secured convertible debentures. (Note 9)
7. Related
Party Transactions
|
(a)
|
During the
nine months ended February 28, 2009, the Company incurred $161,240 (May
31, 2008 - $140,307) for management services provided by the President of
the Company.
|
|
(b)
|
The Company
advanced the President of the Company an amount of $3,772 (May 31, 2008
–$5,772), representing a deposit on travel expenses
paid.
|
|
(c)
|
During the
nine months ended February 28, 2009 the Company received an advance in the
amount of $142,404 from a related party. The loan is non-interest bearing
and is due on demand. On September 24, 2008 the advance was converted into
secured convertible debentures. (Note
9)
|
F-9
8. Shares issued
|
a)
|
During the
year ended May 31, 2008, the Company entered into an investor relations
agreement on May 7, 2008 for a one year period. Pursuant to
this agreement, the Company issued 250,000 common shares at $0.45 per
common share with a fair value of $112,500. On October 9, 2008
the Company issued a written notice of rescission of the agreement and
cancellation of the 250,000 restricted common shares due to the failure of
the public relations consultant to provide services in accordance with the
agreement.
|
|
b)
|
On December
9, 2008, the Company issued 500,000 common shares of the Company at a fair
value of $0.03 per common share with a fair value of $15,000 as
compensation for consulting
services.
|
9.
Secured Convertible Debentures
On September 24,
2008, the Company entered into three secured convertible debenture purchase
agreements with three investors providing for the sale of convertible debentures
(the Debentures) in the aggregate principal amount of $500,000, and 5,000,000
warrants (the “Warrants”) to purchase 5,000,000 shares of the Company’s common
stock, exercisable at a price of $0.10 per share until September 24,
2010. The Debentures and the Warrants are exempt from registration
pursuant to Regulation S of the Securities Act.
The outstanding
principal and accrued interest is payable by the Company in 24 equal monthly
installments commencing September 24, 2009. Interest on the Debentures accrues
monthly at a rate of 10% per annum. The investors may convert, at any
time, any amount outstanding under the Debentures into shares of common stock of
the Company at a conversion price of $0.05 per share.
In accordance with
EITF 00-27 “Application of
Issue No. 98-5 to Certain Convertible Instruments”, the Company has
allocated the proceeds of issuance between the convertible debt and the Warrants
based on their relative fair values. Accordingly, the Company recognized the
fair value of the Warrants of $111,556 as additional paid-in capital and an
equivalent discount against the Debentures. The Company will record further
interest expense over the term of the Debentures of $111,556 resulting from the
difference between the stated value and carrying value at the date of issuance.
The carrying value of the Debentures will be accreted to the face value of
$500,000 to maturity. To February 28, 2009, accrued interest of $21,495 has been
included in accrued liabilities, and accumulated accretion expense of $14,332
increased the carrying value of the Debentures to $402,776.
The Debentures are
secured by a security interests in all current and future assets of the Company
and its subsidiaries. As collateral security the company has granted the
investors a security interest in the right, title and interest of all the
present and future assets of the company.
10. Stock
Options
In November 2007,
the Company adopted a stock option plan (the "Plan") to grant options to
executives, employees and consultants. Under the Plan, the Company may grant
options to acquire up to 2,000,000 common shares of the Company. Options granted
can have a term up to five years and an exercise price as determined by the
Stock Option Committee or which represents the fair market value at the date of
grant. Options vest as specified by the Stock Option Committee. If not
specified, the options shall vest as follows:
|
·
|
Directors and
senior officials to Vice-president - 50% upon the grant date, and 50%
after one calendar year
|
|
·
|
Employees
-10% at the end of any probation period or three months from date of
engagement and 5% at the end of each calendar month
thereafter
|
|
·
|
Other option
holders – 10% at the end of the first thirty days of engagement, 20% upon
completion of 50% of first term or upon 50% of project completion term and
the remainder 30 days thereafter
|
F-10
11. Stock
Options (continued)
The following is a
summary of the stock option activity during the nine month period ended February
28, 2009
|
Number
of Options
|
Weighted
Average Exercise Price
$
|
Weighted
Average Remaining Contractual
Term
(years)
|
Aggregate
Intrinsic
Value
$
|
|
|
Outstanding,
May 31, 2008
|
3,025,000
|
0.27
|
2.26
|
0
|
|
-
|
||||
|
Granted
|
-
|
-
|
||
|
Exercised
|
-
|
-
|
||
|
Expired
|
-
|
–
|
||
|
Outstanding,
February 28, 2009
|
3,025,000
|
0.27
|
2.01
|
–
|
|
Exercisable,
February 28, 2009
|
3,025,000
|
0.27
|
2.01
|
–
|
The following is a
summary of the status of stock options outstanding and exercisable at February
28, 2009. As at February 28, 2009 there are no unvested
options.
|
Number
of Options
|
Weighted
Average Exercise Price
|
Remaining
Contractual Life (years)
|
|
2,000,000
|
$
0.10
|
1.75
|
|
1,000,000
|
$
0.60
|
1
|
|
25,000
|
$1.00
|
.75
|
F-11
12. Warrants
The following is a
summary of the warrant activity during the six month period ended February 28,
2009:
|
Number
of Warrants
|
Weighted
Average Exercise Price
|
|||||||
|
Balance, May
31, 2008
|
9,380,000 | $ | 0.70 | |||||
|
Granted
|
5,000,000 | 0.10 | ||||||
|
Exercised
|
- | - | ||||||
|
Expired
|
- | - | ||||||
|
Balance,
February 28, 2009
|
14,380,000 | $ | 0.49 | |||||
The following is a summary of the warrants outstanding at February 28,
2009:
|
Number
Of
Warrants
|
Weighted
Average
Exercise
Price ($)
|
Expiry
Date
|
||
|
4,300,000
|
0.35
|
May 15,
2009
|
||
|
3,500,000
|
1.00
|
August 10,
2009
|
||
|
650,000
|
1.00
|
September 15,
2009
|
||
|
500,000
|
1.00
|
September 30,
2009
|
||
|
200,000
|
1.00
|
October 22,
2009
|
||
|
200,000
|
1.00
|
November 2,
2009
|
||
|
30,000
|
1.00
|
April 21,
2010
|
||
|
5,000,000
|
0.10
|
September 24,
2010
|
||
|
14,380,000
|
13. Commitments
|
(a)
|
On May 7,
2007, the Company entered into a Management Agreement (the “Agreement”)
with the President of the Company for management services. Per
the Agreement, the Company is required to pay $10,000 per month,
commencing May 7, 2007, and will remain in effect on month-to-month basis
until terminated by either party giving 14 days notice. The agreement was
amended on May 6, 2009 to reduce the monthly fee to $10,000 effective
December 1, 2008.
|
|
(b)
|
On April 18,
2008 the Company entered into a consulting agreement with an individual
for consulting services commencing May 1, 2008 and terminating April 30,
2009. Per the Agreement, the Company is required to issue 50,000
restricted common shares.
|
|
(c)
|
On May 5,
2008 the Company entered into an agreement with a public relations
consultant for a 12 month period commencing on May 5, 2008. The services
to be provided pursuant to the agreement include, but are not limited to,
the preparation and dissemination of press releases and other
communications materials to increase investor awareness of the Company in
Europe and North America. In consideration of the services to be provided,
the Company is obligated to pay $15,000 (paid) and 250,000 restricted
common shares of the Company (issued) and an additional $85,000 by July 5,
2008, which has not been paid due to dispute over non performance of the
contractual obligations of the consultant. In October 2008 the company
issued a written notice of rescission of the agreement and cancellation of
the 250,000 restricted common shares due to the failure of the public
relations consultant to provide services in accordance of the
agreement.
|
F-12
Forward
Looking Statements
This quarterly
report on Form 10-Q contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including "could", "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" and the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially.
While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested in this report.
Business
Overview
Uncertainties
Our most advanced
projects are at the exploration stage and there is no assurance that any of our
mining claims contain a commercially viable ore body. We plan to undertake
further exploration of our properties. We anticipate that we will require
additional financing in order to pursue full exploration of these claims. We do
not have sufficient financing to undertake exploration of our mineral claims at
present and there is no assurance that we will be able to obtain the necessary
financing.
There is no
assurance that a commercially viable mineral deposit exists on any of our
mineral properties. Further exploration beyond the scope of our planned
exploration activities will be required before a final evaluation as to the
economic feasibility of mining of any of our properties is determined. There is
no assurance that further exploration will result in a final evaluation that a
commercially viable mineral deposit exists on any of our mineral
properties.
|
For Three
Months
Ended
February 28, 2009
$
|
For
Three Months
Ended
February 29, 2008
$
|
For
Nine Months
Ended
February 28, 2009
$
|
For
Nine Months
Ended
February 29, 2008
$
|
Accumulated
from April 4, 2006 (Date of Inception) to February
28, 2009
$
|
|
|
Revenue
|
-
|
-
|
-
|
-
|
-
|
|
Expenses
|
|||||
|
Amortization
|
1,283
|
6,327
|
6,990
|
14,291
|
21,438
|
|
General and
administrative
|
64,650
|
188,414
|
342,784
|
749,971
|
1,616,042
|
|
Impairment of
mineral property costs (Note 4)
|
-
|
1,710,000
|
-
|
3,185,000
|
4,530,125
|
|
Mineral
property costs
|
-
|
-
|
63,870
|
333,652
|
385,920
|
|
Professional
fees
|
25,550
|
18,745
|
89,218
|
133,718
|
377,852
|
|
Total
Expenses
|
91,483
|
1,923,486
|
502,862
|
4,416,632
|
6,931,377
|
|
Other
(Income) Expenses
|
|||||
|
Interest
income
|
-
|
(362)
|
(74)
|
(1,459)
|
(2,275)
|
|
Miscellaneous
income
|
(1,468)
|
-
|
(1,468)
|
-
|
(1,468)
|
|
Interest
expense
|
12,430
|
-
|
26,897
|
3,391
|
34,224
|
|
Accretion of
convertible debenture discount
|
8,270
|
-
|
14,332
|
-
|
14,332
|
|
Loss on
disposal of property and equipment
|
7,878
|
-
|
7,878
|
-
|
14,058
|
|
Net Loss for
the period
|
(118,593)
|
(1,923,124)
|
(550,427)
|
(4,418,564)
|
(6,990,248)
|
|
Net Loss Per
Share – Basic and Diluted
|
(0.00)
|
(0.05)
|
(0.01)
|
(0.11)
|
-
|
|
Weighted
Average Shares Outstanding
|
43,962,250
|
42,146,536
|
40,464,316
|
40,992,074
|
-
|
3
Since our inception
on April 4, 2006 to February 28, 2009, we have not generated any revenue and we
have incurred an accumulated deficit of $6,990,248. We may not generate
significant revenues even if our exploration program indicates that mineral
deposits may exist on our mineral claims. We anticipate that we will incur
substantial losses over the next two years.
For the three
months ended February 28, 2009 we incurred a net loss of $118,593 ompared to our
net loss of $1,923,124 for the three months ended February 29, 2008. Our net
loss per share was $0.00 for the three months ended February 28, 2009 and $0.05
for the three months ended February 29, 2008
Our total expenses
for the three months ended February 28, 2009 were $91,483 and consisted of
$1,283 in amortization, $64,650 in general and administrative expenses, and
$25,550 in professional fees. By comparison, our total expenses for
the three months ended February 29, 2008 were $1,923,486, and consisted of
$6,327 in amortization, $188,414 in general and administrative expenses,
$1,710,000 in impairment of mineral property costs, and $18,745 in professional
fees.
For the nine months
ended February 28, 2009 our total expenses were $502,862, and consisted of
$6,990 in amortization cost, $342,784 in general and administrative expenses,
$63,870 in mineral property costs and $89,218 in professional
fees. By comparison, our total expenses for the nine months ended
February 29, 2008 were $4,416, 633 and consisted of $14,291 in amortization,
$749,972 in general and administrative expenses, $3,185,000 in impairment of
mineral property costs, $333,652 in mineral property costs, and $133,718 in
professional fees.
Our total operating
costs were substantially higher for the three months and for the nine months
ended February 29, 2008 compared to the corresponding periods in 2009 due to our
acquisition of certain mining claims and an increase in overall operating
activity related to those acquisitions. Our increased operating activity
resulted in higher audit and legal fees. Also, the costs for impairment of our
mineral properties were higher during fiscal 2008 as we acquired options in a
number of mineral properties with unproven mineral reserves.
From April 4, 2006
(Date of Inception) to February 28, 2009 we accumulated total operating expenses
of $6,931,377 including $21,438 in amortization cost, $1,616,042 in general and
administrative expenses, $4,530,125 in impairment of mineral property costs,
$385,920 in mineral property costs, and $377,852 in professional
fees.
Our general and
administrative expenses include advertising and promotion expenses, consulting
fees, management fees, interest and bank charges, office expenses, motor vehicle
expenses, rent, utility fees, travel and entertainment expenses, and transfer
agent and filing fees.
Liquidity and Capital
Resources
During the nine
months ended February 28, 2009, we used net cash of $359,680 in operating
activities, $12,495 in investing activities, and received net cash of $342,404
from financing activities. This compares to $982,282 of net cash used
in operating activities and $2,297,055 net cash received from financing
activities for the same period in 2008. From April 4, 2006 (Date of
Inception) to November 30, 2008 we used net cash of $1,677,861 in operating
activities, $2,284,863 in investing activities, and received net cash of
$3,968,912 from financing activities.
As
of February 28, 2009 our cash of $6,188 is insufficient to cover our current
monthly burn rate.
4
We
estimate our planned expenses for the next year (from March 1, 2009) to be
approximately $925,000, as summarized in the table below.
|
Description
of Expense
|
Amount
|
|
Exploration
of the High Park Uranium Property
|
$100,000
|
|
Proteus
Claims Maintenance fees
|
$165,000
|
|
Exploration
of the Proteus Claims and Staking and Evaluation of Additional Adjacent
Claims
|
$100,000
|
|
Professional
Fees
|
$100,000
|
|
General and
Administrative Expenses
|
$500,000
|
|
Total
|
$965,000
|
Our general and
administrative expenses for the year will consist of advertising and promotion
expenses, consulting fees, management fees, interest and bank charges, office
expenses, motor vehicle expenses, rent, utility fees, travel and entertainment
expenses, and transfer agent and filing fees. All of these fees will
relate to our day to day business operations and business development
activities.
Our professional
fees will include accounting, audit and legal fees relating primarily to our
regulatory filings throughout the year.
As
at February 28, 2009, we had nominal cash of $6,188 in the
bank. Based on our planned expenditures, we require a minimum of
$965,000 to proceed with our plan of operations over the next twelve months
(beginning March 1, 2009). If we achieve less than the full amount of
financing that we require we will scale back our planned exploration activities
and our day to day operations in order to reduce our exploration expenses and
general and administrative expenses to a level appropriate to the financial
resources available to us.
On
September 24, 2008, we entered into convertible debenture purchase agreements
and granted 5,000,000 warrants to purchase one share each of Buckingham’s common
stock at an exercise price of $0.10 per share for a period of 2 years. The total
amount invested in Buckingham was $500,000. The principal and accrued interest
of the convertible debentures may be converted into common stock at the holder’s
option at a price of $0.05 per share any time on or after October 25, 2008 until
the full amount owed under each convertible debenture is repaid. Buckingham has
reserved a minimum of 5,000,000 common shares pursuant to the holders’ options
to have the convertible debentures repaid in shares.
Buckingham has the
option, for a period of one year after September 24, 2008, of repaying any
amounts borrowed and re-borrowing any amounts repaid under the convertible
debentures without penalty or premium. The outstanding principal of the
convertible debentures and interest accrued thereon at a rate of 10% per annum
is repayable in equal monthly installments over a 24 month period starting one
year after September 24, 2008. The convertible debentures carry a security
interest in all current and future assets of Buckingham and its
subsidiaries.
Future
Financings
We
have no revenues, have achieved losses since inception, and rely upon the sale
of our securities to fund operations. We will not generate revenues even if our
exploration program indicates that a mineral deposit may exist on our mineral
claims. Accordingly, we will be dependent on future additional financing in
order to maintain our operations and continue our exploration
activities.
We
will require additional financing in order to proceed with the exploration of
our mineral properties. We plan to complete private placement sales of our
common stock in order to raise the funds necessary to pursue our plan of
operations. Issuances of additional shares will result in dilution to our
existing shareholders. We currently do not have any arrangements in place for
the completion of any private placement financings and there is no assurance
that we will be successful in completing any private placement
financings.
If
we are unable to achieve the necessary additional financing, then we plan to
reduce the amounts that we spend on our prospective acquisitions, exploration
activities and administrative expenses in order to stay within the amount of
capital resources that are available to us. Specifically, we anticipate that we
would defer drilling programs and certain acquisitions pending our obtaining
additional financing. Still, even in light of our plan to scale back our
operations, if we do not achieve additional financing, our current cash and
working capital will be not be sufficient to enable us to sustain our operations
and our interests in our mineral properties for the next twelve months.
Product
Research and Development
We
do not anticipate spending any material amounts in connection with product
research and development activities during the next twelve months.
Acquisition
of Plant and Equipment and Other Assets
We
do not anticipate the sale or acquisition of any material properties, plant or
equipment during the next twelve months. Any acquisitions are subject to
obtaining additional financing.
5
Off-Balance
Sheet Arrangements
We
have no significant 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.
Inflation
The amounts
presented in the financial statements do not provide for the effect of inflation
on our operations or financial position. The net operating losses shown would be
greater than reported if the effects of inflation were reflected either by
charging operations with amounts that represent replacement costs or by using
other inflation adjustments.
Audit
Committee
The functions of
the audit committee are currently carried out by our Board of Directors. Our
Board of Directors has determined that we do not have an audit committee
financial expert on our Board of Directors carrying out the duties of the audit
committee. Our Board of Directors has determined that the cost of hiring a
financial expert to act as a director of us and to be a member of the audit
committee or otherwise perform audit committee functions outweighs the benefits
of having a financial expert on the audit committee.
ITEM
4. CONTROL AND PROCEDURES
Disclosure Controls
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that
are designed to ensure that the information we are required to disclose in the
reports that we file or submit under the Exchange Act 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 Chief Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure. We carried out an evaluation, under the supervision and
with the participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this
report. Based on the evaluation of these disclosure controls and
procedures, and on the material weaknesses in our internal control over
financial reporting identified in our Annual Report on Form 10-K for the period
ended February 29, 2008, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were not
effective.
Changes in internal
control
We
have not been able to implement any of the recommended changes to control over
financial reporting listed in our Annual Report on Form 10-K for the year ended
February 29, 2008. As such, there were no changes in our internal
control over financial reporting (as defined in Rule 13a-15(f) promulgated under
the Exchange Act) during the period covered by this report that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
Management is not
aware of any legal proceedings contemplated by any governmental authority or any
other party against us. None of our directors, officers or affiliates: (i) are a
party adverse to us in any legal proceedings, or (ii) have an adverse interest
to us in any legal proceedings. Management is not aware of any other legal
proceedings that have been threatened against us.
6
On
December 9, 2009 we issued 400,000 common shares to Aran Asset Management SA in
consideration of consulting services provided to us pursuant to our consulting
agreement with Aran Asset Management dated December 9, 2009. The
shares were issued at the fair market value of $0.03 per share for the aggregate
value of $12,000. The shares were exempt from registration pursuant
to Regulation S of the Securities Act.
Our reliance upon
the exemption under of Regulation S of the Securities Act was based on the fact
that the sale of the securities was completed in an "offshore transaction", as
defined in Rule 902(h) of Regulation S. We did not engage in any directed
selling efforts, as defined in Regulation S, in the US in connection with the
sale of the securities. The investor was not a US person, as defined in
Regulation S, and was not acquiring the securities for the account or benefit of
a US person.
None.
None.
None
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Exhibit
Number
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Exhibit
Description
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7
SIGNATURES
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.
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Buckingham Exploration
Inc.
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|
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(Registrant)
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/s/
C. Robin Relph
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|
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Date: May 14,
2009
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C. Robin
Relph
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Director,
President, Chief Executive Officer, Chief Financial Officer and Principal
Accounting Officer
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8