VNUE, Inc. - Quarter Report: 2012 February (Form 10-Q)

UNITED STATES
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 29, 2012

[ ] 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 000-53462

Suite 418-831 Royal Gorge Blvd.
Cañon City, CO 81212, USA
(Address of principal executive offices)

(604) 737-0203
(Registrant’s telephone number, including area code)

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files). 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):

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

As of April 17, 2012, the registrant’s outstanding common stock consisted of 71,701,936 shares.

TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Buckingham Exploration Inc.
(An Exploration Stage Company)
February 29, 2012

Index

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Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)

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

F-1

Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statements of Operations
(Unaudited)

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

F-2

Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited) 

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

F-3

Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

F-4

Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

F-5

Cautionary Statement Regarding Forward-Looking Information

The statements in this quarterly report that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements appear in a number of different places in this report and can be identified by words such as “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other comparable words. Also look for discussions of strategy that involve risks and uncertainties. Forward-looking statements include, among others, statements regarding our business plans and availability of financing for our business.

You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our estimates. Some of these risks and assumptions include those set forth in reports and other documents we have filed with or furnished to the United States Securities and Exchange Commission (“SEC”). We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Unless required by law, we do not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations. However, you should carefully review the reports and other documents we file from time to time with the SEC.

Presentation of Information

As used in this quarterly report, the terms "we", "us", "our" and the “Company” mean Buckingham Exploration Inc. and its subsidiaries, unless the context requires otherwise.

All dollar amounts in this quarterly report refer to US dollars unless otherwise indicated.

On July 23, 2010, we completed a reverse split of our shares of common stock on a 1-for-400 basis. All share amounts in this quarterly report are presented on a post-split basis, unless otherwise indicated.

Overview

We were incorporated as a Nevada company on April 4, 2006. We have been engaged in the acquisition and exploration of mineral properties since our inception. We have not generated any revenues and have incurred losses since inception.

We currently own an option to acquire a 100% interest in the Lady Ermalina mineral properties, and a 100% interest in the Dome mineral properties, both located in the Province of British Columbia, Canada. In addition, in September 2011, we acquired title to certain mining claims adjacent to our Lady Ermalina claims in consideration for 150,000 shares of our common stock. We have conducted limited exploration work on our mineral properties and none of our properties has been determined to contain any mineral resources or reserves of any kind. 

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See our Annual Report on Form 10-K for the year ended May 31, 2011 for more information.

In September 2011, we appointed Simon Eley, a director of our company, as our President and Chief Executive Officer, in place of Christopher Robin Relph. Mr. Relph, a director of our company, was appointed as Chairman of our board of directors.

In September 2011, we acquired all rights, title and interest in and to the domain name “Buckingham.com” and related property rights, including all intellectual property rights and rights related to website and internet traffic associated with the domain name, from Mr. Relph for consideration of $10,000.

In October 2011, we raised capital of $715,000 by issuing 14,300,000 shares of common stock at a price of $0.05 per share primarily to off-shore investors.

In January 2012, we entered into a Strategic Alliance Agreement with Mining Plus (Pty) Ltd. (“Mining Plus”), to assist in the identification, assessment and development of mining projects, with an emphasis to potentially create early cash flow enabling us to develop and grow our project pipeline The strategic alliance with Mining Plus allows us ready access to over 50 seasoned mining industry professionals to assist in the potential development of mining projects that are identified. Under the terms of the Strategic Alliance Agreement, we appointed Benjamin Auld, a director of Mining Plus, as a director of our company. In connection with his appointment, we issued 500,000 restricted shares of common stock to Mr. Auld as a one-time incentive for joining our board of directors and other contributions to date.

Our plan of operations for the next 12 months is to raise additional financing and explore our mineral properties or acquire additional mineral properties. We plan to conduct a small exploration project on each of our current properties in the next month involving mapping and property surveys, among other things, at a cost of approximately $10,000 per property. We anticipate we will require approximately $0.5 million to carry out any further exploration plans or acquire additional properties over the next 12 months. As at February 29, 2012, we had cash of $192,571 and working capital of $205,228 and will require significant financing to pursue our plans. There can be no assurance that we will obtain the required financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, our business may fail. An investment in our securities involves significant risks and you could lose your entire investment.

Results of Operations

The following discussion and analysis of our results of operations and financial condition for the three and nine months ended February 29, 2012 should be read in conjunction with our unaudited interim consolidated financial statements and related notes included in this report, as well as our most recent annual report on Form 10-K for the year ended May 31, 2011 filed with the SEC.

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Three Months Ended February 29, 2012 Compared to Three Months Ended February 28, 2011

Lack of Revenues

We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to February 29, 2012. As of February 29, 2012, we had an accumulated deficit of $8,134,080. We anticipate that we will not earn any revenues during the current fiscal year as we are an exploration stage company.

Expenses

From April 4, 2006 (date of inception) to February 29, 2012, our total expenses were $3,023,627 comprised of $665,626 in professional fees, $97,832 in mineral property costs and $2,260,169 in general and administrative expenses.

Our total expenses increased to $250,825 for the three months ended February 29, 2012 from $78,912 for the three months ended February 28, 2011. The increase in total expenses was mainly due to higher general and administrative expenses and mineral property costs due to increased activity. General and administrative expenses increased to $192,430 in the current period from $39,346 in the prior period, and mineral property costs increased to $45,239 in the current period from $6,020 in the prior period, primarily resulting from due diligence relating to potential acquisitions of mineral property interests in the current period. Professional fees decreased to $13,156 in the current period from $33,546 in the prior period, primarily due to management efficiencies.

Net Loss

For the three months ended February 29, 2012, we recognized a net loss of $250,825, compared to $78,912 for the three months ended February 28, 2011.

Nine Months Ended February 29, 2012 Compared to Nine Months Ended February 28, 2011

Lack of Revenues

We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to February 29, 2012. As of February 29, 2012, we had an accumulated deficit of $8,134,080. We anticipate that we will not earn any revenues during the current fiscal year or in the foreseeable future as we are an exploration stage company.

Expenses

Our total expenses increased to $533,830 for the nine months ended February 29, 2012 from $293,158 for the nine months ended February 28, 2011. The increase in total expenses was mainly due to higher general and administrative expenses and mineral property costs due to increased activity. General and administrative expenses increased to $409,317 in the current period from $119,863 in the prior period, and mineral property costs increased to $76,301 in the current period from $15,681 in the prior period, primarily resulting from due diligence relating to potential acquisitions of mineral property interests in the current period. Professional fees decreased to $48,212 in the current period from $157,614 in the prior period, primarily due to management efficiencies.

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Net Loss

For the nine months ended February 29, 2012, we recognized a net loss of $533,830, compared to $293,158 for the nine months ended February 28, 2011.

Liquidity and Capital Resources

As of February 29, 2012, we had cash of $192,571, working capital of $205,228, total assets of $217,850, total liabilities of $10,060 and an accumulated deficit of $8,134,080.

Financing Activities

We have funded our operations primarily by a combination of private placements, advances from related parties and loans. From April 4, 2006 (date of inception) to February 29, 2012, financing activities provided cash of $5,167,620, primarily from the sale of our common stock and loans.

During the nine months ended February 29, 2012, financing activities provided cash of $715,000 from the sale of our common stock. During the nine months ended February 28, 2011, financing activities provided cash of to $447,656, primarily from the sale of our common stock and loans.

Operating Activities

Operating activities used cash of $585,249 for the nine months ended February 29, 2012, compared to $313,883 for the nine months ended February 28, 2011. A decrease in accounts payable and accrued liabilities used cash of $17,848 in the nine months ended February 29, 2012, compared to an increase in the same providing cash of $81,823 in the prior period. A decrease in other receivables provided cash of $2,228 in the current period, compared to an increase in the same using cash of $3,724 in the prior period. A decrease in amounts due to related parties used cash of $104,000 in the current period, compared to $97,787 in the prior period. An increase in prepaid expenses used cash of $19,967 in the current period, compared to $1,544 in the prior period.

Investing Activities

Investing activities used cash of $1,933 in the nine months ended February 29, 2012 from the purchase of property and equipment. There were no investing activities during the nine months ended February 28, 2011.

We expect that our total expenses will increase over the next year as we increase our business operations. We do not anticipate generating any revenues over the next year. Our plan of operations for the next 12 months is to raise additional financing and explore our mineral properties or acquire additional mineral properties. We plan to conduct a small exploration project on each of our current properties in the next month involving mapping and property surveys, among other things, at a cost of approximately $10,000 per property. We anticipate we will require approximately $0.5 million to carry out any further exploration plans or acquire additional properties over the next 12 months.

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There can be no assurance that we will obtain any additional financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, our business may fail. An investment in our securities involves significant risks and you could lose your entire investment.

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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Going Concern

Our consolidated financial statements for the period ended February 29, 2012 have been prepared on a going concern basis and Note 2 to the statements identifies issues that raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our common stock and loans from related and other parties to fund our operations. We do not anticipate generating any revenues in the foreseeable future, and if we are unable to raise equity or secure alternative financing, we may not be able to pursue our plans and our business may fail.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROL AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this report, an evaluation was carried out by our principal executive officer and principal financial officer of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of February 29, 2012. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act 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 management to allow timely decisions regarding required disclosures.

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Based on that evaluation, and the material weaknesses outlined below, our principal executive officer and principal financial officer concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting information required to be disclosed, within the time periods specified in the SEC’s rules and forms, and that such information may not be accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosures.

A material weakness is a deficiency, or combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on the assessment of the effectiveness of disclosure controls and procedures as of February 29, 2012, the following significant deficiencies were identified:

Management is currently evaluating remediation plans for the above control deficiencies.

In light of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s disclosure controls or internal controls.

Changes in Internal Control

During the quarter ended February 29, 2012, there were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not a party to any pending material legal proceedings and are not aware of any material legal proceedings threatened against us or of which our property is the subject. 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.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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