UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedMay 31, 2011February 29, 2012
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to________ to ________
COMMISSION FILE NUMBER:NUMBER:000-53556
YATERRA VENTURES CORP.
(Exact name of registrant as specified in its charter)
NEVADA | 75-3249571 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
240 Martin Street, #3 | |
Blaine, WA | 98230 |
(Address of principal executive offices) | (Zip Code) |
(360) 510-8998
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
[X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[ ]X] Yes [ ] No
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 [ ] | Accelerated filer [ ] | |
Non-accelerated filer [ ] | Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X][X]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
As of July 19, 2011,April 20, 2012, the IssuerRegistrant had 1,630,000 Sharesshares of Common Stock outstanding.common stockoutstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and ninesix months ended May 31, 2011February 29, 2012 are not necessarily indicative of the results that can be expected for the year ending August 31, 2011.2012.
As used in this Quarterly Report, the terms "we,” "us,” "our,” “Yaterra” and the “Company” mean Yaterra Ventures Corp. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.
2
YATERRA VENTURES CORP.(An Exploration Stage Company)
THIRD QUARTER INTERIM CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED MAY 31, 2011 AND 2010
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
SECOND QUARTER INTERIM CONDENSED FINANCIAL STATEMENTS |
SIX MONTHS ENDED FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
YATERRA VENTURES CORP.(An Exploration Stage Company)
INTERIM CONDENSED BALANCE SHEETS
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
INTERIM CONDENSED BALANCE SHEETS |
(Unaudited) |
(Stated in U.S. Dollars) |
MAY 31 | AUGUST 31 | FEBRUARY 29, | AUGUST 31, | |||||||||
2011 | 2010 | 2012 | 2011 | |||||||||
ASSETS | ||||||||||||
Current | ||||||||||||
Cash | $ | - | $ | 51 | $ | 1,224 | $ | - | ||||
Prepaid expense | 2,500 | - | - | 360 | ||||||||
Total Current Assets | 1,224 | 360 | ||||||||||
2,500 | 51 | |||||||||||
Computer Equipment(Note 4) | - | 98 | ||||||||||
Mineral Property Acquisition Costs(Note 5) | 24,855 | 24,362 | ||||||||||
Mineral Property Acquisition Costs(Note 4) | 22,000 | 22,000 | ||||||||||
Total Assets | $ | 27,355 | $ | 24,511 | $ | 23,224 | $ | 22,360 | ||||
LIABILITIES | ||||||||||||
Current | ||||||||||||
Excess of checks issued over funds on deposit | $ | 2,760 | $ | - | $ | - | $ | 693 | ||||
Accounts payable and accrued liabilities | 138,628 | 116,739 | 166,703 | 160,548 | ||||||||
Amounts payable to related parties (Note 8) | 42,750 | 30,500 | 52,250 | 47,033 | ||||||||
Promissory notes (Note 6) | 247,980 | 161,091 | ||||||||||
Promissory notes payable (Note 5) | 279,037 | 267,500 | ||||||||||
Promissory notes payable to related parties (Note 6) | 23,244 | 9,593 | ||||||||||
Convertible notes (Note 9) | 47,938 | - | ||||||||||
Total Current Liabilities | 432,118 | 308,330 | 569,172 | 485,367 | ||||||||
STOCKHOLDERS’ DEFICIENCY | ||||||||||||
Capital Stock(Note 7) | ||||||||||||
Authorized: 100,000,000 common voting stock with a par value of $0.001 per share 100,000,000 preferred stock with a par value of $0.001 per share – none issued | ||||||||||||
Issued: 1,630,000 common shares as at August 31, 2010 and May 31, 2011 | 1,630 | 1,630 | ||||||||||
Issued: 1,630,000 common shares as at August 31, 2011 and February 29, 2012 | 1,630 | 1,630 | ||||||||||
Additional Paid-In Capital | 189,370 | 189,370 | 211,544 | 189,370 | ||||||||
Deficit Accumulated During The Exploration Stage | (595,763 | ) | (474,819 | ) | (759,122 | ) | (654,007 | ) | ||||
Total Stockholders’ Deficiency | (404,763 | ) | (283,819 | ) | (545,948 | ) | (463,007 | ) | ||||
Total Liabilities and Stockholders’ Deficiency | $ | 27,355 | $ | 24,511 | $ | 23,224 | $ | 22,360 |
The accompanying notes are an integral part of these interim condensed financial statements.
YATERRA VENTURES CORP.(An Exploration Stage Company)
INTERIM CONDENSED STATEMENTS OF OPERATIONS
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
INTERIM CONDENSED STATEMENTS OF OPERATIONS |
(Unaudited) |
(Stated in U.S. Dollars) |
CUMULATIVE | CUMULATIVE | |||||||||||||||||||||||||||||
PERIOD FROM | PERIOD FROM | |||||||||||||||||||||||||||||
THREE | NINE | INCEPTION | THREE | SIX | INCEPTION | |||||||||||||||||||||||||
MONTHS | MONTHS | NOVEMBER 20 | MONTH PERIODS | MONTH PERIODS | NOVEMBER 20 | |||||||||||||||||||||||||
ENDED | ENDED | 2006 TO | TO THE END OF | TO THE END | 2006 TO | |||||||||||||||||||||||||
MAY 31 | MAY 31 | MAY 31 | FEBRUARY | FEBRUARY | FEBRUARY 29 | |||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | |||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Accounting and audit | $ | 6,360 | $ | 10,819 | $ | 20,991 | $ | 30,526 | $ | 129,668 | $ | 22,279 | $ | 5,348 | $ | 31,895 | $ | 14,631 | $ | 178,537 | ||||||||||
Bank charges and interest | 6,363 | 3,521 | 16,365 | 9,469 | 33,790 | 7,981 | 5,585 | 14,931 | 10,002 | 57,737 | ||||||||||||||||||||
Consulting fees | 150 | 150 | 450 | 450 | 2,600 | 150 | 150 | 300 | 300 | 3,050 | ||||||||||||||||||||
Depreciation | - | 99 | 98 | 296 | 1,184 | - | - | - | 98 | 1,184 | ||||||||||||||||||||
Finance charges | 1,012 | - | 1,012 | - | 1,012 | |||||||||||||||||||||||||
Management fees | 12,000 | 12,000 | 36,000 | 36,000 | 183,500 | 13,750 | 12,000 | 25,000 | 24,000 | 220,500 | ||||||||||||||||||||
Mineral property exploration costs | - | - | 1,756 | 5,560 | 39,994 | - | 1,756 | 2,984 | 1,756 | 52,555 | ||||||||||||||||||||
Office and administrative | 3,836 | 5,971 | 15,783 | 14,192 | 59,138 | 8,510 | 9,178 | 4,886 | 11,947 | 66,633 | ||||||||||||||||||||
Professional fees | 3,339 | 6,428 | 21,702 | 17,509 | 107,360 | 11,318 | 8,954 | 13,362 | 18,363 | 124,118 | ||||||||||||||||||||
Transfer agent and filing fees | 3,369 | - | 7,325 | 4,242 | 22,720 | 9,528 | 3,956 | 10,360 | 3,956 | 34,219 | ||||||||||||||||||||
Travel and promotion | 140 | 1,540 | 474 | 1,540 | 15,809 | 188 | 162 | 385 | 334 | 16,208 | ||||||||||||||||||||
Write-off mineral property costs | - | - | - | - | 3,369 | |||||||||||||||||||||||||
Net Loss For The Period | $ | (35,557 | ) | $ | (40,528 | ) | $ | (120,944 | ) | $ | (119,784 | ) | $ | (595,763 | ) | $ | (74,716 | ) | $ | (47,089 | ) | $ | (105,115 | ) | $ | (85,387 | ) | $ | (759,122 | ) |
Basic And Diluted Loss Per Share | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.05 | ) | ||||||
Weighted Average Number OfCommon Shares Outstanding | 1,630,000 | 1,630,000 | 1,630,000 | 1,630,000 | 1,630,000 | 1,630,000 | 1,630,000 | 1,630,000 |
The accompanying notes are an integral part of these interim condensed financial statements.
YATERRA VENTURES CORP.(An Exploration Stage Company)
INTERIM CONDENSED STATEMENTS OF CASH FLOWS
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
INTERIM CONDENSED STATEMENTS OF CASH FLOWS |
(Unaudited) |
(Stated in U.S. Dollars) |
CUMULATIVE | CUMULATIVE | |||||||||||||||||
PERIOD FROM | PERIOD FROM | |||||||||||||||||
NINE | INCEPTION | SIX | INCEPTION | |||||||||||||||
MONTHS | NOVEMBER 20 | MONTH PERIODS | NOVEMBER 20, | |||||||||||||||
ENDED | 2006 TO | ENDED | 2006 TO | |||||||||||||||
MAY 31 | MAY 31 | FEBRUARY | FEBRUARY 29, | |||||||||||||||
2011 | 2010 | 2011 | 2012 | 2011 | 2012 | |||||||||||||
Cash (Used In) Operating Activities | ||||||||||||||||||
Net loss for the period | $ | (120,944 | ) | $ | (119,784 | ) | $ | (595,763 | ) | |||||||||
Net loss for the period: | $ | (105,115 | ) | $ | (85,387 | ) | $ | (759,122 | ) | |||||||||
Depreciation | 98 | 296 | 1,184 | - | 98 | 1,184 | ||||||||||||
Finance charges on convertible notes | 1,012 | - | 1,012 | |||||||||||||||
Interest accrued on convertible notes | 1,048 | - | 1,048 | |||||||||||||||
Interest accrued on promissory notes | 14,435 | 6,643 | 28,179 | 12,799 | 8,969 | 49,113 | ||||||||||||
Changes in non-cash operating working capital items: | ||||||||||||||||||
Write-off of mineral property acquisition costs | - | - | 3,369 | |||||||||||||||
Changes in non-cash operating working capital | ||||||||||||||||||
items: | ||||||||||||||||||
Accounts payable and accrued liabilities | 21,889 | 31,518 | 138,628 | 6,155 | 9,038 | 166,703 | ||||||||||||
Amounts due to related parties | 12,250 | 7,210 | 42,750 | |||||||||||||||
Amounts payable to related parties | 5,217 | 7,750 | 52,250 | |||||||||||||||
Prepaid expense | (2,500 | ) | - | (2,500 | ) | 360 | - | - | ||||||||||
(74,772 | ) | (74,117 | ) | (387,522 | ) | (78,524 | ) | (59,532 | ) | (484,443 | ) | |||||||
Cash (Used In) Investing Activities | ||||||||||||||||||
Mineral property acquisition costs | (493 | ) | (960 | ) | (24,855 | ) | - | (493 | ) | (25,369 | ) | |||||||
Computer equipment | - | - | (1,184 | ) | - | - | (1,184 | ) | ||||||||||
(493 | ) | (960 | ) | (26,039 | ) | - | (493 | ) | (26,553 | ) | ||||||||
Cash Provided By Financing Activities | ||||||||||||||||||
Issue of share capital | - | - | 191,000 | |||||||||||||||
Promissory notes | 75,051 | 73,195 | 222,398 | |||||||||||||||
Issue of capital stock | - | - | 191,000 | |||||||||||||||
Promissory notes payable | 4,822 | 57,472 | 238,712 | |||||||||||||||
Repayment of promissory notes | (2,597 | ) | - | (2,597 | ) | (5,149 | ) | - | (5,149 | ) | ||||||||
Proceeds from promissory notes payable to related parties | 17,999 | - | 27,485 | |||||||||||||||
Repayment of promissory notes payable to related parties | (5,283 | ) | - | (7,880 | ) | |||||||||||||
Convertible notes subscriptions received | 68,052 | - | 68,052 | |||||||||||||||
72,454 | 73,195 | 410,801 | 80,441 | 57,472 | 512,220 | |||||||||||||
(Decrease) In Cash | (2,811 | ) | (1,882 | ) | (2,760 | ) | ||||||||||||
Increase (Decrease) In Cash | 1,917 | (2,553 | ) | 1,224 | ||||||||||||||
Cash, Beginning Of Period | 51 | 1,941 | - | |||||||||||||||
(Excess of Checks Issued Over Funds on Deposit)Cash, Beginning Of Period | (693 | ) | 51 | - | ||||||||||||||
(Excess of Checks Issued Over Funds onDeposit) Cash, End Of Period | $ | (2,760 | ) | $ | 59 | $ | (2,760 | ) | $ | 1,224 | $ | (2,502 | ) | $ | 1,224 | |||
Supplemental Disclosure Of Cash FlowInformation | ||||||||||||||||||
Cash paid during the period for: | ||||||||||||||||||
Interest | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
Income taxes | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
There were no material non-cash financing or investing activities during the periods presented.
The accompanying notes are an integral part of these interim condensed financial statements.
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS |
The unaudited financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto included for the fiscal year ended August 31, | |
Organization | |
Yaterra Ventures Corp. (“the Company”) was incorporated in the State of Nevada, U.S.A., on November 20, 2006. The Company’s principal executive offices are in Bellingham, Washington, U.S.A. | |
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Exploration Stage Activities | |
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 resource properties. The Company has not commenced business operations. The Company is an exploration stage company as defined in the Securities and Exchange Commission (“S.E.C.”) Industry Guide No. 7. | |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. |
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS(Continued) | |
Going Concern | ||
| ||
As shown in the accompanying financial statements, the Company has incurred a net loss of | ||
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates. | ||
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
The financial statements have been properly prepared within the framework of the significant accounting policies summarized below: | ||
a) | Organization and Start-up Costs | |
Costs of start up activities, including organizational and incorporation costs, are expensed as incurred. | ||
b) | Exploration Stage Enterprise | |
The |
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) | |
c) | Mineral Property Interests | |
The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing when facts and circumstances indicate impairment may exist. | ||
The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable. | ||
Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project. The Company does not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate. | ||
If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values. | ||
The |
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) | |
d) | Cash | |
Cash consists of cash on deposit with high quality major financial institutions, and to date has not experienced losses on any of its balances. The carrying amounts approximate fair market value due to the liquidity of these deposits. | ||
e) |
| |
| ||
Financial Instruments | ||
| ||
The Company classified its cash as held-for-trading, excess of checks issued over funds on deposit, accounts payable and accrued liabilities, accounts payable to related parties, promissory notes payable and | ||
Basic and Diluted Loss Per Share | ||
Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At | ||
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|
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) | |||
Income Taxes | ||||
The Company follows the asset and liability method of accounting for income taxes whereby deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted or substantially enacted tax rates and laws expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in operations in the period that includes the substantive enactment date. | ||||
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, it provides a valuation allowance against that excess. | ||||
h) | Foreign Currency Translation | |||
The Company’s functional currency is the US dollar. Transactions in foreign | ||||
i) | monetary items are translated at the exchange rate prevailing at the balance sheet date; | |||
ii) | non-monetary items are translated at the historical exchange rate; | |||
iii) | revenue and expenses are translated at the average rate in effect during the applicable accounting period. |
The Company has an operating bank account held in Canadian dollars that may expose them to certain translation risks due to foreign exchange fluctuations between the Canadian and US currencies. Foreign exchange gains and losses are reflected in the statement of operations for the period. | |||
Use of Estimates | |||
The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates. |
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) | |
Use of Estimates (Continued) | ||
Significant accounts that require estimates as a basis for determining the stated amounts include mineral property acquisition costs and impairment, accrued liabilities and the valuation allowance of deferred tax assets. | ||
j) | Impairment of Long-Lived Assets | |
The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such cases, the amount of the impairment is determined based on the relative fair values of the impaired assets. The Company tests the recoverability of the assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. | ||
Asset Retirement Obligations | ||
An asset retirement obligation (“ARO”) is a legal obligation associated with the retirement of a tangible long-lived asset that the Company is required to settle. The Company recognizes the fair value of a liability for the ARO in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset is increased by the same amount as the liability. |
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
| ||
| ||
The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flows, discounted at the Company’s credit-adjusted risk-free interest rate. To date, no significant asset retirement obligation exists due to the early stage of exploration. Accordingly, no liability has been recorded. | ||
Environmental Protection and Reclamation Costs | ||
The operations of the Company have been, and may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restorations costs. Both the likelihood of new regulations and their overall effect upon the Company may vary from region to region and are not predictable. |
YATERRA VENTURES CORP. |
(An Exploration Stage Company) |
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS |
FEBRUARY 29, 2012 |
(Unaudited) |
(Stated in U.S. Dollars) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) | |
l) | Environmental Protection and Reclamation Costs (Continued) | |
Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against the statement of operations as incurred or capitalized and amortized depending upon their future economic benefits. The Company does not currently anticipate any material capital expenditures for environmental control facilities because its property holding is at an early stage of exploration. |
Fair Value of Financial Instruments | ||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a three-tier fair value hierarchy which prioritizes the inputs in measuring fair value as follows: |
Level 1: | Observable inputs such as quoted prices in active markets; | |
Level 2: | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
The Company classified its cash as Level 1. |
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
3. | RECENT ACCOUNTING PRONOUNCEMENTS |
In May 2011, the FASB issued new authoritative guidance to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between GAAP and International Financial Reporting Standards. This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively. The Company does not expect that the adoption of this guidance will have a material impact on its financial statements. |
YATERRA VENTURES CORP. | |
(An Exploration Stage Company) | |
| |
FEBRUARY 29, 2012 | |
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YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
4. |
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MAY 31 | AUGUST 31 | ||||||||||||
2011 | 2010 | ||||||||||||
ACCUMULATED | NET BOOK | NET BOOK | |||||||||||
COST | AMORTIZATION | VALUE | VALUE | ||||||||||
Computer equipment | $ | 1,184 | $ | 1,184 | $ | - | $ | 98 |
MINERAL PROPERTIES |
AUGUST 31 | ABANDONED, | MAY 31 | |||||||||||
2010 | ADDITIONS | IMPAIRED | 2011 | ||||||||||
Mineral Property | |||||||||||||
Blue Jack claims | $ | 16,000 | $ | - | $ | - | $ | 16,000 | |||||
Frances claims | 2,362 | 493 | - | 2,855 | |||||||||
Minnie Lode claims | 6,000 | - | - | 6,000 | |||||||||
$ | 24,362 | $ | 493 | $ | - | $ | 24,855 |
AUGUST 31 | ABANDONED, | AUGUST 31 | |||||||||||
2009 | ADDITIONS | IMPAIRED | 2010 | ||||||||||
Mineral Property | |||||||||||||
Blue Jack claims | $ | 16,000 | $ | - | $ | - | $ | 16,000 | |||||
Frances claims | 443 | 1,919 | - | 2,362 | |||||||||
Minnie Lode claims | 6,000 | - | - | 6,000 | |||||||||
$ | 22,443 | $ | 1,919 | $ | - | $ | 24,362 |
AUGUST 31, | ABANDONED, | FEBRUARY 29, | |||||||||||
2011 | ADDITIONS | IMPAIRED | 2012 | ||||||||||
Mineral Property | |||||||||||||
Blue Jack claims | $ | 16,000 | $ | - | $ | - | $ | 16,000 | |||||
Minnie Lode claims | 6,000 | - | - | 6,000 | |||||||||
$ | 22,000 | $ | - | $ | - | $ | 22,000 | ||||||
AUGUST 31, | ABANDONED, | AUGUST 31, | |||||||||||
2010 | ADDITIONS | IMPAIRED | 2011 | ||||||||||
Mineral Property | |||||||||||||
Blue Jack claims | $ | 16,000 | $ | - | $ | - | $ | 16,000 | |||||
Frances claims | 2,362 | 1,007 | (3,369 | ) | - | ||||||||
Minnie Lode claims | 6,000 | - | - | 6,000 | |||||||||
$ | 24,362 | $ | 1,007 | $ | (3,369 | ) | $ | 22,000 |
During the period ended August 31, 2007, the Company entered into a purchase agreement to acquire an undivided 100% interest in a mineral claim (known as the “Minnie Claim”Lode Claims”) located in the Leecher Creek Mining District, Okanogan County, Washington. The consideration was $6,000 cash (paid) on execution of the agreement.
During the year ended August 31, 2009, the Company entered into a purchase agreement to acquire an undivided interest in a series of ten mineral claims (collectively referred to as the “Blue Jack Claims”) located in Humboldt County, Nevada. The consideration was $16,000 (paid) on execution of the agreement.
YATERRA VENTURES CORP.(An Exploration Stage Company)
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
MAY 31, 2011(Unaudited – see Notice to Reader)(Stated in U.S. Dollars)
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On July 14, 2009, the Company entered into an assignment agreement to acquire an undivided 60% interest in a mineral claim (known as the “Frances” claim) situated in the Vancouver Mining District, British Columbia, Canada. The Company paid $500 CDN on execution of the agreement.
All other terms of the agreement remain unchanged. During the year ended August 31, 2011, the Company abandoned and wrote off all costs incurred with respect to the Frances property.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate,” "believe,” "estimate,” "should,” "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption, "Part II - Item 1A. Risk Factors,” and elsewhere in this Quarterly Report. Forward looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date We intend to discuss in our Quarterly Reports and Annual Reports any events or circumstances that occurred during the period to which such documents relate that are reasonably likely to cause actual events or circumstances to differ materially from those disclosed in this Quarterly Report. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of such factors, may cause actual results to differ materially from those contained in any forwarding looking statement. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"). OVERVIEW We were incorporated on November 20, 2006 pursuant to the laws of the State of Nevada. We are an exploration stage company engaged in the acquisition and exploration of mineral properties. Currently, we hold a 100% interest in two mineral properties that we call the “Blue Jack Property” and the “Minnie Claim”. The Blue Jack Property is comprised of 10 mineral claims coveringapproximately 206 acres located in Humboldt County, Nevada. The Minnie Claim covers an area of 20 acres, located in the Leecher Creek Mining Division, Washington State. We plan to focus our resources on the Blue Jack Property in order to assess whether it possesses mineral deposits of In November 2011, we completed a preliminary rock sampling program on the Blue Jack Property. The results of this initial program indicated that the Blue Jack Property contained anomalous values of rare earth minerals. Based on these results, we plan to
We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs. 3 PLAN OF OPERATION During the next twelve months and subject to our ability to obtain additional financing, we intend to conduct mineral exploration activities on the Blue Jack Property Blue Jack Property Our plan is to conduct Phase
We anticipate that we will incur the following expenses over the next twelve months:
To date, we have not earned any revenues and we do not anticipate earning revenues in the near future. As at 4 RESULTS OF OPERATIONS Three
Revenue We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.
Expenses Our expenses for the three and
Our operating expenses 5 Our operating expenses increased from $85,387, during the six months ended February 28, 2011, to $105,115, during the six months ended February 29, 2012. The increase was primarily due to increases in accounting and audit expenses, bank charges and interest, finance charges, management fees, mineral property exploration costs, transfer agent and filing fees and travel and promotion. This was partially offset by decreases in depreciation, office and administrative expenses and
Audit and accounting expenses and professional expenses primarily relate to expenses incurred in connection with meeting our ongoing reporting requirements under the Exchange Act. Management Mineral If we are able to obtain sufficient financing to proceed with our plan of operation, of which there is no assurance, we expect that our expenses will increase significantly as we engage in mining and exploration activities.
LIQUIDITY AND CAPITAL RESOURCES
As of Since our inception, we have used our common stock to raise money for our operations and to fund our property acquisitions. We have not obtained profitable operations and are dependent upon obtaining additional financing to pursue our plan of operation. Future Financings We currently do not have sufficient financial resources to implement Phase I(a) of our exploration program on the Blue Jack On December 9, 2011, our Board of Directors approved an offering of up to $100,000 of 10% convertible notes (the “Offering”). The Offering will be completed pursuant to Regulation S of the
persons who are not U.S. Persons as contemplated under Regulation S. The proceeds of Our plan of operation calls for us to spend significantly more than our current capital resources or the amount of financing that we have been able to obtain to date. As such, there is a substantial doubt that we will be able to raise significant financing to complete our stated plan of operation. Any substantial financing that we are able to obtain is expected to be in the form of equity financing. 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. CRITICAL ACCOUNTING POLICIES
Use of Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates. Significant accounts that require estimates as a basis for determining the stated amounts include mineral property acquisition costs and impairment, accrued liabilities and the valuation allowance of deferred tax assets. Exploration Stage Enterprise Our financial statements are prepared using the accrual method of accounting. Until such properties are acquired and developed, we will continue to prepare our financial statements and related disclosures in accordance with entities in the exploration stage. Mineral Property Interests We are an exploration stage mining company and have not yet realized any revenue from our operations. We are primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment We regularly perform evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of our investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable. Our management periodically reviews the carrying value of our investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that we will continue exploration on such project. We do not set a If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or 7 determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values. Our exploration activities and proposed mine development are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. We have made, and expect to make in the future, expenditures to comply with such laws and regulations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable. ITEM 4. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rules 13a-15(e) and 15(d)-15(e) as of
Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. None. ITEM 1A. RISK FACTORS. The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation. If we do not obtain additional financing, our business will fail. As at Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure. Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. Our mineral properties do not contain a known body of commercial ore and, therefore, any program conducted on our mineral properties would be an exploratory search of ore. There is no certainty that any expenditures made in the exploration of our mineral properties will result in discoveries of commercial quantities of ore. Most exploration projects do not result in the discovery of commercially mineable deposits of ore. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration program do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources to purchase such claims. If we do not have sufficient capital resources and are unable to obtain sufficient financing, we may be forced to abandon our operations. We have no known mineral reserves and if we cannot find any, we may have to cease operations. We are in the initial phases of our exploration
9
The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near the Blue Jack We face significant competition in the mineral exploration industry. We compete with other mining and exploration companies possessing greater financial resources and technical facilities than we do. Due to our weaker competitive position, we may have greater difficulty in hiring and retaining qualified personnel to conduct our planned exploration activities, which could cause delays in our exploration programs. In addition, there is significant competition for a limited number of mineral properties. Due to our weaker financial position, we may be unable to acquire rights to new mineral properties on a continuing basis. Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business. The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards. The payment of such liabilities may result in our inability to complete our planned exploration program and/or obtain additional financing to fund our exploration program. As we undertake exploration of our mineral properties, we will be subject to compliance with government regulations that may increase the anticipated cost of our exploration program. There are several governmental regulations that materially restrict mineral exploration. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. If we enter the production phase, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. Examples of regulatory requirements include:
At this stage of our development, the annual cost of complying with regulatory requirements in the State of Nevada is expected to be minimal. There is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program. We will also have to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned-up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the 10 recommended work program. If remediation costs exceed our cash reserves we may be unable to complete our exploration program and have to abandon our operations.
Because our executive officers and directors do not have formal training specific to the technicalities of mineral exploration, there is a higher risk that our business will fail. None of our executive officers and directors has any formal training as a geologist. With the exception of Mr. Gorrill, our executive officers and directors have only limited training in the technical aspects of managing a mineral exploration company. With very limited direct training or experience in these areas, our management may not be fully aware of the specific requirements related to working within this industry. Our management's decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry. If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail Our success will largely depend on our ability to hire highly qualified personnel with experience in geological exploration. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business. Because the prices of metals fluctuate, if the price of metals for which we are exploring decreases below a specified level, it may no longer be profitable to explore for those metals and we will cease operations. Metal prices are determined by such factors as expectations for inflation, the strength of the United States dollar, global and regional supply and demand, and political and economic conditions and production costs in metals producing regions of the world. The aggregate effect of these factors on metal prices is impossible for us to predict. In addition, the prices of metals such as lead, zinc, copper, silver, gold or uranium are sometimes subject to rapid short-term and/or prolonged changes because of speculative activities. The current demand for and supply of these metals affect the metal prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of these metals primarily consists of new production from mining. If the prices of the metals are, for a substantial period, below our foreseeable cost of production, it may not be economical for us to continue operations and investors could lose their entire investment.
Subject to escrow, Mr. Atkinson, will control 55.2% of our issued and outstanding shares of common stock. Accordingly, in accordance with our Articles of Incorporation and Bylaws, Mr. 11 corporate combinations or similar transactions that might benefit minority stockholders which may be rejected by Mr.
We will likely conduct further offerings of our equity securities in the future, in which case our stockholders’ interest may become diluted. Since our inception, we have relied on such sales of our common stock to fund our operations. We will likely be required to conduct additional equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, stockholders' percentage interest in us could become diluted. The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor. Our stock is quoted on the OTC Bulletin Board under the symbol "YTRV.” Companies quoted on the OTC Bulletin Board have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire at a price equal or greater than the price paid by the investor. Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable 12 information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. MINE SAFETY DISCLOSURES None. ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS. The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:
Notes:
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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