UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934
For the quarterly period ended August 31, 20172018
☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934
For the transition period from ________________________ to ________________________
Commission File Number: 0-23726None
MASCOTA RESOURCES CORP.
(Exact name of registrant as specified in its charter)
NEVADANEVADA
| | 36-4752858
|
(State or other jurisdiction of incorporation or organization) | | 36-4752858 (I.R.S. Employer Identification No.) |
29409 232nd Ave. SE7976 East Phillips Circle
Black Diamond, WA 98010Centennial, CO 80112-3231
(Address of principal executive offices, including Zip Code)
(206)-818-4799(303) 961-7690
(Issuer'sIssuer’s telephone number, including area code)
(Former name or former address if changed since last report)
Check whether the issuer (1) has 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 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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). Yes ☐ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "non-accelerated” “non-accelerated filer,"” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ ☒ | Smaller reporting company | ☒ |
| | | Emerging growth company | ☐ |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒☐ No ☐☒
State the number of shares outstanding of each of the issuer'sissuer’s classes of common equity, as of the latest practicable date: 3,890,7506,246,190 shares of common stock as of October 18, 2017.December 31, 2018.
MASCOTA RESOURCES CORP. | |
CONSOLIDATED BALANCE SHEET | |
(Stated in US Dollars) (Unaudited) | |
ASSETS | | August 31, | | | November 30, | |
| | 2018 | | | 2017 | |
| | | | | | |
Current Assets | | | | | | |
Cash | | $ | 18,177 | | | $ | 2,846 | |
Total Current Assets | | | 18,177 | | | | 2,846 | |
Fixed Assets | | | | | | | | |
Land and land improvements | | | 111,963 | | | | 55,000 | |
Total Fixed Assets | | | 111,963 | | | | 55,000 | |
| | | | | | | | |
Total Assets | | $ | 130,140 | | | $ | 57,846 | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
LIABILITIES | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts Payable | | $ | 48,328 | | | $ | 19,530 | |
Accrued Interest, Notes Payable | | | 2,106 | | |
| 74 | |
Accrued Interest, Notes Payable - Related Parties | | | 233 | | | | 9 | |
Accrued Interest, Convertible Notes Payable | | | - | | | | 214 | |
Accrued Interest, Convertible Notes Payable - Related Parties | | | - | | | | 577 | |
Convertible Notes Payable - Related Parties | | | - | | | | 10,000 | |
Convertible Notes Payable | | | - | | | | 10,000 | |
Stock Subscription Payable | | | 60,000 | | | | - | |
Total Current Liabilities | | | 110,667 | | | | 40,404 | |
Long Term Liabilities | | | | | | | | |
Notes Payable | | | 45,000 | | | | 45,000 | |
Notes Payable - Related Parties | | | 11,900 | | | | 5,000 | |
Total Long-term Liabilities | | | 56,900 | | | | 50,000 | |
| | | | | | | | |
Total Liabilities | | | 167,567 | | | | 90,404 | |
STOCKHOLDERS' DEFICIT | | | | | | | | |
Preferred Stock, $0.01 par value, 10,000,000 shares authorized | | | 500 | | | | 500 | |
50,000, issued or outstanding as of August 31, 2018 and November 30, 2017 | | | | | |
Common Stock, $0.001 par value, 90,000,000 shares authorized, | | | | | | | | |
5,476,190 and 4,140,750 shares issued and outstanding as of August 31, 2018 and November 30, 2017, respectively 5,476 | | | | 4,141 | |
| | | | | | | | |
Additional paid in capital | | | 186,249 | | | | 160,753 | |
Accumulated deficit | | | (229,652 | ) | | | (197,952 | ) |
Total Stockholders' Deficit | | | (37,427 | ) | | | (32,558 | ) |
Total Liabilities and Stockholders' Deficit | | $ | 130,140 | | | $ | 57,846 |
|
MASCOTA RESOURCES CORP. | |
CONDENSED CONSOLIDATED BALANCE SHEETS | |
(Stated in US Dollars) | |
(Unaudited) | |
| | | | | | |
| | | | | | |
| | August 31, | | | November 30, | |
| | 2017 | | | 2016 | |
| | | | | | |
ASSETS | | | | | | |
| | | | | | |
Current Assets | | | | | | |
Cash | | $ | 2,546 | | | $ | 1,172 | |
Total Current Assets | | | 2,546 | | | | 1,172 | |
| | | | | | | | |
Total Assets | | $ | 2,546 | | | $ | 1,172 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts Payable | | $ | 4,762 | | | $ | 9,016 | |
Accrued Interest | | | 76 | | | | - | |
Accrued Interest, Related Party | | | 438 | | | | - | |
Convertible Note Payable | | | 5,000 | | | | - | |
Convertible Note Payable, Related Party | | | 10,000 | | | | - | |
Total Current Liabilities | | | 20,276 | | | | 9,016 | |
| | | | | | | | |
Total Liabilities | | | 20,276 | | | | 9,016 | |
| | | | | | | | |
STOCKHOLDERS' DEFICIT | | | | | | | | |
Preferred Stock, $0.01 par value, 10,000,000 shares authorized, | | | 500 | | | | 500 | |
50,000 issued and outstanding | | | - | | | | - | |
Common Stock, $0.001 par value, 90,000,000 shares authorized, | | | | | | | | |
3,890,750 shares issued and outstanding | | | 3,891 | | | | 3,891 | |
Additional paid-in capital | | | 156,003 | | | | 156,003 | |
Accumulated deficit | | | (178,124 | ) | | | (168,238 | ) |
Total Stockholders' Deficit | | | (17,730 | ) | | | (7,844 | ) |
| | | | | | | | |
Total Liabilities and Stockholders' Deficit | | $ | 2,546 | | | $ | 1,172 | |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
MASCOTA RESOURCES CORP. | MASCOTA RESOURCES CORP. | | MASCOTA RESOURCES CORP. | |
Condensed Consolidated Statements of Operations | | |
CONSOLIDATED STATEMENTS OF OPERATIONS | | CONSOLIDATED STATEMENTS OF OPERATIONS | |
(Stated in US Dollars) | (Stated in US Dollars) | | (Stated in US Dollars) | |
(Unaudited) | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | | | Three Months Ended | | | Nine Months Ended | |
| | August 31, | | | August 31, | | | August 31, | | | August 31, | |
| | 2017 | | | 2016 | | �� | 2017 | | | 2016 | | | 2018 | | | 2017 | | | 2018 | | | 2017 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Revenue | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Professional fees | | | | 1,950 | | | | 730 | | | | 8,910 | | | | 3,560 | |
Legal fees | | | | 16,165 | | | | - | | | | 16,800 | | | | 2,530 | |
General and administrative | | | 2,032 | | | | 10,806 | | | | 9,372 | | | | 11,017 | | | | 1,481 | | | | 1,302 | | | | 2,693 | | | | 3,282 | |
Total Operating Expenses | | | 2,032 | | | | 10,806 | | | | 9,372 | | | | 11,017 | | |
Total Expenses | | | $ | 19,596 | | | $ | 2,032 | | | $ | 28,403 | | | $ | 9,372 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss | | | (2,032 | ) | | | (10,806 | ) | | | (9,372 | ) | | | (11,017 | ) | | | (19,596 | ) | | | (2,032 | ) | | | (28,403 | ) | | | (9,372 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Expenses | | | | | | | | | | | | | | | | | |
Interest expense | | | 227 | | | | 316 | | | | 514 | | | | 2,295 | | | | 888 | | | | 76 | | | | 2,631 | | | | 86 | |
Interest expense, related parties | | | | 217 | | | | 151 | | | | 666 | | | | 428 | |
Total Other Income (Expenses) | | | | (1,105) | | | | (227) | | | | (3,297) | | | | (514) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (2,259 | ) | | $ | (11,122 | ) | | $ | (9,886 | ) | | $ | (13,312 | ) | | $ | (20,701 | ) | | $ | (2,259 | ) | | $ | (31,700 | ) | | $ | (9,886 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss per share, basic and fully diluted | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) | | $ | (0.00 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average number of shares outstanding - basic and fully diluted | | | 3,890,750 | | | | 3,497,913 | | | | 3,890,750 | | | | 3,233,120 | | |
Weighted average number of shares | | | | 4,214,126 | | | | 3,890,750 | | | | 4,189,489 | | | | 3,890,750 | |
outstanding - basic and fully diluted | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
MASCOTA RESOURCES CORP. | MASCOTA RESOURCES CORP. | | MASCOTA RESOURCES CORP. | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | |
CONSOLIDATED STATEMENT OF CASH FLOWS | | CONSOLIDATED STATEMENT OF CASH FLOWS | |
(Stated in US Dollars) | (Stated in US Dollars) | | (Stated in US Dollars) | |
(Unaudited) | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | | |
| | Nine Months Ended | | | Nine Months Ended | |
| | August 31, | | | August 31,
| |
| | 2017 | | | 2016 | | | 2018 | | | 2017 | |
Cash Flows from Operating Activities | | | | | | | | | | | | |
Net loss | | $ | (9,886 | ) | | $ | (13,312 | ) | | $ | (31,700 | ) | | $ | (9,886 | ) |
Change in operating assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts payable | | | (4,254 | ) | | | (4,751 | ) | | | 28,798 | | | | (4,254 | ) |
Accrued interest | | | 76 | | | | - | | |
Accrued interest, related parties | | | 438 | | | | 2,298 | | |
Net Cash (Used by) Operating Activities | | | (13,626 | ) | | | (15,765 | ) | |
Accrued interest, notes payable - related parties | | | | 2,096 | | | | 438 | |
Accrued interest, notes payable | | | | 160 | | | | 76 | |
Accrued interest, convertible notes payable - related parties | | | | 220 | | | | | |
Accrued interest, convertible notes payable | | | | 604 | | | | | |
| | | | | | |
| | |
Net Cash from (used by) operating activities | | | | 178 | | | | (13,626 | ) |
| | | | | | | | | | | | | | | | |
Cash Flows from Investing Activities | | | | | | | | | | | | | | | | |
Net Cash (Used by) Investing Activities | | | - | | | | - | | |
Land Improvement | | | | (56,963 | ) | | | - | |
Net Cash used by Investing Activities | | | | (56,963 | ) | | | - | |
| | | | | | | | | | | | | | | | |
Cash Flows from Financing Activities | | | | | | | | | | | | | | | | |
Convertible note payable | | | 5,000 | | | | - | | |
Convertible note payable, related party | | | 10,000 | | | | 20,150 | | |
Net Cash Provided by Financing Activities | | | 15,000 | | | | 20,150 | | |
Proceeds from sale of stock subscriptions | | | | 60,000 | | | | - | |
Proceeds from issuance of notes payable, related parties | | | | 6,900 | | | | | |
Proceeds from issuance of convertible notes payable | | | | 5,216 | | | | | |
Convertible notes payable - related party | | | | | | | | 10,000 | |
Convertible notes payable | | | | | | | | 5,000 | |
Net Cash from Financing Activities | | | | 72,116 | | | | 15,000 | |
| | | | | | | | | | | | | | | | |
Net increase in cash | | | 1,374 | | | | 4,385 | | |
Net Increase in cash | | | | 15,331 | | | | 1,374 | |
| | | | | | | | | | | | | | | | |
Cash at beginning of period | | | 1,172 | | | | 3,600 | | | | 2,846 | | | | 1,172 | |
| | | | | | | | | | | | | | | | |
Cash at end of period | | $ | 2,546 | | | $ | 7,985 | |
| $ | 18,177 | |
| $ | 2,546 | |
| | | | | | | | | | | | | | | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
| | | | | | | | | | | | | | | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | | | | | | |
Cash paid for: | | | | | | | | | | | | | | | | |
Interest | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
Income taxes | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
Conversion of shareholders notes into common and preferred stock | | $ | - | | | $ | 71,254 | | |
Forgiveness of accrued interest on shareholder notes | | $ | - | | | $ | 4,708 | | |
Conversion of notes and accrued interest into common stock | | | $ | 26,831 | | | $ | - | |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
MASCOTA RESOURCES CORP.
Notes to Condensed ConsolidatedUnaudited Financial Statements
For the Three and Nine Months Ended
August 31, 2017 and 2016
(Unaudited)2018
Note 11. Basis of presentation
While the information presented in the accompanying August 31, 20172018 financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United State of America. 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 adjustment are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These financial statements should be read in conjunction with the Company'sCompany’s November 30, 20162017, financial statements (and notes thereto). Operating results for the nine months ended August 31, 20172018 are not necessarily indicative of the results that can be expected for the year ending November 30, 2017.2018.
The accompanying financial statements represent the consolidated operations of Mascota Resources Corp. (“MRC”) and Great Northern Properties, Inc. (“GNP”) from the periods of each of the Company’s wholly-owned subsidiaries’ respective formation or acquisition dates forward, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All intercompany transactions have been eliminated, and all amounts are presented in the US Dollar. The consolidated entity is referred to as “the Company,” “we,” “us,” or “our.”
Note 2 2.Business
Nature of Operations
Mascota Resources Corp. ("the Company," "we," "us," or "our")MRC was incorporated in the state of Nevada on November 3, 2011. The Company is an exploration stage company andMRC was formed for the purpose of acquiring exploration and development stage mineral properties.
On November 9, 2011,20, 2017, the Company incorporated a wholly-owned subsidiary, MRC Exploration LLC ("MRC")acquired all of the outstanding shares of GNP for consideration of 250,000 shares of the Company’s restricted common stock valued at $5,000 ($0.02 per share), as well as promissory notes in the Stateprincipal amount of Nevada$50,000, for the purposetotal purchase price of mineral exploration.
During May 2013, MRC acquired a Uranium mineral claim located$55,000. GNP was incorporated in the Athabasca Basin, within the Province of Saskatchewan, Canada (the "Claim"). Subsequently, the required explorationAlaska on September 22, 2017 and development expenditures werehad not made and the ownership interestengaged in the Claim lapsed on May 3, 2015 and as of that date, the Company no longer held a beneficial interest in the Claim.
The Company's business plan is to proceed withany operations, other than the acquisition from its sole officer and explorationdirector of feasible mineral claimsa parcel of undeveloped land in Anchorage, Alaska. The Company’s plans for this property are to determine whether therebuild a triplex with three rental units, each of which will be approximately 1,200 sq. ft. The promissory notes bear interest at 6% per year, are commercially exploitable reserves of gold, silverunsecured, and uranium. The Company's geological consulting firm is well-experienced inare due and payable on October 31, 2022 or upon the mineral exploration business and will provide us with the expected costs of exploration to determine the commercial viabilitysale of the prospect.
property in Anchorage, Alaska, whichever is the first to occur. Prior to the acquisition, there were no significant common shareholdings or affiliations between the MRC, GNP, or either entity’s shareholders. As a result of the acquisition, MRC’s capital, operations, and management remained intact. As such, the transaction was accounted for as a business purchase, whereby the Alaska property (GNP’s only balance sheet item) was recorded on the acquisition date at fair market value.
Note 3
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principlesUS GAAP applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the ordinary course of business. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has not yet achieved profitable operations, has accumulated losses of $178,124,$229,652, since its inception through August 31, 20172018 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company'sCompany’s ability to continue as a going concern.
The Company'sCompany’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company may be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Companycompany cannot continue in existence.
Note 4 Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and are stated in US dollars. The Company has adopted a November 30 year end.
Consolidated Statements
These consolidated financial statements include the accounts of the Company and MRC Exploration LLC., a wholly owned subsidiary incorporated in Nevada, USA on November 9, 2011. All significant inter-company transactions and balances have been eliminated.
Foreign Currency Translation
The Company's functional currency is the United States dollar as substantially all of the Company's operations are in the USA. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission ("SEC").
Assets and Liabilities
Assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period, if applicable.
Translation adjustments from the use of different exchange rates from period to period are included in the Accumulated Other Comprehensive Income account in Stockholders' Equity, if applicable.
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations (no comprehensive loss shown in Statement of Operations).
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Cash Equivalents
The Company considers all short termshort-term investments purchased with an original maturity of three months or less to be cash equivalents.
Income Taxes
We account for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Current tax benefits are offset by a valuation reserve as they are considered not likely to be realized in the foreseeable future.
Net Income (Loss) Per Share
In accordance with FASB ASC Topic 260 "EarningsEarnings per Share", basic earnings per share ("EPS") is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. No potentially dilutive
At November 30, 2017, the Company had related party and non-party convertible notes payable outstanding that, if converted, would result in the issuance of 1,000,000 shares of common stock. The debt or equity instruments were issued or outstandingwas fully converted during the periodnine months ended August 31, 20172018 (Note 5) and no convertible debt or other potentially dilutive securities were outstanding at August 31, 2018. In addition, the Company received funds for stock subscriptions during the nine months ended August 31, 2018. The stock subscriptions include warrants that have a dilutive effect on EPS once issued. As of August 31, 2018, the shares and associated warrants had not yet been issued (Note 7).
New Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
Employees
The Company does not have any employees, other than Mark Rodenbeck who serves as the Company’s only officer. Mr. Rodenbeck does not receive any compensation for his services to the Company.
Note 3. Long-Lived Assets
On November 20, 2017 the Company acquired a parcel of undeveloped land in Anchorage, Alaska via its acquisition of 100% stock ownership of GNP. The Company's plans for this property are to build a triplex with 3 rental units, each of which will consist of approximately 1,200 sq. ft. Upon acquisition, the land was recorded at its fair market value, which was deemed to be the value of the $55,000 in consideration paid for the GNP stock. Land improvements are recorded at cost, totaling $56,963 and $0 as of August 31, 2018 and November 30, 2017, respectively. The Company intends to evaluate the land and land improvements for impairment periodically in accordance with ASC 360Property, Plant, and Equipment.
Note 4.Stockholders’ Equity
The Company’s common stock is quoted under the symbol “MACR” on the OTC Pink tier operated by OTC Markets Group, Inc. To date, an active trading market for the Company’s common stock has not developed.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of its $0.01 par value preferred stock. As of August 31, 2018, and November 30, 2017 the Company had 50,000 outstanding shares of preferred stock. The preferred shares are not convertible into shares of the Company’s common stock.
Common Stock
On August 21, 2018, the convertible notes referenced in Notes 5(a) and 5(b) totaling $25,000, including accrued interest of $1,831, were converted into 1,335,440 shares of the Company’s common stock.
As of August 31, 2018, and November 30, 2017 the Company had 5,476,190 and 4,140,750 shares, of common stock issued and outstanding, respectively.
Note 5. Notes Payable
(a) Convertible Notes Payable - Related Parties
On December 14, 2016, the Company received $10,000 from Mark Rodenbeck pursuant to an unsecured promissory note. The note was due December 14, 2017, carried an interest rate of 6%, and is convertible into shares of the Company’s common stock at $0.02 per share. This note was converted on August 21, 2018 (Note 4).
(b) Convertible Notes Payable
On May 18, 2017 an unaffiliated investor advanced the Company $5,000. On September 25, 2017, a second unaffiliated investor also advanced the Company $5,000. In February 2018, an investor advanced $5,216. The $15,216 total proceeds were received pursuant to unsecured promissory notes that are due one year from their respective issuance dates, carry an interest rate of 6%, and are convertible into shares of the Company’s common stock at $0.02 per share. These notes were converted on August 21, 2018 (Note 4).
(c) Notes Payable - Related Parties
In connection with the Company's acquisition of GNP, on November 20, 2017 the Company issued a $5,000 unsecured note payable to GNP's former sole officer and director, Jerry Lewis, who became a director of the Company in February 2018. The note carries a 6% interest rate and is payable upon the earlier of October 31, 2022 or the sale of the Company's Anchorage, Alaska property acquired from GNP.
In August, Jerry Lewis, a director of the Company, and a company controlled by Mr. Lewis, loaned the Company $6,900. The loans are unsecured, due on demand, and bear 6% interest per year.
(d) Notes Payable
In connection with the Company’s acquisition of GNP, on November 20, 2017 the Company issued $45,000 in unsecured notes payable to two of GNP’s former shareholders, who each own approximately 1% of the Company's issued and outstanding common stock and have no further affiliation with the Company or GNP. The notes carry a 6% interest rate and are payable upon the earlier of October 31, 2022 or the sale of the Company’s Anchorage, Alaska property acquired from GNP.
(d) Summary
Item | Loan Amount | Accrued Interest |
August 31, 2018 | Nov. 30, 2017 | August 31, 2018 | Nov. 30, 2017 |
Convertible Notes Payable – Related Parties | $ 0 | $ 10,000 | $ 0 | $ 577 |
Convertible Notes Payable | 0 | 10,000 | 0 | 214 |
Notes Payable – Related Parties | 11,900 | 5,000 | 233 | 9 |
Notes Payable | 45,000 | 45,000 | 2,106 | 74 |
Total | $ 56,900 | $ 70,000 | $ 2,339 | $ 874 |
Note 56. Related Party Transactions
In support of the Company's efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing.
As detailedThe Company engaged in Note 7, amounts previously owed to the Company's President, Dale Rasmussen, and Secretary, Mark Rodenbeck, were converted into the Company's common stock on June 28, 2016.
On December 14, 2016, the Company's Secretary, Mark Rodenbeck, advanced the Company $10,000 pursuant to an unsecured, 6% promissoryvarious note due on December 14, 2018. Principal and interest are convertible at Mr. Rodenbeck's option into the Company's common stock in $100 increments at a fixed rate of $.02 per share. Accrued interest and interest expense on this note as of and forpayable transactions with related parties during the nine months ended August 31, 2017 totaled $438.
2018 and 2017. (See Note 6 Convertible Notes Payable
On May 18, 2017, an unaffiliated investor advanced the company $5,000 pursuant to an unsecured, 6% promissory note due on May 18, 2018. The note and accrued interest are convertible at the investor's option into the Company's common stock in $100 increments at a fixed rate of $.02 per share. Accrued interest and interest expense on this note as of and for the period of May 18, 2017 through August 31, 2017 totaled $76.
Note 7 Stockholders' Deficit7. Stock Subscriptions Payable and Warrants
Authorized Share CapitalFrom May 23 to August 31, 2018 the Company received $60,000 from the sale to private investors of 600,000 Units at a price of $0.10 per unit. Each Unit consisted of one share of the Company’s common stock and one Series A Warrant. Each Series A warrant allows the holder to purchase one share of the Company’s common stock at a price of $1.00 per share at any time on or before June 1, 2019. As of the date these financial statements were issued, certificates for the shares and warrants had not been issued.
The authorized share capital of the Company consists of 90,000,000 shares of common stock with par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001.
Preferred Stock
On June 28, 2016, the Company issued 50,000 shares of its preferred stock to Dale Rasmussen in satisfaction of his $15,436 loan made to the Company.
As of August 31, 2017 and November 30, 2016 the Company had 50,000 shares of preferred stock issued and outstanding.
Common Stock
On June 21, 2016, 2,000,000 shares of common stock owned by Maria Ponce, the Company's former President, were canceled and returned to treasury.
On June 28, 2016, the Company issued 50,000 common shares to Dale Rasmussen in satisfaction of Mr. Rasmussen's remaining loans of $1,000 made to the Company. Also on June 28, 2016, the Company issued 2,740,750 common shares to Mark Rodenbeck in satisfaction of loans totaling $54,818 made to the Company. Mr. Rasmussen and Mr. Rodenbeck also agreed to forgive the accrued interest totaling $4,708 due on those loans, which is reflected as an addition to paid-in capital.
As of August 31, 2017 and November 30 2016, the Company had 3,890,750 shares of common stock issued and outstanding.
Note 88. Subsequent Events
Between September 1, 2018 and November 15, 2018, the Company sold 425,000 Units at a price of $.10 per Unit in a private offering for total proceeds of $42,500. Each Unit consisted of one share of the Company’s common stock and one Series A Warrant. Each Series A warrant allows the holder to purchase one share of the Company’s common stock at a price of $1.00 per share at any time on or before June 1, 2019.
On September 25, 2017, an unaffiliated investor advanced10, 2018, Jerry Lewis, a director of the Company, $5,000 pursuant to anand a company controlled by Mr. Lewis, loaned the Company $13,500. The loans are unsecured, 6% promissory note due on September 25, 2018. The notedemand, and accruedbear 6% interest are convertible at the investor's option into the Company's common stock in $100 increments at a fixed rate of $.02 per share.year.
The Company has evaluated subsequent events through the date these financial statements were issued. There have been no additional subsequent events after August 31, 2017 for which disclosure is required.
ITEM 2. MANAGEMENT'SITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
We did not conduct any operations during the nine months ended August 31, 2018.
On November 20, 2017 we acquired all of the outstanding shares of Great Northern Properties, Inc. ("GNP") for consideration of 250,000 shares of our restricted common stock valued at $5,000 ($0.02 per share), as well as promissory notes in the principal amount of $50,000, for total purchase price of $55,000. The promissory notes bear interest at 6% per year and are due and payable on October 31, 2022 or the sale of this property in Anchorage, Alaska, whichever is the first to occur. We plan to build a triplex with 3 rental units, each of which will consist of approximately 1,200 sq. ft., on this property. In August 2018 we applied for a construction permit and began soil testing for the project.
Our operating expenses during the three months ended August 31, 2018 and 2017 increased significantly from $2,032 on August 31, 2017 to $18,596 on August 31, 2018 and were comprised primarily of professional fees. Interest expense for the three months ended August 31, 2018 and 2017 totaled $1,105 and $227, respectively. The increase is due to interest recorded on new debt described in Note 5 to the financial statements. This resulted in an increase in net loss from $2,259 for the three months ended August 31, 2017 to $20,701 for the three months ended August 31, 2018.
During the nine months ended August 31, 2018, our net loss increased to $31,700 as compared to a net loss of $9,886 during the nine months ended August 31, 2017. This is due to an increase in operating expenses from $9,372 for the nine months ended August 31, 2017 to $28,403 for the nine months ended August 31, 2018. The increase is due to engineering services required for our property in Alaska. Additionally, we incurred increased interest expense of $3,297 during the nine months ended August 31, 2018 as compared to $514 during the nine months ended August 31, 2017 due to the issuance of new debt.
We received proceeds from issuance of stock subscriptions (pursuant to the below private offering) notes payable, and convertible notes payable of $60,000, $6,900 and $5,216 respectively, during the nine months ended August 31, 2018, compared to the receipt of $15,000 for the issuance of convertible notes payable during the six months ended August 31, 2017.
Between May 1, 2018 and November 15, 2018, we sold 1,025,000 Units at a price of $.10 per Unit in a private offering, for total proceeds of $102,500 (including the $60,000 mentioned above). Each Unit consisted of one share of our common stock and one Series A Warrant. Each Series A warrant allows the holder to purchase one share of our common stock at a price of $1.00 per share at any time on or before June 1, 2019.
In August 2018 the notes and accrued interest referenced in Notes 5(a) and 5(b) to the financial statements which are part of this report were converted into 1,335,440 shares of our common stock.
We have relied on advances from related parties until such time that we can earn revenue to support our operations or obtain financing through sales of our equity or securities. There is no formal written commitment from any person to provide us with capital. During the nine months ended August 31, 2017 and 2016, we received $10,000 and $20,150, respectively, in proceeds from related parties, as well as $5,000 from an unaffiliated investor in May 2017, which we used to pay for professional fees to maintain our registrant status with the SEC. During the nine months ended August 31, 2016, we issued 50,000 shares of preferred stock to our President in satisfaction of $15,436 in loans we owed to him, and 2,790,750 shares of our common stock to our President and Secretary in satisfaction of $55,818 in related party loans. The officers also forgave accrued interest on these loans in the amount of $4,708, which is reflected in paid-in capital. We did not engage in any equity transactions during the nine months ended August 31, 2017.
ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures as of August 31, 2017.2018. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive and Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission'sCommission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company'scompany’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the period ended August 31, 20172018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
Item 6. Exhibits
Exhibits
| | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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.
MASCOTA RESOURCES CORP.
January 4, 2019 By: /s/Mark Rodenbeck
| MASCOTA RESOURCES CORP. | |
| | | |
| | | |
October 18, 2017 | By: | /s/ Dale Rasmussen | |
| | Dale Rasmussen,Mark Rodenbeck, Principal Executive and Financial Officer | |
10