UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE ACT OF 1934
For the quarterly period endedOctober 31, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File number0-31501
QUINCY RESOURCES INC.
(Exact name of registrant as specified in charter)
Nevada 98-0218264
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
309 Centre Street
Hancock MI 49930-2107
(Address of principal executive offices) (Zip Code)
906-482-4695
Registrants telephone number, including area code
1302 Arbutus Street, Vancouver, BC, V6J 2W8
(Former name, address, and 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), Yes [X] No [ ] and ( ) has been subject to filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date.
Class Outstanding as of October 31, 2002
Common Stock, $0.001 per share 10,026,500
INDEX
| | Page Number |
PART 1. | | |
ITEM 1. | Financial Statements | 3 |
| | | |
| | Balance Sheet as at October 31, 2002 and April 30, 2002 | 4 |
| | | |
| | Statement of Operations
For the six months ended October 31, 2002 and 2001 and for the period from May 5, 1999 (Date of Inception) to October 31, 2002 |
5
|
| | | |
| | Statement of Cash Flows
For the six months ended October 31, 2002 and 2001 and for the period from May 5, 1999 (Date of Inception) to October 31, 2002 |
6
|
| | | |
| | Notes to Financial Statements | 7 |
| | | |
ITEM 2. | Plan of Operations | 10 |
| | | |
PART 11. | | |
| | Signature | 12 |
| | | |
| | Certificate pursuant to 18 U.S.C. Section 1330 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
13
|
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Quincy Resources Inc. (an exploration stage company) at October 31, 2002 and April 30, 2002 and the statement of operations and statement of cash flow for the six months ended October 31, 2002 and 2001, and for the period from May 5, 1999 (date of inception) to October 31, 2002 have been prepared by the Companys management in conformity with accounting principles generally accepted in the United States 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 adjustments are of a normal recurring nature.
Operating results for the six months ended October 31, 2002, are not necessarily indicative of the results that can be expected for the year ending April 30, 2003.
QUINCY RESOURCES INC.
(Exploration Stage Company)
BALANCE SHEETS
October 31, 2002 and April 30, 2002
(Unaudited Prepared by Management)
| | October 31, 2002 | April 30, 2002 |
ASSETS | | |
| | | |
CURRENT ASSETS | | |
Cash | $ 15,000 | $ 41 |
| | | |
| | $15,000 | $ 41 |
| | | |
LIABILITIES AND STOCKHOLDERS EQUITY | | |
CURRENT LIABILITIES | | |
Accounts payable related party | 27,649 | 6,016 |
Accounts payable and deposits | 15,754 | 13,801 |
Total Current Liabilities | 43,403 | 19,817 |
| | | |
STOCKHOLDERS EQUITY | | |
Common stock | | |
200,000,000 shares authorized, at $0.001 par value; 10,026,500 shares issued and outstanding |
10,027
|
10,027
|
Capital in excess of par value | 39,223 | 35,023 |
Deficit accumulated during the exploration stage | (77,653) | (64,826) |
Total Stockholders Deficiency | (28,403) | (19,776) |
| | | |
| | $15,000 | $41 |
The accompanying notes are an integral part of these unaudited financial statements
QUINCY RESOURCES INC.
(Exploration Stage Company)
STATEMENT OF OPERATIONS
For the six months ended October 31, 2002 and 2001 and for the period May 5, 1999 (Date of Inception) to October 31, 2002
(Unaudited Prepared by Management)
| | Three Months Ended October 31, 2002 | Three Months Ended October 31, 2001 | Six Months Ended October 31, 2002 | Six Months Ended October 31, 2001 | Inception to July 31, 2002 |
| | | | | | |
SALES | $ - | $ - | | $ - | $ - |
GENERAL AND ADMINISTRATIVE EXPENSES: | | | |
Accounting | 0 | 950 | 1,000 | 1,900 | 13,350 |
Bank charges | 16 | 20 | 48 | 64 | 328 |
Consulting | 0 | 0 | 0 | 0 | 1,000 |
Edgar filing fees | 0 | 0 | 0 | 459 | 2,083 |
Geology report | 0 | 0 | 0 | 0 | 1,950 |
Incorporation costs | 0 | 0 | 0 | 0 | 670 |
Legal fees | 7,359 | 0 | 7,359 | 465 | 7,824 |
Management fees | 1,500 | 1,500 | 3,000 | 3,000 | 21,000 |
Office | 0 | 171 | 25 | 705 | 1,703 |
Rent | 0 | 900 | 900 | 1,800 | 11,700 |
Staking fees | 0 | 0 | 0 | 2,902 | 4,007 |
Telephone | 0 | 300 | 300 | 600 | 3,900 |
Transfer agent | 0 | 285 | 195 | 207 | 5,825 |
Travel | 0 | 0 | 0 | 0 | 2,313 |
| | | | | | |
NET LOSS | $(8,875) | $(4,126) | $(12,827) | $(12,102) | $(77,653) |
NET LOSS PER COMMON SHARE | | | |
Basic | $ - | $ - | $ - | $ - | $ - |
AVERAGE OUTSTANDING SHARES | | | |
Basic | 10,039,277 | 10,026,500 | 10,032,889 | 10,026,500 | |
The accompanying notes are an integral part of these unaudited financial statements
QUINCY RESOURCES INC.
(Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the three and six months ended October 31, 2002 and 2001 and for the period from May 5,
1999 (Date of Inception) to July 31, 2002
(Unaudited Prepared by Management)
| | Three Months Ended October 31, 2002 | Three Months Ended October 31, 2001 | Six Months Ended October 31, 2002 | Six Months Ended October 31, 2001 | Inception to July 31, 2002 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net loss | $ (8,875) | $ (4,126) | $ (12,827) | $ (12,102) | $ (77,653) |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | |
Capital contribution expense | 1,500 | 2,700 | 4,200 | 5,400 | 36,600 |
Increase in accounts payable - related party | 21,483 | 720 | 21,633 | 5,135 | 27,649 |
Increase in accounts payable | (14,124) | 692 | (13,047) | 1,635 | 754 |
Net cash from operations | (16) | (14) | (41) | 68 | (12,650) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
Proceeds from issuance of common Stock | 15,000 | 0 | 15,000 | 0 | 27,650 |
Net Increase (Decrease) in Cash | 14,984 | (14) | 14,959 | 68 | 15,000 |
Cash at Beginning of period | 16 | 82 | 41 | 0 | 0 |
CASH AT END OF PERIOD | $15,000 | $ 68 | $15,000 | $ 68 | $15,000 |
The accompanying notes are an integral part of these unaudited financial statements
QUINCY RESOURCES INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 2002
(Unaudited Prepared by Management)
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on May 5, 1999 with authorized common stock of 200,000,000 shares with $0.001 par value.
The Company was organized for the purpose of acquiring and developing mineral properties. At the report date mineral claims, with unknown reserves, had been acquired. The Company has not established the existence of a commercially minable ore deposit and therefore has not reached the development stage and is considered to be in the exploration stage.
Since inception the Company has completed Regulation D offerings of 10,026,500 shares of its capital stock for cash. The Company has undertaken a private placement of up to 700,000 units of the Company, at a price of $0.15 per unit, each unit consisting of one common share of the Issuer and one-half of one warrant to purchase one additional common share of the Issuer at a price of $0.25 for one year. As at October 31, 2002 the Company had received subscriptions for 100,000 units. The subscriptions received are included in accounts payable.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On October 31, 2002, the Company had a net operating loss carry forward of $68,778. The tax benefit of $20,633 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has no operations. The net operating loss expires in 2023.
Basic Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.
QUINCY RESOURCES INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
October 31, 2002
(Unaudited Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued
Capitalization of Mining Claim Costs
Costs of acquisition, exploration, carrying, and retaining unproven properties are expensed as incurred. Costs incurred in proving and developing a property ready for production are capitalized and amortized over the life of the mineral deposit or over a shorter period if the property is shown to have an impairment in value. Expenditures for mine equipment will be capitalized and depreciated over their useful lives.
Environmental Requirements
At the report date environmental requirements related to the mineral leases acquired are unknown and therefore an estimate of any future cost cannot be made.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
Financial Instruments
The carrying amounts of financial instruments including cash and accounts payable, are considered by management to be their estimated fair values.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
3. ACQUISITION OF MINERAL LEASE
The Company acquired and staked an undeveloped mineral claim containing 16 units covering 256 hectares located in the Ferrier Creek area of the English Township in the Porcupine mining Division of Ontario, Canada approximately 50 kilometres south of the mining community of Timmins.
QUINCY RESOURCES INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
October 31, 2002
(Unaudited Prepared by Management)
3. ACQUISITION OF MINERAL LEASE -continued
The Company re-staked the its mineral claims on June 13, 2001 and recorded them as follows:
Mineral claim number P1184080 on July 4, 2001; and
Mineral claim numbers P1167077 and P1167078 on July 10, 2001.
The claims are in good standing for two years from the date of recording them.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Former officer-directors who acquired 40% of the common stock issued made contributions to capital by the payment of Company expenses of $35,100.
The present officer director of the Company who holds 40% of the common stock issued has advanced the sum of $27,649 to the Company, $15,649 through the payment of certain of the Companys expenses and $12,000 through loans to the Company which bear 10% simple interest.
5. GOING CONCERN
The Company will need additional working capital to be successful in its efforts to develop the mineral lease acquired and continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding, and long term financing, which will enable the Company to operate in the coming year.
6. ACCOUNTS PAYABLE RELATED PARTY
Accounts payable related party, include a $12,000 note payable with simple interest calculated at 10% per annum. This note is payable on demand.
ITEM 2. PLAN OF OPERATIONS
Managements Plan of Operation
When used in this discussion, the words believe, anticipates, expects and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, that speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company that attempt to advise interested parties of factors which affect the Companys business, in this report, as well as the Companys periodic reports on Forms 10-KSB and 10-QSB filed with the Securities and Exchange Commission.
Mineral Property
The Company had an independent consultant re-stake certain mineral claims in English township in the Porcupine Mining Division of Ontario, Canada on June 13, 2001 and had the mineral claims recorded as follows: number P1184080 was recorded on July 4, 2001 and numbers P1167078 and P1167077 were recorded on July 10, 2001. These claims are in good standing for two years from the date of recording. Therefore, none of the claims will expire until 2003. No known mineral deposits are known to exist on the claims but the property is subject to exploration activities to determine whether there is an ore body present. The Company has not undertaken any exploration work on the claims since they were record in July 2001.
Subject to obtaining sufficient financing the Company plans to review its mineral claims and, if warranted, undertake further exploration activities.
Change of control
On August 16, 2002, Adam Smith, President and Director of the Company, and Gordon Krushnisky, Secretary Treasurer and Director, each entered into two separate Stock Purchase Agreements with Daniel T. Farrell whereby Smith and Krushniksy sold collectively 4,000,000 common shares in the capital stock of the Company to Farrell for a total consideration of $4,000 cash. Pursuant to the above noted Agreement, Farrell was appointed the Companys President, Secretary and Treasurer. The Companys Board of Directors elected Farrell to the Board of Directors effect on August 30, 2002. At the same time, Smith and resigned. This resulted in a change of control. Refer to Item 6 (b) below.
Liquidity and Capital Resources
At the present time, Quincy Resources Inc. does not have sufficient funds to undertake any exploration program on its property and therefore it will have to determine the best method of raising funds to accomplish its goals. To this end the Company has undertaken a private placement of up to 700,000 units of the Company, at a price of $0.15 per unit, each unit consisting of one common share of the Issuer and one-half of one warrant to purchase one additional common share of the Issuer at a price of $0.25 for one year. As at October 31, 2002 the Company had received subscriptions for 100,000 units. The subscriptions received are
included in the account payable.
Results of Operations
There have been no operations during the current period.
Part 11. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving the Company or its mineral claim. No director, officer or affiliate of the Company is (i) a party adverse to the Company in any legal proceedings, or (ii) has an adverse interest to the Company in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against the Company or its mineral claim.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company has outstanding 10,026,500 shares of common stock as at October 31, 2002. Other than mentioned under Item 6 (b) below, there have been no changes in securities since the Companys fiscal year end.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
No report is required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be attached by Item 601 of Regulation S-B are listed below and are incorporated herein by this reference.
No Exhibits are required
(b) Change of control. For details pertaining to the change of control refer to Information Statement Pursuant to Section 14 (f) of the Securities Exchange Act of 1934 and Rule 14f-1 and the Companys Current Report filed on Form 8-K dated September 3, 2002 which can be viewed on the following website: http://www/sec/gov
SIGNATURE
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.
QUINCY RESOURCES INC.
November 29, 2002
/s/ "Daniel Farrell"
Daniel Farrell
Director
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-QSB for the six -month period ended October 31, 2002 of Quincy Resources Inc. (the "Company"), Daniel Farrell, President and Director of the Company, hereby certify that, to the best of his knowledge and belief:
1. The Quarterly Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934, as amended; and
2. The information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ "Daniel Farrell"
Daniel Farrell
Director
December 15, 2002
