UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended December 31, 2010 | |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to __________ | |
Commission File Number: 000-27645 |
Ivany Nguyen, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 88-0258277 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| 7 Ingram Drive, Suite 128, Toronto, Ontario, Canada M6M 2L7 |
| (Address of principal executive offices) |
| (888) 648-9366 Ext. 2 |
| (Registrant’s telephone number) |
| _______________________________________________________________ |
(Former name, former address and former fiscal year, if changed since last report) |
Indicated 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
[ ] Large accelerated filer [ ] Non-accelerated filer | [ ] Accelerated filer [X] 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 [X] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 44,206,877 common shares as of February 11, 2011.
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 (§ 229.405 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 [X]
TABLE OF CONTENTS | Page | |
PART I – FINANCIAL INFORMATION | ||
| 3 | ||
| 4 | ||
| 9 | ||
| 9 | ||
PART II – OTHER INFORMATION | ||
| 10 | ||
| 10 | ||
| 10 | ||
| 10 | ||
| 10 | ||
| 10 | ||
| 10 | ||
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows: | |
| F-3 | Statements of Stockholders’ Equity as of December 31, 2010 (unaudited); |
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2010 are not necessarily indicative of the results that can be expected for the full year.
3
IVANY NGUYEN, INC.
(An Exploration Stage Company)
Balance Sheets
(Unaudited)
| ASSETS | December 31, 2010 | June 30, 2010 | |||
| CURRENT ASSETS | |||||
| Cash | $ | 207,812 | $ | 69,461 | |
| Prepaid expenses | 62,334 | - | |||
| Total Current Assets | 270,146 | 69,461 | |||
| EQUIPMENT, net | 255 | 1,266 | |||
| TOTAL ASSETS | $ | 270,401 | $ | 70,727 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable | $ | 56,904 | $ | 53,422 | |
| Total Current Liabilities | 56,904 | 53,422 | |||
| STOCKHOLDERS' EQUITY (DEFICIT) | |||||
Preferred stock; 10,000,000 shares authorized, at $0.001 par value, none issued or outstanding and outstanding | - | - | |||
Common stock; 200,000,000 shares authorized, at $0.001 par value, 44,206,877 and 39,506,877 shares issued and outstanding, respectively | 44,207 | 39,507 | |||
| Additional paid-in capital | 10,963,972 | 10,391,672 | |||
| Deficit accumulated during the exploration stage | (10,794,682) | (10,413,874) | |||
| Total Stockholders' Equity (Deficit) | 213,497 | 17,305 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 270,401 | $ | 70,727 | |
The accompanying notes are an integral part of these financial statements.
IVANY NGUYEN, INC.
(An Exploration Stage Company)
Statements of Operations
(Unaudited)
For the Three Months Ended December 31, | For the Six Months Ended December 31, | From Inception Through | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | |||||||||||||||
| REVENUES | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
| OPERATING EXPENSES | |||||||||||||||||||
| Exploration | - | - | - | - | 170,873 | ||||||||||||||
| Professional fees | 124,422 | 31,058 | 341,786 | 109,658 | 1,455,898 | ||||||||||||||
| General and administrative | 19,232 | 252,998 | 38,011 | 271,904 | 2,218,977 | ||||||||||||||
| Impairment of mining properties | - | - | - | - | 545,221 | ||||||||||||||
| Depreciation | 506 | 505 | 1,011 | 1,010 | 5,809 | ||||||||||||||
| Total Operating Expenses | 144,160 | 284,561 | 380,808 | 382,572 | 4,396,778 | ||||||||||||||
| LOSS FROM OPERATIONS | (144,160 | ) | (284,561 | ) | (380,808 | ) | (382,572 | ) | (4,396,778) | ||||||||||
| INCOME TAX EXPENSE | - | - | - | - | - | ||||||||||||||
| LOSS FROM CONTINUING OPERATIONS | (144,160 | ) | (284,561 | ) | (380,808 | ) | (382,572 | ) | (4,396,778 | ) | |||||||||
| DISCONTINUED OPERATIONS | - | - | - | - | (6,397,904 | ) | |||||||||||||
| NET LOSS | $ | (144,160 | ) | $ | (284,561 | ) | $ | (380,808 | ) | $ | (382,572 | ) | $ | (10,794,682 | ) | ||||
| BASIC LOSS PER SHARE | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 42,230,790 | 37,031,877 | 41,026,549 | 36,701,877 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
IVANY NGUYEN, INC.
(An Exploration Stage Company)
Statement of Stockholders' Equity (Deficit)
(Unaudited)
| Common Stock | Additional Paid-In | Stock Subscription | Deficit Accumulated | Total Stockholders'Equity | |||||||||||||
| Shares | Amount | Capital | Payable | Stage | (Deficit) | ||||||||||||
| Balance, June 30, 2005 | 246,032 | $ | 246 | $ | 6,215,095 | $ | - | $ | (6,330,697 | ) | $ | (115,356) | |||||
Net loss for the year ended June 30, 2006 | - | - | - | - | (28,518 | ) | (28,518) | ||||||||||
| Balance, June 30, 2006 | 246,032 | 246 | 6,215,095 | - | (6,359,215 | ) | (143,874) | ||||||||||
Net loss for the year ended June 30, 2007 | - | - | - | - | (38,689 | ) | (38,689) | ||||||||||
| Balance, June 30, 2007 | 246,032 | 246 | 6,215,095 | - | (6,397,904 | ) | (182,563) | ||||||||||
Mineral properties acquired for common stock | 20,150,000 | 20,150 | 77,958 | - | - | 98,108 | |||||||||||
| Common stock issued for cash | 5,055,845 | 5,056 | 1,273,191 | - | - | 1,278,247 | |||||||||||
| Value of options granted | - | - | 1,528,233 | - | - | 1,528,233 | |||||||||||
Net loss for the year ended June 30, 2008 | - | - | - | - | (2,631,422 | ) | (2,631,422) | ||||||||||
| Balance, June 30, 2008 | 25,451,877 | 25,452 | 9,094,477 | - | (9,029,326 | ) | 90,603 | ||||||||||
Common stock issued for services at $0.91 | 300,000 | 300 | 272,700 | - | - | 273,000 | |||||||||||
Common stock issued for exercised options at $0.05 per share | 100,000 | 100 | 4,900 | - | - | 5,000 | |||||||||||
Common stock issued for cash at $0.05 per share | 10,200,000 | 10,200 | 480,800 | 19,000 | - | 510,000 | |||||||||||
Net loss for the year ended June 30, 2009 | - | - | - | - | (520,690 | ) | (520,690) | ||||||||||
| Balance, June 30, 2009 | 36,051,877 | 36,052 | 9,852,877 | 19,000 | (9,550,016 | ) | 357,913 | ||||||||||
Common stock issued for stock subscription payable | 380,000 | 380 | 18,620 | (19,000) | - | - | |||||||||||
Common stock issued for cash at $0.05 per share | 600,000 | 600 | 29,400 | - | - | 30,000 | |||||||||||
Common stock issued for exercised options at $0.10 per share | 2,250,000 | 2,250 | 222,750 | - | - | 225,000 | |||||||||||
Common stock issued for services at $0.17 per shared | 225,000 | 225 | 38,025 | - | - | 38,250 | |||||||||||
| Fair value of warrants issued for services | - | - | 230,000 | - | - | 230,000 | |||||||||||
Net loss for the year ended June 30, 2010 | - | - | - | - | (863,858 | ) | (863,858) | ||||||||||
| Balance, June 30, 2010 | 39,506,877 | 39,507 | 10,391,672 | - | (10,413,874 | ) | 17,305 | ||||||||||
Common stock issued for services at $0.19 per shared | 1,150,000 | 1,150 | 220,850 | - | - | 222,000 | |||||||||||
Common stock and warrants issued for cash | 3,000,000 | 3,000 | 297,000 | - | - | 300,000 | |||||||||||
Warrants exercised for cash at $0.10 per share | 550,000 | 550 | 54,450 | - | - | 55,000 | |||||||||||
Net loss for the six months ended December 31, 2010 | - | - | - | - | (380,808 | ) | (380,808) | ||||||||||
| Balance, December 31, 2010 | 44,206,877 | $ | 44,207 | $ | 10,963,972 | $ | - | $ | (10,794,682 | ) | $ | 213,497 | |||||
The accompanying notes are an integral part of these financial statements.
IVANY NGUYEN, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Six Months Ended December 31, | Through December 31, | |||||||
| 2010 | 2009 | 2010 | ||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (380,808 | ) | $ | (382,572 | ) | $ | (10,794,682) |
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Discountinued operations | - | - | 6,215,341 | |||||
| Value of options granted | - | - | 1,758,233 | |||||
| Common stock issued for services | 159,666 | - | 470,916 | |||||
| Depreciation | 1,011 | 1,010 | 5,809 | |||||
| Impairment of mining properties | - | - | 545,221 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Change in accounts payable | 3,482 | 27,014 | 56,904 | |||||
| Net Cash Used in Operating Activities | (216,649 | ) | (354,548 | ) | (1,742,258) | |||
| INVESTING ACTIVITIES | ||||||||
| Purchase of mineral properties | - | - | (447,113) | |||||
| Purchase of computer equipment | - | - | (6,064) | |||||
| Net Cash Used in Investing Activities | - | - | (453,177) | |||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from common stock | 355,000 | 20,000 | 2,403,247 | |||||
| Repayment of notes payable | - | - | (40,247) | |||||
| Proceeds from notes payable | - | - | 40,247 | |||||
| Repayment to shareholder | - | - | (160,962) | |||||
| Borrowings from shareholder | - | 374 | 160,962 | |||||
| Net Cash Provided by Financing Activities | 355,000 | 20,374 | 2,403,247 | |||||
| NET INCREASE (DECREASE) IN CASH | 138,351 | (334,174 | ) | 207,812 | ||||
| CASH AT BEGINNING OF PERIOD | 69,461 | 455,263 | - | |||||
| CASH AT END OF PERIOD | $ | 207,812 | $ | 121,089 | $ | 207,812 | ||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| CASH PAID FOR: | ||||||||
| Interest | $ | - | $ | - | $ | - | ||
| Income Taxes | $ | - | $ | - | $ | - | ||
| NON CASH FINANCING ACTIVITIES: | ||||||||
| Common stock issued for mineral properties | $ | - | $ | - | $ | 98,108 | ||
| Common stock issued for prepaid expenses | 72,000 | - | 72,000 | |||||
The accompanying notes are an integral part of these financial statements.
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2010 and for all periods presented herein, have been made.
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. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2010 audited financial statements. The results of operations for the period ended December 31, 2010 is not necessarily indicative of the operating results for the full year.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. During the six months ended December 31, 2010 the Company realized a net loss of $380,808 and has incurred an accumulated deficit of $10,794,682. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – RELATED PARTY TRANSACTIONS
The Company currently has consulting agreements with two of the Company’s officers. Each agreement authorizes each member to receive $6,000 per month in consulting fees along with reimbursement of expenses incurred on the Company’s behalf. During the six months ended December 31, 2010 the Company paid $158,804 in combined fees and expense reimbursements to these two officers.
NOTE 4 – CAPITAL STOCK TRANSACTIONS
Preferred stock
The authorized preferred stock is 10,000,000 shares with a par value of $0.001. As of December 31, 2010, the Company has no shares of preferred stock issued or outstanding.
Common stock
The authorized common stock is 200,000,000 shares with a par value of $0.001. As of December 31, 2010 and June 30, 2010, 44,206,877 and 36,051,877 shares were issued and outstanding, respectively.
During the year ended June 30, 2007, the Company completed a reverse split on its common stock from 500 shares to 1 share. The reverse stock split is reflected on a retroactive basis.
IVANY NGUYEN, INC.
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 4 – CAPITAL STOCK TRANSACTIONS (CONTINUED)
During the year ended June 30, 2008, the Company issued 5,055,845 shares of its common stock for cash of $1,278,247. The Company also issued 20,150,000 shares of its common stock for mineral properties valued at $98,108. The Company issued 2,500,000 options valued at $1,528,233.
During the year ended June 30, 2009, the Company issued 10,200,000 shares of its common stock for $510,000 cash. Of this, $19,000 was recorded as a stock subscription payable because the shares were not issued until after the end of the fiscal year. During this year the Company also issued 100,000 common shares for options exercised at $0.05 per share. An additional 300,000 shares of common stock were issued for services at $0.91 per share based on the market value of the stock on the date of issuance.
During the year ended June 30, 2010, the Company issued 600,000 shares of common stock for $30,000 cash. During this year the Company also issued 380,000 in fulfillment of the $19,000 stock subscription payable recorded in the previous year and 2,225,000 shares of common stock for options exercised at $0.10 per share. The Company also issued 225,000 common shares to a public relations and marketing firm as compensation for services performed valued at $0.17 per share based on the stock price on the date of issuance. During the 2010 fiscal year the Company issued 1,000,000 warrants with a fair value of $230,000 in exchange for services. The fair value of the warrants was determined using the Black-Scholes valuation model under the assumptions detailed in Note 7.
During the three months ended September 30, 2010, the Company issued 550,000 shares of common stock for $55,000 cash to warrant holders upon the exercise of the warrants. The Company also issued 1,150,000 shares of common stock to consultants for services performed. The stock was valued at $222,000 based on the average price of $0.19 per share trading price on the dates of issuance. Of the total $222,000 of stock issued, $72,000 was capitalized as a prepaid expense and will be amortized to professional fees over the one year life of the service contract. The remaining $150,000 was expensed as professional fees upon issuance.
During the three months ended December 31, 2010, the Company also issued 3,000,000 shares of common stock with 3,000,000 attached warrants for cash proceeds of $300,000. The warrants are exercisable for a two year period at an exercise price of $0.15. The Company valued these warrants using the Black-Scholes valuation model using the assumptions detailed in footnote 7 and attributed a total of $175,226 of the total $300,000 proceeds to the warrants based on their relative fair value.
NOTE 5 – STOCK OPTIONS AND WARRANTS
The estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses is determined using the Black-Scholes evaluation model.
On June 10, 2010, the Company entered into an Investor Relations Agreement for investor and public relations services. The services will include organizing presentations in several European cities, assistance with coverage in the German financial media, and certain shareholder relations matters. Under the Agreement, the Company agreed to compensate the consultant with options to purchase 1,000,000 shares of our common stock at an exercise price of $0.20 per share.
During the years ended June 30, 2010 and 2009, the estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses was determined using the Black-Scholes pricing model and the following assumptions: expected term of 2-5 years, a risk free interest rate of 2.05-3.35%, a dividend yield of 0% and volatility of 90-907%. The amount of the expense charged to operations for compensatory options and warrants granted in exchange for services was $1,758,233.
During the six months ended December 31, 2010 no compensatory common stock purchase options were granted. During this period the Company issued 3,000,000 warrants in conjunction with common stock sold for cash. These warrants have a two year life and an exercise price of $0.15. The Company calculated a relative fair value for these warrants based on a volatility of 380% and a stock price on the date of issuance of $0.12-$0.20.
IVANY NGUYEN, INC.
Notes to the Financial Statements
December 31, 2010 and 2009
NOTE 5 – STOCK OPTIONS AND WARRANTS (CONTINUED)
Changes in stock options issued through December 31, 2010 were as follows:
Number Of | Weighted Average | Value if | ||||||
| Outstanding, June 30, 2007 | - | $ | - | $ | - | |||
| Granted | 2,500,000 | 0.10 | 250,000 | |||||
| Exercised | - | - | - | |||||
| Cancelled | - | - | - | |||||
| Outstanding, June 30, 2008 | 2,500,000 | 0.10 | 250,000 | |||||
| Exercisable, June 30, 2008 | 2,500,000 | 0.10 | 250,000 | |||||
| Granted | - | - | - | |||||
| Exercised | 100,000 | 0.01 | 500 | |||||
| Cancelled | - | - | - | |||||
| Outstanding, June 30, 2009 | 2,400,000 | 0.10 | 250,500 | |||||
| Exercisable, June 30, 2009 | 2,400,000 | 0.10 | 250,500 | |||||
| Granted | 1,000,000 | 0.20 | 200,000 | |||||
| Exercised | (2,250,000) | 0.10 | (225,000) | |||||
| Cancelled | - | - | - | |||||
| Outstanding, June 30, 2010 | 1,150,000 | 0.20 | 225,500 | |||||
| Exercisable, June 30, 2010 | 1,150,000 | 0.20 | 225,500 | |||||
| Granted | 3,000,000 | 0.15 | 450,000 | |||||
| Exercised | (550,000) | 0.10 | (55,000) | |||||
| Cancelled | - | - | - | |||||
| Outstanding, December 31, 2010 | 3,600,000 | $ | 0.17 | $ | 620,500 | |||
| Exercisable, December 31, 2010 | 3,600,000 | $ | 0.17 | $ | 620,500 | |||
NOTE 6 – SUBSEQUENT EVENTS
In accordance with ASC 855, Company management reviewed all material events through February 10, 2011, the date these financial statements were issued, and has determined that there are no additional material subsequent events to report.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continu e,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Description of Business
Ivany Nguyen, Inc. was formed as a Delaware corporation on July 13, 1999. Our principal executive offices are located at 7 Ingram Drive, suite 128 Toronto, Ontario, Canada M6M 2L7. Our telephone number is 1-888 648-9366 EXT 2.
We are engaged in building an agricultural company focused on the development of bamboo in South-East Asia. We identified a key area where we believe we can harvest an existing bamboo resource and produce end products destined for both local markets in South East Asia as well as abroad.
We also hold certain metallic permits in Alberta. We intend on selling these permits and their related exploration data in order to divest ourselves from the mining sector and move toward a pure agricultural focus.
Laos Bamboo Property License
Recently, we have successfully secured provincial and federal government approval to proceed with the development of our proposed bamboo harvesting project in Attapeu Province in Laos. Under official document no. 1334/SNL, the federal Department of Agriculture & Forest in Laos has granted us approval to extract and harvest 5000 hectares of bamboo. In addition, we have been granted approval by the Attapeu Provincial Agency of Land Management to build a factory, storage and nursery facilities on a 20 hectare land parcel located within the industrial zone of the Attapeu Province. This approval has been granted by the pursuant to official document no. 0580/QDDD. Furthermore, the Laos federal government in has granted our foreign investment license and we have been approved by the Committee of Incentive and Management of Domestic & Foreign Investment as a 100% holder pursuant to Official Document No. 1193-KH-DT.
The quality of the bamboo is such that we are planning to harvest it for multiple downstream products. The licensed areas are in close proximity to electrical grids and are accessible by paved roads. Skilled labor can be readily accessed in the nearby local communities where our planned production facilities will be located. Under our arrangements with the government, we had until the November 20, 2010 to open a corporate bank account in Laos and to deposit $210,000, which represents 30% of the $700,000 in total registered capital of our project. As of February 14, 2011 we have not yet opened a bank account in Laos or deposited the required $210,000.00 dollars. As at February 14, 2011, provincial and federal government approval to proceed with the development of our proposed bamboo harvesting project in Atta peu Province in Laos is still in effect, and talks are in progress with the local Laos authorities for new terms. After making this initial deposit, we will receive a stamp from the Ministry of Finance and will be able to proceed in using our funds to purchase the equipment needed to build our factory, as well as hiring the necessary labor. We have broken down our planned factory construction and production goals into two phases. In Phase 1, we plan on developing operations which will produce bamboo skewers and bamboo chips. In Phase 2, we plan on expanding our factory and production lines to include a full bamboo flooring line. In order to satisfy the government requirements regarding our project, we need to conclude Phase 1 and demonstrate our serious intent on producing bamboo in Laos before continuing to Phase 2.
| Phase 1 Cost Estimates | ||
| Concrete Slab | $ | 12,500.00 |
| Electrical Panel & Grid Connection | $ | 13,500.00 |
| Agricultural Building | $ | 65,000.00 |
| Chipper & Conveyor Line | $ | 75,000.00 |
| Skewer Lines | $ | 15,000.00 |
| Bailing Machine | $ | 3,500.00 |
| Labour | $ | 8,000.00 |
| Office | $ | 10,000.00 |
| Green-House | $ | 3,500.00 |
| Equipment & Supplies | $ | 4,000.00 |
| Total: | $ | 210,000.00 |
During the quarter ended December 31, 2010, our management was able to raise total additional capital in the amount of $300,000 through a private offering conducted under Rule 506 of Regulation D. We will need to raise additional funds to enable us to complete Phase 1 of our development plan as set forth above. As of February 14, 2011 we have not yet opened a bank account in Laos or deposited the required $210,000.00 dollars. As of February 14, 2011, provincial and federal government approval to proceed with the development of our proposed bamboo harvesting project in Attapeu Province in Laos is still in effect, and talks are in progress with the local Laos authorities for new terms.
Mineral Properties
Zama Lake Pb-Zn Property
The Zama Lake Pb-Zn property consists of 6 sections of a metallic permit with each section covering approximately 256 hectares for a total of 1536 hectares located 700 km north northwest of Edmonton Alberta. The property previously consisted of 10 metallic permits covering an area of approximately 92,160 hectares. The property is a grass roots Pb-Zn play staked as the result of the discovery of anomalous sphalerite and galena grains found in till samples collected during diamond exploration. The property area is forested and hosts parts of the Zama Lake Oil and Gas field. Zama Lake and Zama City are oil industry support bases and are located within the property.
Exploration on the Zama Lake property consisting of till sampling, examination of indicator mineral concentrates and silt geochemistry indicates the likely proximal presence of Pb-Zn mineralization near surface. The best potential likely exists along structural breaks (faults), collapse structures, porous zones (tuffs), and proximal or up dip of petroleum zones. This potential likely exists beyond the carbonates at depth and into the shale. Further work is required to evaluate the Zama Lake property.
The property that is the subject of the Zama Lake property is undeveloped and does not contain any open-pit or underground mines which can be rehabilitated. There is no commercial production plant or equipment located on the property that is the subject of the mineral claim. Our exploration program has been exploratory in nature and there is no assurance that mineral reserves will be found. After completing the initial minimum $400,000 exploration program required to maintain our metallic permits in good standing until May 2010, and conducting an airborne geophysical survey, our consulting geologist recommended that we keep 3840 acres which will lower our minimum expenditures required to maintain the mineral permits. In order to maintain the metallic mineral permits in good standing until May 2012, and to evaluate the potent ial of the Zama Lake property further, an exploration program costing approximately $30,000 will be required.
Results of Operations for the three and six months ended December 31, 2010 and 2009
We have not earned any revenues since the inception of our current business operations. We incurred expenses and a net loss in the amount of $144,160 for the three months ended December 31, 2010, compared to expenses and a net loss of $284,561 for the three months ended December 31, 2009. We incurred expenses and a net loss in the amount of $380,808 for the six months ended December 31, 2010, compared to expenses and a net loss of $382,572 for the six months ended December 31, 2009. Our expenses during the three and six months ended December 31, 2010 and the three and six months ended December 31, 2009 consisted primarily of professional fees and general and administrative expenses. We have incurred total expenses and a net loss of $4,396,778 from the inception of our current operations through December 31, 2010.
Our losses are attributable to operating expenses together with a lack of any revenues. We anticipate our operating expenses will increase as we continue with our plan of operations.
Liquidity and Capital Resources
As of December 31, 2010, we had current assets in the amount of $270,146 consisting of cash in the amount of $207,812 and prepaid expenses in the amount of $62,334. Our current liabilities as of December 31, 2010 consisted of accounts payable in the amount of $56,904. Thus, we had working capital of $213,242 as of December 31, 2010.
We have incurred cumulative net losses of $4,396,778 since inception of our current operations. We have not attained profitable operations and are dependent upon obtaining financing to pursue significant exploration and development activities. We do not anticipate earning revenues until such time that we are into commercial production of our current and/or potential resources properties. We are presently in the development stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our mineral properties, or if such resources are discovered, that we will enter into commercial production. In addition, we can provide no firm assurance that our efforts to commence our proposed bamboo project in Laos will be successful or that our contemplated harvesting ope rations can be successfully commenced.
Significant additional capital will be required in order to our planned bamboo processing business into full operation. Management estimates that construction of the physical plant will require approximately $210,000 and an additional $490,000 will be required to undertake full commercial bamboo harvesting operations on our licensed property in Laos. Although we were able to raise additional equity capital in the amount of $300,000 during the quarter ended December 31, 2010, we anticipate that Phase 1 of our development plan will consume nearly all of our capital resources. Accordingly, in order to undertake full commercial bamboo harvesting operations, we will need to continue raising substantial additional equity capital. Although our efforts to raise additional equity capital are ongoing, we currently do not ha ve any firm arrangements for the required equity financing and we may not be able to obtain such financing when required, in the amount necessary under to fund the planned bamboo operation, or on terms that are financially feasible.
Off Balance Sheet Arrangements
As of December 31, 2010, there were no off balance sheet arrangements.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue significant exploration activities. We have incurred cumulative net losses of $4,396,778 since our inception of our current operations and require capital for our contemplated operational and marketing activities to take place. Our ability to raise additional capital through the future issuances of the common stock is unknown. The obtainment of additional financing, the successful development of our contemplated plan of operations, and our transition, ultimately, to the attainment of profitable operations are necessary for us to continue operations. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Currently, we do not believe that any accounting policies fit this definition.
Recently Issued Accounting Pronouncements
In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be a pplied retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505):
Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4T. Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2010. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Derek Ivany, and our Chief Financial Officer, Mr. Victor Cantore. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2010, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2010.
Management determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation and control procedures not regularly performed due to the lack of staff and resources.
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 Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On October 27, 2010, we issued 1,000,000 Units to a single purchaser pursuant to Rule 506 under Regulation D for a purchase price of $0.10 per Unit ($100,000). Each unit consisted of one share of common stock and one warrant to purchase one share of common stock for a price of $0.15, exercisable for 24 months. These shares were offered and sold exclusively to accredited investors and we did not engage in any general solicitation or advertising regarding the shares.
On December 3, 2010, we issued 2,000,000 Units to a single purchaser pursuant to Rule 506 under Regulation D for a purchase price of $0.10 per Unit ($200,000). Each unit consisted of one share of common stock and one warrant to purchase one share of common stock for a price of $0.15, exercisable for 24 months. These shares were offered and sold exclusively to accredited investors and we did not engage in any general solicitation or advertising regarding the shares.
Item 3. Defaults upon Senior Securities
None
Item 4. [Removed and Reserved]
Item 5. Other Information
None
Item 6. Exhibits
| Exhibit Number | Description of Exhibit |
| 3.1 | Articles of Incorporation, as amended (1) |
| 3.2 | Bylaws, as amended (2) |
| 1 | Incorporated by reference to Annual Report on Form 10-KSB for the period ended June 30, 2002 filed on December 19, 2002. |
| 2 | Incorporated by reference to the Registration Statement on Form 10 filed December 28, 1999. |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Ivany Nguyen, Inc. | |
| Date: | February 14, 2011 |
By: /s/ Derek Ivany Derek Ivany Title: Chief Executive Officer and Director |