VICTORY EAGLE RESOURCES CORP.
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
The accompanying unaudited interim financial statements of Victory Eagle Resources Corp. (the "Company" or “Victory Eagle”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's registration statement filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year July 31, 2008 as reported in Form 10-KSB, have been omitted.
In April 2004 the majority shareholder of Victory Eagle loaned the Company $26,500. Interest is being accrued on this unsecured note at the rate of 10% per annum. As of January 31, 2009, the interest accrued on the loan is $12,742. The note payable and accrued interest are payable on demand.
During the six months ended January 31, 2009, all mineral property options owned by the Company expired. An impairment charge of $6,500 was recorded to reflect this, and is included in general and administrative expenses.
In September, 2008, the Company issued 78,690 shares for total cash proceeds of $15,738.
Item 2. Management's Discussion and Analysis and Plan of Operation.
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", and "Victory Eagle" mean Victory Eagle Resources Corp., unless otherwise indicated.
Corporate History
We were incorporated in the State of Nevada on March 18, 2004. We are engaged in the acquisition and exploration of mining properties. We maintain our statutory registered agent's office at Suite 880-50 West Liberty Street, Reno, Nevada 89501 and our business office is located at 133 Atlas Toronto, Ontario M6C 3P4.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Our Current Business
We are an exploration stage resource company, and are primarily engaged in the exploration for and development in the properties in which we have acquired interests. .. We do not currently have any properties. We are actively pursuing an acquisition of a resource property.
During the six months ended January 31, 2009, all mineral property options owned by the Company expired. An impairment charge of $6,500 was recorded to reflect this, and is included in general and administrative expenses.
Product Research and Development
Our business plan is focused on the long-term exploration and development of our mineral properties.
We do not anticipate that we will expend any significant funds on research and development over the next twelve months ending October 31, 2009.
Employees
Currently there are no full time or part-time employees of our Company (other than our directors and officer who, at present, have not signed employment or consulting agreements with us). We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officer or directors). We do and will continue to outsource contract employment as needed. However, if we are successful in our initial and any subsequent drilling programs we may retain additional employees.
Purchase or Sale of Equipment
We do not intend to purchase any significant equipment over the next twelve months ending October 31, 2009.
Competition
The gold mining industry is fragmented. We compete with other exploration companies looking for gold. We are one of the smallest exploration companies in existence. We are an infinitely small participant in the gold mining market. While we compete with other exploration companies, there is no competition for the exploration or removal of minerals from our property. Readily available gold markets exist in Canada and around the world for the sale of gold.
We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations. Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
Government Regulations and Supervision
Our future mineral exploration program will be subject to applicable rules and regulations of the jurisdiction in which we hold properties. As of January 31, 2009 we do not hold rights to any mineral properties. subject to the Mineral Tenure Act (British Columbia) and Regulation. This act sets forth rules for
Locating claims
Posting claims
Working claims
Reporting work performed
The Mineral Tenure Act (British Columbia) and Regulation also governs the work requirements for a claim including the minimum annual work requirements necessary to maintain a claim. The holder of a mineral claim must perform exploration and development work on the claim of $100 in each of the first three years and $200 in the eighth and subsequent years.
We are also subject to the British Columbia Mineral Exploration Code (the "Code") that tells us how and where we can explore for minerals. We must comply with these laws to operate our business. The purpose of the Code is to assist persons who wish to explore for minerals in British Columbia to understand the process whereby exploration activities are permitted and regulated. The Code establishes province wide standards for mineral exploration and development activities. The Code also manages and administers exploration and development activities to ensure maximum extraction with a minimum of environmental disturbance. The Code does not apply to certain exploration work we will be conducting. Specifically, work that does not involve mechanical disturbance of the surface including:
Prospecting using hand-held tools
Geological and geochemical surveying
Airborne geophysical surveying
Hand-trenching without the use of explosives
The establishment of gridlines that do not require the felling of trees
Exploration activities that we intend on carrying out which are subject to the provisions of the Code are as follows:
Drilling, trenching and excavating using machinery
Disturbance of the ground by mechanical means
Compliance with these rules and regulations will require us to meet the minimum annual work requirements. Also, prior to proceeding with any exploration work subject to the Code we must apply for a notice of work permit. In this notice we will be required to set out the location, nature, extent and duration of the proposed exploration activities. The notice is submitted to the regional office of the Mines Branch, Energy Division.
We currently do not have any pending applications for government approval of our exploration program. We only require one permit for exploration and we have not yet applied for it since it is not required until later stages of exploration (i.e. drilling). We estimate that this exploration permit can be obtained within 2 weeks.
Environmental Law
The Code deals with environmental matters relating to the exploration and development of mining properties. The goal of this Act is to protect the environment through a series of regulations affecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are responsible to provide a safe working environment, to not disrupt archaeological sites, and to conduct our activities to prevent unnecessary damage to the property.
We anticipate no discharge of water into active stream, creek, river, lake or any other body of water regulated by environmental law or regulation. No endangered species will be disturbed. Restoration of the disturbed land will be completed according to law. All holes, pits and shafts will be sealed upon abandonment of the property. It is difficult to estimate the cost of compliance with the environmental law since the full nature and extent of our proposed activities cannot be determined until we start our operations and we know what that will involve from an environmental stand point.
We are in compliance with the Mineral Tenure Act (British Columbia) and the Code will continue to comply with these regulations in the future. We believe that compliance with these regulations will not adversely affect our business operations in the future.
There is no requirement to reclaim the mineral claims after we have completed our exploration program. However, a claim must be maintained by performing an annual work requirement or by payment of cash in lieu of work. The minimum amount of exploration and development work on the claim must be $100 per claim in each of the first three years and $200 in the eighth and subsequent years. Provided we meet the minimum annual work requirements or pay cash in lieu of work we will maintain the claims in good standing.
Three Months Ended January 31, 2009 and 2008
During the three months ended January 31, 2009, operating expenses totaled $23,416 and we experienced a net loss of $23,416 against no revenues. During the three months ended January 31, 2008, operating expenses totaled $4,650, and we experienced a net loss of $4,650. From inception to January 31, 2009, our operating expenses total $127,129 and we experienced a net loss of $127,129 against no revenues.
Six Months Ended January 31, 2009 and 2008
During the six months ended January 31, 2009, operating expenses totaled $35,336 and we experienced a net loss of $35,336 against no revenues. During the six months ended January 31, 2008, operating expenses totaled $9,307, and we experienced a net loss of $9,307. From inception to January 31, 2009, our operating expenses total $127,129 and we experienced a net loss of $127,129 against no revenues. The increase in operating expenses is attributable to general and administrative costs.
Financial Condition, Liquidity and Capital Resources
At January 31, 2009, our total assets were $6,201,which consisted of cash of $6,201.
At January 31, 2009, our total current liabilities were $50,067.
Historically, we have financed our cash flow and operations from the sale of stock and advances from shareholders. Our total cash and cash equivalent position as at January 31, 2009 is $6,201.
For the six months ended January 31, 2009, we had a net loss of $35,336, which primarily consisted of general and administrative expenses of $34,000 and interest expenses of $1,336.
We have no external sources of liquidity in the form of credit lines from banks. Based on the plan of operation described below, management believes that our available cash will not be sufficient to fund our immediate working capital requirements and therefore, we will have to raise financing through the sale of our equity securities or arrange another advance from a shareholder of our company as soon as possible.
Plan of Operation
Cash Requirements
Over the twelve months ending October 31, 2009 we plan to expend a total of approximately $140,000 in respect of acquiring new mineral properties. We estimate that we will also require working capital of approximately $10,000 over the twelve months ending January 31, 2010.
Based on our current plan of operations, we require immediate funds to commence our exploration operations. For the year ended July 31, 2006 we successfully raised $56,025 through the sale of 560,250 common shares pursuant to our SB2 registration statement. This will allow us to complete Phase 1 of our proposed exploration program. We will not undertake Phase 2 unless we obtain additional funding. We will require additional financing before we generate any significant revenues. We intend to raise the capital required to meet any additional needs through sales of our securities in secondary offerings or private placements. We have no agreements in place to do this at this time. If we fail to raise sufficient funds, we may modify our operations plan accordingly. Even if we do raise funds for operations, there is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable.
There are no assurances that we will be able to obtain additional funds required for our continued operations. In such event that we do not raise sufficient additional funds by secondary offering or private placement, we will consider alternative financing options, if any, or be forced to scale down or perhaps even cease our operations.
Over the twelve months ending January 31, 2010 we intend to use all available funds to commence exploration of our mineral properties, as follows:
Estimated Funding Required During the Next Twelve Months
| Operations: acquiring new properties | | $ | 140,000 | |
| Working Capital | | $ | 10,000 | |
| Total | | $ | 150,000 | |
Product Research and Development
Our business plan is focused on the long-term exploration and, if warranted, the development of our mineral properties.
We do not anticipate that we will expend any significant funds on research and development over the next twelve months ending January 31, 2010.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the next twelve months ending January 31, 2010.
Employees
Currently there are no full time or part-time employees of our company (other than our directors and officers who, at present, have not signed employment or consulting agreements with us). We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors). We do and will continue to outsource contract employment as needed. However, if we are successful in our initial and any subsequent drilling programs we may retain additional employees.
Going Concern
The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
We have incurred losses of $127,129 from March 18, 2004 (inception) through January 31, 2009.
There are no assurances that we will be able to either (1) ever achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through future private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from our recently completed offering, operations and any future private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.
These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Our independent auditor's report on our audited financial statements, in our Form 10-KSB filed November 13, 2008 for the fiscal year ended July 31, 2008, contained a going concern qualifier. The qualifying explanatory paragraph contained in their audit report should be read in connection with our management's discussion of our financial condition, liquidity and capital resources.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to smaller reporting companies.
Item 3. Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this quarterly report, being January 31, 2009, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's President along with our company's Secretary. Based upon that evaluation, our company's President along with our company's Secretary concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no significant changes in our company's internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission'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 President and Secretary as appropriate, to allow timely decisions regarding required disclosure.
