UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2013
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to ________________
Commission file number 000-52308
| Victory Eagle Resources Corp. |
| (Exact name of small business issuer as specified in its charter) |
| Nevada | | N/A |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
San Borja N° 1358, Col. Vertiz Narvarte, CP 03600 Benito Juárez, Mexico City, Mexico |
| (Address of principal executive offices) |
52-55-9171-1499 |
| (Issuer's telephone number) |
| ____________________________________________________________ |
| (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
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 during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o |
| Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | | Outstanding as of June 4, 2013 |
| Common Stock, $0.001 par value | | 3,614,940 |
TABLE OF CONTENTS
| | | | | |
| PART I - FINANCIAL INFORMATION |
| | | | | | |
| Item 1. | Financial Statements | | | 3 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | 7 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | | 9 | |
| Item 4. | Controls and Procedures | | | 9 | |
| PART II - OTHER INFORMATION |
| | | | | | |
| Item 1. | Legal Proceedings | | | 10 | |
| Item 1A. | Risk Factors | | | 10 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | | 10 | |
| Item 3. | Defaults Upon Senior Securities | | | 10 | |
| Item 4. | Mine Safety Disclosures | | | 10 | |
| Item 5. | Other Information | | | 10 | |
| Item 6. | Exhibits | | | 11 | |
PART 1 – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VICTORY EAGLE RESOURCES CORP.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
(Unaudited)
| | | April 30, 2013 | | | July 31, 2012 | |
| ASSETS | |
| Current assets | | | | | | |
| Cash | | $ | 1,176 | | | $ | 16,147 | |
| Total current assets | | | 1,176 | | | | 16,147 | |
| Total assets | | $ | 1,176 | | | $ | 16,147 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 8,400 | | | $ | 5,103 | |
| Note payable and advances-related parties | | | 27,949 | | | | 27,949 | |
| Accrued interest - note payable - related party | | | 24,098 | | | | 22,094 | |
| Total current liabilities | | | 60,447 | | | | 55,146 | |
| Total liabilities | | | 60,447 | | | | 55,146 | |
| | | | | | | | | |
| STOCKHOLDERS' DEFICIT: | | | | | | | | |
| Common stock, $0.001 par value, 25,000,000 shares authorized, 3,614,940 shares issued and outstanding | | | 3,615 | | | | 3,615 | |
| Additional paid-in capital | | | 200,748 | | | | 200,748 | |
| Subscription receivable | | | (3,880 | ) | | | (3,880 | ) |
| Deficit accumulated during the exploration stage | | | (259,754 | ) | | | (239,482 | ) |
| Total stockholders' deficit | | | (59,271 | ) | | | (38,999 | ) |
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | | $ | 1,176 | | | $ | 16,147 | |
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
| | | Three Months Ended April 30, | | | Nine months Ended April 30, | | | Inception Through April 30, | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | | | 2013 | |
| Operating expenses: | | | | | | | | | | | | | | | |
| Exploration cost | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 9,500 | |
| General and administrative | | | 4,195 | | | | 7,900 | | | | 18,268 | | | | 29,202 | | | | 226,156 | |
| Operating loss | | | (4,195 | ) | | | (7,900 | ) | | | (18,268 | ) | | | (29,202 | ) | | | (235,656 | ) |
| Interest expense | | | (668 | ) | | | (668 | ) | | | (2,004 | ) | | | (2,004 | ) | | | (24,098 | ) |
| Net loss | | $ | (4,863 | ) | | $ | (8,568 | ) | | $ | (20,272 | ) | | $ | (31,206 | ) | | $ | (259,754 | ) |
| Net loss per share: | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 3,614,940 | | | | 3,498,940 | | | | 3,614,940 | | | | 3,459,028 | | | | | |
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | Nine months Ended April 30, 2013 | | | Nine months Ended April 30, 2012 | | | Inception Through April 30, 2013 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
| Net loss | | $ | (20,272 | ) | | $ | (31,206 | ) | | $ | (259,754 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
| Impairment of mineral property rights | | | - | | | | - | | | | 11,500 | |
| Net change in: | | | | | | | | | | | | |
| Prepaid expenses | | | - | | | | 550 | | | | - | |
| Accounts payable and accrued liabilities | | | 3,297 | | | | 3,180 | | | | 8,400 | |
| Accrued interest on note payable-related party | | | 2,004 | | | | 2,004 | | | | 24,098 | |
| NET CASH USED IN OPERATING ACTIVITIES | | | (14,971 | ) | | | (25,472 | ) | | | (215,756 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | |
| Expenditures on mineral property rights | | | - | | | | - | | | | (2,000 | ) |
| NET CASH USED IN INVESTING ACTIVITES | | | - | | | | - | | | | (2,000 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Proceeds from note payable and advances-related parties | | | - | | | | 794 | | | | 27,949 | |
| Proceeds from sale of common stock | | | - | | | | 55,000 | | | | 190,983 | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | | | - | | | | 55,794 | | | | 218,932 | |
| NET CHANGE IN CASH | | | (14,971 | ) | | | 30,322 | | | | 1,176 | |
| Cash, beginning of period | | | 16,147 | | | | 2,343 | | | | - | |
| Cash, end of period | | $ | 1,176 | | | $ | 32,665 | | | $ | 1,176 | |
| | | | | | | | | | | | | |
| SUPPLEMENTAL DISCLOSURES | | | | | | | | | | | | |
| Interest paid | | $ | - | | | $ | - | | | $ | - | |
| Income taxes paid | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
| Non-cash investing and financing activities | | | | | | | | | | | | |
| Stock issued for mineral property costs | | $ | - | | | $ | - | | | $ | 9,500 | |
| Issuance of common stock for subscription receivable | | $ | - | | | $ | - | | | $ | 3,880 | |
See accompanying summary of accounting policies and notes to financial statements.
VICTORY EAGLE RESOURCES CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Victory Eagle Resources Corp. (the “Company”) 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 Form 10-K. 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 disclosure contained in the audited financial statements for the most recent fiscal year as reported on Form 10-K, have been omitted.
Going Concern
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since inception resulting in an accumulated deficit of $259,754 as of April 30, 2013 and further losses are anticipated in the development of its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and advances from officers and/or issuance of common stock for cash.
NOTE 2 - NOTE PAYABLE AND ADVANCES – RELATED PARTIES
During April 2004, the majority shareholder of the Company loaned $26,500 to the Company. Interest is being accrued on this note at the rate of 10% per annum. As at April 30, 2013, the interest accrued on the loan was $24,098. The note payable and accrued interest are payable on demand. Interest expense for the nine months ended April 30, 2013 and 2012 was $2,004.
As of April 30, 2013, the Company had a balance of $1,449 due to the President for payments made on behalf of the Company. The advances from the President are unsecured, non-interest bearing and repayable upon demand.
Item 2. Management's Discussion and Analysis and Plan of Operation.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) 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. Our business is 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 San Borja N° 1358, Col. Vertiz Narvarte, CP 03600 Benito Juárez, Mexico City, Mexico.
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 do not currently have interest in mineral properties. We are actively pursuing acquisition of a resource property.
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 $259,754 from March 18, 2004 (inception) through April 30, 2013.
There are no assurances that we will be able to either (1) 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 auditors’ report on our audited financial statements, in our Form 10-K filed October 29, 2012 for the fiscal year ended July 31, 2012, indicated that there was substantial doubt about our ability to continue as a going concern. 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.
Results of Operations
Three Months Ended April 30, 2013 and 2012
We generated no revenue during the three months ended April 30, 2013 or 2012. During the three months ended April 30, 2013, operating expenses totaled $4,195 and we had net loss of $4,863. During the three months ended April 30, 2012, operating expenses totaled $7,900 and we had a net loss of $8,568. Operating expenses decreased from 2012 to 2013 due to decreased legal and filing fees as we continued to streamline our operations. During the three months ended April 30, 2013 and 2012, we recorded interest expense of $668 on the note payable to a shareholder of the Company.
Nine Months Ended April 30, 2013 and 2012
We generated no revenue during the nine months ended April 30, 2013 or 2012. During the nine months ended April 30, 2013, operating expenses totaled $18,268 and we had a net loss of $20,272. During the nine months ended April 30, 2012, operating expenses totaled $29,202 and we had a net loss of $31,206. Operating expenses decreased from 2012 to 2013 due to decreased legal and filing fees as we continue to streamline our operations. During the nine months ended April 30, 2013 and 2012, we recorded interest expense of $2,004 on the note payable to a shareholder of the Company.
Liquidity and Capital Resources
At April 30, 2013, our only asset was cash of $1,176.
As at April 30, 2013, we had total liabilities of $60,447, consisting of accounts payable of $8,400, note payable to related party and advance from related party of $27,949, and accrued interest on related party note of $24,098.
Historically, we have financed our cash flows and operations from the sales of our common stock and advances from stockholders.
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.
Recent Accounting Pronouncements
Management does not anticipate that the recently issued but not yet effective accounting pronouncements will materially impact the Company’s financial statements.
Off Balance Sheet Arrangements
As of April 30, 2013 and the date of this Quarterly Report, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer who is also our principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.
Changes in internal control over financial reporting.
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect our internal control over financial reporting.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not involved in any pending litigation or legal proceeding.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
d) Exhibits
| Exhibit No. | | Document Description |
| | | |
| 31.1* | | Section 302 Certification of Chief Executive Officer and Chief Financial Officer |
| | | |
| 32.1* | | Section 906 Certification of Chief Executive Officer and Chief Financial Officer |
| 101.INS ** | | XBRL Instance Document |
| | | |
| 101.SCH ** | | XBRL Taxonomy Extension Schema Document |
| | | |
| 101.CAL ** | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | | |
| 101.DEF ** | | XBRL Taxonomy Extension Definition Linkbase Document |
| | | |
| 101.LAB ** | | XBRL Taxonomy Extension Label Linkbase Document |
| | | |
| 101.PRE ** | | XBRL Taxonomy Extension Presentation Linkbase Document |
_______________
*Filed herewith
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| | VICTORY EAGLE RESOURCES CORP. | |
| | | | |
| Date: June 14, 2013 | By: | /s/ Angel Cruz | |
| | | Angel Cruz, President, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | |
