Force Minerals (NUNC) 10-Q 2013 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 endedMay 31, 2013
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number:000-52494

Force Minerals Corp.

(Exact name of registrant as specified in its charter)

Nevada	98-0462664
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1400 16th Street, Suite 400, Denver, CO 80202

(Address of principal executive offices)

720-470-1414

(Registrant’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 [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] 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	[ ] Accelerated filer
[ ] Non-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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,182,293 common shares as of June 5, 2013.

	TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4:	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	13
Item 1A:	Risk Factors	13
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3:	Defaults Upon Senior Securities	13
Item 4:	Mine Safety Disclosures	13
Item 5:	Other Information	13
Item 6:	Exhibits	13

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:

F-1	Condensed Consolidated Balance Sheets as of May 31, 2013 and November 30, 2012 (unaudited);
F-2	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended May 31, 2013 and 2012 and period from November 1, 2006 (Inception) to May 31, 2013 (unaudited);
F-3	Condensed Consolidated Statements of Cash Flows and Comprehensive Loss for the six months ended May 31, 2013 and 2012 and period from November 1, 2006 (Inception) to May 31, 2013 (unaudited);
F-4	Notes to Condensed Consolidated Interim Financial Statements (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 May 31, 2013 are not necessarily indicative of the results that can be expected for the full year. 

3

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Condensed Consolidated Balance Sheets 

	May 31, 2013			November 30, 2012
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	1,365		$	35,442
Total Current Assets		1,365			35,442
Mineral property option		340,099			340,099
Total Assets	$	341,464		$	375,541
LIABILITIES
Current
Accounts payable and accrued liabilities	$	20,612		$	43,713
Advances Payable		20,000			20,000
Due to related parties		—			4,625
Convertible notes payable, net of discount		176,385			315,518
Derivative liabilities		115,800			58,200
Total Current Liabilities		332,797			442,056
Asset retirement obligation		17,372			16,845
Total Liabilities		350,169			458,901
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value; 10,000,000 shares authorized, 4,000,000 issued		4,000			—
Common stock, $0.1 par value,750,000,000 shares authorized; 2,182,293 shares issued (November 30, 2012 - 1,054,169 shares issued) (1)		218,229			105,417
Additional paid in capital		4,048,523			3,812,334
Deferred stock compensation		(84,512	)		(95,400	)
Accumulated other comprehensive income		6,738			6,027
Deficit accumulated during the development stage		(4,201,683	)		(3,911,738	)
Total Stockholders' Deficit		(8,705	)		(83,360	)
Total Liabilities and Stockholders' Deficit	$	341,464		$	375,541
(1) All common share amounts and per share amounts in these financial statements, reflecte the one hundred-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013 respectively, including retroactive adjustment of common share amounts. See Note 11.

See accompanying notes to the Condensed Consolidated Financial Statements

F-1

FORCE MINERALS CORPORATION 

(formerly Force Energy Corp)

(A Development Stage Company)

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three month period ended May 31						Six month period ended May 31						November 1, 2006 (Date of Inception) to May 31,
	2013			2012			2013			2012			2013
Expenses
Accounting and audit fees		5,290			3,900			24,944			14,400			334,890
Accretion of ARO		623			551			1,238			1,075			8,395
Bank charges and interest		32			148			55			980			5,498
Consulting fees		(92,400	)		63,838			(25,100	)		63,838			596,839
Depreciation		—			—			—			—			4,651
Investor relations		—			—			—			—			61,443
Legal fees		526			5,453			9,745			12,259			231,064
Management fees - Note 7		96,262			53,700			163,762			107,400			1,546,362
Mineral property exploration costs		—			—			—			—			64,250
Offices expenses		70			333			248			2,669			44,441
Oil and gas exploration costs		—			—			—			—			15,000
Rent		801			777			1,585			1,548			48,399
Transfer and filing fees		569			429			1,076			919			82,478
Travel		—			1,289			—			1,289			12,476
Write-off of oil and gas costs		—			—			—			—			553,466
(Loss) income from operations		(11,773	)		(130,418	)		(177,553	)		(206,377	)		(3,609,652	)
Other income/ (expense)
Debt forgiveness		—			—			—			—			15,286
Loss on settlement of advance payable		—			—			—			—			(30,000	)
Change in fair value of derivative liability		77,200			(21,000	)		(16,500	)		(40,200	)		(16,500	)
Interest expense		(105,863	)		(69,637	)		(139,967	)		(169,774	)		(562,140	)
Interest income		2,261			—			2,261			—			2,419
Net (loss) income before income taxes		(38,175	)		(221,055	)		(331,759	)		(416,351	)		(4,200,587	)
Benefit (loss) from income tax		41,814			(421	)		41,814			(421	)		(1,096	)
Net (loss) income		3,639			(221,476	)		(289,945	)		(416,772	)		(4,201,683	)
Foreign currency translation adjustments		140			454			711			(830	)		6,738
Comprehensive (loss) income for the period		3,779			(221,022	)		(289,234	)		(417,602	)		(4,194,945	)
Basic loss per share		0.00			(0.39	)		(0.22	)		(0.75	)
Weighted average number of shares outstanding (2)		1,330,509			569,388			1,303,119			554,418
(2) All common share amounts and per share amounts in these financial statements, reflect the one hundred-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013 respectively, including retroactive adjustment of common share amounts. See Note 11.

See accompanying notes to the Condensed Consolidated Financial Statements

F-2

FORCE MINERALS CORPORATION 

(formerly Force Energy Corp)

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows 

(Unaudited)

	Six months ended May 31						November 1, 2006 (Date of Inception)
	2013			2012			to May 31, 2013
				Restated
				(Note 15)			(Cumulative)
Operating Activities
Net loss		(289,945	)		(416,772	)		(4,201,683	)
Adjustment to reconcile net loss to net cash used in operating activities
Non-cash interest expense		9,230			25,680			47,703
Interest expense - beneficial conversion feature of convertible note and advance payable		—			97,000			127,000
Accretion and elimination of discount on convertible notes		130,737			47,375			384,126
Loss from change in fair value of derivative liability		16,500			40,200			55,100
Consulting fees paid in stock		—			53,838			583,338
Gain from settlement of related party balance		28,764			—			28,764
Share based compensation		75,000			62,400			804,600
Debt forgiveness		—			—			(15,286	)
Accretion of ARO		527			1,075			7,681
Depreciation		—			—			4,651
Impairment of oil and gas costs		—			—			533,466
Changes in assets and liabilities:
Prepaid expenses		—			1,119			—
Advance payable		—			—			50,000
Accounts payable and accrued liabilities		(976	)		(27,570	)		18,695
Net cash used in operating activities		(30,163	)		(115,655	)		(1,571,845	)
Investing Activities
Acquisition of property and equipment		—			—			(4,651	)
Acquisition of mineral property option		—			—			(110,099	)
Acquisition and development costs of oil and gas properties		—			—			(387,517	)
Net cash flows used in investing activities		—			—			(502,267	)
Financing Activities
Capital stock issued		—			—			1,419,000
Proceeds from convertible note payable		—			177,500			507,500
Due to related parties		(4,625	)		(625	)		160,817
Repayment convertible note payable		—			(57,655	)		(57,655	)
Proceeds from reverse acquisition		—			—			37,058
Net cash provided by (used in) financing activities		(4,625	)		119,220			2,066,720
Effect of foreign exchange on cash		711			—			6,027
Change in cash		(34,077	)		3,565			(1,365	)
Cash at the beginning of the period		35,442			16,393			—
Cash at the end of the period		1,365			19,958			(1,365	)

See accompanying notes to the Condensed Consolidated Financial Statements

F-3

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2013

(Unaudited)

Note 1Interim Reporting

The unaudited condensed consolidated financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. All adjustments are of a normal recurring nature. These interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s audited consolidated financial statements for the fiscal year ended November 30, 2012. The Company assumes that the users of the interim consolidated financial information herein have read or have access to the audited financial statements for the preceding fiscal period and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s audited consolidated financial statements for the fiscal year ended November 30, 2012, has been omitted. The results of operations for the six-month period ended May 31, 2013 are not necessarily indicative of results for the entire year ending November 30, 2013.

Note 2Nature of Operations and Going Concern

The Company was incorporated in the state of Nevada, United States of America on November 1, 2006. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.

Effective December 28, 2006, the Board of Directors authorized a 3 for 1 forward stock split of the common shares. The authorized number of common shares increased from 90,000,000 to 270,000,000 common shares with a par value of $0.001. All references in the accompanying financial statements to the number of common shares have been restated to reflect the forward stock split.

On February 12, 2008, the Company acquired 100% of the common shares of Force Energy Corp., an inactive company incorporated in Nevada on July 19, 2005, for $100, to effect a name change of the Company. On February 12, 2008, the Company and Force Energy Corp filed articles of merger with the Secretary of State of Nevada to effectuate a merger between the two companies. The surviving entity of the merger was the Company. Immediately thereafter the Company changed its name to Force Energy Corp.

On June 6, 2013, the Board of Directors changed the name of the Company to Force Minerals Corporation. Also on June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The name change and reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

F-4

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 2Nature of Operations and Going Concern – (cont’d)

At May 31, 2013, the Company has a working capital deficit of $331,432 . The Company has yet to achieve profitable operations, has accumulated losses of $4,201,683 since its inception and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.

Note 3Recent Developed Accounting Pronouncements

Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210):  Disclosures about Offsetting Assets and Liabilities (ASU 2011-11).  The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position.  Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013.  The adoption of this update did not have a material impact on the consolidated financial statements.

Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02).  This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI).  The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income.  However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto.  Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail.  This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012.  The adoption of this update did not have a material impact on the consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.The amendments in ASU No. 2013-05 resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) withina foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this standard is effective prospectively for fiscal years, and interim reporting periods within those years, beginning December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-05 will have on our consolidated financial statements.

Note 4Financial Instruments and Risk Management

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

F-5

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 4Financial Instruments and Risk Management(cont’d)

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety

These levels are:

Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3- inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Financial assets and liabilities measured at fair value on a recurring basis:

	FAIR VALUE		MAY 31, 2013				NOVEMBER 30, 2012
	INPUT		CARRYING		ESTIMATED		CARRYING		ESTIMATED
		LEVEL		AMOUNT		FAIR VALUE		AMOUNT		FAIR VALUE
Derivative Liability		3		115,800		115,800		58,200		58,200
Total Financial Liabilities			$	115,800	$	115,800	$	58,200	$	58,200

In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.

The carrying value of cash balances, accounts payable and accrued liabilities and due to related party approximates the fair value due to their short-term maturities.

Risk management is carried out by the Board of Directors. The Company's risk exposures and their impact on the Company's financial instruments are summarized below:

a) Credit risk

Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations.

The Company’s cash and cash equivalents and are primarily held in large financial institutions.. Management believes that the credit risk with respect to cash and cash equivalents, is remote.

F-6

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 4Financial Instruments and Risk Management(cont’d)

b) Liquidity risk

The Company tries to ensure that there is sufficient capital in order to meet short term business requirements, after taking into account the Company’s holdings of cash. As at May 31, 2013, the Company had cash totaling 1,365 (November 30, 2012 - $35,442) to settle current liabilities of $332,797 (November 30, 2012 - $442,056). The Company believes it will be able to raise financing in order to settle its current liabilities as they fall due.

c) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

i) Interest rate risk

The Company has cash balances and no interest-bearing debt. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

ii) Foreign currency risk

The Company’s functional currency is the Canadian dollar as substantially all of the Company’s operations are in Canada. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (“SEC”).

During the quarter ended May 31, 2013, the Company entered into a Property option agreement to acquire a mineral property in Mexico. Accordingly, future costs may be incurred in currencies other than its functional currency which may result in increased exposure to foreign exchange risk.

The Company does not participate in any hedging activities to mitigate any gains or losses which may arise as a result of exchange rate changes.

iii) Commodity Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. To mitigate price risk, the Company closely monitors commodity prices of precious metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

F-7

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 4Financial Instruments and Risk Management(cont’d)

d) Mineral Property Risks

The Company has diligently investigated rights of ownership of all of its mineral property interests and, to the best of its knowledge, all agreements relating to such ownership rights are in good standing. However, all properties/concessions may be subject to prior claims, agreements or transfers, and rights of ownership may be affected by undetected defects.

Mineral exploration and development is highly speculative and involves inherent risks. While rewards if a feasible ore body is discovered might be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that the current exploration programs by the Company will result in the discovery of economically viable quantities of ore.

e) Environmental Risk

Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation of the Company’s operation may cause additional expenses and restrictions.

If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous materials and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest, if any. The Company attempts to conduct its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties, if any, interests that may result in material liability to the Company.

f) Geopolitical Risk

Certain of the Company’s property interests may from time to time be located in countries outside of Canada, and mineral exploration and mining activities may be affected in varying degrees by political stability and government regulations relating to the mining industry. Any changes in regulations or shifts in political attitudes may vary from country to country and are beyond the control of the Company and may adversely affect its business. Such changes have, in the past, included nationalization of foreign owned businesses and properties. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income and other taxes and duties, expropriation of property, environmental legislation and mine safety. These uncertainties may make it more difficult for the Company and its joint venture partners to obtain any required production financing for its mineral properties.

F-8

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 5Mineral Properties

a) Zoro Property – Manitoba Canada

On July 6, 2010, the Company entered into a Property Option Agreement (amended May 11, 2011) to acquire an option to purchase a 100% interest in the property known as the Zoro 1 property, a mineral property comprising 52 hectares (approximately 128.50 acres) in the Snow Lake region of Manitoba Canada. In order to exercise the option, the Company must pay cash or issue stock to the Optionor by the following dates:

i) $59,600 (Cdn$62,000) on signing the agreement (paid)

ii) $102,900 (Cdn$100,000) or issue 10,000 shares of common stock on or before June, 15, 2011. (10,000 shares issued with a fair value of $80,000)

iii) $50,500 cash (Cdn$50,000) and issue 75,000 common stock on or before June, 15, 2012. ($50,500 paid (Cdn$50,000) and 75,000 shares issued with a fair value of $150,000)

iv) $403,560 (Cdn$400,000) or issue a specified number of common shares still to be determined by the parties on or before June, 15, 2013

During the six month period ended May 31, 2013, the Company incurred $nil (six months ended May 31, 2012 - $nil) of exploration expenditures on the property.

The Company is currently negotiating the final cash or stock payment with the vendor.

b) La Predilecta; La Predilecta II; La Crus and La Cascada Properties – Mexico

On May 30, 2013, the Company entered into a Property Option Agreement to acquire an option to purchase a 100% interest in four mining concessions known as La Predilecta; La Predilecta II; La Crus and La Cascada comprising approximately 1,181 hectares in the Miahuatlan District, in the southern portion of Centrales Region within Oaxaca State Mexico. The Company will hold its interest via a wholly owned Mexican subsidiary which is yet to be incorporated when the Optionor receives the $100,000 cash.

In order to exercise the option, the Company must pay cash or issue stock to the Optionor by the following dates:

i) $50,000 within 60 days of signing the agreement.

ii) $50,000 within 90 days of signing the agreement.

iii) Issue an aggregate of 4,000,000 shares of Preferred stock.

Each preferred share shall have an underlying voting right equivalent to 100 shares of Common stock and shall be convertible into 100 shares of Common stock.

As at May 31, 2013, no cash payments had been made.

Note 6Advance Payable

On March 21, 2011, the Company received a cash advance of $20,000. The advance is unsecured, non-interest bearing and has no fixed repayment terms.

F-9

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 7Related Party Transactions

Amounts due from (to) related parties comprise:

	May 31		November 30
	2013		2012
Amounts due to Director
Management fees	$	—	$	4,625

All amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

On July 23, 2010, the Company entered into an employment contract with the Company President which expires July 22, 2011. Pursuant to the contract, the President received 25,000 common shares having a fair value of $550,000. Should the contract be terminated prior to completion the President will return 1,000 shares to treasury for each unfulfilled month of the contract. The President will also receive $2,500 per month for months 1-3; $4,000 per month for months 4-6 and $5,000 per month for months 7-12 of the contract.

The fair value of 13,000 shares issued which were earned immediately and have been expensed as stock based compensation of $286,000. The fair value of the remaining 12,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned.

Pursuant to this stock award the Company recorded management fees of $nil (year ended November 31, 2011 - $170,200; year ended November 30, 2010 - $93,800).

On July 18, 2011, the Company entered into a new employment contract with the Company President which expires July 18, 2013. Pursuant to the contract, the President received 25,000 common shares having a fair value of $125,000. The President will receive $7,500 per month for months 13-24 of the contract. Unless the contract is terminated by either party giving 45 days written notice the contract will automatically renew. Should the contract be renewed then the President will receive 25,000 shares of common stock and an annual increase of $2,500 per month upon each renewal. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.025 per share.

The fair value of the 25,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned. Pursuant to this stock award during the six month period ended May 31, 2013 the Company recorded management fees of $nil (six month period ended May 31, 2012 - $62,400).

F-10

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 7Related Party Transactions – (cont’d)

On July 16, 2012, the Company entered into an addendum to the contract which expires July 15, 2014. Pursuant to the contract, the President received 75,000 common shares on July 2012, and will continue to receive 75,000 common shares upon each anniversary date of the addendum. The fair value of the shares received was $150,000. The President will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.01 per share.

The fair value of the 75,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned.

During the six month period ended May 31, 2013, the Company recorded management fees of $75,000 (six month period ended May 31, 2012 - $nil) pursuant to this stock award.

On May 30, 2013, the Company entered into a second addendum to the contract which expires May 30, 2015. Pursuant to the contract, the President received 500,000 common shares upon signing the agreement, 221,250 shares were issued to settle amounts owing under prior contract of $22,125 and 278,750 shares are to be earned over the period of the contract. As before the President will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 90 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.001 per share.

The fair value of the shares issued in settlement of amounts owing of $22,125 was $50,889 The difference between the recorded amount payable and the fair value of stock issued being $28,764 was charged to operations as management fees upon issuance.

The fair value of the 278,750 shares issued with a fair value of $64,113 which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders’ equity until earned. During the six month period ended May 31, 2013, the Company recorded management fees of $nil (six month period ended May 31, 2012 - $nil) pursuant to this stock award

During the six month periods ended May 31, 2013 and May 31, 2012 the Company charged or accrued the following amounts:

	Six Months Ended
	May 31, 2013
	2013		2012
Amounts charged by directors
Management fees	$	163,762	$	107,400

F-11

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 8Convertible Notes Payable

	May 31			November 30
	2013			2012
Promissory Note #6		20,000			20,000
Promissory Note #7		20,000			20,000
Promissory Note #8		20,000			20,000
Promissory Note #10		30,000			30,000
Promissory Note #11		—			42,500
Promissory Note #12		16,600			42,500
Promissory Note #13		75,000			75,000
Promissory Note #14		—			50,000
		181,600			300,000
Debt discount		(25,415	)		—
Accrued interest		20,200			15,518
	$	176,385		$	315,518

As at May 31, 2013 and November 30, 2012, convertible notes payable are recorded net of unamortized debt discount of $25,415 and $nil respectively.

Promissory Note #6

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 2,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly subsequent to the period end on June 14, 2013 this conversion provision was triggered.

F-12

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 8Convertible Notes Payable- (cont’d) -(Restatement – Note 15)

Promissory Note #7

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 2,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly, subsequent to the period end on June 14, 2013 this conversion provision was triggered.

Promissory Note #8

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 2,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly, subsequent to the period end on June 14, 2013 this conversion provision was triggered. 

Promissory Note #10

On March 20, 2012, the Company received $30,000 cash and the Company issued a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.

F-13

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited) 

Note 8Convertible Notes Payable- (cont’d) -(Restatement – Note 15)

Promissory Note #10 – (cont’d)

The note may be converted at the option of the holder into common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly, the note may be converted into 3,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly, subsequent to the period end on June 14, 2013, this conversion provision was triggered.

Promissory Note #11

On June 12, 2012, the Company received $42,500 cash and the Company issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 14, 2013. During the six month period ended May 31, 2013, the Company accrued $107 (six month period ended May 31, 2012 - $nil) in interest expense.

After 180 days the note may be converted at the option of the holder into common stock of the Company. The conversion price is defined as “55% multiplied by market price where market price is determined as the average bid price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered.

In December 2012, upon the holders option to convert becoming active, the Company recorded debt discount and a derivative liability of $38,600 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six month period ended May 31, 2013, the Company recorded a loss of $3,700 (six month period ended May 31, 2012 – $nil) due to the change in value of the derivative liability during the period, and debt discount of $28,468 (six month period ended May 31, 2012 - $nil) was accreted to the statement of operations.

During the six month period ended May 31, 2013, the Company issued 192,576 common shares upon the conversion of $42,500 of the principal balance plus $1,700 accrued interest into common stock, and $42,300 of the derivative liability was re-classified as additional paid in capital upon conversion.

As at May 31, 2013, accrued interest of $nil (November 30, 2012 - $1,593), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $nil (November 30, 2012 - $nil) was recorded.

F-14

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 8Convertible Notes Payable - (cont’d) -(Restatement – Note 15)

Promissory Note #12

On August 17, 2012, the Company received $42,500 cash and the Company issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 21, 2013. During the six month period ended May 31, 2013 the Company accrued $1,675 (six month period ended May 31, 2012 - $nil) in interest expense.

After 180 days the note may be converted at the option of the holder into Common stock of the Company. The conversion price is defined as “48% multiplied by market price where market price is determined as the average bid price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered.

In February 2013, upon the holders option to convert becoming active, the Company recorded debt discount and a derivative liability of $43,600 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six month period ended May 31, 2013, the Company recorded a loss of $1,400 (six month period ended May 31, 2012 – $nil) due to the change in value of the derivative liability during the period, and debt discount of $43,600 (six month period ended May 31, 2012 - $nil) was accreted to the statement of operations. The Company also issued 189,679 common shares upon the conversion of $25,900 of the principal balance into common stock, and $25,400 of the derivative liability was re-classified as additional paid in capital upon conversion.

As at May 31, 2013, accrued interest of $2,655 (November 30, 2012 - $978), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $19,600 (November 30, 2012 - $nil) was recorded.

Promissory Note #13

On September 12, 2012, the Company received $75,000 cash and the Company issued a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 14, 2013. During the six month period ended May 31, 2013, the Company accrued $2,992 (six month period ended May 31, 2012 - $nil) in interest expense.

After 180 days the note may be converted at the option of the holder into Common stock of the Company. The conversion price is defined as “50% multiplied by market price where market price is determined as the average of the lowest three bid prices during the ten trading days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered.

F-15

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 8Convertible Notes Payable- (cont’d) -(Restatement – Note 15)

Promissory Note #13 (cont’d)

In March 2013, upon the holders option to convert becoming active, the Company recorded debt discount of $75,000, charged $1,800 to interest expense and also recorded a derivative liability of $76,800 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six month period ended May 31, 2013, the Company recorded a loss of $1,600 (six month period ended May 31, 2012 – $nil) due to the change in value of the derivative liability during the period, and debt discount of $49,585 (six month period ended May 31, 2012 - $nil) was accreted to the statement of operations.

As at May 31, 2013, accrued interest of $4,291 (November 30, 2012 - $1,299) debt discount of $25,415 (November 30, 2012 - $nil) and a derivative liability of $78,400 (November 30, 2012 - $nil) was recorded.

Promissory Note #14

On October 24, 2012, Notes 5 and 9 were amalgamated and a new amended note was created, in the amount of $50,000. The promissory note is unsecured, bears interest at 10% per annum, and is due upon demand. During the six month period ended May 31, 2013 the Company accrued $1,587 (six month period ended May 31, 2012 - $nil) in interest expense.

The note may be converted at the option of the holder at any time into Common stock of the Company. The conversion price is defined as “50% multiplied by the market price, where market price is determined as the lowest 3 closing bid prices during the ten trading day period ending the day prior to conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms.

Upon inception the Company recorded a debt discount and a derivative liability of $48,200 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount has been charged immediately to the statement of operations as the note is due upon demand. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six month period ended May 31, 2013, the Company recorded a loss of $6,300 (six month period ended May 31, 2012 - $nil) due to the change in value of the derivative liability during the period.

During the six month period ended May 31, 2013, the Company issued 245,867 common shares upon the conversion of $50,000 of the principal balance of the note into common stock, and $50,200 of the derivative liability was reclassified as additional paid in capital upon conversion.

F-16

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 8Convertible Notes Payable- (cont’d) -(Restatement – Note 15)

Promissory Note #14 (cont’d)

As at May 31, 2013, accrued interest of $2,095 (November 30, 2012 - $507), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $2,100 (November 30, 2012 - $45,200) was recorded.

The Company determined that Promissory notes # 6, 7 ,8, and 10 should be accounted for in accordance with FASB ASC 470-20 which addresses “Accounting for Convertible Securities with Beneficial Conversion Features".The intrinsic value of the conversion feature is calculated as the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (being $0.05 for notes # 6, 7 and 8 and $0.02 for note 10), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature is calculated as pro rata portion of the proceeds from issuance of the convertible debt, being equal to proceeds received multiplied by intrinsic value divided by the total value received (ie. the aggregate of proceeds and intrinsic value). This beneficial conversion feature is allocated to debt discount and additional paid in capital. Because the debt is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

During the six month period ended May 31, 2013 interest expense relating to the beneficial conversion feature of convertible notes of $nil (six month ended May 31, 2012 - $97,000) was recorded in the financial statements, with a corresponding increase to additional paid in capital

Note 9Derivative Liabilities

The Company issued financial instruments in the form of convertible notes with embedded conversion features. Many of the convertible notes payable have conversion rates, which are indexed to the market value of the Company’s stock price.

During the six month period ended May 31, 2013, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $159,000 (year ended November 30, 2012 - $120,000). During the six month period ended May 31, 2013 $120,100 (year ended November 30, 2012, $172,800) of convertible notes payable and accrued interest was converted into common stock of the Company. For the six month period ended May 31, 2013 the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $117,900 (year ended November 30, 2012 - $228,500) was reclassed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the six month period ended May 31, 2013, the Company recognized a loss of $16,500 (three month period ended May 31, 2012 – gain of $77,200) based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.

These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP ASC 815. The valuation assumptions are determined by Level 3 inputs. The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above:

F-17

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 9Derivative Liabilities (cont’d)

	May 31			November 30
	2013			2012
Balance, beginning of period	$	58,200		$	129,000
Initial recognition of derivative liability		159,000			117,100
Conversion of derivative financial instruments to Common stock		(117,900	)		(228,500	)
Change in fair value of derivative liability		16,500			40,600
Balance, end of period	$	115,800		$	58,200

These instruments were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation. The instruments do not qualify for hedge accounting, and as such, all future changes in the fair value will be recognized currently in earnings until such time as the instruments are exercised, converted or expire. The following assumptions were used to determine the fair value of the derivative liabilities using the Black-Scholes valuation model as at May 31, 2013 and November 30, 2012.

	May 31,			November 30
	2013			2012
Risk free rate		0.08	%		0.13	%
Dividend yield		Nil			Nil
Weighted Average Expected term		0.21 Years			0.44 Years
Weighted Average volatility		137	%		98	%

Note 10Asset Retirement Obligation

During the period November 2007 to October 2009, the Company acquired in tranches a 50% working interest in the Hayter 10-8-40-1 W4M oil and gas well in Alberta Canada, known as the “Hayter Prospect”. During the year ended November 30, 2012, due to financial restrictions in the current capital markets, management determined the focus of the Company in the future would predominantly be the exploration and development of the Zoro Mineral Property, and as the Company had no current plans to further develop the Hayter property, the Company recorded an impairment provision of $135,427 during the fiscal year ended November 30, 2012, resulting in the book value of the Hayter prospect being $nil at November 30, 2012. As of May 31, 2013 and November 30, 2012, the Company determined the asset retirement obligation to be $17,372 and $16,845, respectively.

Total future asset retirement obligations were estimated by management based on the Company’s net ownership interest, estimated costs to reclaim and abandon the wells and the estimated timing of the costs to be incurred in future periods. The Company has estimated the net present value of its total asset retirement obligations at February 28, 2013 to be $16,889 based on a total undiscounted liability of $17,057 (Cdn$17,500) in the Hayter Prospect, Alberta, Canada. These payments are expected to be made over the next seven years, with the majority of the cost incurred between 2016 and 2019.

F-18

Note 10Asset Retirement Obligation(cont’d)

The Company’s credit adjusted risk free rate of 15% and an inflation rate of 8% were used to calculate the present value of the asset retirement obligation.

	May 31			November 30
	2013			2012
Balance, beginning of year	$	16,845		$	13,524
Liabilities incurred		—			—
Accretion expense		615			2,238
Effect of foreign exchange		(88	)		1,083
	$	17,372		$	16,845

Note 11Capital Stock

Authorized

10,000,000 Preferred shares, par value $0.001 – 4,000,000 issued

(November 30, 2012 - none issued)

750,000,000 Common shares par value $0.1 –2,182,293 issued

(November 30, 2012 – 1,054,169 shares issued)

On June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

Issued

Preferred Stock

On May 14, 2013, the Company issued 4,000,000 preferred shares pursuant to the Mexican mineral property option agreement. Each share has an underlying voting right equivalent to 100 common shares, and is convertible into 100 common shares of the Company.

Common Stock

Between December 12, 2012 and May 31, 2013, the Company issued an aggregate of 245,868 common shares with an aggregate fair value of $100,200, upon the conversion of $50,000 of a convertible note which was due upon demand.

Between January 12, 2013, and May 31, 2013, the Company issued 192,576 common shares with an aggregate fair value of $86,500, upon the conversion of accrued interest of $1,700 and $42,500 principal of a convertible note which was due on March 14, 2013.

F-19

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 11Capital Stock (cont’d)

Between May 2, 2013 and May 31, 2013, the Company issued 189,679 common shares with an aggregate fair value of $51,300, upon the conversion of $25,900 of a convertible note which was due on May 21, 2013.

Note 12.Supplemental Disclosure with Respect to Cash Flows

During the six month period ended May 31, 2013, the following non-cash investing and financing activities occurred:

i) 4,000,000 preferred shares were issued with a fair value of $1,160,000 pursuant to a mineral property agreement.

ii) An aggregate of 245,868 common shares were issued with a fair value of $100,200 upon the conversion into stock of $50,000 of the principal of a convertible note payable.

iii) An aggregate of 192,576 common shares were issued with a fair value of $86,500 upon the partial conversion into stock of accrued interest of $1,700 and $42,500 principal of a convertible note payable.

iv) An aggregate of 189,679 common shares were issued with a fair value of $51,300 upon the partial conversion into stock of $25,900 of the principal of a convertible note payable.

v) 221,250 common shares were issued with a fair value of $50,888 to settle amounts owing to the President amounting to $22,125.

vi) 278,750 common shares were issued pursuant to a management fee contract with the President.

During the six month period ended May 31, 2012, the following non-cash investing and financing activities occurred:

i) 26,919 common shares were issued pursuant to a consultancy agreement.

ii) An aggregate of 24,865 common shares were issued with a fair value of $65,300 upon the conversion into stock of $33,800 of accrued interest and principal of a convertible note payable.

F-20

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 13Commitment

On May 5, 2012, the Company entered into a consultancy agreement with Primary Capital LLC. (“Primary”), whereby Primary would provide financial advisory and investment banking services to the Company for a period of two years commencing May 7, 2012. Pursuant to the agreement, the Company paid Primary a non-refundable signing fee of $10,000 and issued Primary common stock equivalent to 4.9% (the “Applicable Percentage”) of the common shares on a fully diluted basis after giving effect to the conversion of all outstanding derivative securities at the time of inception of the agreement.

Accordingly, on May 5, 2012, 26,919 common shares were issued with a fair value of $53,838.

Pursuant to the agreement should the Company issue further potentially dilutive derivative instruments, or issue stock from treasury at any time, then within 5 days of the end of the fiscal quarter in which such instruments or stock was issued, the Company will issue to Primary additional common shares (the “Adjustment shares”) such that Primary continues to hold common stock equivalent to the Applicable Percentage.

Should the Board of Directors grant options, warrants or other securities pursuant to a restricted stock purchase plan or stock option plan approved by the stockholders and Board of Directors of the Company, to employees or Directors such grants shall be considered Excluded Securities for the purposes of determining the Applicable Percentage and the calculation of Adjustment shares in future periods.

Also if the Company completes any financing during the engagement period and also within 2 years of the termination of the agreement with any party introduced to the Company by Primary, Primary will be entitled to:

i) a cash fee of 8% of the gross proceeds of the financing,

ii) a 5 year warrant to purchase that number of shares equal to 8% of the number of shares issued in the financing on the same terms as the financing. Any such warrant issued will be in a form provided by Primary and may include terminology allowing for full ratchet anti-dilution provisions, standard and cashless exercise provisions and the same registration rights as received by the original investors.

The agreement can be terminated by either party by providing written notice at any time after the first anniversary of the agreement if either party is in breach of the agreement and fails to cure such breach within 15 days after it receives notice of such breach. During the quarter ended May 31, 2013, the Company terminated the contract.

Note 14Subsequent Events

Subsequent to the period end:

i) On June 6, 2013, the Board of Directors changed the name of the Company to Force Minerals Corporation.

ii) Also on June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares which received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged.

F-21

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 14Subsequent Events(cont’d)

Subsequent to the period end:

iii) Resulting from the reverse split noted above certain conversion provisions were triggered with respect to notes 6, 7, and 8 on June 28, 2013. The provision allows for the notes to be converted into common stock at the lower of 40% of market price at the time of conversion and $0.01 per share.

Note 15Restatement

i) Mineral Property Option Costs

The Company reviewed its accounting policy for the capitalization of mineral option costs, and has determined that the mineral option costs incurred in the year ended November 30, 2010, amounting to $59,600 were expensed, when they should have been capitalized and accordingly, the results for the year ended November 30, 2010, were restated. The effect of the restatement was to increase the value of the Mineral Property Option by $59,600 at November 30, 2010, 2011 and 2012 and to reduce the loss for the year ended November 30, 2010 by $59,600, resulting in the accumulated deficit being reduced by $59,600 at November 30, 2010, 2011 and 2012, respectively.

ii) Convertible Notes Payable

The Company has determined that certain transactions relating to the convertible notes payable were not correctly accounted for in the six month periods ended May 31, 2012 and accordingly the results of the six and three month periods ended May 31, 2012 have been restated.

The Company did not recognize any embedded derivative liabilities arising upon the inception or during the term of certain convertible notes payable. As a result of this, at May 31, 2012, the value of the convertible notes on the balance sheet was overstated by $150,724 and derivative liabilities were understated by $170,900.

In the condensed consolidated statement of loss, for the six month period ended May 31, 2012 accretion of convertible debt and interest discount expense was overstated by $68,311, interest expense on beneficial conversion feature of convertible notes was overstated by $140,000 gain on elimination of convertible debt was overstated by $21,888 and interest expense was understated by $162,868. Finally the loss on change in fair value of derivative liability was understated by $40,200.

In the condensed consolidated statement of loss, for the three month period ended May 31, 2012 accretion of convertible debt and interest discount expense was overstated by $30,630, interest expense on beneficial conversion feature of convertible notes was overstated by $50,000 gain on elimination of convertible debt was overstated by $21,888 and interest expense was understated by $66,434. Finally the loss on change in fair value of derivative liability was understated by $21,000.

F-22

FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2013

Page 2 - (Unaudited)

Note 15Restatement(cont’d)

iii) Accumulated Other Comprehensive Income

The Company also determined the accounting for foreign exchange with respect to the translation adjustments arising on the translation of its Canadian subsidiary had been incorrectly recorded. Such gains or losses arising had been included in the operations of the year, rather than being treated as elements of other comprehensive income, which forms a separate part of equity.

As a result of the restatement, the Company has increased the balance of other comprehensive income at November 30, 2011 by $6,388 and also increased the accumulated deficit by a corresponding amount. During the six month period ended May 31, 2012, foreign exchange charged to the income statement was reduced by $830 and a corresponding reduction to accumulated comprehensive income was recorded. During the three month period ended May 31, 2012, foreign exchange credited to the income statement was reduced by $454 and a corresponding increase to accumulated comprehensive income was recorded.

The net effect of the above restatements at May 31, 2012 is to increase the carrying value of the mineral property by $59,600 to $139,600, reduce the carrying value of the convertible notes payable from $357,432 to $206,708 and to increase the derivative liability from $nil to $170,900. Accumulated other comprehensive income increased from $nil to $6,561. Also the previously reported loss for the six month period ended May 31, 2012, was increased by $16,095 to $416,491 and the previously reported loss for the three month period ended May 31, 2012 increased by $29,145 to $221,476. The previously reported accumulated deficit at May 31, 2012 increased by 44,176 from $3,300,141 to $3,255,965.

F-23

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 continue,” “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.

Company Overview

We are currently engaged in the business of identifying, evaluating, and qualifying potential mineral properties and investing in interests in those properties with the goal of producing commercially marketable quantities of various types of minerals.

The Hayter Well

We presently hold a 50% working interest of the County Line Energy Corp. interest in the Hayter Well located in Alberta, Canada. However, for the time being we have decided to abandon our pursuit of extracting oil and gas from this or any other oil and gas property. Instead, we plan to focus our efforts on our current mineral properties.

Zoro 1 Mineral Claim

On July 6, 2010, we entered into an option agreement with Dalton Dupasquier, pursuant to which Mr. Dupasquier has granted to us the sole and exclusive right and option, exercisable in the manner described below, to acquire a 100% net undivided interest in the property known as the Zoro 1 mineral claim, located near the East Shore of Wekusko Lake in west-central Manitoba, Canada.

Amount of Payment	Date Payment is Due	Additional Notes
$59,600	July 6, 2010	This amount was paid.
$102,900	June 15, 2011	This amount was paid in 1,000,000 shares of common stock.
$194,800	June 15, 2012	This amount was agreed to be paid in $50,500 and 7,500,000 shares of common stock. We have paid $50,500 and issued 7,500,000 shares of common stock.
$403,560	June 15, 2013	We did not make the payment as of June 15, 2013.  We are in negotiations to extend the payment date.  No assurance can be made, however, that we will come to terms with Mr. Dupasquier. As such, we may lose our option on the property.

4

During the year ended November 30 2012, we incurred $8,639 on exploration expenditures on the property. During the six months ended May 31, 2013, we incurred $0 on exploration expenditures on the property.

We have no rights to the Zoro 1 mineral claim unless and until we exercise the option.

We acquired the option to explore the potential for deposits of lithium on the Zoro 1 mineral claim. According to the United States Geological Survey (USGS), global end-use markets for lithium include ceramics and glass, batteries, lubricating greases, air treatment, continuous casting and primary aluminum production. Batteries, especially rechargeable batteries, are the market for lithium compounds with the largest growth potential as major automobile companies pursue the development of lithium batteries to power hybrid electric cars.

In September 2009, we received a Technical Report on the Zoro 1 mineral claim. The report was authored by Mr. Mark Fedikow, PhD., P.Eng. of Mount Morgan Resources Ltd. The objectives of the report were to summarize the geology, review the historic ore reserves, and economic potential of the spodumene-bearing dykes delineated on the property and their surrounding geological environment.

An historic reserve estimate for Lithium oxide (Li2O) has been calculated on limited drilling on a single dyke on the Zoro 1 mineral claim. Drill indicated spodumene reserves coupled with data from trenching have been calculated with a total undiluted tonnage given as 1,727,550 at 0.945% Li2O. However, the historic data upon which the resource of 1,727,550 tons grading 0.945% Li2O was based is not dispositive. When the historic work was done, there was no “Qualified Person” in place, assay labs were not ISO Certified and insufficient drilling was undertaken to define the resource. It therefore became necessary to conduct more exploration activities to support the limited historic data available.

There are seven zoned pegmatite dykes on the Zoro 1 mineral claim. An exploration team explored the main dyke, located the additional seven trenches that had historically been noted on the Zoro 1 claim and produced a geologic map of each trench. Once areas of interest were located, the crew cleaned out the trenches and used a pick and shovel method to look at rocks to find pegmatite. They then took channel samples using a rock saw on historic trenches hosting pegmatite.

While exploring the main and additional seven dykes on the project area the crew identified several additional trenches that had not been noted in previous exploration programs. These findings suggest a potential for a greater amount of resource to be spread across the property, and give further encouragement for more detailed exploration.

Altogether 170 channel samples were sent for assay at Activation Laboratories in Ancaster, Ontario. The samples were analyzed to confirm historical lithium assays, and to assess the pegmatite for rare earth elements, including gold, rubidium, niobium, tantalum, tin, tungsten, and beryllium, all of which add to the prospectivity and economic viability of the Zoro 1 property.

Analysis of the channel samples collected from historic trenches in the pegmatite target has confirmed that a significant zone of lithium mineralization is present on the Zoro 1 claim. Analytical results are summarized in Table 1, which is attached to our annual report as Exhibit 99.2 that we filed with the Securities and Exchange Commission on February 23, 2012.

5

With the current and future importance of lithium and the mineralized zone at Zoro 1, we are now preparing for the next phase of our exploration program. This phase, which will require a drill program, will assess the third dimension of the deposit and its historic resource, and determine the economic viability of mining the resource.

We plan to continue to explore the Zoro 1 mineral claim using the Exploration Recommendations outlined by Dr. Fedikow in the NI 43-101 Technical Report, which are set forth below along with a table of recommended expenditures.

Initially, the Zoro 1 pegmatites should be the focus of the following exploration approaches. These are as follows:

1. Trench rehabilitation including overburden stripping and washing.

2. Geologic mapping of individual trenches at a scale of 1:20.

3. Detailed geological mapping at a scale appropriate to document relevant features on the property. This will include the seven pegmatite dykes, trench locations, historic drill collars and geological attributes of the dykes. It is likely this mapping will be undertaken at a scale of 1:1000.

4. Trench and channel sampling should be undertaken to confirm historic assay results.

5. Re-log historic drill core as possible.

6. A grid should be re-established on the property and an attempt made to tie-in the collar locations of all previous drilling. This information would help to structure new diamond drill programs. Initially, an attempt should be made to re-construct the historic grid although it is unlikely this will be possible given the length of time that has elapsed since the grid was first cut.

7. The geochemistry of the spodumene with particular relevance to iron content should be evaluated. Albite-rich portions of the pegmatite should be assayed for tantalum, tin, and niobium values. Altered and mineralized wallrocks should be assayed for gold particularly where the mineral assemblage of pyrrhotite, chalcopyrite and arsenopyrite are observed. Any subsequent drill program should be accompanied by a multi-element geochemical approach to assaying core including assays for gold. This will be followed up with assays for specific metals that may be present in the pegmatite dykes. The new assay program should be accompanied by a quality assurance and quality control program.

8. Diamond drilling should initially target Dyke No. 1 with the aim of ascertaining the physical size and extent of this dyke. Additional drilling will be necessary in the vicinity of the six remaining known dykes as well as any additional lithium-bearing pegmatite uncovered during exploration on the remainder of the property.

Trench Rehabilitation, Geologic Mapping and Assays (Four Weeks)
1. Trench stripping, excavation and washing:	$	15,000.00
2. Field technician:  $250.00/day:	$	7,000.00
3. General Laborers (n=2): $150.00/day:	$	8,400.00
4. Geologist: $400.00/day:	$	11,200.00
5. Assays (n=100 @ $50.00/sample):	$	5,000.00
Drill Program
6. Mobilization/Demobilization of equipment and crews:	$	10,000.00
7. Two Thousand metres of NQ coring:	$	250,000.00
8. Moves between holes:	$	25,000.00
9. Core trays and survey tool:	$	8,000.00
10. Room and board @ $150.00/day for 60 days:	$	18,000.00
11. Communications and freight:	$	10,000.00
12. Helicopter:	$	40,000.00
13. Helicopter fuel:	$	7,500.00
14. Geologist @ $400.00/day for 60 days:	$	24,000.00
15. Geologist Room and Board @ $150.00/day:	$	9,000.00
16. Geologist Transportation/Mobilization/Demobilization/Site access:	$	5,000.00
17. Assays @$50.00/sample for 300 samples:	$	15,000.00
18. Report preparation:	$	7,500.00
Sub-total:	$	475,600.00
Contingency @ 10%:	$	47,560
Total:	$	523,160.00

6

Tres Hermanas Silver-Lead-Zinc Property

On May 14, 2013, we entered into a Mineral Property Acquisition Agreement (the "MPAA") with Highlander Overseas, Inc., a West Indies corporation (“Highlander”). Pursuant to the terms and conditions of the MPAA, Highlander shall grant us with the right to acquire one hundred percent (100%) of the mining interests in those certain four concessions known as La Predilecta, La Predilecta II, La Crus, and La Cascada (the “Property”), which is comprised of a total of approximately Three Thousand One Hundred Eighty One Hectares (3,181 ha) and is located in Miahuatlan District, in the Southern portion of Valles Centrales Region within Oaxaca State, Mexico. In exchange, we are required to: (i) pay two cash payments of Fifty Thousand dollars ($50,000) to Highlander for a total of One Hundred Thousand dollars ($100,000), the first payment of $50,000 is to be paid within 60 days after both parties have executed the MPAA, and the second payment is to be paid 90 days after both parties have executed the MPAA, and (ii) issue an aggregate of four million (4,000,000) restricted shares of our preferred common stock to Highlander, pursuant the terms and conditions of the MPAA.

We have not made the payments as of the date of this report. We are in negotiations to extend the payment date. No assurance can be made, however, that we will come to terms with Highlander. As such, we may lose our option on the property.

An NI 43-101 Report was prepared on the Tres Hermanas Silver-Lead-Zinc Property by Geologists Richard R. Culbert and David M. Pollard. A brief description of their Report follows.

The Tres Hermanas Property comprises 3,671 hectares, covering a mountainous area in the vicinity of the village of San Sebastian Rio Dulce, some 50 kilometres southwest of the city of Oaxaca.

Although there is some quartz of epithermal character, most of the vein is composed of sulphides. Silver, lead, zinc and molybdenum are the elements of value, while the gangue includes pyrite, arsenopyrite and barite, in addition to some quartz. Much of the sulphides occur as a fine, black intergrowth. Samples taken by the geologists verify the tenor of the silver grades reported from the earlier work, although most of the samples had to be taken from adit mouths and dumps.

The exploration conducted so far has yielded consistently encouraging results from surface sampling, adit sampling, soil geochemistry and four diamond drill cores. Looking forward, future work within a Phase I budget of $796,385, will include further soil geochemistry that extends the current grid further to the south-west, ground geophysics, in the form of a resistivity survey, Magnetometry and I.P. together with a 3,000 metre drilling program. This program will consist of approximately 26 drill holes focussing on the San Sebastian structure.

If this program gives the positive results that are anticipated, further funding will be sought (Phase II). This funding would finance a further 10,000 metres of drilling together with opening up all the adits with conventional mining equipment. These adits could then be mapped and sampled. Following this, an underground drilling program, using bazooka drills, should establish a measured and indicated resource. Bulk metallurgical tests would then be necessary to determine what concentrates can be produced at the mine and, how effectively local smelters would be able to recover these metals from the concentrate. A scoping study would then be undertaken to consider the economic viability of the project.

The total costs for Phase I and II are summarized in the below tables. The total cost of these two phases together is estimated at $11,446,485. We hope to be able to raise funds to commence work on Phase I of the program. There is no guarantee, however, that we will have the resources to permit any exploration on the claims.

7

Phase I Budget

Grid Cutting (3H)
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Surveyer	9000	m (line)	1000 m per Day	9	$	450.00	Day	$	4,050.00
Cutting Crews (6 people)	9000	m (line)	1000 m per Day	9	$	120.00	Day	$	1,080.00
Consumables				9	$	50.00	Day	$	450.00
Food and Lodging				9	$	420.00	Day	$	3,780.00
Sub Total								$	9,360.00
Soil Sampling (3H)
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Geologist	366	sample	40 per day	9.15	$	450.00	Day	$	4,117.50
Soil Crew (6 people)	366	sampe	40 per day	9.15	$	120.00	Day	$	1,098.00
Geochem (40 elements)	366	samples			$	40.00	Sample	$	14,640.00
Consumables				9	$	50.00	Day	$	450.00
Food and Lodging				9	$	420.00	Day	$	3,780.00
Sub Total								$	24,085.50
Geophysics (3H)
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Magnetometry	33000	m (line)	2500 m per Day	14.4	$	1,000.00	Day	$	14,400.00
I.P.	16500	m (line)	1000 m per Day	16.5	$	2,200.00		$	36,300.00
Consumables				17	$	50.00	Day	$	850.00
Food and Lodging				17	$	420.00	Day	$	7,140.00
Sub Total								$	58,690.00
Drilling (3H)
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Drilling (3H)	3000	m	50 m/ day	60	$	150.00	m	$	450,000.00
Geologist (S. Amer)	3000	m	50 m/ day	60.00	$	450.00	Day	$	27,000.00
Assistant (2 person)	3000	m	50 m/ day	60.00	$	60.00	Day	$	3,600.00
Geochem (40 elements)	3000	samples			$	40.00	Sampe	$	120,000.00
Crew House (6 people)				60.00	$	120.00	Day	$	7,200.00
Field Support (10 people)				60.00	$	200.00	Day	$	12,000.00
Sub Total								$	619,800.00
Drilling, Lodging and Consumables
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Consumables				60	$	75.00	Day	$	4,500.00
Food + Lodging				60	$	1,020.00	Day	$	61,200.00
Sub Total								$	65,700.00
Plotting and Analysis
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Geologist (S. Amer)				25	$	450.00	Days	$	11,250.00
Drafts Person				25	$	250.00	Days	$	6,250.00
Consumables				25	$	50.00	Day	$	1,250.00
Sub Total								$	18,750.00
Total Phase 1								$	796,385.50

8

Phase II Budget

Man Portable Diamond Drilling
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Drilling HQ/NQ	10000	m	50 m per Day	200	$	50.00	m	$	1,500,000.00
Geologist (S Amar)	10000	m	50 m per Day	200	$	450.00	Day	$	90,000.00
Core House (6 people)				200	$	20.00	Day	$	24,000.00
Field Support (10 people)				200	$	200.00	Day	$	40,000.00
Geochem (40 element)	10000	samples			$	40.00	Sample	$	400,000.00
Consumables				200	$	75.00	Day	$	15,000.00
Food and Lodging				200	$	1,020.00	Day	$	204,000.00
Sub Total								$	2,273,000.00
U/G Development
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Slash out Adts 1 to 5	2500	m	12 m per day	206.3333333	$	2,200.00	m	$	5,500,000.00
2 Geologist / Sampler				208	$	1,000.00	day	$	208,000.00
1 Planning Engineer				208	$	800.00	day	$	166,400.00
Geochem	3000	samples	3 per 2.5 minutes		$	40.00	sample	$	120,000.00
Sub Total								$	5,994,400.00
Bazooka Drilling
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Drilling	20000	m	80 m/ 5 m drift	166.7	$	50.00	m	$	1,000,000.00
2 Geologist/ Sampler				166.7	$	1,000.00	day	$	166,700.00
Geochem	20000	samples	80 m per day	166.7	$	40.00	sample	$	800,000.00
Sub Total								$	1,966,700.00
Technical Studies
Mettalugical								$	100,000.00
Screening								$	250,000.00
Plotting, Analysis and Report
Cost Center	Quantity	Units	Rate	Total Days		Cost per	Unit		Total Dollars
Geologist (S Amer)				100	$	450.00	Days	$	45,000.00
Draft Person				70	$	250.00	Days	$	17,500.00
Consumables				70	$	50.00	Day	$	3,500.00
Sub Total								$	66,000.00
Total Phase II								$	10,650,100.00
Total Phase I & II								$	11,446,485.50

9

Results of operations for the three and six months ended May 31, 2013 and May 31, 2012, and for the period from Inception (November 1, 2006) to May 31, 2013

Our operating results for the three and six months ended May 31, 2013 and May 31, 2012 are summarized as follows:

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	May 31, 2013			May 31, 2012			May 31, 2013			May 31, 2012
Revenue	$	0		$	0		$	0		$	0
Operating Expenses	($	11,773	)	($	130,418	)	($	177,553	)	($	206,377	)
Other Expenses	($	26,402	)	($	90,637	)	($	154,206	)	($	209,974	)
Net Income (Loss)	$	3,639		($	221,476	)	($	289,945	)	($	416,772	)

Revenues

We have not earned any revenues to date, and do not anticipate earning revenues until such time as we encounter commercially productive minerals to exploit. All of our prospects are undeveloped. We anticipate that we will have to address the cash shortfall through additional equity financings in the future. We can offer no assurance, however, that such financings will be available on terms acceptable to our company.

Expenses

Our expenses for the three and six months ended May 31, 2013 and May 31, 2012 are outlined in the table below:

	Three Months Ended May 31, 2013			Three Months Ended May 31, 2012		Six Months Ended May 31, 2013			Six Months Ended May 31, 2012
Accounting and audit fees	$	5,290		$	3,900	$	24,944		$	14,400
Accretion of ARO		623			551		1,238			1,075
Bank charges and interest		32			148		55			980
Consulting fees		(92,400	)		63,838		(25,100	)		63,838
Legal fees		526			5,453		9,745			12,259
Management fees		96,262			53,700		163,762			107,400
Office expenses		70			333		248			2,669
Rent		801			777		1,585			1,548
Transfer and filing fees		569			429		1,076			919
Travel		—			1,289		—			1,289

We had operating expenses of $11,773 for the three months ended May 31, 2013, as compared with operating expenses of $130,418 for the same period ended 2012. We experienced a decrease in operating expenses for the three months ended May 31, 2013 as a result of a credit of $92,400 for consulting fees because the contract was terminated and an accrual for “ stock to be issued “ pursuant to the contract was reversed. Our operating expenses were $177,553 for the six months ended May 31, 2013 as compared with $206,377 for the same period ended May 31, 2012, also as a result of a credit of $25,100 for consulting fees because the contract was terminated and an accrual for “stock to be issued” pursuant to the contract was reversed that was not experienced in the same period ended 2012. However, our management fees for both the three and six months ended May 31, 2012 were significantly higher than for the same periods ended May 31, 2013.

10

Other Expenses

We recorded $26,402 in other expenses as a result of $105,863 in interest expenses, offset mainly by $77,200 represented by a change in fair value of derivative liability for the three months ended May 31, 2013, as compared with other expenses of $90,637 as a result of $21,000 represented by a change in fair value of derivative liability and $69,637 for interest expenses for the three months ended May 31, 2012.

We recorded $154,206 in other expenses as a result of $139,967 in interest expenses and $16,500 represented by a change in fair value of derivative liability, offset by $2,261 in interest income for the six months ended May 31, 2013, as compared with other expenses of $209,974 as a result of $40,200 represented by a change in fair value of derivative liability and $169,774 for interest expenses for the six months ended May 31, 2012.

Net Loss

We recorded net income of $3,639 for the three months ended May 31, 2013, as compared with a net loss of $221,476 for the same period ended May 31, 2012.

We recorded a net loss of $289,945 for the six months ended May 31, 2013, as compared with $416,772 for the same period ended May 31, 2012.

Liquidity And Capital Resources

Working Capital

	May 31, 2013			November 30, 2012
Current Assets	$	1,365		$	35,442
Current Liabilities	$	332,797		$	442,056
Working Capital (Deficit)	($	331,432	)	($	406,614	)

Cash Flows

	Six Months Ended May 31, 2013			Six  Months Ended May 31, 2012
Cash used in Operating Activities	($	30,163	)	($	115,655	)
Cash used in Investing Activities		—			—
Cash provided (used) by Financing Activities	($	4,625	)	$	119,220
Increase (Decrease) in Cash	($	34,077	)	$	3,565

Cash Used In Operating Activities

Our net losses for the six months ended May 31, 2013 and May 31, 2012 were the main contributed reason for our negative operating cash flow for both periods. Cash used in operating activities was funded by cash on hand and cash from financing activities.

Cash from Financing Activities

We used $4,625 in cash for amounts owed to related party during the six months ended May 31, 2013 compared to cash provided of $119,220 from $177,500 from the issuance of convertible notes payable, offset by $625 in payment of related party advances and $57,655 in settlement of convertible notes payable during the six months ended May 31, 2012.

We will depend almost exclusively on outside capital to pay for the continued exploration and development of our properties. Such outside capital may include the sale of additional stock and/or commercial borrowing. Capital may not continue to be available if necessary to meet these continuing development costs or, if the capital is available, that it will be on terms acceptable to us. The issuance of additional equity securities by us would 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.

If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment.

Stock Split

On June 6, 2013, the Board of Directors changed the name of the Company to Force Minerals Corporation. Also on June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The name change and reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

11

Off Balance Sheet Arrangements

As of May 31, 2013, there were no off balance sheet arrangements.

Going Concern

At May 31, 2013, we had a working capital deficit of $331,432. We have yet to achieve profitable operations, have accumulated losses of $4,201,683 since our inception and expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.

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 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending November 30, 2013, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our 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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended May 31, 2013 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

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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

During the three month period ended May 31, 2013, we incurred the following stock transactions:

Between December 12, 2012 and May 31, 2013, we issued an aggregate of 245,868 common shares with an aggregate fair value of $100,200, upon the conversion of $50,000 of a convertible note which was due upon demand.

Between January 12, 2013, and May 31, 2013, we issued 192,576 common shares with an aggregate fair value of $86,500, upon the conversion of accrued interest of $1,700 and $42,500 principal of a convertible note which falls due on March 14, 2013.

Between May 2, 2013 and May 31, 2013, we issued 189,679 common shares with an aggregate fair value of $51,300, upon the conversion of $25,900 of a convertible note which fell due on May 21, 2013.

We issued 500,000 shares to our officer and director, Tim DeHerrera, to settle amounts owing under a prior contract of $22,125 and 278,750 shares are to be earned over the period of his employment agreement.

On June 26, 2013, we issued 4,000,000 shares of preferred stock to Highlander Overseas, Inc. in connection with a Mineral Property Acquisition Agreement.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On July 18, 2011, we entered into an employment contract with our President, Mr. Tim DeHerrera. On May 30, 2013, we entered into a second addendum to the contract which expires on May 30, 2015. Pursuant to the contract, Mr. DeHerrera received 500,000 common shares upon signing the agreement, 221,250 shares were issued to settle amounts owing under a prior contract of $22,125 and 278,750 shares are to be earned over the period of the contract. As before, he will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 90 days written notice the contact will automatically renew. If we do not have sufficient cash resources to settle the cash element of the contract, then at the request of Mr. DeHerrera any accrued unpaid fees may be converted into common stock at $0.001 per share.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2013 formatted in Extensible Business Reporting Language (XBRL).

**Provided herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

	FORCE MINERALS CORP.
Date:	July 17, 2013 By:/s/ Tim DeHerrera Tim DeHerrera Title: Chief Executive Officer and Director

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