Laureate Resources & Steel Industries (LRRS) 10-Q 2009 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 ended February 28, 2009

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 000-52781

Laureate Resources & Steel Industries Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada

(State or other jurisdiction of incorporation or organization)

98-0471111

(I.R.S. Employer Identification No.)

100 Wall Street, 21st Floor

New York, NY 10005

(Address of principal executive offices)

866-525-8833

(Registrant’s telephone number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	o	Accelerated Filer	o
Non-Accelerated Filer	o	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes x No o

As of April 6, 2009, the Issuer had 47,333,650 shares of its Common Stock outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report on Form 10-Q (this “Report”) includes 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. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information and, in particular, appear in the section entitled “Management’s Discussion and Analysis or Plan of Operations” and elsewhere in this Report. When used in this Report, the words “estimates,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should” and variations of these words or similar expressions (or the negative versions of any these words) are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we can give no assurance that management’s expectations, beliefs and projections will be achieved.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the results referred to in the forward-looking statements contained in this Report. Important factors outside the scope of our control could cause our actual results to differ materially from the results referred to in the forward-looking statements we make in this Report. Without limiting the foregoing, if we are unable to acquire approvals or consents from third parties or governmental authorities with respect to our new business model, our plans to commence our new business may become irrevocably impaired.

All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report. Except to the extent required by applicable laws and regulations, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Laureate Resources & Steel Industries Inc. (formerly known as Kingston Mines Ltd.). 

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PART I   FINANCIAL INFORMATION

LAUREATE RESOURCES & STEEL INDUSTRIES INC.

(A development stage company)

Balance Sheet

	February 28,			August 31
	2009			2008
ASSETS	(unaudited)
Current Assets
Cash	$	5,505		$	48,613
Prepaid expense		-			850
Total Current Assets and Total Assets	$	5,505		$	49,463
LIABILITIES AND STOCKHOLDERS' EQUITY (Deficiency)
Current Liabilities
Loan payable - related party	$	512,436		$	201,818
Interest payable - related party		16,965			3,185
Accounts Payable and Accrued liabilities		688,015			51,787
Total Current Liabilities and Total Liabilitiies	$	1,217,416		$	256,790
Total Stockholders' Equity (Deficiency)		(1,211,911	)		(207,327	)
Total Liabilities and Stockholders' Equity (Deficiency)	$	5,505		$	49,463

See notes to financial statements

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LAUREATE RESOURCES & STEEL INDUSTRIES INC.

(A development stage company)

Statement of Operations

(unaudited)

													Accumulated from
													June 16, 2005
													(Date of Inception)
	For the			For the			For the			For the			to
	Three months ended			Three months ended			Six months ended			Six months ended			February 28,
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008			2009
Revenue		-			-									-
EXPENSES
Professional Fees		483,800			1,039			533,185			6,578			630,059
Salary and General Administration		150,643			136			334,529			7,498			461,954
Directors Fees		21,788			-			44,296			-			77,314
Employee stock option expense		-			-			64,758			-			71,780
Interest - Related Party		7,996			-			13,780			112			16,967
Marketing / Public Relations		295						14,905			-			26,739
Management Serivces - Related Party		63,889			-			63,889			-			63,889
Engineering Study		-			-			-			-			48,039
Expense of Arimathea warrants		-			-			-			-			221,208
Total Expenses	$	728,411		$	1,175		$	1,069,342		$	14,188		$	1,617,949
Loss From Continuing Operations	$	(728,411	)	$	(1,175	)	$	(1,069,342	)	$	(14,188	)	$	(1,617,949	)
Loss From Discontinued Operations		-			(2,392	)		-			(8,713	)		(64,569	)
Net Loss	$	(728,411	)	$	(3,567	)	$	(1,069,342	)	$	(22,901	)	$	(1,682,518	)
Basic and Diluted Loss Per Share
Continuting Operations		(0.02	)		-			(0.02	)		-
Discontinued Operations		-			-						-
Total Basic and Diluted Loss Per Share		(0.02	)		-			(0.02	)		-
Weighted Average Shares Outstanding		47,333,650			61,641,342			47,333,650			64,987,496

See notes to financial statements

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LAUREATE RESOURCES & STEEL INDUSTRIES INC.

(A development stage company)

Statement of Cash Flows

(unaudited)

							Accumulated from
							June 16, 2005
							(Date of Inception)
	For the			For the			to
	Six months ended			Six months ended			February 28,
	February 28, 2009			February 29, 2008			2009
Operating Activities
Net loss for the period	$	(1,069,342	)	$	(22,902	)	$	(1,682,518	)
Adjustments to reconcile net loss to net cash		-			-
used in operations:		-			-
- issuance of warrants		-			-			221,208
- issuance of stock options		64,758			-			71,780
- accrued interest		-			113			1,025
Change in operating assets and liabilities		-			-			-
- prepaid expense		850			2,158			-
- accounts payable and accrued liabilities		650,008			61			704,980
Net Cash Used in Operating Activities		(353,726	)		(20,570	)		(683,525	)
Financing Activities		-			-			-
Proceeds of Loan from related party, net		310,618			(105,999	)		512,436
Repayment of convertible debenture - Related Party		-			(15,000	)		-
Proceeds from issuance of common stock		-			-			176,594
Net Cash Provided by (used in) Financing Activities		310,618			(120,999	)		689,030
Increase (Decrease) in Cash		(43,108	)		(141,569	)		5,505
Cash- Beginning of Period		48,613			142,608			-
Cash - End of Period	$	5,505		$	1,039		$	5,505

See notes to financial statements

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LAUREATE RESOURCES & STEEL INDUSTRIES INC.

(A Development Stage Company)

Notes to the Financial Statements

(unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X relating to smaller reporting companies. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the six-month period ended February 28, 2009 are not necessarily indicative of the results that may be expected for the year ended August 31, 2009.

The balance sheet at August 31, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that are particularly susceptible to change include assumptions used in determining the fair value of securities owned and non-readily marketable securities.

For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-KSB for the year ended August 31, 2008 filed on December 18, 2008.

2. ORGANIZATION AND DESCRIPTION OF BUSINESS

Laureate Resources & Steel Industries Inc. the “Company” was incorporated in the State of Nevada on June 16, 2005.

The Company had been an exploration company from its formation through February 6, 2008 when a change in control of the Company took effect.  Since its formation, the Company’s business plan was to explore five mineral claims covering 1,865.43 hectares located on the south and southwest flanks of Sugarloaf Mountain in the Nicola Mining Division in British Columbia, Canada (the “Sugarloaf Property”). We originally intended to explore the Sugarloaf Property for commercially exploitable mineral reserves of valuable minerals. The Sugarloaf Property has no proven or probable mineral reserves. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures made by us did not result in the discovery of commercially exploitable reserves of valuable minerals. Any further funds spent on the exploration of these claims would probably be lost.  Accordingly, the Company has made a determination to cease the mineral exploration business and pursue another business opportunity. Accordingly, the results of operations of the exploration business have been classified as discontinued operations for all periods presented.  We intend to position ourselves as a leading processor and manufacturer of OCTG products serving oil and gas companies worldwide. We aim to achieve global recognition in the OCTG industry by developing manufacturing and trading establishments around the world.

We anticipate that our focus will be on the manufacture, process and sales of tubular products in the carbon steel, high alloy and corrosion resistant alloy markets.  We plan to cater to mature steel grade markets and future high grade markets as world requirements shift towards improved production from difficult oil reserve zones.  We are in the process of developing a new business plan for the Company.  We intend to produce Oil Country Tubular Goods (“OCTG”) which refers to casing and tubing used in producing or transporting oil and gas.  Casing is the pipe that is used in the drilling of a well.  Such casing is placed into a well, secured in place, and then serves to prevent the collapse of the well.  Tubing is the pipe through which oil or gas flows to the surface.  We expect to focus on offering seamless steel pipe production and OCTG trading in the energy producing industry.

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We anticipate offering complete supply chain capabilities through acquisitions as well as organic growth and development.

3. GOING CONCERN

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred accumulated losses of $1,682,518 since inception through February 28, 2009, has a stockholders’ deficiency of $1,211,911 as of February 28, 2009 and has no source of revenues or business operations.

The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7, “Development Stage Companies.”  The ability of the Company to continue as a going concern and to emerge from the development stage is dependent upon, among other things, its successful execution of its plan of operations and ability to raise additional financing.  There is no guarantee that the Company will be able to raise additional capital. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing to fund the ongoing development of the Company's business.  The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109) which requires that deferred tax assets and liabilities be recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, SFAS 109 requires recognition of future tax benefits, such as carryforwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.

Long-lived assets

In accordance with the Financial Accounting Standards Board (“FASB”) SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Financial instruments

The fair values of cash, prepaid expense, accrued liabilities and amounts due to a related party was estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company’s operations are in Canada resulting in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risks.

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Basic and diluted net income (loss) per share

The Company computes net income (loss) per share in accordance with SFAS No. 128, “Earnings Per Share” (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Recent accounting pronouncements

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, a replacement of FASB Statement No. 141 (SFAS No. 141(R)), which significantly changes the principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement is effective prospectively, except for certain retrospective adjustments to deferred tax balances, for fiscal years beginning after December 15, 2008. The Company will assess the impact of this statement upon any future business combinations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (SFAS No. 160). This statement established accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The accounting and reporting for minority interests will be recharacterized as noncontrolling interests and classified as a component of equity separate from the parent’s equity. In addition, SFAS No. 160 establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective prospectively, except for certain retrospective disclosure requirements, for fiscal years beginning after December 15, 2008. Accordingly, the Company will adopt SFAS No. 160 in the fiscal year 2009.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No, 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company’s future reported financial position or results of operations.

5.  PREFERRED AND COMMON STOCK

The Company has 50,000,000 shares of preferred stock authorized and none issued.

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The Company has 100,000,000 shares of common stock authorized as of February 28, 2009.  On May 21, 2008, the Company declared the payment of a stock dividend consisting of six additional shares of the Company’s common stock for each one share of the Company’s common stock held as of the record date. In connection with this stock dividend, the ownership of stockholders possessing 6,761,950 shares of the Company’s common stock was increased to 47,333,650 shares of common stock.

The offering period for the Company's initial public offering expired on March 13, 2007. During the offering period, the Company sold a total of 12,333,650 common shares at $0.0143 per share for cash proceeds of $176,195.

6. RELATED PARTY TRANSACTIONS

During the period ended February 28, 2009, the Company has the following transactions with Rudana Investment Group AG (Rudana), the Company’s majority shareholder:

Loans Payable
Interest bearing loans (A) (B)	$	526,369
Loan Receivable
Non-interest bearing advance (B)	$	30,535
Net loan payable to Rudana	$	495,834
Interest expense accrued	$	16,965

(A)	Bears interest at 7.5% per annum
(B)	Due on demand

Under the terms of the Warrants, Arimathea is not permitted to exercise and own more than 4.9% of the Company’s common stock at any given time.  The Warrants contain customary adjustment provisions and have anti-dilution protection for certain future issuances of equity securities.  The Warrants do not contain any call provisions and there are no obligations on the part of Arimathea to exercise the Warrants at any time

The value of the warrants was expensed during the year ended August 31, 2008 for a value of $221,208.  The term of the warrants reflected the original 10 year term on both warrants, since the agreed upon amendment did not occur during the fiscal year ended August 31, 2008.  The value was determined by using the Black Scholes option pricing model.  The variables used in the Black Scholes model were as follows: volatility 50% and a 5 year treasury rate of 4.0%

7.  INCOME TAXES

The Company has available approximately $1,678,087 of net operating loss carryforwards available to offset future taxable income, if any. These carryforwards substantially expire in 2028:

The Company has a deferred tax asset of approximately $400,000 resulting from these carryforwards for which a 100% valuation allowance has been established. Utilization of these carryforwards may be limited due to the change of ownership referred to in note 2.

8. EMPLOYEE EMPLOYMENT AGREEMENT

During the fourth quarter 2008 (as amended on October 23, 2008), effective August 22, 2008 the Company entered into a two year employment agreement with its chief operating officer (“COO”) which provides for annual salary of $200,000 plus living expenses of $118,000 per year. In addition, the COO received an option to purchase 500,000 shares of the Company’s common stock for $1 per share. The options vested on November 22, 2008 and were exercisable on February 22, 2009. The total value of the options using the Black Scholes Option Pricing Model (“Black Scholes”) was approximately $72,000 which is being charged to expense over the vesting period. The variables used in the Black Scholes model were as follows: volatility 50% and a 1 year treasury rate of 1.5%.

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9. WARRANTS ISSUED

On May 10, 2008 (as subsequently amended) and May 22, 2008, the Company issued warrants (the “Warrants”) to purchase 23,666,825 shares of common stock to Arimathea Limited in consideration for international corporate development services rendered on behalf of the Company.

Under the terms of the Warrants, Arimathea is not permitted to exercise and own more than 4.9% of the Company’s common stock at any given time.  The Warrants contain customary adjustment provisions and have anti-dilution protection for certain future issuances of equity securities.  The Warrants do not contain any call provisions and there are no obligations on the part of Arimathea to exercise the Warrants at any time.

The value of the warrants was expensed during the year ended August 31, 2008 for a value of $221,208. The term of the warrants reflected the original 10 year term on both warrants, since the agreed upon amendment did not occur during the fiscal year ended August 31, 2008. The value was determined by using the Black Scholes option pricing model. The variables used in the Black Scholes model were as follows: volatility 50% and a 5 year treasury rate of 4.0%.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Introduction

We were incorporated in the State of Nevada on June 16, 2005.  Our fiscal year end is August 31.  We were previously a mineral resource exploration company but we did not have any active operations and we did not realize any revenues.  Following the change of control of our Company on February 6, 2008 we decided to cease the mineral exploration business and pursue other business opportunities. 

Our address is 100 Wall Street, 21st Floor, New York, NY 10005 and our telephone number is 866-525-8833.

Plan of Operations

The Company intends to produce Oil Country Tubular Goods (OCTG), which refers to casing and tubing used in producing or transporting oil and gas.  Casing is the pipe that is used in the drilling of a well.  Such casing is placed into a well, secured in place, and then serves to prevent the collapse of the well.  Tubing is the pipe through which oil or gas flows to the surface.

The Company plans to position itself as a leading processor and manufacturer of OCTG products serving oil and gas companies worldwide. We aim to achieve global recognition in the OCTG industry by developing manufacturing and trading establishments around the world.

We anticipate that our focus will be on the manufacture, process and sales of tubular products in the carbon steel, high alloy and corrosion resistant alloy markets.  We plan to cater to mature steel grade markets and future high grade markets as world requirements shift towards improved production from difficult oil reserve zones.  Our current business model has four operational segments, all with synergistic business verticals to capture the entire value chain, through which we will endeavor to become a world leader in comprehensive manufacture, supply and value added services to major international and independent oil companies as well as original equipment manufacturers (OEMs) and engineering, procurement and construction companies (EPCs).  We plan to vertically and horizontally structure and conduct our business on a fully integrated basis through the following activities:

·Produce raw (green) tubes in China with growth in other regions

·Produce finished value-added products from green tubes

·Trade in all company products over the entire value chain

·Acquire captive iron ore resources (Africa, Australia, Latin America)

Our business model is built around the seamless steel pipe production and trading supply chain to the ever evolving energy producing industry.  Concentrating on the manufacture and supply of OCTG, we plan to build and develop manufacturing and processing operations in the Gulf Cooperation Counsel countries of the Middle East (GCC) and China.

We anticipate offering complete supply chain capabilities through acquisitions as well as organic growth and development.

On January 7, 2009, Mr. Gerry Sullivan resigned as the Company’s Chief Financial Officer and interim President and Chief Executive Officer.  The Company’s Board of Directors has appointed the Company’s Chief Operating Officer, Mr. Gareth McMurray as the Company’s interim President and Chief Executive Officer, and has appointed Mr. Mathias Kaiser as the Company’s Chief Financial Officer.  As of the date hereof, the Company has no full time employees. 

The Company has entered into an agreement with Prime Asset Finance Ltd. (“PAF”), a UK company which is a wholly owned subsidiary of Rudana Investment Group AG, our majority controlling shareholder.  Under the terms of the agreement, PAF will assist and advise us on developing strategic plans for inception of operations, preparing acquisition growth plans, identifying potential acquisition candidates, initiating discussion with potential acquisition candidates and strategic alliance partners, analyzing the financial implications of potential acquisitions and strategic alliances; negotiating terms and conditions of transactions and strategic alliances; outlining and managing the due diligence process; developing strategies to maximize revenue and corporate value including growth through sales, utilizing alternative distribution channels and enhancing marketing programs and providing support for investor relations programs.  We have agreed to pay an initial services fee of $250,000 to PAF and will continue to pay management services fees of $25,000 per month in respect of the management services, which commenced January 1, 2009.  All of the management fees have accrued to date and have not yet been paid. In addition, PAF will be compensated in the amount of 5% of the total transaction value of any company acquired by us by merger or acquisition.  We believe that the services of PAF have been valuable to us with respect to inception of our operations and activities, particularly in regard to establishing our initial strategic alliances and recruiting our highly qualified senior management team and introducing us to prospective customers.  The terms and conditions of our agreement with PAF have been independently reviewed and assessed by the independent members of our Board of Directors, who have determined that the PAF agreement is fair and reasonable to our Company and its shareholders.

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Revenues and Expenses

Since the date of incorporation, the Company has had no revenues.  During the three months ended February 28, 2009, the Company incurred aggregate expenses of approximately $728,411.  These expenses were primarily professional fees in the amount of $483,800 and salaries and general administrative fees in the amount of approximately $150,643, which consisted mainly of the salaries of Company officers and support staff.  The Company also paid directors fees in the amount of $21,788. The Company expects that all expenses will increase significantly over the balance of the fiscal year ending August 31, 2009 in connection with deployment of the Company’s plans for operations.  The Company had no material expenses during the three months ended February 29, 2008 since the Company had no operations at that time.

Liquidity and capital resources

We have not derived any revenues from operations.  Our only capital has been obtained via issuance of common stock and shareholder loans.  During the period covered by this Report the Company received stockholder loans from Rudana Investment Group AG in the aggregate amount of $146,580 (collectively, the “Shareholder Loans”).  The Company has used the proceeds from the Shareholder Loans for general corporate purposes.  The Shareholder Loans have an interest rate of seven and a half percent (7.5%) per annum, which together with the principal amount shall be repayable thirty (30) days after demand by Rudana.

As of the end of our fiscal quarter on February 28, 2009, our total assets were $5,505 and our total liabilities were $1,217,416.  We do not have sufficient working capital to satisfy our cash requirements for the next twelve months of operations. We expect to continue to pay our costs and expenses through shareholder loans during the foreseeable future.

On May 10, 2008 (as subsequently amended) and May 22, 2008, the Company issued warrants (the “Warrants”) to purchase 23,666,825 shares of common stock to Synergy Investments & Finance Holding Limited (“Synergy”), formerly known as Arimathea Limited, in consideration for international corporate development services rendered on behalf of the Company.  Synergy and the Company subsequently entered into an agreement to amend the Warrants.  These Amended Warrants were executed on December 15, 2008 and have an exercise term of three years and will become exercisable only for the purchase of a number of shares equal to (i) 5% of the amount of capital raised by the Company from introductions made by Synergy, divided by (ii) the exercise price of $0.10 per share, which purchase price has been determined by reference to the price the Company’s Common Stock was sold to shareholders in the Company’s prior public offering (without adjustment for a subsequent stock dividend).  Under the terms of the Warrants, Synergy is not permitted to exercise and own more than 4.9% of the Company’s common stock at any given time.  The Warrants contain customary adjustment provisions and have anti-dilution protection for certain future issuances of equity securities.  The Warrants do not contain any call provisions and there are no obligations on the part of Synergy to exercise the Warrants at any time.

In connection with his appointment as the Company’s Chief Operating Officer, Gareth McMurray has been granted an option to purchase 500,000 shares of common stock of the Company at an exercise price of $1.00 per share.  This stock option vested after three months of service, on November 22, 2008, and was exercisable after six months of service, on February 22, 2009, subject to applicable securities laws and the standard terms and conditions of the Company’s stock option agreement.  

Off Balance Sheet Arrangements

As of February 28, 2009, we did not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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ITEM 3.  CONTROLS AND PROCEDURES

As of the end of the period covered by this Report, the Company carried out, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) in ensuring that information required to be disclosed by the Company in its reports is recorded, processed, summarized and reported within the required time periods.  In carrying out that evaluation, management identified a material weakness (as defined in Public Company Accounting Oversight Board Standard No. 2) in our internal control over financial reporting.

The material weakness identified by Management consisted of inadequate staffing and supervision within the bookkeeping and accounting operations of the Company.  The relatively small number of employees who have bookkeeping and accounting functions prevents us from segregating duties within the Company’s internal control system.  The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.  Accordingly, based on their evaluation of the Company’s disclosure controls and procedures as of February 28, 2009, the Company’s Chief Executive Officer and its Chief Financial Officer have concluded that, as of that date, the Company’s controls and procedures were not effective for the purposes described above. The Company intends to take steps to remediate such procedures as soon as reasonably possible.

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended February 28, 2009 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II.   OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not, and has not been during the period covered by this Quarterly Report, a party to any legal proceedings.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the vote of the Company’s security holders during the period covered by this Quarterly Report.

ITEM 5: OTHER INFORMATION

Not Applicable.

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ITEM 6. EXHIBITS

Exhibit Description

31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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.

LAUREATE RESOURCES &
STEEL INDUSTRIES INC.
By:	/s/ Gareth McMurray
	Name:	Gareth McMurray
	Title:	Interim Chief Executive Officer
By:	/s/ Mathias Kaiser
	Name:	Mathias Kaiser
	Title:	Chief Financial Officer

Date: April 20, 2009

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