UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedOctober 31, 2012or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission File Number000-52010
BLUE SKY PETROLEUM INC.
(Exact name of registrant as specified in its charter)
| Nevada | N/A |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| 3702 South Virginia Street, Suite G12-401, Reno, Nevada | 89502 |
| (Address of principal executive offices) | (Zip Code) |
(202) 470-4608
(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.
[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).
[X] YES [ ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] | Accelerated filer [ ] | |
| Non-accelerated filer [ ] | (Do not check if a smaller reporting company) | 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
[X] YES [ ] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
47,220,000 common shares issued and outstanding as of December 11, 2012.
Table of Contents
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our unaudited condensed financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
3
BLUE SKY PETROLEUM INC.
(formerly Intervia Inc.)
(An Exploration Stage Company)
CONDENSED FINANCIAL STATEMENTS
October 31, 2012
(Stated in US Dollars)
(Unaudited)
| Condensed Balance Sheets | F–1 |
| Condensed Statements of Operations | F–2 |
| Condensed Statements of Cash Flows | F–3 |
| Notes to Condensed Financial Statements | F–4 |
4
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| CONDENSED BALANCE SHEETS |
| (Stated in US Dollars) |
| October 31, | January 31, | |||||
| 2012 | 2012 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash | $ | - | $ | 66,341 | ||
| Prepaid expenses | - | 1,352 | ||||
| TOTAL CURRENT ASSETS | - | 67,693 | ||||
| RESOURCE PROPERTY | - | 50,000 | ||||
| TOTAL ASSETS | $ | - | $ | 117,693 | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts payable and accrued liabilities | $ | 27,805 | $ | 35,224 | ||
| Due to related parties | 106,468 | 106,308 | ||||
| TOTAL LIABILITIES | 134,273 | 141,532 | ||||
| STOCKHOLDERS’ DEFICIT | ||||||
| Capital stock | ||||||
| Authorized 225,000,000 common shares, $0.001 par value, | ||||||
| Issued and outstanding 47,220,000 common shares (January 31, 2012 – 46,800,000) | 47,220 | 46,800 | ||||
| Stock subscriptions payable | - | 70,000 | ||||
| Additional paid-in capital | 297,240 | 227,660 | ||||
| Deficit accumulated during the development stage | (478,733 | ) | (368,299 | ) | ||
| TOTAL STOCKHOLDERS’ DEFICIT | (134,273 | ) | (23,839 | ) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | - | $ | 117,693 | ||
The accompanying notes are an integral part of these condensed financial statements
F-1
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| CONDENSED STATEMENTS OF OPERATIONS |
| (Stated in US Dollars) |
| (Unaudited) |
| Three | Three | Nine | Nine | February 2, | |||||||||||
| months | months | months | months | 2005 | |||||||||||
| ended | ended | ended | ended | (Inception) to | |||||||||||
| October 31, | October 31, | October 31, | October 31, | October 31, | |||||||||||
| 2012 | 2011 | 2012 | 2011 | 2012 | |||||||||||
| Operating expenses | |||||||||||||||
| Donated services | $ | - | $ | - | $ | - | $ | - | $ | 4,500 | |||||
| Exploration expenses | 1,352 | 60,814 | 1,352 | 73,648 | 75,000 | ||||||||||
| Loss on sale of resource property | 50,000 | - | 50,000 | - | 50,000 | ||||||||||
| Professional fees | 17,237 | 17,593 | 32,217 | 46,547 | 297,881 | ||||||||||
| General and administrative | 20,810 | 2,902 | 26,865 | 9,870 | 51,352 | ||||||||||
| Net loss | $ | (89,399 | ) | $ | (81,309 | ) | $ | (110,434 | ) | $ | (130,065 | ) | $ | (478,733 | ) |
| Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
| Weighted average number of shares outstanding – basic and diluted | 47,220,000 | 46,800,000 | 47,204,727 | 42,693,066 |
The accompanying notes are an integral part of these condensed financial statements
F-2
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| CONDENSED STATEMENTS OF CASH FLOWS |
| (Stated in US Dollars) |
| (Unaudited) |
| Nine | Nine | February 2, | |||||||
| months | months | 2005 | |||||||
| ended | ended | (Inception) to | |||||||
| October 31, | October 31, | October 31, | |||||||
| 2012 | 2011 | 2012 | |||||||
| Operating Activities | |||||||||
| Net loss | $ | (110,434 | ) | $ | (130,065 | ) | $ | (478,733 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities: | |||||||||
| Donated capital | - | - | 4,500 | ||||||
| Expenses paid by Company shareholder | 160 | - | 9,190 | ||||||
| Loss on sale of resource property | 50,000 | - | 50,000 | ||||||
| Changes in working capital: | |||||||||
| Prepaid expenses | 1,352 | (1,352 | ) | - | |||||
| Accounts payable and accrued liabilities | (7,419 | ) | 13,479 | 27,805 | |||||
| Net cash used in operating activities | (66,341 | ) | (117,938 | ) | (387,238 | ) | |||
| Investing Activities | |||||||||
| Acquisition of resource property | - | (25,000 | ) | (50,000 | ) | ||||
| Net cash used in investing activities | - | (25,000 | ) | (50,000 | ) | ||||
| Financing Activities | |||||||||
| Proceeds from related party payable | - | 9,030 | 97,278 | ||||||
| Proceeds from the issuance of capital stock | - | 100,000 | 170,000 | ||||||
| Proceeds from stock subscriptions payable | - | 169,960 | |||||||
| Net cash provided by financing activities | - | 109,030 | 437,238 | ||||||
| Net Decrease in Cash | (66,341 | ) | (33,908 | ) | - | ||||
| Cash at Beginning of Period | 66,341 | 33,908 | - | ||||||
| Cash at End of Period | $ | - | $ | - | $ | - | |||
| Supplemental Disclosures of Cash Flow Information | |||||||||
| Cash Paid For: | |||||||||
| Interest | $ | - | $ | - | $ | - | |||
| Income taxes | $ | - | $ | - | $ | - | |||
| Non-Cash Financing Activities: | |||||||||
| Common stock issued for subscriptions payable | $ | 70,000 | $ | 99,960 | $ | 169,960 |
The accompanying notes are an integral part of these condensed financial statements
F-3
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| NOTES TO THE CONDENSED FINANCIAL STATEMENTS |
| October 31, 2012 |
| (Stated in US Dollars) |
| (Unaudited) |
1. NATURE OF BUSINESS
The Company was incorporated in the State of Nevada on February 2, 2005. The Company was previously in the business of developing fuel cell products in China. During fiscal 2008, the Company suspended the development of their fuel cell products due to the inability to raise sufficient additional financing. Management is currently focusing on identifying, evaluating and negotiating new business opportunities. Effective July 31, 2012, the Company through a merger with a wholly-owned subsidiary changed its name from Intervia Inc. to Blue Sky Petroleum Inc. (the “Company”).
The Company is considered to be an exploration stage company and has not generated any revenues from operations. The Company’s shares were de-listed from the OTC-BB subsequent to filing the Form 10-Q for the period ended October 31, 2008. The Company has not been in compliance with the filing requirements of the Securities Exchange Commission (“SEC”). The Company is currently in the process of completing all the required filings with the SEC to enable the Company to reinstate its shares for trading on the OTC-BB. The Company will obtain additional funding by borrowing funds from its director and officer, or by private placement of common stock. There can be no assurance that the Company will be successful in its efforts to raise additional financing or if financing is available, that it will be on terms that are acceptable to the Company.
The accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern. As of October 31, 2012, the Company has not yet achieved profitable operations and has accumulated a deficit of $478,733 since inception. Its ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time which raises substantial doubt that the Company will be able to continue as a going concern. These unaudited interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
Management is also aware that material uncertainties exist, related to current economic conditions, which could cast doubt about the entity’s ability to continue to finance its activities. It is expected that the Company will 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.
2. BASIS OF PRESENTATION
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the rules and regulations of the Securities and Exchange Commission. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended January 31, 2012 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended October 31, 2012 are not necessarily indicative of the results that may be expected for the year ending January 31, 2013.
Management has evaluated events occurring between the end of the nine months ended October 31, 2012, to the date when the financial statements were issued.
F-4
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| NOTES TO THE CONDENSED FINANCIAL STATEMENTS |
| October 31, 2012 |
| (Stated in US Dollars) |
| (Unaudited) |
3. SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at October 31, 2012, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these unaudited condensed interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's January 31, 2012 audited financial statements. The results of operations for the period ended October 31, 2012 and 2011 are not necessarily indicative of the operating results for the full year.
4. RESOURCE PROPERTY
Proteus Property
On July 15, 2010, the Company entered into an Option Agreement, wherein acquired an exclusive options to purchase of a 100% interest in the Proteus Property which is located near Cobalt, Ontario, Canada.
The Company was unsuccessful in raising additional capital for this exploration project and therefore do not have sufficient funds to make the required option payments. Consequently, effective August 13, 2012, the Company entered into an assignment agreement among Timber Wolf Gold Inc., a Nevada corporation (“Timber Wolf”) and Gino Chitaroni, wherein the Company have assigned all of its rights, title and interest in and to the option agreement for the Property to Timber Wolf, with no further obligations to the Company.
5. RELATED PARTY TRANSACTIONS
As of January 31, 2011, the Company owed $77,943 to related parties. During the year ended January 31, 2012, the Company received $19,335 in additional cash loans from related parties, and had $9,030 in expenses paid on its behalf by related parties, leaving a balance due of $106,308 as of January 31, 2012.
During the period ended October 31, 2012, the Company had $160 in expenses paid on its behalf by related parities, leaving a balance due of $106,468 as of October 31, 2012. The amount owing is unsecured, bears no interest, and due on demand. All related party transactions are measured at the exchange amount which is the amount of consideration agreed to by the related parties.
6. COMMON STOCK
On July 31, 2012, the Company effected a three (3) new for one (1) old forward stock split of authorized and issued and outstanding shares of common stock. The effect of the three-for-one stock split has been applied retroactively to reflect the change.
The Company is authorized to issue 225,000,000 (pre stock-split – 75,000,000) shares of its $0.001 (pre stock-split –$0.001) par value common stock. At October 31, 2012 and January 31, 2012, the Company had 47,220,000 (pre stock-split – 15,740,000) and 46,800,000 (pre stock-split – 15,600,000) shares issued and outstanding respectively.
At October 31, 2012 and January 31, 2012 the Company had no issued or outstanding stock options or warrants.
F-5
| BLUE SKY PETROLEUM INC. |
| (formerly Intervia Inc.) |
| (An Exploration Stage Company) |
| NOTES TO THE CONDENSED FINANCIAL STATEMENTS |
| October 31, 2012 |
| (Stated in US Dollars) |
| (Unaudited) |
6. COMMON STOCK (CONTINUED)
At January 31, 2011, the Company had received $99,960 in advance for the issuance of 36,000,000 (pre stock-split –12,000,000) shares of common stock at a price of $.00278 (pre stock-split – $0.00833) per share. On March 4, 2011, these shares of common stock were issued in full satisfaction of the stock subscription payable.
On July 14, 2011, the Company issued 300,000 (pre stock-split – 100,000) shares of capital stock for cash at $0.3333 (pre stock-split – $1.00) per share, for an aggregate value of $100,000.
At January 31, 2012, the Company had received $70,000 in advance for the issuance of 420,000 (post stock-split –140,000) shares of common stock at a price of $0.1667 (pre stock-split – $0.50) per share. On February 10, 2012, these shares of common stock were issued in full satisfaction of the stock subscription payable.
7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no items to disclose.
F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.
As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Blue Sky Petroleum Inc., unless otherwise indicated. We have no subsidiaries.
Corporate Overview
The address of our principal executive office is 3702 South Virginia Street, Suite G12-401, Reno, NV 89502. Our telephone number is (202) 470-4608.
Effective August 7, 2012 we changed the name of our company to “Blue Sky Petroleum Inc.”, by way of a merger with our wholly-owned subsidiary Blue Sky Petroleum Inc., which was created solely for the name change.
Also effective August 7, 2012, we effected a forward split of our authorized and issued and outstanding shares of common stock on a 3 new for 1 old basis and, consequently, our authorized capital increased from 75,000,000 to 225,000,000 and correspondingly, our issued and outstanding shares of common stock increased from 15,740,000 to 47,220,000 shares of common stock, all with a par value of $0.001.
Effective September 19, 2012, our stock symbol changed from “ITVA” to “BSKY” to better reflect the new name of our company. The symbol change became effective with the Over-the-Counter Bulletin Board at the opening of trading on September 19, 2012.
5
Corporate History
We were incorporated in the State of Nevada on February 2, 2005. Our original business plan was to develop fuel cell technology and produce fuel cells in China for indoor forklifts, scooters, underwater equipment (e.g. shallow underwater sightseeing submarines) that require a small size, longevity of use and silent operation. During fiscal 2008 we suspended the development of our products and business plan until we were able raise sufficient additional financing.
Since the suspension of our original business plan, our management had been analyzing various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares.
On July 15, 2010, we entered into an option agreement to purchase a 100% interest in the Proteus Property located near Cobalt, Ontario, an area known historically for the mining of silver ore. As a result of the option agreement for the Proteus Property, we became a mineral exploration company and presently endeavor to plan and implement an exploration program for the Proteus Property commencing in the fall of 2012. However we were not able to raise sufficient capital to make our option payments or undertake exploration. Effective August 13, 2012, we entered into an assignment agreement between Timber Wolf Gold Inc., a Nevada corporation and Gino Chitaroni, wherein we have assigned all of our rights, title and interest in and to the option agreement for the Proteus Property to Timber Wolf, with no further obligations to our company.
Research and Development
We do not currently have a formal research and development effort. We did not spend any funds on research and development during the last two fiscal years.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve months ending October 31, 2013.
Employees
Currently, we do not have any employees. Additionally, we have not entered into any consulting or employment agreements with our president, chief executive officer, treasurer, secretary or chief financial officer. Our directors, executive officers and certain contracted individuals play an important role in the running of our company. We do not expect any material changes in the number of employees over the next 12 month period. We do and will continue to outsource contract employment as needed.
Plan of Operation
You should read the following discussion of our financial condition and results of operations together with our reviewed but unaudited financial statements and the notes to those reviewed but unaudited financial statements included elsewhere in this filing prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.
Anticipated Cash Requirements
Based on our net loss of $110,434 incurred during the nine month period ended October 31, 2012, our monthly burn rate is approximately $12,270. We estimate our operating expenses and working capital requirements for the twelve month period beginning November 1, 2012 to be as follows:
6
Estimated Expenses for the Twelve Month Period Beginning November 1, 2012:
| Operating Expenses | |||
| Professional Fees | $ | 60,000 | |
| Transfer and Filing Fees | $ | 10,000 | |
| Contingency | $ | 30,000 | |
| Total | $ | 100,000 |
At present, our cash requirements for the next 12 months (beginning November 1, 2012) outweigh the funds available to maintain our operations. Of the $100,000 that we require for the next 12 months, we had $Nil in cash as of October 31, 2012, and a working capital deficit of $134,273. In order to improve our liquidity, we plan to pursue additional equity financing from private investors or possibly a registered public offering. We do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.
Results of Operations
Three months ended October 31, 2012 compared to three months ended October 31, 2011.
| Three | Three | |||||
| months | months | |||||
| ended | ended | |||||
| October 31, | October 31, | |||||
| 2012 | 2011 | |||||
| Revenue | $ | Nil | $ | Nil | ||
| Operating Expenses | $ | 89,399 | $ | 81,309 | ||
| Net Income (Loss) | $ | (89,399 | ) | $ | (81,309 | ) |
Expenses
Our operating expenses for the three month periods ended October 31, 2012 and October 31, 2011 are outlined in the table below:
| Three | Three | |||||
| months | months | |||||
| ended | ended | |||||
| October 31, | October 31, | |||||
| 2012 | 2011 | |||||
| Exploration | $ | 1,352 | $ | 60,814 | ||
| Loss on sale of resource property | $ | 50,000 | $ | Nil | ||
| Professional fees | $ | 17,237 | $ | 17,593 | ||
| General and administrative | $ | 20,810 | $ | 2,902 |
Operating expenses for the three months ended October 31, 2012 increased by 9.95% as compared to the comparative period in October 31, 2011 primarily as a result of the loss on the sale of our resource property and increased general and administrative expenses.
7
Nine months ended October 31, 2012 compared to nine months ended October 31, 2011.
| Nine months | Nine months | |||||
| ended | ended | |||||
| October 31, | October 31, | |||||
| 2012 | 2011 | |||||
| Revenue | $ | Nil | $ | Nil | ||
| Operating Expenses | $ | 110,434 | $ | 130,065 | ||
| Net Income (Loss) | $ | (110,434 | ) | $ | (130,065 | ) |
Expenses
Our operating expenses for the nine month periods ended October 31, 2012 and October 31, 2011 are outlined in the table below:
| Nine months | Nine months | |||||
| ended | ended | |||||
| October 31, | October 31, | |||||
| 2012 | 2011 | |||||
| Exploration | $ | 1,352 | $ | 73,648 | ||
| Loss on sale of resource property | $ | 50,000 | $ | Nil | ||
| Professional fees | $ | 32,217 | $ | 46,547 | ||
| Transfer agent and filing fees | $ | 26,865 | $ | 9,870 |
Operating expenses for the nine months ended October 31, 2012 decreased by 15.09% as compared to the comparative period in October 31, 2011 primarily as a result of decreased exploration expenses and professional fees.
Revenue
We have not had any revenues from operations since inception (February 2, 2005). We do not anticipate that we will earn any revenues from operations unless and until we acquire and operate a profitable business. This might never happen and we can offer no assurance that even if we acquire a business that we will ever be profitable.
Liquidity and Capital Resources
Working Capital
| As at | As at | Percentage | |||||||
| October 31, | January 31, | Increase/ | |||||||
| 2012 | 2012 | (Decrease) | |||||||
| Current Assets | $ | Nil | $ | 67,693 | (100)% | ||||
| Current Liabilities | $ | 134,273 | $ | 141,532 | (5.13)% | ||||
| Working Capital (deficiency) | $ | (134,273 | ) | $ | (73,839 | ) | 81.85% |
8
Cash Flows
| Nine Months | Nine Months | |||||
| Ended | Ended | |||||
| October 31, | October 31, | |||||
| 2012 | 2011 | |||||
| Net cash (used in) operating activities | $ | (66,341 | ) | $ | (117,938 | ) |
| Net cash provided by financing activities | $ | Nil | $ | 109,030 | ||
| Net cash (used in) investing activities | $ | (Nil) | $ | (25,000 | ) | |
| Net increase (decrease) in cash | $ | (66,341 | ) | $ | (33,908 | ) |
Our net cash used by operating activities for the nine months ended October 31, 2012 was $66,341 compared with $117,938 for the nine months ended October 31, 2011. Our management believes that we will need additional funding in order to meet our operating expenses.
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.
Future Financings
We will require additional funds to implement our growth strategy in our new business. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.
There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis should it be required, or generate significant material revenues from operations, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.
Off-Balance Sheet Arrangements
We have no 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 that is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
The accompanying interim financial statements have been prepared by our company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at October 31, 2012, and for all periods presented herein, have been made.
9
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these unaudited condensed interim financial statements be read in conjunction with the financial statements and notes thereto included in our company's January 31, 2012 audited financial statements. The results of operations for the period ended October 31, 2012 and 2011 are not necessarily indicative of the operating results for the full year.
Item 3. Quantitative Disclosures About Market Risks
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
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Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
| Exhibit Number | Description |
| (3) | Articles of Incorporation and Bylaws |
| 3.1 | Articles of Incorporation (incorporated by reference to our Registration Statement on Form SB-2 filed on May 8, 2006) |
| 3.2 | Bylaws (incorporated by reference to our Registration Statement on Form SB-2 filed on May 8, 2006) |
| 3.3 | Amended and Restated Bylaws (incorporated by reference to our Current Report on Form 8-K filed on February 12, 2009) |
| 3.4 | Articles of Merger (incorporated by reference to our Current Report on Form 8-K filed on August 9, 2012) |
| 3.5 | Certificate of Change (incorporated by reference to our Current Report on Form 8-K filed on August 9, 2012) |
| (10) | Material Contracts |
| 10.1 | Option Agreement dated July 15, 2010 (incorporated by reference to our Annual Report on Form 10-K filed on December 16, 2010) |
| 10.2 | Amending Agreement between our company and Gino Chitaroni dated July 16, 2012 (incorporated by reference to our Current Report on Form 8-K filed on July 18, 2012) |
| 10.3 | Assignment Agreement between our company, Timber Wolf Gold Inc. and Gino Chitaroni dated August 13, 2012 (incorporated by reference to our Current Report on Form 8-K filed on August 20, 2012) |
| (14) | Code of Ethics |
| 14.1 | Code of Ethics (incorporated by reference to our Annual Report on Form 10-KSB filed on May 9, 2008) |
| (31) | Rule 13a-14(a) / 15d-14(a) Certifications |
| 31.1* | |
| (32) | Section 1350 Certifications |
| 32.1* | |
| 101** | Interactive Data File |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | Filed herewith. |
| ** | Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BLUE SKY PETROLEUM INC. | |
| (Registrant) | |
| Dated: December 17, 2012 | /s/ Patrick Laferriere |
| Patrick Laferriere | |
| President, Secretary, Chief Financial Officer and Director | |
| (Principal Executive Officer, Principal Financial Officer | |
| and Principal Accounting Officer) |
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