Fortem Resources (FTMRQ) 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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ü	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended:November 30, 2009
Or
	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: 000-52645

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STRONGBOW RESOURCES INC

(Exact Name of Issuer as specified in its charter)

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Nevada	20-4119257
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

250-777 N. Rainbow Blvd., Las Vegas, NV 89107

(Address of Issuer’s Principal Executive Offices) (Zip Code)

(702) 938-3656

Issuer’s telephone number

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.					ü	Yes		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. 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			Accelerated filer
Non-accelerated filer	(Do not check if a smaller		Smaller reporting company				ü
	reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
					ü	Yes		No
Class of Stock		No. Shares Outstanding		Date
Common		103,189,736		January 10, 2010

FORWARD LOOKING STATEMENTS

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain an historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable term inology. In evaluating forward looking statements, you should consider various factors outlined in our latest Form 10-K filed with U.S. Securities Exchange Commission (“SEC”) on June 12, 2009, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements.

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PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

STRONGBOW RESOURCES INC.

(An Exploration Stage Company)

BALANCE SHEETS

	November 30, 2009			February 28, 2009
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	134,117		$	7
Prepaid expense		15,963			—
Other receivable		—			275,000
Total Assets	$	150,080		$	275,007
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	22,216		$	33,521
Due to related parties		10,500			52,622
		32,716			86,143
STOCKHOLDERS' EQUITY
Capital Stock Authorized:
750,000,000 common shares, par value $0.001 per share Issued and outstanding 103,189,736  common shares		11,390			11,390
Additional paid in capital		465,885			465,885
Deficit accumulated during the exploration stage		(359,911	)		(288,411	)
Total Stockholders' Equity		117,364			188,864
Total Liabilities and Stockholders' Equity	$	150,080		$	275,007

The accompanying notes are an integral part of these financial statements

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STRONGBOW RESOURCES INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	Cumulative results from July 9, 2004 to November 30,
				Three Months Ended November 30,						Nine Months Ended November 30,
	2009			2009			2008			2009			2008
GENERAL AND ADMINISTRATIVE EXPENSES
Office and general	$	179,427		$	24,615		$	36,533		$	39,151		$	110,658
Consulting		108,386			18,000			8,892			36,000			29,892
Professional fees		96,046			6,836			(1,296	)		15,971			20,628
		(383,859	)		(49,451	)		(44,129	)		(91,122	)		(161,178	)
GAIN ON SETTLEMENT OF DEBT		48,948			—			—			19,622			—
LOSS ON SETTLEMENT OF DEPOSIT		(25,000	)		—			—			—			—
NET LOSS	$	(359,911	)	$	(49,451	)	$	(44,129	)	$	(71,500	)	$	(161,178	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE				$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED COMMON SHARES OUTSTANDING					103,189,736			103,127,236			103,189,736			102,000,000

The accompanying notes are an integral part of these financial statements

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STRONGBOW RESOURCES INC.

(A Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Cumulative results from July 9, 2004 to November 30,
					Nine Months Ended November 30,
	2009			2009			2008
OPERATING ACTIVITIES
Net loss from continuing operations	$	(359,911	)	$	(71,500	)	$	(161,178	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on Settlement of debt		(48,948	)		(19,622	)		—
Changes in non-cash working capital items
Accounts receivable		—			275,000			(5,042	)
Prepaid expenses		(15,963	)		(15,963	)		(3,270	)
Accounts payable and accrued liabilities		22,216			(11,305	)		(11,193	)
Cash used by (used in) continuing operations		(402,606	)		156,610			(180,683	)
FINANCING ACTIVITIES
Common stock issued for cash		477,275			—			115,325
Due to related parties		59,448			(22,500	)		67,158
Cash provided by (used in) financing activities		536,723			(22,500	)		182,483
INCREASE IN CASH		134,117			134,110			1,800
CASH, BEGINNING		—			7			1,136
CASH, ENDING	$	134,117		$	134,117		$	2,936
SUPPLEMENTAL DISCLOSURE:
Cash paid for:
Interest paid	$	—		$	—		$	—
Income taxes paid	$	—		$	—		$	—

The accompanying notes are an integral part of these financial statements

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STRONGBOW RESOURCES INC.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

November 30, 2009

(Unaudited)

1.

BASIS OF PRESENTATION

Unaudited Interim Financial Statements

The unaudited interim financial statements of Strongbow Resources Inc. (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP 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 February 28, 2009 included in the Company’s Annual Report on Form 10-K filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements included in the10-K report. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recur ring adjustments, have been made. Operating results for the three and nine month periods ended November 30, 2009 are not necessarily indicative of the results that may be expected for the year ending February 28, 2010.

Subsequent Events

The Company evaluated events occurring between the end of its fiscal quarter, November 30, 2009 and January 13, 2010 when the financial statements were issued. There were no subsequent events which required disclosure in these financial statements.

Recently Adopted Accounting Guidance

On March 1, 2009, the Company adopted authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on business combinations. The guidance retains the fundamental requirements that the acquisition method of accounting (previously referred to as the purchase method of accounting) be used for all business combinations, but requires a number of changes, including changes in the way assets and liabilities are recognized and measured as a result of business combinations. It also requires the capitalization of in-process research and development at fair value and requires the expensing of acquisition-related costs as incurred. The Company completed no business combinations since March 1, 2009 and the adoption of the new guidance did not have an impact on its financial statements.

On March 1, 2009, the Company adopted the authoritative guidance issued by the FASB that changes the accounting and reporting for non-controlling interests. Non-controlling interests are to be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control are to be accounted for as equity transactions. In addition, net income attributable to a non-controlling interest is to be included in net income and, upon a loss of control, the interest sold, as well as any interest retained, is to be recorded at fair value with any gain or loss recognized in net income. Adoption of the new guidance did not have an impact on the Company’s financial statements.

On March 1, 2009, the Company adopted the authoritative guidance on fair value measurement for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Adoption of the new guidance did not have an impact on the Company’s financial statements.

Recent Accounting Guidance Not Yet Adopted

In October 2009, the FASB issued authoritative guidance on revenue recognition that will become effective for the Company  beginning July 1, 2010, with earlier adoption permitted. Under the new guidance on arrangements that include software elements, tangible products that have software components that are essential to the functionality of

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the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue recognition guidance. Additionally, the FASB issued authoritative guidance on revenue arrangements with multiple deliverables that are outside the scope of the software revenue recognition guidance. Under the new guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. The adoption of this new guidance will not have an impact on the Company’s financial statements.

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for us beginning July 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. The adoption of this new guidance will not have an impact on the Copany’s financial statements.

2.

OTHER RECEIVABLE

On November 28, 2007, the Company entered into an agreement with Holloman Minerals Pty. Ltd. (“Holloman”). Pursuant to the terms of the agreement, Holloman granted the Company the right to acquire up to a 80% interest in seven uranium exploration licenses, located in the State of South Australia in consideration of the payment to Holloman of a $300,000 refundable deposit.

In May 2009, the Company and Holloman mutually agreed not to pursue the joint venture pertaining to the uranium leases. Effective May 29, 2009, the Company executed a deposit settlement agreement with Holloman to terminate all commitments related to the joint venture. As part of the settlement, Holloman agreed to refund $275,000 of the deposit paid by the Company and retained $25,000 to offset direct lease expenses which it incurred.

On July 6, 2009, the Company received payment of the $275,000 refund from Holloman.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited financial statements and related notes included as part of this report and our Form 10-K for the year ended February 28, 2009 filed with the SEC on June 12, 2009.

General

Strongbow Resources Inc. (“Strongbow” or the “Company”) is an exploration stage company incorporated in the State of Nevada on July 9, 2004. We have been relatively inactive since inception.

We originally intended to import and market plush toys and related products under our former name, “Plush Mall Inc.” We were unable, however, to identify a sufficient number of products for redistribution. Accordingly, we determined to focus our business efforts on the exploration, development and acquisition of mineral properties.

In-keeping with our change of focus, we amended our articles of incorporation during January 2008 to change our name from Plush Mall, Inc. to Strongbow Resources Inc. During October 2007 we amended our articles of incorporation to increase the number of our authorized common shares from 75,000,000 to 750,000,000 and to forward stock split our common stock on a 10-for-1 basis. The stock split was based on market conditions and upon a determination by our Board of Directors that the stock split was in our best interests and of the shareholders.

On November 28, 2007 we entered into a term sheet agreement (the “Agreement”) with Holloman Minerals Pty. Ltd. (“Holloman Minerals”) which provided the basis for a joint venture through which we could earn an 80% interest in seven (7) Australian uranium mineral exploration leases (the “Leases”). The Leases comprised 3,792 square kilometres (967,025 acres) located in the Lake Frome Embayment near Lake Callabonna in South Australia. During December 2008, we paid a deposit of $300,000 to Holloman Minerals in connection with this transaction.

Under the Agreement, we would earn our 80% interest in the Leases by investing $2,000,000 in project related expenditures within the first two years, and a total of $5,000,000 in such expenditures within four years following formation of the venture. The Agreement was contingent upon completion of a comprehensive joint venture agreement acceptable to both parties.

In May 2009, we mutually agreed with Holloman Minerals not to pursue creation of the joint venture contemplated by the Agreement. Effective May 29, 2009, we executed a Deposit Settlement Agreement with Holloman Minerals to amicably terminate all commitments related to the joint venture. As part of the settlement, Holloman Minerals agreed to refund $275,000 of the deposit we paid in connection with the Agreement. Holloman Minerals retained $25,000 to offset direct lease expenses which it incurred. On July 6, 2009, we received payment of the $275,000 refund from Holloman.

During 2010, we plan to identify and complete lease acquisition(s) and pursue joint venture agreements with third parties to explore for natural resources in Australia or other parts of the world.

Results of Operations

As of January 10, 2010 we did not own any mineral properties and had not generated any revenues.

For the nine month period ended November 30, 2009 our general and administrative expenses decreased substantially. This decrease resulted largely from the closure of our Vancouver-based offices and the retirement of our former Chief Executive Officer. We intend to increase our administrative personnel in the near future and anticipate a growth in expense as a result.

We intend to seek additional natural resource properties in Australia or in other parts of the world. In that connection, we plan to identify, negotiate and rely upon third party farm-ins and other joint venture partners to assist in the exploration and development of future properties.

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Liquidity and Capital Resources

The mineral exploration and extraction industry is cyclical in nature and tends to reflect general economic conditions. The US and other world economies are in a recession which continues to inhibit investment liquidity. Our access to capital, as well as that of our partners and contractors, could be limited due to tighter credit markets and may inhibit the formation of exploration ventures and partnerships. As a result, our future operations may be delayed due to financial constraints.

At November 30, 2009, we had an advance payable of $10,500 to a shareholder. This advance was used to support our administrative operations. This advance is unsecured, non-interest bearing, and has no set terms of repayment.

Our material future contractual obligations as of November 30, 2009 are shown below.

	Payments due by period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Loans and Advances	$	10,500	$	10,500		—		—		—

Our operations have been financed from the sale of our common stock and advances from our current and former shareholders, officers, directors and their affiliates.

In May 2009 we settled a $20,622 debt to a former Officer for $1,000. On June 6, 2009 we received a payment of $275,000 on the settlement of our deposit with Holloman Minerals.

We are attempting to raise the capital required to implement our business plan. We believe our plan of operations will require approximately $500,000 in financing over the twelve-month period ending January 31, 2011.

If we are unable to raise the financing we need, our business plan may fail and our stockholders could lose their investment. There can be no assurance that we will be successful in raising the capital we require, or that if the capital is offered, it will be subject to terms we consider acceptable. Investors should be aware that even in the event we are able to raise the funds we require, there can be no assurance that we will succeed in our acquisition, exploration or production plans and we may never be profitable.

As of January 10, 2010 we did not have any off balance sheet arrangements.

Critical Accounting Policies and Estimates

Measurement Uncertainty

The process of preparing financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements; accordingly, actual results may differ from estimated amounts. Significant items subject to such estimates and assumptions include the carrying value of assets and certain income tax exposure. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in earnings in the periods in which they become known.

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Foreign Currency Translation

Transaction amounts denominated in foreign currencies are translated into their functional currency equivalents at exchange rates prevailing at the transaction dates. Carrying values of monetary assets and liabilities reflect the exchange rates at the balance sheet date. Gains and losses on settlement are included in the determination of net income (loss) for the current period.

Deferred Income Taxes

We follow the asset and liability method of accounting for future income taxes. Under this method, future income tax assets and liabilities are recorded based on temporary differences between the carrying amount of balance sheet items and their corresponding tax basis. In addition, the future benefits of income tax assets, including unused tax losses, are recognized, subject to a valuation allowance, to the extent that it is more likely than not that such future benefits will ultimately be realized. Future income tax assets and liabilities are measured using enacted tax rates and laws expected to apply when the tax liabilities or assets are to be either settled or realized.

Loss per share

We present both basic and diluted earnings (loss) per share (EPS) on the face of the statements of operations. Basic EPS is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Diluted EPS figures are equal to those of basic EPS for each period since we have no dilutive stock options and warrants.

ITEM 4T.

CONTROLS AND PROCEDURES

An evaluation was carried out under the supervision and with the participation of our management, including our Principal Financial Officer and Principal Executive Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of November 30, 2009, our disclosure controls and procedures are effective to satisfy the objectives for which they are intended.  

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States. Because of its inherent limitations, internal control over financialreporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.

There were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal quarter covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II -OTHER INFORMATION

ITEM 6.

EXHIBITS

Exhibit Number	Description of Exhibits
31.1	Rule 13a-14(a) Certifications
31.2	Rule 13a-14(a) Certifications
32	Section 1350 Certifications

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:

January 13, 2010

STRONGBOW RESOURCES INC.
By:	/s/ HERBERT SCHMIDT
	Herbert Schmidt, Principal Executive, Financial and Accounting Officer

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