UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| [ X ] | QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended October 31, 2009
| [ ] | TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________
Commission file number 000-52958
| ENDEAVOR EXPLORATIONS INC. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 00-0000000 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | |
| 114 West Magnolia Street, #400-102, Bellingham, Washington | 98225 |
| (Address of principal executive offices) | (Zip Code) |
| | | |
| | |
| 206-338-2649 |
| (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) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 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.
Larger 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 CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
| Class | Outstanding at December 15, 2009 |
| common stock - $0.001 par value | 23,940,900 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
ENDEAVOR EXPLORATIONS INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
(Unaudited)
OCTOBER 31, 2009
ENDEAVOR EXLORATIONS INC.
(An Exploration Stage Company)
(Unaudited)
| | | | | | |
| | October 31, | | | July 31, | |
| | 2009 | | | 2009 | |
| | |
| ASSETS | |
| | | | | | |
| Current | | | | | |
| Cash | $ | 5,946 | | | $ | 1,665 | |
| Prepaid expenses | | 3,015 | | | | 4,020 | |
| | | 8,961 | | | | 5,685 | |
| Intellectual property (Note 2) | | 77,000 | | | | - | |
| | $ | 85,961 | | | $ | 5,685 | |
| | | | | | | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | |
| Current | | | | | | | |
| Accounts payable and accrual liabilities | $ | 39,761 | | | $ | 24,751 | |
| Promissory notes payable (Note 3) | | 206,965 | | | | 178,541 | |
| Due to related parties | | 13,321 | | | | 7,340 | |
| | | 260,047 | | | | 210,632 | |
| | | | | | | | |
| STOCKHOLDERS’ EQUITY | |
| Common stock (Note 4) | | | | | | | |
| Authorized: | | | | | | | |
| 75,000,000 common shares, $0.001 par value | | | | | | | |
| Issued and outstanding: | | | | | | | |
22,040,000 common shares (July 31, 2009 – 21,040,000) | | 22,040 | | | | 21,040 | |
| Additional paid-in capital | | 231,201 | | | | 149,513 | |
| Deficit accumulated during the exploration stage | | (427,327 | ) | | | (375,500 | ) |
| | | (174,086 | ) | | | (204,947 | ) |
| | | | | | | | |
| | $ | 85,961 | | | $ | 5,685 | |
| | | | | | | | |
| Subsequent Events (Note 5) | | | | | | | |
The accompanying notes are an integral part of these interim financial statements.
ENDEAVOR EXPLORATIONS INC.
(An Exploration Stage Company)
(Unaudited)
| | Three months ended October 31, 2009 | | | Three months ended October 31, 2008 | | | Cumulative from July 13, 2005 (Inception) to October 31, 2009 | |
| | | | | | | | | |
| Expenses | | | | | | | | |
| Development costs (Note 2) | $ | 12,000 | | | $ | - | | | $ | 12,000 | |
| Finance charges (Note 3) | | 10,688 | | | | 89,219 | | | | 212,318 | |
| Mineral property cost | | 391 | | | | 19,366 | | | | 45,358 | |
| Office and other administration expenses (Note 2) | | 28,748 | | | | (13,155 | ) | | | 157,651 | |
| | | | | | | | | | | | |
| Net loss | $ | (51,827 | ) | | $ | (95,430 | ) | | $ | (427,327 | ) |
| | | | | | | | | | | | |
| Net loss per share - basic and diluted | $ | (0.00 | ) | | $ | (0.01 | ) | | | | |
| | | | | | | | | | | | |
| Weighted average number of shares outstanding - basic and diluted | | 21,094,348 | | | | 31,001,304 | | | | | |
| | | | | | | | | | | | |
The accompanying notes are an integral part of these interim financial statements.
ENDEAVOR EXPLORATIONS INC.
(An Exploration Stage Company)
(Unaudited)
| | | | | | | | Cumulative from | |
| | Three months ended October 31, | | | Three months ended October 31, | | | July 13, 2005 (Inception) to October 31, | |
| | 2009 | | | 2008 | | | 2009 | |
| | | | | | | | | |
| Cash Flow From Operating Activities | | | | | | | | |
| Net loss | $ | (51,827 | ) | | $ | (95,430 | ) | | $ | (427,327 | ) |
| Non-cash items: | | | | | | | | | | | |
| Foreign exchange | | (76 | ) | | | (22,240 | ) | | | (8,511 | ) |
| Finance charges | | 10,688 | | | | 89,177 | | | | 212,318 | |
| Non-cash working capital items: | | | | | | | | | | | |
| Prepaid expenses | | 1,005 | | | | (4,050 | ) | | | (3,015 | ) |
| Accounts payable and accrual liabilities | | 15,010 | | | | (4,252 | ) | | | 39,761 | |
| Net cash used in operations | | (25,200 | ) | | | (36,795 | ) | | | (186,774 | ) |
| | | | | | | | | | | | |
| Cash Flow From Investing Activities | | | | | | | | | | | |
| Acquisition of intellectual properties | | (5,000 | ) | | | - | | | | (5,000 | ) |
| Acquisition of mineral property | | - | | | | - | | | | (288,824 | ) |
| Net cash used in investing activities | | (5,000 | ) | | | - | | | | (293,824 | ) |
| | | | | | | | | | | | |
| Cash Flow From Financing Activities | | | | | | | | | | | |
| Advances from related party | | 5,981 | | | | - | | | | 13,321 | |
| Long term debt, net | | - | | | | (10,128 | ) | | | 218,915 | |
| Issuance of capital stock | | - | | | | - | | | | 46,800 | |
| Repurchase shares for cancellation | | - | | | | - | | | | (1 | ) |
| Proceeds from promissory notes payable | | 28,500 | | | | 85,000 | | | | 207,509 | |
| Net cash provided by financing activities | | 34,481 | | | | 74,872 | | | | 486,544 | |
| | | | | | | | | | | | |
| Increase in cash | | 4,281 | | | | 38,077 | | | | 5,946 | |
| | | | | | | | | | | | |
| Cash, beginning | | 1,665 | | | | 11,072 | | | | - | |
| | | | | | | | | | | | |
| Cash, ending | $ | 5,946 | | | $ | 49,149 | | | $ | 5,946 | |
| | | | | | | | | | | | |
| Supplemental cash flow information | | | | | | | | | | | |
| Cash paid for: | | | | | | | | | | | |
| Interest | $ | - | | | $ | - | | | $ | - | |
| Income taxes | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | |
| Non-cash item: | | | | | | | | | | | |
| Shares issued for mineral property | $ | - | | | $ | - | | | $ | 7,000,000 | |
| Shares issued for purchase of intellectual properties | $ | 72,000 | | | $ | - | | | $ | 72,000 | |
The accompanying notes are an integral part of these interim financial statements.
ENDEAVOR EXPLORATIONS INC.
(An Exploration Stage Company)
October 31, 2009
| | Unaudited Interim Financial Statements |
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. They may not include all information and footnotes required by 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 July 31, 2009, 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 three months ended October 31, 2009 are not necessarily indicative of the results that may be expected for the year ending July 31, 2010.
On October 27, 2009, the Company entered into an Asset Purchase Agreement with Spidex Technologies (“Spidex”) to acquire the following intellectual property assets from Spidex:
| a) | MDC GPS Trademark for mobile data technology, which is a software application that can run on GPS enabled Smartphones; |
| b) | Domain Names: MOBILEDATACORP.COM; and |
| c) | Proprietary Code, which is an experimental Java source code that can send GPS data to a server. |
The purchase price consists of a payment of $5,000 and the issuance of 1,000,000 shares of the Company with a fair value of $72,000 (Note 4). The Company incurred legal expenses of $10,000 relating to this acquisition which was expensed during the quarter ended October 31, 2009.
The Company will retain Spidex to provide services to further develop and commercialize the purchased assets for $12,000 per month for a period of one year. For the three months ended October 31, 2009, $12,000 has been paid to Spidex and recorded as development costs.
ENDEAVOR EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
October 31, 2009
3. CONVERTIBLE PROMISORY NOTES PAYABLE
| Balance at July 31, 2009 | | $ 178,541 |
| October 8, 2009 convertible promissory note issued | | 28,500 |
| | | 207,041 |
| Translation gain | | (76) |
| Balance October 31, 2009 | | $ 206,965 |
| | On October 8, 2009, the Company issued a convertible promissory note with a principal amount of $28,500. The note is unsecured, payable on demand and does not bear any interest. The note, or any part thereof, can be converted to one share of the Company for each $0.08 outstanding in principal. At conversion, the maximum number of shares that will be issued is 356,250. The beneficial conversion feature of $10,688 was expensed as finance charges during the quarter ended October 31, 2009. |
4. COMMON STOCK
| | On October 27, 2009, the Company issued 1,000,000 of its common shares for purchase of the intellectual property assets from Spidex (Note 2). |
5. SUBSEQUENT EVENTS
| a) | On November 19, 2009 the Company issued 1,900,900 shares in settlement of convertible promissory notes issued to the Company’s president for amounts of US$4,600 issued on August 17, 2007 and US$13,888 (CDN$15,000) issued on December 14, 2007. |
| b) | On November 19, 2009 the Company signed a convertible promissory note of $20,000. The note is interest free, payable on demand and each $0.08 of principal can be converted into one common share of the Company. |
| c) | On November 23, 2009 the Company’s directors resolved to seek approval from the shareholders of the Company to change the name of the Company to Mobile Data Corp. |
The Company evaluated subsequent events through the financial statements filing date of December 15, 2009.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
THE FOLLOWING PRESENTATION OF MANAGEMENT’S DISCUSSION AND ANALYSIS OF ENDEAVOR EXPLORATIONS INC. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
Overview
During part of the fiscal period ended October 31, 2009, Endeavor was a startup exploration stage company without operations. Subsequently, management decided to expand Endeavor’s focus and identify and assess new projects for acquisition purposes that are more global in nature and technology-based.
MDC GPS Technology
During the fiscal period ended October 31, 2009, management decided to expand Endeavor’s focus and identify and assess new projects for acquisition purposes that are more global in nature and technology-based. In September 2009, Endeavor entered into a letter of intent with Spidex Technologies (the “Letter of Intent”) for the acquisition of all of the right, title and interest in a mobile data technology for Smartphones (the “Technology”) that can run on GPS enabled Smartphones. The Technology is a software application that will run in the background and will collect and transmit location data to a server. Server applications will include location monitoring of vehicles, children and members of social networking groups. See Exhibit 10.3 – Letter of Intent for more details.
After conducting its due diligence on the Technology, Endeavor entered into an asset purchase agreement in October 2009 with Spidex Technologies for the acquisition of all of the right, title and interest in the Technology. As consideration for the acquisition of the Technology, Endeavor paid Spidex $5,000 on the signing of the Letter of Intent and issued 1 million restricted shares to Spidex at a deemed price of $0.10 per share.
Also, Spidex agreed to assist Endeavor in the further development and commercialization of the Technology. Endeavor agreed to retain Spidex for a period of 12 months and to pay Spidex a monthly consulting fee to provide services to Endeavor for the purpose of developing and advancing the Technology to a point where it can be sold commercially. Either party may terminate these services upon 30 days’ notice. The focus of the research and development of the Technology will be on developing a software system whereby a GPS enabled smartphone will send location based information to a server. The server will receive and store this location based information and web applications on the server can be developed to provide various consumer and business web services. Endeavor plans to target BlackBerry devices initially but intends to broaden support to other GPS enabled smartphones including the Apple iPhone, Google Andriod devices and possibly Palm Pre and Motorola iDen devices. Also, pursuant to the terms and conditions of the asset purchase agreement, Spidex will be entitled to a partial royalty or partial payment if Endeavor sells its interest in the Technology. See Exhibit 10.4 – Asset Purchase Agreement for more details.
Martin Lake Claims
On January 18, 2008, Endeavor Explorations Inc. acquired eight mineral claims located in the Uranium City area of Northern Saskatchewan known as the Martin Lake Properties (the “Martin Lake Claims”). The Martin Lake Claims covered approximately 1,500 hectares (3,700 acres). However, on July 21, 2009, the board of directors approved management’s recommendation to abandon the Martin Lake Claims. Management recommended abandoning the Martin Lake Claims in view of the current economic downturn and it was determined that the Martin Lake Claims no longer warranted further exploration or development based on the results of exploration Endeavor has conducted on the Martin Lake Claims. Pursuant to the terms and conditions of the Mining Property Purchase Agreement, Endeavor sent notice on August 4, 2009 to Mr. Dubnick of its intention to abandon the Martin Lake Claims. As a result of the abandonment of the Martin Lake Claims 60 days prior to any deadline for additional assessment work to be completed, Endeavor has no further obligations under the Mining Property Purchase Agreement. See Exhibit 10.2 – Mining Property Purchase Agreement for more details.
Plan of Operation
Endeavor has not had any significant revenues generated from its business operations since inception. Endeavor expects that the revenues generated from its business for the next 12 months will not be enough for its required working capital. Until Endeavor is able to generate any consistent and significant revenue it may be required to raise additional funds by way of equity or debt financing.
At any phase, if Endeavor finds that it does not have adequate funds to complete a phase, it may have to suspend its operations and attempt to raise more money so it can proceed with its business operations. If Endeavor cannot raise the capital to proceed it may have to suspend operations until it has sufficient capital. Endeavor expects to raise the required funds for the next 12 months with equity or debt financing.
To become profitable and competitive, Endeavor needs to develop and advance the Technology to a point where it can be sold commercially. To achieve this goal, management has prepared the following phases for its plan of operation for the next 12 months.
Phase 1 - Develop the Technology (9 months)
In Phase 1, Endeavor plans to (1) develop the first client software for BlackBerry GPS enabled smartphones, (2) develop server software which can receive data from the BlackBerry GPS enabled smartphones, and (3) develop a server based web application to provide a location based service. Endeavor has budgeted approximately $500,000 for this phase and expects it to take nine months to complete, with completion expected within the first nine months of Endeavor’s plan of operation, which began in October 2009.
Phase 2 - Implement marketing strategy (3 months)
In Phase 2, Endeavor plans to (1) hire personnel for sales, marketing and customer service, (2) create a marketing strategy for the Technology and its products, and (3) implement its marketing strategy on its target market.
Endeavor has budgeted approximately $250,000 for this phase and expects it to take three months to complete with completion expected within the final three months of Endeavor’s plan of operation.
Risk Factors
An investment in Endeavor’s common stock involves a number of very significant risks. Prospective investors should refer to all the risk factors disclosed in Endeavor’s Form SB-2 filed on April 4, 2007 and Endeavor’s Form 10-K filed on November 3, 2008, and Endeavor’s Form 10-K filed on November 2, 2009.
Financial Condition
As at October 31, 2009, Endeavor had a cash balance of $5,946. Management does not anticipate generating any revenue for the foreseeable future. When additional funds become required, the additional funding will come from equity financing from the sale of Endeavor’s common stock or sale of part of its interest in the Martin Lake Claims. If Endeavor is successful in completing an equity financing, existing shareholders will experience dilution of their interest in Endeavor. Endeavor does not have any financing arranged and Endeavor cannot provide investors with any assurance that Endeavor will be able to raise sufficient funding from the sale of its common stock. In the absence of such financing, Endeavor’s business will fail.
Based on the nature of Endeavor’s business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that very few technology companies in the development stage ultimately develop, market, and successfully sell their products. Endeavor’s future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:
| · | Endeavor’s ability to raise additional funding; |
| · | the competitive market for similar technology and the pricing of such technology; |
| · | the results of Endeavor’s proposed research and development on its Technology; and |
| · | Endeavor’s ability to find joint venture partners for the development of its Technology |
Due to Endeavor’s lack of operating history and present inability to generate revenues, Endeavor’s auditors have stated their opinion that there currently exists a substantial doubt about Endeavor’s ability to continue as a going concern
Liquidity
Endeavor’s internal sources of liquidity will be loans that may be available to Endeavor from management. Management has previously loaned Endeavor donated services and rent. Though Endeavor has no written arrangements with any of its directors or officers, Endeavor expects that the directors or officers will provide Endeavor with internal sources of liquidity, if it is required.
Also, Endeavor’s external sources of liquidity will be private placements for equity conducted outside the United States. During the quarter covered by this quarterly report, Endeavor did not complete any definitive arrangements for any external sources of liquidity.
Capital Resources
As of October 31, 2009, Endeavor had total assets of $85,961, consisting of $5,946 in cash, $3,015 in prepaid expenses, and $77,000 in intellectual property, and total current liabilities of $260,047 for a net working capital of $(174,086), compared with a net working capital of ($204,947) as of July 31, 2009. The liabilities consisted of $39,761 in accounts payable and accrual liabilities, $206,965 in promissory notes payable, and $13,321 due to related parties.
There are no assurances that Endeavor will be able to achieve further sales of its common stock or any other form of additional financing. If Endeavor is unable to achieve the financing necessary to continue its plan of operations, then Endeavor will not be able to continue its exploration programs and its business will fail.
Net Cash Used in Operating Activities
For the three month period ended October 31, 2009, net cash used in operating activities decreased to $25,200 compared with $36,795 for the same three month period in the previous fiscal year.
At October 31, 2009, Endeavor had cash of $5,946. During the three month period ended October 31, 2009, Endeavor used $25,200 in cash for operating activities. This was primarily a result of non-cash items of $(76) in foreign exchange and $10,688 in finance charges and the non-cash working capital items of $1,005 in prepaid expenses and $15,010 in accounts payable and accrual liabilities.
Net Cash Used in Investing Activities
Net cash used by investing activities was $5,000 for the three month period ended October 31, 2009, for the acquisition of the intellectual property, as compared with $nil used for the same three month period in the previous fiscal year.
Net Cash Provided By Financing Activities
Net cash flows provided by financing activities decreased to $34,481 for the three month period ended October 31, 2009 as compared with financing activities of $74,872 for the same three month period in the previous fiscal year, primarily as a result of advances from a related party in the amount of $5,981 and proceeds from a promissory notes payable of $28,500.
Results of Operation for the Period Ended October 31, 2009
Endeavor has had no operating revenues since its inception on July 13, 2005, through to October 31, 2009. Endeavor’s activities have been financed from the proceeds of share subscriptions and from proceeds from promissory notes. From its inception, on July 13, 2005, to October 31, 2009 Endeavor has raised a total of $46,800 from private offerings of its common stock and a total of $207,509 from proceeds from promissory notes payable.
For the period from inception on July 13, 2005, to October 31, 2009, Endeavor incurred total expenses of $427,327. These expenses included $12,000 in development costs, $212,318 in finance charges, $45,358 in mineral property costs, and $157,651 in office and other administration expenses.
For the three month period ended October 31, 2009, Endeavor incurred total expenses of $51,827. These expenses included $12,000 in development costs, $10,688 in finance charges, $391 in mineral property costs, and $28,748 in office and other administration expenses.
For the three month period ended October 31, 2008, Endeavor incurred total expenses of $95,430. These expenses included $89,219 finance charges, $19,366 in mineral property costs, and $(13,155) for office and other administration expenses.
Endeavor has not attained profitable operations and is dependent upon obtaining financing to pursue future acquisitions. For these reasons, there is substantial doubt that Endeavor will be able to continue as a going concern.
Off-balance Sheet Arrangements
Endeavor has no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support and credit risk support or other benefits.
Material Commitments for Capital Expenditures
Endeavor had no contingencies or long-term commitments at October 31, 2009.
Tabular Disclosure of Contractual Obligations
Endeavor is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Overview and Anticipated Expenses
Management anticipates spending approximately $750,000 on the research, development, and marketing of the Technology in the next 12 months. However, the amount to be spent on the Technology will depend on whether Endeavor can develop the Technology to a point where it is marketable.
Management intends to continue to have Endeavor’s outside consultant assist in the preparation of its quarterly and annual financial statements and have these financial statements reviewed or audited by its independent auditor. Endeavor’s outside consultant is expected to charge Endeavor approximately $1,250 to prepare its quarterly financial statements and approximately $1,750 to prepare its annual financial statements. Endeavor’s independent auditor is expected to charge approximately $2,500 to review its quarterly financial statements and approximately $12,000 to audit its annual financial statements. In the next 12 months, management anticipates spending approximately $25,000 to pay for Endeavor’s accounting and audit requirements.
Additionally, management expects to incur legal costs of approximately $4,000 per quarter to support three quarterly 10-Q filings and $5,000 to support one annual 10-K filing. In the next twelve months, management anticipates spending approximately $17,000 for legal costs to pay for three quarterly filings and one annual filing.
Forward Looking Statements
The information in this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including statements regarding Endeavor’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. 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 terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports Endeavor files with the Securities and Exchange Commission. These factors may cause Endeavor’s actual results to differ materially from any forward-looking statement. Endeavor disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Endeavor is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Management maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in Endeavor’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including Endeavor’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of Endeavor’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of October 31, 2009.
Based on that evaluation, management concluded, as of the end of the period covered by this report, that Endeavor’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information was not accumulated or communicated to management to allow timely decisions regarding required disclosure, for the reasons set out in the management’s report on internal control over financial reporting disclosed in Endeavor’s Form 10-K for 2009.
Changes in Internal Controls over Financial Reporting
As of the end of the period covered by this report, there have been no changes in Endeavor’s internal controls over financial reporting during the quarter ended October 31, 2009, that materially affected, or are reasonably likely to materially affect, Endeavor’s internal control over financial reporting subsequent to the date of management’s last evaluation.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
Endeavor is not a party to any pending legal proceedings and, to the best of Endeavor’s knowledge, none of Endeavor’s property or assets are the subject of any pending legal proceedings.
Item 1A. Risk Factors.
Endeavor is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the quarter of the fiscal year covered by this report, (i) Endeavor did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) Endeavor did not sell any unregistered equity securities, with the exception of the following:
October 2009 – Asset Purchase Agreement
During the quarter of the fiscal year covered by this report, Endeavor issued 1 million restricted shares of common stock in the capital of Endeavor pursuant to the terms and conditions of an asset purchase agreement dated October 27, 2009. The 1 million restricted shares were issued on November 12, 2009. See Exhibit 10.3 – Letter of Intent, Exhibit 10.4 – Asset Purchase Agreement, and Endeavor’s Form 8-K (Current Report) filed on October 2, 2009 for more details.
For this share issuance, Endeavor relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. The value of the restricted shares was set by Endeavor based on the fair market value of the assets acquired.
November 2009 – Conversion of Promissory Notes
During the quarter of the fiscal year covered by this report, Endeavor issued an aggregate 1,900,900 restricted shares of common stock in the capital of Endeavor pursuant to the terms and conditions of (1) a convertible promissory note dated August 17, 2007 in the principal amount of $4,600 and (2) a convertible promissory note dated December 14, 2007 in the principal amount of $14,409. The conversion price for both promissory notes was $0.01 per share. The 1,900,900 restricted shares were issued on November 23, 2009.
For this share issuance, Endeavor relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission. The value of the restricted shares was arbitrarily set by Endeavor and had no relationship to its assets, book value, revenues or other established criteria of value.
Item 3. Defaults Upon Senior Securities.
During the quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of Endeavor. Also, during this quarter, no material arrearage in the payment of dividends has occurred.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders through the solicitation of proxies or otherwise, during the quarter of the fiscal year covered by this report.
Item 5. Other Information.
During the quarter of the fiscal year covered by this report, Endeavor reported all information that was required to be disclosed in a report on Form 8-K.
Endeavor has adopted a new code of ethics that applies to all its executive officers and employees, including its CEO and CFO. See Exhibit 14 – Code of Ethics for more information. Endeavor undertakes to provide any person with a copy of its financial code of ethics free of charge. Please contact Endeavor at info@endeavorexplorations.com to request a copy of Endeavor’s code of ethics. Management believes Endeavor’s code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
Item 6. Exhibits
| (a) | Index to and Description of Exhibits |
All Exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to Endeavor’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-52958 and SEC File Number 333-140779.
| Exhibit | Description | Status |
| 3.1 | Articles of Incorporation of Endeavor Explorations Inc., filed as an Exhibit to Endeavor’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. | Filed |
| 3.2 | Bylaws of Endeavor Explorations Inc., filed as an Exhibit to Endeavor’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. | Filed |
| 10.1 | Mineral Property Purchase Agreement dated July 28, 2006 between Ainslie Corrigan and Endeavor Explorations Inc., filed as an Exhibit to Endeavor’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. | Filed |
| 10.2 | Mineral Property Purchase Agreement dated January 18, 2008 between Rod Dubnick and Endeavor Explorations Inc., filed as an Exhibit to Endeavor’s Form 8-K (Current Report) on January 24, 2008, and incorporated herein by reference. | Filed |
| 10.3 | Letter of Intent dated September 29, 2009 between Spidex Technologies and Endeavor Explorations Inc., filed as an Exhibit to Endeavor’s Form 8-K (Current Report) on October 2, 2009, and incorporated herein by reference. | Filed |
| 10.4 | Asset Purchase Agreement dated October 27, 2009 between Endeavor Explorations Inc. and Spidex Technologies, filed as an Exhibit to Endeavor’s Form10-K (Annual Report) on November 2, 2009, and incorporated herein by reference. | Filed |
| 14 | Code of Ethics, filed as an Exhibit to Endeavor’s Form 10-Q (Quarterly Report) on March 17, 2008, and incorporated herein by reference. | Filed |
| 31 | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Included |
| 32 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Included |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Endeavor Explorations Inc. has caused this report to be signed on its behalf by the undersigned duly authorized person.
ENDEAVOR EXPLORATIONS INC.
Dated: December 15, 2009 By: /s/ Belkis Jimenez Rivero
Name: Belkis Jimenez Rivero
Title: Director, CEO, and CFO
(Principal Executive Officer and
Principal Financial Officer)
Exhibit 31
ENDEAVOR EXPLORATIONS INC.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Belkis Jimenez Rivero, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ending October 31, 2009 of Endeavor Explorations Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: December 15, 2009
/s/ Belkis Jimenez Rivero
Belkis Jimenez Rivero
Chief Executive Officer
ENDEAVOR EXPLORATIONS INC.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Belkis Jimenez Rivero, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ending October 31, 2009 of Endeavor Explorations Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: December 15, 2009
/s/ Belkis Jimenez Rivero
Belkis Jimenez Rivero
Chief Financial Officer
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Endeavor Explorations Inc. (the “Company”) on Form 10-Q for the period ending October 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Belkis Jimenez Rivero, President, Chief Executive Officer of the Company and a member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Belkis Jimenez Rivero
Belkis Jimenez Rivero
Chief Executive Officer
December 15, 2009
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Endeavor Explorations Inc. (the “Company”) on Form 10-Q for the period ending October 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Belkis Jimenez Rivero, Chief Financial Officer of the Company and a member of the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Belkis Jimenez Rivero
Belkis Jimenez Rivero
Chief Financial Officer
December 15, 2009
