UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the period ended July 31, 2008.
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period ____________ to ____________
Commission File Number333-146572
Asia Atlantic Resources
(Exact name of small Business Issuer as specified in its charter)
| Nevada | Pending |
| (State or other jurisdiction of | (IRS Employer Identification No.) |
| incorporation or organization) | |
| 113 Warrick Street | |
| Coquitlam, British Columbia, Canada | V3K 5L3 |
| (Address of principal executive offices) | (Postal or Zip Code) |
| Issuer’s telephone number, including area code: | 206-339-4977 |
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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 | [ ] | Smaller reporting company | [ X ] |
| (do not check if a smaller reporting company) | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ X ] No [ ]
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
July 31, 2008
| ASIA ATLANTIC RESOURCES. |
| (An Exploration Stage Company) |
| BALANCE SHEETS |
| July 31, 2008 and April 30, 2008 |
| (Unaudited) |
| July 31, | April 30, | |||||
| 2008 | 2008 | |||||
| (Unaudited) | (Audited) | |||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | $ | 7,655 | $ | - | ||
| Notes receivable – Note 6 | - | 9,532 | ||||
| Total Assets | $ | 7,655 | $ | 9,532 | ||
| LIABILITIES | ||||||
| Current | ||||||
| Bank indebtedness | $ | - | $ | 79 | ||
| Accounts payable and accrued liabilities | 4,300 | 5,113 | ||||
| Total Liabilities | 4,300 | 5,192 | ||||
| STOCKHOLDERS’ EQUITY | ||||||
| Capital Stock – Note 5 | ||||||
| Authorized: | ||||||
| 75,000,000 common shares with a par value of $.001 | ||||||
| Issued and outstanding: | ||||||
| 7,600,000 common shares | 7,600 | 7,600 | ||||
| Additional paid in capital | 22,400 | 22,400 | ||||
| Accumulated deficit | (26,645 | ) | (25,660 | ) | ||
| Total Stockholders’ Equity | 3,355 | 4,340 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 7,655 | $ | 9,532 | ||
Going Concern – Note 2
F-2
SEE ACCOMPANYING NOTES
| ASIA ATLANTIC RESOURCES |
| (An Exploration Stage Company) |
| STATEMENT OF OPERATIONS (Unaudited) |
| For the three months ended July 31, 2008 and July 31, 2007 and |
| for the period January 22, 2007 (Date of Inception) to July 31, 2008 |
| Accumulated for | |||||||||
| For the three months ended | from January 22, 2007 | ||||||||
| July 31, | to (Date of Inception) | ||||||||
| 2008 | 2007 | July 31, 2008 | |||||||
| Expenses | |||||||||
| Geological, mineral and prospect costs | $ | - | $ | - | $ | 8,000 | |||
| General and administrative | (15 | ) | 64 | 2,547 | |||||
| Incorporation costs | - | - | 441 | ||||||
| Professional fees | 1,000 | 3,555 | 15,771 | ||||||
| (985 | ) | (3,619 | ) | (26,759 | ) | ||||
| Interest revenue | - | - | 114 | ||||||
| Net Loss for the Period | $ | (985 | ) | $ | (3,619 | ) | $ | (26,645 | ) |
| Basic and fully diluted net loss per common | |||||||||
| share | (0.00 | ) | (0.00 | ) | (0.00 | ) | |||
| Weighted average common shares | |||||||||
| outstanding | 7,600,000 | 7,600,000 | |||||||
F-3
SEE ACCOMPANYING NOTES
| ASIA ATLANTIC RESOURCES |
| (An Exploration Stage Company) |
| STATEMENT OF CASH FLOWS (Unaudited) |
| For the three months ended July 31, 2008 and July 31, 2007 |
| for the period January 22, 2007 (Date of Inception) to July 31, 2008 |
| From January 22, | |||||||||
| For the three months ended | 2007 | ||||||||
| July 31, | (Date of Inception) to | ||||||||
| 2008 | 2007 | July 31, 2008 | |||||||
| Operating Activities | |||||||||
| Net loss for the period | $ | (985 | ) | $ | (3,619 | ) | $ | (26,645 | ) |
| Cash provided by (used in) changes | |||||||||
in operating assets and liabilities | |||||||||
| Notes receivable | 9,532 | - | - | ||||||
| Accounts payable and accrued liabilities | (813 | ) | (1,945 | ) | 4,300 | ||||
| Net cash provided by (used in) | |||||||||
| Operating Activities | 7,734 | (5,564 | ) | (22,345 | ) | ||||
| Financing Activities | |||||||||
| Common stock issued for cash | - | - | 30,000 | ||||||
| Net cash provided by (used in) | |||||||||
| Financing Activities | - | - | 30,000 | ||||||
| Increase in cash and cash equivalents during the | |||||||||
| period | 7,734 | (5,564 | ) | 7,655 | |||||
| Cash and cash equivalents, beginning of the period | (79 | ) | 21,869 | - | |||||
| Cash and cash equivalents, end of the period | $ | 7,655 | $ | 16,305 | $ | 7,655 | |||
| Supplemented disclosure of cash flow | |||||||||
| information: | |||||||||
| Cash paid for: | |||||||||
| Interest | $ | - | $ | - | $ | - | |||
| Income taxes | $ | - | $ | - | $ | - | |||
F-4
| ASIA ATLANTIC RESOURCES |
| (An Exploration Stage Company) |
| NOTES TO THE FINANCIAL STATEMENTS (Unaudited) |
| July 31, 2008 |
| Note 1 | Interim Reporting |
While the information presented in the accompanying interim three months interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2008 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2008 annual financial statements. | |
Operating results for the three months ended July 31, 2008 are not necessarily indicative of the results that can be expected for the year ended April 30, 2009. | |
| Note 2 | Nature and Continuance of Operations |
The Company was incorporated in the State of Nevada on January 22, 2007 and is in the exploration stage. The Company has acquired a mineral property located in the Province of British Columbia, Canada, and has not yet determined whether this property contains reserves that are economically recoverable. The recoverability of amounts from the property will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy expenditure requirements and to complete the development of the property and upon future profitable production or proceeds from the sale thereof | |
The Company has adopted April 30 as its fiscal year end. | |
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At July 31, 2008, the Company had not yet achieved profitable operations, has accumulated losses of $26,645 since its inception. The Company expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management anticipates that additional funding will be in the form of equity financing from the sale of common stock. Management may also seek to obtain short-term loans from the directors of the Company. There are no current arrangements in place for equity funding or short-term loans. |
F-5
| Note 3 | Summary of Significant Accounting Policies | |
Development Stage Company | ||
The Company is a development stage company as defined in the Statements of Financial Accounting Standards (“SFAS”) No. 7. The Company is still in the developmental stage, devoting substantially all of its present efforts to establish its business and its planned principal operations have not commenced, as only one subsidiary has started to realize some revenues but has not achieved full operations. All losses accumulated since inception have been considered as part of the Company’s development stage activities. | ||
Financial Instruments | ||
The carrying values of cash and cash equivalents, notes receivable and accounts payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. | ||
Revenue Recognition | ||
The Company recognizes revenue when minerals are delivered to the purchaser. | ||
Mineral Property Costs | ||
Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified. From that time forward, the Company will capitalize all costs to the extent that future cosh flows from mineral reserves equal or exceed the costs deferred. The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production. Costs related to site restoration programs will be accrued over the life of the project. To date, the Company has not established any proven reserves on its mineral property. | ||
Environmental Costs | ||
Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of: | ||
i) | completion of a feasibility study; or | |
ii) | the Company’s commitment to a plan of action based on the then known facts. | |
Basic and Diluted Net Income (Loss) Per Share | ||
The Company computes net loss per share in accordance with SFAS No. 128, "Earnings Per Share". SFAS 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the year is used in | ||
F-6
determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti dilutive.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Cash and Currency Risks
The Company incurs expenditures in Canadian and U.S. dollars. Consequently, some assets and liabilities are exposed to Canadian dollar foreign currency fluctuations. As at July 31, 2008, there were no amounts denominated in Canadian dollars included in the financial statements. The Company has cash balances at well-known financial institutions. Balances in U.S. dollars at Canadian institutions are not protected by insurance and are therefore subject to deposit risk. As at July 31, 2008 all cash and equivalents represented cash at Canadian financial institutions.
Derivative Instruments
The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB No. 133”, SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities”, and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”, which is effective for the Company as of its inception. These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.
If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. The Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes.
Foreign Currency Translations
The Company's functional currency is US dollars. Foreign currency balances are translated into US dollars as follows:
Monetary assets and liabilities are translated at the period-end exchange rate. Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the period-end exchange rate. Revenue and expense items are translated at the average exchange rate for the period. Foreign exchange gains and losses in the period are included in operations
F-7
| Income Taxes | |
The Company follows SFAS No. 109, “Accounting for Income Taxes” which requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled | |
Recent Accounting Pronouncements | |
The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. | |
| Note 4 | Mineral Property |
On February 9, 2007, the Company purchased a mineral claim in the Province of British Columbia for $8,000. The claim will expire on September 17, 2008 unless the Company carries out assessment procedures as required by government. | |
| Note 5 | Capital Stock |
On February 12, 2007, the Company issued 2,000,000 common shares for $2,000 in cash to the sole director. | |
On February 15, 2007, the Company issued 5,600,000 common shares for $28,000 in cash. | |
There are no shares subject to options, warrants or other agreements as at July 31, 2008. | |
| Note 6 | Notes Receivable |
The notes receivable were due from a director of the Company. They were unsecured and interest was charged at 12% per annum. |
F-8
Forward-Looking Statements
This Form 10-Q includes "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
All statements other than historical facts included in this Form, including without limitation, statements under "Plan of Operation", regarding our financial position, business strategy, and plans and objectives of management for the future operations, are forward-looking statements.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, market conditions, competition and the ability to successfully complete financing.
Item 2. Plan of Operation
Our plan of operations for the twelve months following the date of this report is is to complete the geologist recommended exploration work on the KL Baez property consisting of grid emplacement, concentrated geological mapping and sampling, geophysical surveys and an initial drill hole. We estimate that the cost of this entire program, which we will conduct in phases, will be approximately $50,000.
We intend to retain a professional geologist to undertake the proposed exploration on the KL Baez claim.
Total expenditures over the next 12 months, including anticipated administrative expenses, are expected to be $70,000.
While we have enough funds on hand to commence initial exploration on the KL Baez property, we will require additional funding to cover our administrative expenses and to complete all recommended exploration. As well, we will need additional financing in order to complete any additional exploration that is recommended once this initial exploration is completed. We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, we do not have any arrangements in place for any future equity financing.
Results of Operations for the Period Ended July 31, 2008
We did not earn any revenues during the three-month period ended July 31, 2008. We do not anticipate earning revenues unless we enter into commercial production on the KL Baez Property, which is doubtful.
We incurred operating expenses in the amount of $985 for the three-month period ended July 31, 2008. These operating expenses were comprised entirely of professional fees.
At July 31, 2008, we had total assets of $7,655, consisting entirely of cash and total liabilities of $4,300 consisting of accounts payable and accrued liabilities.
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
Item 3 Controls and Procedures
Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures as of July 31, 2008. This evaluation was conducted by Christopher Murphy, our chief executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.
Limitations on the Effective of Controls
Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based upon their evaluation of our controls, our chief executive officer and principal accounting officer has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.
PART II- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
| 31.1 | |
| 31.2 | |
| 32.1 | |
| 32.2 |
We did not file any current reports on Form 8-K during the period.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
September 15, 2008
Asia Atlantic Resources
/s/ Christopher Murphy
Christopher Murphy
President, Chief Executive Officer
and director
