Item 2. Management's Discussion and Analysis or Plan of Operation.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in conformity with generally accepted accounting principles in the United States of America for interim financial statements. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.
As used in this quarterly report, the terms "we", "us", "our company", “Company” and "California Mines" mean California Mines Corp., unless otherwise indicated. All dollar amounts refer to US dollars unless otherwise indicated.
General
Our Business – General
We were incorporated on January 14, 2000 under the laws of the state of Nevada. We are an exploration stage company with no revenues to date. As of the date hereof, we can be defined as a "shell" company, an entity which is generally described as having no or nominal operations and with no or nominal assets or assets consisting solely of cash and cash equivalents.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Current Business
We are in the business of acquisition and exploration of mineral properties. We have not generated revenues since our inception.
On May 6, 2013, our board of directors approved an agreement and plan of merger to merge with and into our wholly-owned subsidiary California Mines Corp., a Nevada corporation, to effect a name change from Palmdale Executive Homes, Corp. to California Mines Corp. California Mines Corp. was formed on May 6, 2013 solely for the change of name.
In addition to the name change, our board of directors approved a forty (40) for one (1) forward stock split of our authorized and our issued and outstanding shares of common stock. Upon effect of the forward stock split, our authorized capital will be increased from 25,000,000 to 1,000,000,000 shares of common stock and correspondingly, our issued and outstanding shares of common stock will be increased from 3,561,000 to 142,440,000 shares of common stock, all with a par value of $0.001.
Articles of Merger to effect the merger and change of name and a Certificate of Amendment to effect the forward stock split were filed with the Nevada Secretary of State on May 23, 2013, both with an effective date of June 14, 2013.
These amendments were reviewed by the Financial Industry Regulatory Authority (“FINRA”) and were approved for filing with an effective date of June 14, 2013.
On July 14, 2013, our ticker symbol changed from “PMDX” to “CLMC” to better reflect our new name. Our new CUSIP number is 130446107.
Employees
Currently there are no full time or part-time employees of our company. However, our President, Santiago Medina, our Chief Operating Officer, Mr. Defensor and our Vice President-Geology, Mr. Calpito are consultants of our company. If business is successful and we experience rapid growth, our current officers and directors may be required to hire new personnel to improve, implement and administer our operational, management, financial and accounting systems.
Results of Operations
Six months ended June 30, 2013 and 2012
For the six months ended June 30, 2013, we incurred expenditures of $106,074 and posted losses of $106,074. For the six months ended June 30, 2012, we incurred expenditures of $81,545 and posted losses of $81,545.
Operating expenses for the six months ending June 30, 2013 were $95,642 compared to operating expenses for the six months ended June 30, 2012 of $78,251. Of the operating expenses, general and administrative expense increased from $18,251 in 2012 to $35,642 in the same six month period in 2013 as we raised more working capital and were able to more actively execute our business plans in 2013. We incurred total consulting fees of 60,000 payable to our Chief Operating Officer and Vice President of Geology for the six months ended June 30, 2013 and June 30, 2012. For the six months ended June 30, 2013, we accrued interest expenses of $10,432 on three promissory notes, compared to interest expense of $3,294 on one promissory note for the six months ended June 30, 2012.
Three months ended June 30, 2013 and 2012
For the three months ended June 30, 2013, we incurred expenditures of $62,603 and posted losses of $62,603. For the three months ended June 30, 2012, we incurred expenditures of $41,491 and posted losses of $41,491.
Operating expenses for the three months ending June 30, 2013 were $57,387 compared to operating expenses for the three months ended June 30, 2012 of $39,844. Of the operating expenses, general and administrative expense increased from $9,844 in 2012 to $27,387 in the same three month period in 2013 as we raised more working capital and were able to more actively execute our business plans in 2013. We incurred total consulting fees of $30,000 payable to our Chief Operating Officer and Vice President of Geology for the three months ended June 30, 2013 and June 30, 2012. For the three months ended June 30, 2013, we accrued interest expenses of $5,216 on three promissory notes, compared to interest expense of $1,647 on one promissory note for the three months ended June 30, 2012.
We will require additional financing before we generate significant revenues. We intend to raise the capital required to meet any additional needs through sales of our securities in secondary offerings or private placements. We have no agreements in place to do this at this time.
There are no assurances that we will be able to obtain additional funds required for our continued operations. In such event that we do not raise sufficient additional funds by secondary offering or private placement, we will consider alternative financing options, if any, or be forced to scale down or perhaps even cease our operations.
Liquidity and Capital Resources
During the six months ended June 30, 2013 we used $41,103 in our operations, and had no financing or investing activities.
At June 30, 2013, there was a working capital deficit of $417,346 compared to working capital deficit of $311,272 on December 31, 2012.
At June 30, 2013, our total current assets were $1,817 compared to $42,920 on December 31, 2012.
At June 30, 2013, our total current liabilities were $419,163 compared to $354,192 on December 31, 2012.
At June 30, 2013, we had promissory notes payable to non-related parties of $125,000 and promissory note payable to our President, Santiago Medina of $82,569.
On August 9, 2013, we raised $150,000 with the issuance of an unsecured convertible note with a term of one year and simple annual interest rate of 12%. The principal amount and accrued interest is convertible into the Company’s common shares at the conversion price of 75% of the average closing prices for the five trading days immediately preceding the conversion date.
Plan of Operations
We intend to develop the mining property we have leased in Tuolumne County, California known as the Providence Mines property. We anticipate that we will expend approximately $240,000 on operations over the next twelve months, including $200,000 for exploration of the leased mineral property and $40,000 for working capital.
Over the next twelve months we intend to raise funds through sales of our common stock in private placements to qualified investors or debt financing.
Recently Issued Accounting Standards
Management does not anticipate that the recently issued but not yet effective accounting pronouncements will materially impact the Company’s financial statements.
Off Balance Sheet Arrangements
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Going Concern
As at June 30, 2013 we have not generated income from our operations, had a working capital deficit of $417,346 and accumulated loss of $428,216 since inception. Due to the uncertainty of our ability to generate sufficient revenues from our operating activities and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, in their report on our financial statements for the fiscal year ended December 31, 2012, our registered independent auditors included additional comments indicating concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our registered independent auditors. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management plans to continue to seek financing on favorable terms; however, there is no assurance that such financing can be obtained on favorable terms. If we are unable to generate sufficient revenue or obtain additional funds for our working capital needs, we may need to cease or curtail operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
As a “smaller reporting company”, we are not required to provide the information under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer who is also our principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to the Company, particularly during the period when this report was being prepared. However, because we have limited transactions which are all approved and reviewed by our directors and sole officer, the impact of the limitations are not material.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None from January 1, 2013 to the date of this filing.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits.
Exhibits required by Item 601 of Regulation S-K
Exhibit Number and Exhibit Title
| Exhibit No. | | Document Description |
| | | |
| 31.1 | | Section 302 Certification of Chief Executive Officer and Chief Financial Officer |
| | | |
| 32.1 | | Section 906 Certification of Chief Executive Officer and Chief Financial Officer |
| | | |
| 10.8 | | Form of Convertible Loan Agreement |
| 101.INS ** | | XBRL Instance Document |
| | | |
| 101.SCH ** | | XBRL Taxonomy Extension Schema Document |
| | | |
| 101.CAL ** | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | | |
| 101.DEF ** | | XBRL Taxonomy Extension Definition Linkbase Document |
| | | |
| 101.LAB ** | | XBRL Taxonomy Extension Label Linkbase Document |
| | | |
| 101.PRE ** | | XBRL Taxonomy Extension Presentation Linkbase Document |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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.
| | CALIFORNIA MINES CORP. | |
| | | | |
| Date: August 14, 2013 | By: | /s/ Santiago Medina | |
| | | Santiago Medina | |
| | | Chief Executive Officer, Chief Financial Officer, Treasurer and Director (Principal Executive and Principal Financial and Accounting Officer) | |
