Shengrui Resources Co. Ltd.
(Former name, former address and former fiscal year, if changed since last report)
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.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
As of September 13, 2010 the registrant’s outstanding common stock consisted of 5,456,400 shares.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
BALANCE SHEETS
(Expressed in US Dollars)
(Unaudited)
| | | July 31, 2010 | | | October 31, 2009 | |
| ASSETS | | | | | | |
| Current | | | | | | |
| Cash and cash equivalents | | $ | - | | | $ | 319 | |
| | | $ | - | | | $ | 319 | |
| LIABILITIES | | | | | | | | |
| Current | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 70,641 | | | $ | 57,730 | |
Due to related parties (Note 3) | | | 105,303 | | | | 45,428 | |
| | | | 175,994 | | | | 103,158 | |
| SHAREHOLDERS' DEFICIENCY | | | | | | | | |
| Capital stock (100,000,000 shares authorized, $0.0001 par value, 5,456,400 shares issued and outstanding [October 31, 2009 – 5,456,400]) (Note 4) | | | 546 | | | | 546 | |
| Additional paid-in capital | | | 622,177 | | | | 622,177 | |
| Deficit | | | (798,667 | ) | | | (725,562 | ) |
| | | | (175,944 | ) | | | (102,839 | ) |
| | | $ | - | | | $ | 319 | |
Nature and continuance of operations (Note 1)
The accompanying notes are an integral part of these financial statements.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in US Dollars)
(Unaudited)
| | | Period from inception on October 31, 2006 to July 31, 2010 | | | For the three months ended July 31, 2010 | | | For the three months ended July 31, 2009 | | | For the nine months ended July 31, 2010 | | | For the nine months ended July 31, 2009 | |
| Expenses | | | | | | | | | | | | | | | |
| General and administrative expenses | | $ | 4,040 | | | $ | - | | | $ | - | | | $ | 319 | | | $ | 2,591 | |
| Management fees | | | 13,500 | | | | - | | | | - | | | | - | | | | 1,500 | |
| Rent | | | 13,500 | | | | - | | | | - | | | | - | | | | 1,500 | |
| Stock-based compensation | | | 449,550 | | | | - | | | | - | | | | - | | | | - | |
| Professional fees | | | 304,128 | | | | 30,170 | | | | 38,474 | | | | 72,786 | | | | 79,305 | |
| Bank charges and interest | | | 647 | | | | - | | | | - | | | | - | | | | 647 | |
| Foreign exchange loss | | | 4,302 | | | | - | | | | - | | | | - | | | | 282 | |
| | | | 789,667 | | | | 30,170 | | | | 38,474 | | | | 73,105 | | | | 85,825 | |
| | | | (789,667 | ) | | | (30,170 | ) | | | (38,474 | ) | | | (73,105 | ) | | | (85,825 | ) |
| Write-off of exploration advances | | | (20,000 | ) | | | - | | | | - | | | | - | | | | (20,000 | ) |
| Gain on settlement of debt | | | 36,000 | | | | - | | | | - | | | | - | | | | 36,000 | |
| Write-off of exploration costs | | | (25,000 | ) | | | - | | | | - | | | | - | | | | - | |
| Net loss for the period | | | (798,667 | ) | | | (30,170 | ) | | | (38,474 | ) | | | (73,105 | ) | | | (69,825 | ) |
| Deficit, beginning of the period | | | - | | | | (768,497 | ) | | | (632,404 | ) | | | (725,562 | ) | | | (601,053 | ) |
| Deficit, end of the period | | $ | (798,667 | ) | | $ | (798,667 | ) | | $ | (670,878 | ) | | $ | (798,667 | ) | | $ | (670,878 | ) |
| Earnings per share | | | | | | | | | | | | |
| Basic | | $ | (0.01 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) |
| Weighted average number of shares outstanding | | | 5,456,000 | | | | 5,456,000 | | | | 5,456,000 | | | | 5,456,000 | |
The accompanying notes are an integral part of these financial statements.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Expressed in US Dollars)
(Unaudited)
| | | Period from inception on October 31, 2006 to July 31, 2010 | | | For the nine months ended July 31, 2010 | | | For the nine months ended July 31, 2009 | |
| Cash flow from operating activities | | | | | | | | | |
| Net loss for the period | | $ | (798,667 | ) | | $ | (73,105 | ) | | $ | (69,825 | ) |
| Add back non-cash operating activities: | | | | | | | | | | | | |
| Gain on settlement of debt | | | (36,000 | ) | | | - | | | | (36,000 | ) |
| Donated rent | | | 13,500 | | | | - | | | | 1,500 | |
| Donated services | | | 13,500 | | | | - | | | | 1,500 | |
| Write-off of exploration advances | | | 20,000 | | | | - | | | | 20,000 | |
| Consulting fees | | | 25,930 | | | | - | | | | 38,451 | |
| Stock-based compensation | | | 449,550 | | | | - | | | | - | |
| Write-off of exploration costs | | | 25,000 | | | | - | | | | - | |
| Changes in non-cash working capital | | | | | | | | | | | | |
| Exploration advances | | | (20,000 | ) | | | - | | | | - | |
| Accounts payable and accrued liabilities | | | 106,641 | | | | 12,911 | | | | 14,202 | |
| Net cash used in operating activities | | | (200,546 | ) | | | (60,194 | ) | | | (30,172 | ) |
| Cash flow from investing activities | | | | | | | | | | | | |
| Acquisition of oil and gas properties | | | (50,930 | ) | | | - | | | | (6,120 | ) |
| Net cash used in investing activities | | | (50,930 | ) | | | - | | | | (6,120 | ) |
| Cash flow from financing activities | | | | | | | | | | | | |
| Advances from related parties | | | 151,386 | | | | 59,875 | | | | 18,288 | |
| Capital stock subscribed | | | 71,660 | | | | - | | | | - | |
| Proceeds from the issuance of capital stock | | | 42,780 | | | | - | | | | - | |
| Repurchase of capital stock | | | (14,350 | ) | | | - | | | | - | |
| Note payable | | | - | | | | - | | | | 18,000 | |
| Net cash provided by financing activities | | | 251,476 | | | | 59,875 | | | | 36,288 | |
| Net change in cash and cash equivalents during the period | | | - | | | | (319 | ) | | | (4 | ) |
| Cash and cash equivalents, beginning of period | | | - | | | | 319 | | | | 323 | |
| Cash and cash equivalents, end of period | | $ | - | | | $ | - | | | $ | 319 | |
The accompanying notes are an integral part of these financial statements.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIENCY)
(Expressed in US Dollars)
(Unaudited)
| | | Common stock | | | | | | | | | | | | | |
| | | Number of shares | | | Amount | | | Additional Paid in Capital | | | | | | Deficit accumulated during the | | | Total shareholders’ equity (deficiency) | |
| Balance, October 31, 2008 | | | 5,456,400 | | | $ | 546 | | | $ | 573,094 | | | $ | - | | | $ | (601,053 | ) | | $ | (27,413 | ) |
| Donated services and rent | | | - | | | | - | | | | 3,000 | | | | - | | | | - | | | | 3,000 | |
| Extinguishment of related party debt | | | - | | | | - | | | | 46,083 | | | | - | | | | - | | | | 46,083 | |
| Net loss | | | | | | | - | | | | - | | | | - | | | | (124,509 | ) | | | (124,509 | ) |
| Balance, October 31, 2009 | | | 5,456,400 | | | | 546 | | | | 622,177 | | | | - | | | | (725,562 | ) | | | (102,839 | ) |
| Net loss | | | - | | | | - | | | | - | | | | - | | | | (73,105 | ) | | | (73,105 | ) |
| Balance, July 31, 2010 | | | 5,456,400 | | | $ | 546 | | | $ | 622,177 | | | $ | - | | | $ | (798,667 | ) | | $ | (175,944 | ) |
The accompanying notes are an integral part of these financial statements.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in US Dollars)
July 31, 2010
1. NATURE AND CONTINUANCE OF OPERATIONS
Shengrui Resources Co. Ltd. (the “Company”) was incorporated in the State of Nevada on October 30, 2006. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting for Development Stage Enterprises”. The Company’s principal business was the acquisition and exploration of oil and gas resources. It has changed its principal business to the acquisition and exploration of mineral resources.
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at July 31, 2010 the Company has accumulated losses of $798,667 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These finan cial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America applicable to interim financial information and with the rules and regulations of the United States Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed, or omitted, pursuant to such rules and regulations. In the opinion of management, the unaudited interim financial statements include all adjustments necessary for the fair presentation of the results of the interim periods presented. All adjustments are of a normal recurring nature, except as otherwise noted below. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended October 31, 2009. The results of operations for the interim periods are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
Recent accounting pronouncements
In May 2009, the Financial Accounting Standards Board (the “FASB”) issued authoritative guidance regarding subsequent events. The authoritative guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The authoritative guidance requires disclosure of the date through which subsequent events have been evaluated and whether that date represents the date the financial statements were issued or were available to be issued. The authoritative guidance is effective for interim and annual periods ending after June 15, 2009. There was no significant impact on the Company’s financial statements.
SHENGRUI RESOURCES CO. LTD.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in US Dollars)
July 31, 2010
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”, a replacement of FASB Statement No. 162 (the “Codification”). The Codification, which was launched on July 1, 2009, became the single source of authoritative non-governmental US generally accepted accounting principles (“GAAP”), superseding various existing authoritative accounting pronouncements. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company adopted the Codification for its reporting period ending on October 31, 2009. The adoption of the Codification had no significant impact on the Company’s financial statements.
In August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value” (“Update 2009-05”). Update 2009-05 clarifies that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value of such liability using one or more of the techniques prescribed by the update. The Company is currently assessing the impact of this new standard on its financial statements.
3. RELATED PARTY TRANSACTIONS
| a) | At July 31, 2010, the Company was indebted to a related company with one or more directors in common for $105,303 (October 31, 2009 - $45,428), representing expenditures paid on behalf of the Company. This amount is unsecured, non-interest bearing, due on demand and has no specific terms of repayment. |
4. COMMON STOCK
| a) | During the year ended October 31, 2007, the Company issued 7,800 shares of common stock for $780. |
| b) | During the year ended October 31, 2007, the Company received subscriptions of $71,660 for 716,000 shares of common stock issued pursuant to a private placement at $0.10 per share. |
| c) | During the year ended October 31, 2007, the Company received subscriptions of $450 from the former President of the Company for 4,500,000 shares of common stock pursuant to a private placement at $0.0001 per share. On March 19, 2008, the shares were issued. At October 31, 2007, $450 was included in common stock subscribed. Stock-based compensation was recorded during the year ended October 31, 2008, representing the difference between the fair value of the common shares and the consideration received. |
| d) | On January 15, 2008, the Company issued 1,072,100 shares of common stock pursuant to a private placement at $0.10 per share for proceeds of $107,210. At October 31, 2007, the Company had included proceeds from this private placement of $71,210 in common stock subscribed. |
| e) | On June 12, 2008, the Company received subscriptions of $6,000 for 20,000 shares of common stock pursuant to a private placement at $0.30 per share. On June 22, 2008, the shares were issued. |
| f) | On October 23, 2008, the Company repurchased 143,500 shares of common stock for cash consideration of $14,350, which were surrendered for cancellation pursuant to rescission agreements dated October 23, 2008. |
Forward-Looking Statements
This quarterly report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.
Business Overview
We were incorporated as a Nevada company on October 30, 2006. Until recently, we were engaged in the acquisition and exploration of oil and gas properties. Currently, we are engaged in the development of business interests in the People's Republic of China (the “PRC”) with the goal of completing the acquisition of one or more operating companies in the mineral resource industry. On August 10, 2009, we initiated a proposal to acquire 100% of the issued and outstanding shares of Helongjiang Jiu Xin Mining Investment Co. Ltd., a private mining company located in Harbin, Heilongjiang Province. We did not enter into any formal agreements with respect to this acquisition, and in August 2010 we terminated our discussions with the company.
Our business activities in both the PRC and North America are directed by Arthur Skagen, our Chief Executive Officer, and Donald Fairholm, our Chief Financial Officer. Mr. Skagen and Mr. Fairholm also manage our operations.
We formerly had one wholly owned subsidiary, Patch Oilsands Ltd., a British Columbia corporation through which we acquired properties in Leismer, Alberta. On April 16, 2009 we transferred 100% of the shares of Patch Oilsands Ltd. to Pacific Bridge Capital Ltd., a company over which Arthur Skagen, our Chief Executive Officer and Director, has sole voting and investment power, pursuant to a consulting agreement in exchange for services rendered.
Our common stock was quoted on the OTC Bulletin Board under the symbol “SRUI” until September 7, 2010, when it was deleted as no bid or ask prices were quoted for a sufficient period of time pursuant to Rule 15c2-11 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We plan to apply to again have our common stock quoted on the OTC Bulletin Board; however, there is no guarantee that our application will be accepted.
We intend to build our business by developing business interests within the PRC. We are currently exploring business opportunities in the mineral and natural resource sector as well as other sectors, and although we are focusing our attention on the PRC we also intend to develop business interests in North America as opportunities arise.
Going Concern
Our financial statements for the nine months ended July 31, 2010 have been prepared on a going concern basis and contain an additional explanatory paragraph in Note 1 which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of securities to fund our operations. We may not generate any revenues even if we complete the acquisition of one or more operating companies, and we are dependent on obtaining outside financing in order to maintain our operations and continue our proposed activities. If we are unable to raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail.
If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business operations.
Results of Operations
Results of Operations for the Three Months Ended July 31, 2010
For the three months ended July 31, 2010 we did not generate any revenues and we incurred a net loss of $30,170, compared to a net loss of $38,474 for the same period in fiscal 2009. Our net loss per share for the three months ended July 31, 2010 was $0.01, as was our net loss per share for the same period in fiscal 2009.
Our total expenses for the three months ended July 31, 2010 were $30,170, compared to total expenses of $38,474 for the same period in fiscal 2009, for a net decrease of approximately 22%. Our total expenses for the three months ended July 31, 2010 consisted of $30,170 in professional fees, whereas our total expenses for the same period in fiscal 2009 consisted of $38,474 in professional fees.
Results of Operations for the Nine Months Ended July 31, 2010
For the nine months ended July 31, 2010 we did not generate any revenues and we incurred a net loss of $73,105, compared to a net loss of $69,825 for the same period in fiscal 2009. Our net loss per share for the nine months ended July 31, 2010 was $0.01, as was our net loss per share for the same period in fiscal 2009.
Our total expenses for the nine months ended July 31, 2010 were $73,105, compared to total expenses of $85,825 for the same period in fiscal 2009, for a net decrease of approximately 15%. Our total expenses for the nine months ended July 31, 2010 consisted of $72,786 in professional fees and $319 in general and administrative expenses, whereas our total expenses for the same period in fiscal 2009 consisted of $79,305 in professional fees, $1,500 in management fees, $1,500 in rent, $2,591 in general and administrative expenses, $647 in bank charges and $282 in foreign exchange loss. During the nine months ended July 31, 2009 we also received $36,000 in the form of gain on the settlement of debt and wrote off $20,000 in exploration advances as w e determined that it was not feasible to continue exploring and developing the oil and gas properties in which we held an interest.
Our general and administrative expenses consist primarily of transfer agent fees and general office expenses. Our professional fees include legal, accounting and auditing fees.
Results of Operations for the Period from October 30, 2006 (Date of Inception) to July 31, 2010
From our inception on October 30, 2006 to July 31, 2010 we did not generate any revenues and we incurred a net loss of $798,667.
From our inception on October 30, 2006 to July 31, 2010 we incurred total expenses of $789,667, including $304,128 in professional fees, $13,500 in management fees, $13,500 in rent, $449,550 in stock-based compensation, $4,302 in foreign exchange losses, $647 in bank charges and interest and $4,040 in general and administrative expenses. We also received $36,000 in the form of gain on the settlement of debt, wrote off $25,000 in oil and gas exploration costs because we allowed our interest in a property located in Worsley, Alberta to expire and wrote off $20,000 in exploration advances as we determined that it was not feasible to continue exploring and developing the oil and gas properties in which we held an interest.
Liquidity and Capital Resources
We have limited operational history. As of July 31, 2010 we had no cash or cash equivalents, $175,944 in total liabilities and a working capital deficit of $175,944. As of July 31, 2010 we had an accumulated deficit of $798,667.
We are solely dependent on the funds raised through our equity financing. Our net loss of $798,667 from our inception on October 30, 2006 to July 31, 2010 was funded by equity financing. Since our inception on October 30, 2006, we have raised gross proceeds of $100,090 in cash from the sale of our securities.
From our inception on October 30, 2006 to July 31, 2010 we spent $200,546 on operating activities, including $13,500 in donated rent, $13,500 in donated services, $20,000 in the write-off of exploration advances, $25,930 in consulting fees, $449,500 in stock-based compensation, $25,000 in the write-off of exploration costs and $106,641 in accounts payable. During that time, we also received $36,000 in the form of gain on the settlement of debt and $20,000 in exploration advances.
During the nine months ended July 31, 2010 we spent $60,194 on operating activities, including $12,911 in accounts payable. During the same period in fiscal 2009 we spent $30,172 on operating activities, including $1,500 in donated rent, $1,500 in donated services, $20,000 in the write-off of exploration advances, $38,451 in consulting fees and $14,202 in accounts payable. During that time, we also received $36,000 in the form of a gain on the settlement of debt.
From our inception on October 30, 2006 to July 31, 2010 we spent $50,930 on investing activities. During the nine months ended July 31, 2010 we did not spend any money on investing activities, whereas we spent $6,120 on investing activities during the same period in fiscal 2009. All of our investing activities since inception were related to the acquisition of oil and gas properties.
From our inception on October 30, 2006 to July 31, 2010 we received $251,476 from financing activities, including $42,780 in proceeds from the issuance of our common stock, $71,660 from subscriptions for our common stock and $151,386 in advances from related parties. From our inception on October 30, 2006 to July 31, 2010 we also spent $14,350 on repurchases of our common stock.
During the nine months ended July 31, 2010 we received $59,875 from financing activities, all of which was in the form of advances from related parties. During the same period in fiscal 2009 we received $36,288 from financing activities, including $18,288 in the form of advances from related parties and $18,000 in the form of a note payable.
Our decrease in cash for the nine months ended July 31, 2010 was $319 due to a combination of our operating and financing activities.
For the next 12 months we intend to:
| ● | develop business interests in China; and |
| ● | leverage those business interests in China to complete the acquisition of one or more operating companies in the mineral resource industry. |
Our planned operation and exploration expenditures over the next 12 months are summarized as follows:
| Description | Potential Completion Date | Estimated Expenses ($) |
| Develop a website | 12 months | 10,000 |
| Develop business interests in China | 12 months | 220,000 |
| Complete the acquisition of one or more operating mineral resource companies | 12 months | 250,000 |
| Professional fees | 12 months | 120,000 |
| Marketing expenses | 12 months | 60,000 |
| General and administrative expenses | 12 months | 24,000 |
| Total | | 684,000 |
Our general and administrative expenses for the year will consist primarily of transfer agent fees, investor relations expenses, bank and interest charges and general office expenses. The professional fees are related to our regulatory filings throughout the year and the acquisition of any company in which we may acquire an interest.
Based on our planned expenditures, we require additional funds of approximately $684,000 to proceed with our business plan over the next 12 months. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.
We intend to raise the balance of our cash requirements for the next 12 months from private placements, loans from related parties or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing. There is no assurance that any financing will be available to us or if available, on terms that will be acceptable to us.
Even though we plan to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for funding our operations as we do not have tangible assets to secure any such financing. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide any assurance that we will be able to raise sufficient funds from the sale of our common stock to finance our operations or planned acquisition activities. In the absence of such financing, we will not be able to develop business interests in China to the extent that we would like or complete any formal business acquisitions, and we may be forced to abandon our business plan.
We also hope to obtain additional financing as part of any acquisition agreement that we may ultimately negotiate. However, there is no guarantee that we will enter into a definitive acquisition agreement, and if we successfully complete an acquisition our capital requirements and business plans may change substantially.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Inflation
The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Not applicable.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were are not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control
During the three months ended July 31, 2010 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not aware of any legal proceedings to which we are a party. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.
None.
None.
None.
| Exhibit Number | Exhibit Description |
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | Shengrui Resources Co. Ltd. |
| | (Registrant) |
| | |
| Date: September 13, 2010 | /s/ Arthur Skagen |
| | Arthur Skagen |
| | Chief Executive Officer, Director |
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