UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2012
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number: 333-169970
BROOKFIELD RESOURCES INC.
(Exact name of registrant as specified in its charter)
Nevada |
| 32-0309203 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
|
|
|
5045 Orbitor Drive, Bldg. 10, Suite 200 Mississauga, Ontario, Canada |
| L4W 4Y4 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code (877) 216-9586
Not applicable
(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 registrant 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 has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [X]
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 | [ ] (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 Act). Yes [ ] No [X] x
As of January 14, 2013, there were 437,503,920 shares of Common Stock, par value $0.0001 per share, outstanding.
BROOKFIELD RESOURCES INC.
QUARTERLY REPORT ON FORM 10-Q
November 30, 2012
TABLE OF CONTENTS
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Brookfield Resources Inc. “SEC” refers to the Securities and Exchange Commission.
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Brookfield Resources Inc.
(A Development Stage Company)
November 30, 2012 and 2011
Index to the Financial Statements
Contents | Page(s) |
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|
Balance Sheets as November 30, 2012 (Unaudited) and August 31, 2012 | F-1 |
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F-2 | |
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F-3 | |
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F-4 | |
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F-5 |
2
Brookfield Resources Inc. | |||||||||
(An Exploration Stage Company) | |||||||||
Balance Sheets | |||||||||
| |||||||||
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| November 30, 2012 |
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| August 31, 2012 |
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| (Unaudited) |
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Assets |
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Current assets |
|
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|
|
|
|
|
|
Cash |
|
| $ | - |
|
| $ | 380 |
|
Prepaid expenses |
|
|
| - |
|
|
| 500 |
|
|
|
|
|
|
|
|
|
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|
Total current assets |
|
|
| - |
|
|
| 880 |
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Other assets |
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Mineral Resources Claim Rights |
|
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| 26,674 |
|
|
| - |
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Total other assets |
|
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| 26,674 |
|
|
| - |
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Total assets |
|
| $ | 26,674 |
|
| $ | 880 |
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Liabilities and stockholders' deficit |
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Current liabilities: |
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Accrued expenses |
|
| $ | 100 |
|
| $ | 21,329 |
|
Advances from stockholder |
|
|
| 42,226 |
|
|
| 14,500 |
|
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|
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Total current liabilities |
|
|
| 42,326 |
|
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| 35,829 |
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Total Liabilities |
|
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| 42,326 |
|
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| 35,829 |
|
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Stockholders' deficit |
|
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Preferred stock: $0.0001 par value: 10,000,000 shares authorized; |
|
|
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none issued or outstanding |
|
|
| - |
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| - |
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Common stock: $0.0001 par value: 900,000,000 shares authorized; |
|
|
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437,503,920 and 138,751,200 shares issued and outstanding, respectively |
|
|
| 43,750 |
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| 13,875 |
|
Additional paid-in capital |
|
|
| 66,479 |
|
|
| 28,565 |
|
Accumulated deficit |
|
|
| (77,389) |
|
|
| (77,389) |
|
Deficit accumulated during the exploration stage |
|
|
| (48,492) |
|
|
| - |
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|
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Total stockholders' deficit |
|
|
| (15,652) |
|
|
| (34,949) |
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Total liabilities and stockholders' deficit |
|
| $ | 26,674 |
|
| $ | 880 |
|
See accompanying notes to the financial statements.
F-1
Brookfield Resources Inc. | |||||||||||||
(Formerly Movie Trailer Galaxy, Inc.) | |||||||||||||
(An Exploration Stage Company) | |||||||||||||
Statements of Operations | |||||||||||||
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| ||||||||||||
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| For the Period from |
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| For the Three Months |
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| For the Three Months |
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| September 1, 2012 |
|
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| Ended |
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| Ended |
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| (Exploration) through |
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| November 30, 2012 |
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| November 30, 2011 |
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| November 30, 2012 |
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| (Unaudited) |
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| (Unaudited) |
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| (Unaudited) |
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Revenues earned during the exploration stage |
|
| $ | - |
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| $ | - |
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| $ | - |
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Operating expenses |
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Compensation |
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| 500 |
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| - |
|
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| 500 |
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Professional fees |
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| 10,245 |
|
|
| - |
|
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| 10,245 |
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General and administrative expenses |
|
|
| 37,747 |
|
|
| - |
|
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| 37,747 |
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Total operating expenses |
|
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| 48,492 |
|
|
| - |
|
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| 48,492 |
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Loss from continuing operations before income tax provision |
|
|
| (48,492) |
|
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| - |
|
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| (48,492) |
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Income tax provision |
|
|
| - |
|
|
| - |
|
|
| - |
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Net loss from continuing operations |
|
|
| (48,492) |
|
|
| - |
|
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| (48,492) |
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Discontinued operations |
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Loss from operations of discontinued operations, net of tax |
|
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| - |
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| (8,637) |
|
|
| - |
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Loss from discontinued operations, net of tax |
|
|
| - |
|
|
| (8,637) |
|
|
| - |
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Net loss |
|
| $ | (48,492) |
|
| $ | (8,637) |
|
| $ | (48,492) |
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Net loss per common share: |
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- Basic and diluted |
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Continuing operations |
|
| $ | (0.00) |
|
| $ | - |
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|
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Discontinued operations |
|
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| - |
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| (0.00) |
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| $ | (0.00) |
|
| $ | (0.00) |
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Weighted average common shares outstanding |
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- basic and diluted |
|
|
| 348,863,988 |
|
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| 138,751,200 |
|
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|
|
|
See accompanying notes to the financial statements.
F-2
Brookfield Resources Inc. | |||||||||||||||||
(Formerly Movie Trailer Galaxy, Inc.) | |||||||||||||||||
(An Exploration Stage Company) | |||||||||||||||||
Statement of Stockholders' Equity (Deficit) | |||||||||||||||||
For the Interim Period ended November 30, 2012 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
| |||||||||||||||||
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| Deficit |
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| Common Stock, $0.0001 Par Value |
|
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| Accumulated |
| Total | |||||||
|
| Number of |
|
|
| Additional |
| Accumulated |
| during the |
| Stockholders' | |||||
|
| Shares |
| Amount |
| Paid-in Capital |
| Deficit |
| Exploration Stage |
| Equity (Deficit) | |||||
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| |||
Balance, April 27, 2010 (inception) |
| 1,500,000 |
| $ | 150 |
| $ | - |
| $ | - |
| $ | - |
| $ | 150 |
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Contribution to capital |
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| - |
|
| 100 |
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| - |
|
| - |
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| 100 |
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Shares issued for cash from June 23, 2010 |
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through August 31, 2010 at $0.05 per share |
| 843,800 |
|
| 84 |
|
| 42,106 |
|
| - |
|
| - |
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| 42,190 |
|
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Effect of forward stock split net of cancellations |
| 136,407,400 |
|
| 13,641 |
|
| (13,641) |
|
| - |
|
| - |
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| - |
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Net loss |
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|
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|
|
|
| (544) |
|
| - |
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| (544) |
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Balance, August 31, 2010 |
| 138,751,200 |
|
| 13,875 |
|
| 28,565 |
|
| (544) |
|
| - |
|
| 41,896 |
|
|
|
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|
|
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Net loss |
|
|
|
|
|
|
|
|
|
| (49,281) |
|
| - |
|
| (49,281) |
|
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|
|
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Balance, August 31, 2011 |
| 138,751,200 |
|
| 13,875 |
|
| 28,565 |
|
| (49,825) |
|
| - |
|
| (7,385) |
|
|
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|
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|
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|
|
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Net loss |
|
|
|
|
|
|
|
|
|
| (27,564) |
|
| - |
|
| (27,564) |
|
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|
|
|
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|
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|
|
|
|
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|
Balance, August 31, 2012 |
| 138,751,200 |
|
| 13,875 |
|
| 28,565 |
|
| (77,389) |
|
| - |
|
| (34,949) |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
Contribution to capital |
|
|
|
|
|
|
| 41,115 |
|
| - |
|
| - |
|
| 41,115 |
|
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Shares issued for acquisition of mineral claim rights on |
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September 27, 2012 at $0.000089 per share |
| 298,752,720 |
|
| 29,875 |
|
| (3,201) |
|
| - |
|
| - |
|
| 26,674 |
|
|
|
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|
|
|
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|
|
|
|
|
|
|
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Net loss |
|
|
|
|
|
|
|
|
|
| - |
|
| (48,492) |
|
| (48,492) |
|
|
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|
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|
|
|
|
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Balance, November 30, 2012 |
| 437,503,920 |
| $ | 43,750 |
| $ | 66,479 |
| $ | (77,389) |
| $ | (48,492) |
| $ | (15,652) |
See accompanying notes to the financial statements.
F-3
Brookfield Resources Inc. | ||||||||||||
(Formerly Movie Trailer Galaxy, Inc.) | ||||||||||||
(An Exploration Stage Company) | ||||||||||||
Statements of Cash Flows | ||||||||||||
| ||||||||||||
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| For the Period from |
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| For the Three Months |
|
|
| For the Three Months |
|
|
| September 1, 2012 |
|
|
|
| Ended |
|
|
| Ended |
|
|
| (Exploration) through |
|
|
|
| November 30, 2012 |
|
|
| November 30, 2011 |
|
|
| November 30, 2012 |
|
|
|
| (Unaudited) |
|
|
| (Unaudited) |
|
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| (Unaudited) |
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Cash flows from operating activities: |
|
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|
|
|
|
|
|
|
|
Net loss |
| $ | (48,492) |
|
| $ | (8,637) |
|
| $ | (48,492) |
|
|
|
|
|
|
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|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
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|
|
|
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|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses |
|
| (21,229) |
|
|
| 5,051 |
|
|
| (21,229) |
|
Prepaid expenses |
|
| 500 |
|
|
| - |
|
|
| 500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
| (69,221) |
|
|
| (3,586) |
|
|
| (69,221) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from shareholder advances |
|
| 27,726 |
|
|
| 4,000 |
|
|
| 27,726 |
|
Capital contribution |
|
| 41,115 |
|
|
| - |
|
|
| 41,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
| 68,841 |
|
|
| 4,000 |
|
|
| 68,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
| (380) |
|
|
| 414 |
|
|
| (380) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
| 380 |
|
|
| 2,083 |
|
|
| 380 |
|
|
|
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Cash, end of period |
| $ | - |
|
| $ | 2,497 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flows information: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid |
| $ | - |
|
| $ | - |
|
| $ | - |
|
Income tax paid |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
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Non-cash financing and investing transactions: |
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|
|
|
|
|
|
|
Common share issued for mineral resources claim rights |
| $ | 26,674 |
|
| $ | - |
|
| $ | 26,674 |
|
See accompanying notes to the financial statements.
F-4
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Note 1 - Organization and Operations
Brookfield Resources Inc. (formerly Movie Trailer Galaxy, Inc.)
Brookfield Resources Inc., formerly Movie Trailer Galaxy, Inc., an exploration stage company, (the “Company”) was incorporated on April 27, 2010 under the laws of the State of Nevada.
Discontinued Operations
Since April 27, 2010, the Company had planned to provide information for movie lovers and access to related products. On September 27, 2012, the Company entered into an Asset Purchase Agreement for the purchase, transfer and assignment of various exploration licenses from Matteo Sacco to the Company. Effective September 1, 2012, the Company changed its business strategy to the exploitation of mineral mining rights and discontinued the operation of its existing business plan of providing a comprehensive portal to preview the latest movie information. Therefore, as of September 1, 2012, the results of the operations of providing a comprehensive portal to preview the latest movie information have been classified as discontinued operations for all periods presented.
Change in Control
On September 11, 2012, a Stock Purchase Agreement (the “SPA”) was entered into by and among Movie Trailer Galaxy, Inc. (“Movie Trailer” or the “Company”), Stephanie Wyss, (the “Seller”), and Robert Roon (the “Purchaser” and together with the Company and the Seller, the “Parties”). Pursuant to the SPA, the Purchaser purchased an aggregate of 840,000,000 shares of common stock of the Company (64% of the outstanding shares) from the Seller for an aggregate purchase price of $25,000.00.
On September 27, 2012, an Asset Purchase Agreement was entered into for the purchase, transfer and assignment of various exploration licenses from Matteo Sacco (“Seller”) to the Company. The exploration licenses were originally issued to Seller from the Nova Scotia Department of Natural Resources. The Company issued two hundred ninety eight million seven hundred fifty two thousand and seven hundred twenty (298,752,720) common shares for the acquisition of the exploration licenses to the Seller. The Company’s sole director at the time, Robert S. Roon, cancelled eight hundred and forty million (840,000,000) shares of common stock that were held by him which represented approximately 84.2% of the Company’s issued and outstanding shares. Upon cancellation of the shares held by Mr. Roon, the Seller owns approximately 68.3% of the Company’s issued and outstanding common shares.
Robert S. Roon, the Company’s Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director resigned as the Company’s Chief Executive Officer, Chief Financial Officer, Secretary, and Treasurer. Matteo Sacco was appointed as the Company’s President, Chief Executive Officer, Chief Financial Officer and Secretary. Robert Roon’s resignation as an officer was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Amendments to the Certificate of Incorporation
On September 17, 2012, effective October 2, 2012, the Company filed a Certificate of Amendment of Certificate of Incorporation and effectuated a forward split of all issued and outstanding shares of common stock, at a ratio of five hundred and sixty-for-one (560:1) (the "Stock Split").
On September 26, 2012, effective November 15, 2012, the Company filed a Certificate of Amendment of Certificate of Incorporation and (i) changed its name to Brookfield Resources Inc. ("Brookfield Resources"); (ii) changed its total number of common shares which the Company is authorized to issue from Two Hundred and Eighty Billion (280,000,000,000) shares, par value $0.0001 per share, to Nine Hundred Million (900,000,000) shares, par value $0.0001 per share.
F-5
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
All shares and per share amounts in the financial statements have been adjusted to give retroactive effect to the Stock Split.
Cancellation of Common Shares
In September, 2012, the Company authorized the cancellation of 315,176,400 shares owned by various shareholders which were returned to treasury.
On October 5, 2012, the Company had entered certain agreements with various shareholders to cancel an aggregate of 858,600,400 shares owned by them.
All shares and per share amounts in the financial statements have been adjusted to give retroactive effect to the cancellation of those common shares.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation - Unaudited Interim Financial Information
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended August 31, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on December 7, 2012.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.
Exploration Stage Company
The Company is an exploration stage company as defined by section 915-235-50 of the FASB Accounting Standards Codification. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception has been considered as part of the Company's exploration stage activities.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
F-6
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
The Company’s significant estimates and assumptions include the fair value of financial instruments; the carrying value, recoverability and impairment, if any, of long-lived assets; income tax rate, income tax provision, deferred tax assets and the valuation allowance of deferred tax assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 |
| Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
|
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|
Level 2 |
| Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
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Level 3 |
| Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accrued expenses and shareholder advances, approximate their fair values because of the short maturity of these instruments.
F-7
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.
Fiscal Year-End
The Company elected August 31 as its fiscal year end date.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Mineral Properties
The Company follows Section 930 of the FASB Accounting Standards Codification for its mineral properties. Mineral properties and related mineral rights acquisition costs are capitalized pending determination of whether the drilling has found proved reserves. If a mineral ore body is discovered, capitalized costs will be amortized on a unit-of-production basis following the commencement of production. Otherwise, capitalized acquisition costs are expensed when it is determined that the mineral property has no future economic value. General exploration costs and costs to maintain rights and leases, including rights of access to lands for geophysical work and salaries, equipment, and supplies for geologists and geophysical crews are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves, further exploration costs and development costs as well as interest costs relating to exploration and development projects that require greater than six (6) months to be readied for their intended use incurred after such determination will be capitalized. The establishment of proven and probable reserves is based on results of final feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be transferred to the appropriate asset categories and amortized on a unit-of-production basis. Capitalized costs, net of salvage values, relating to a deposit which is abandoned or considered uneconomic for the foreseeable future will be written off. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss will be recognized for all other sales of proved properties and will be classified in other operating revenues. Maintenance and repairs are charged to expense, and renewals and betterments are capitalized to the appropriate property and equipment accounts.
The provision for depreciation, depletion and amortization (“DD&A”) of mineral properties will be calculated on a property-by-property basis using the unit-of-production method. Taken into consideration in the calculation of DD&A are estimated future dismantlement, restoration and abandonment costs, which are net of estimated salvage values. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.
To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all general exploration costs, if any, are being expended.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
F-8
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitment and Contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
F-9
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Revenue Recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Mineral Exploration and Development Costs
All exploration expenditures are expensed as incurred. Costs of acquisition and option costs of mineral rights are capitalized upon acquisition. Mine development costs incurred to develop mineral deposits, to expand the capacity of mines or to develop mine areas substantially in advance of production are also capitalized once proven and probable reserves exist, and the property is determined to be a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. If the Company does not continue with exploration after the completion of the feasibility study, the cost of mineral rights will be expensed at that time. Costs of abandoned projects, including related property and equipment costs, are charged to mining costs. To determine if these costs are in excess of their recoverable amount, periodic evaluations of the carrying value of capitalized costs and any related property and equipment costs are performed. These evaluations are based upon expected future cash flows and/or estimated salvage value.
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.
Income Tax Provision
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
F-10
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Uncertain Tax Positions
The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the interim period ended November 30, 2012 or 2011.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
There were no potentially dilutive common shares outstanding for the interim period ended November 30, 2012 or 2011.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
F-11
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Subsequent Events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Recently Issued Accounting Pronouncements
FASB Accounting Standards Update No. 2011-08
In September 2011, the FASB issued the FASB Accounting Standards Update No. 2011-08 “Intangibles—Goodwill and Other: Testing Goodwill for Impairment” (“ASU 2011-08”). This Update is to simplify how public and nonpublic entities test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.
The guidance is effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.
FASB Accounting Standards Update No. 2011-11
In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.
The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
FASB Accounting Standards Update No. 2012-02
In July 2012, the FASB issued the FASB Accounting Standards Update No. 2012-02 “Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”).
This Update is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. This guidance builds upon the guidance in ASU 2011-08, entitled Testing Goodwill for Impairment. ASU 2011-08 was issued on September 15, 2011, and feedback from stakeholders during the exposure period related to the goodwill impairment testing guidance was that the guidance also would be helpful in impairment testing for intangible assets other than goodwill.
The revised standard allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired.
F-12
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
This Update is effective for annual and interim impairment tests performed in fiscal years beginning after September 15, 2012. Earlier implementation is permitted.
Other Recently Issued, but not yet Effective Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
Note 3 - Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the accompanying financial statements, the Company had a deficit accumulated during its exploration stage at November 30, 2012, a net loss and net cash used in operating activities for the interim period then ended, respectively, with no revenues earned during the period. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 - Stockholders’ Deficit
Shares Authorized
Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Five Hundred Ten Million (510,000,000) shares of which Ten Million (10,000,000) shares shall be Preferred Stock, par value $0.0001 per share, and Five Hundred Million (500,000,000) shares shall be Common Stock, par value $0.0001 per share.
On September 17, 2012, effective October 2, 2012, the Company filed a Certificate of Amendment of Certificate of Incorporation and effectuated a forward split of all issued and outstanding shares of common stock, at a ratio of five hundred and sixty-for-one (560:1) (the "Stock Split").
All shares and per share amounts in the financial statements have been adjusted to give retroactive effect to the Stock Split.
On September 26, 2012, effective November 15, 2012, the Company filed a Certificate of Amendment of Certificate of Incorporation and changed its total number of common shares which the Company is authorized to issue from Two Hundred and Eighty Billion (280,000,000,000) shares, par value $0.0001 per share, to Nine Hundred Million (900,000,000) shares, par value $0.0001 per share.
F-13
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Common Stock
On April 27, 2010, the Company issued 840,000,000 common shares to its Chief Executive Officer valued at $150 for compensation upon formation of the Company.
For the period from June 23, 2010 through November 30, 2010, the Company sold 472,528,000 shares of its common stock in a private placement at $0.000089 per share to 40 individuals for $42,190.
On September 11, 2012, in a private transaction, 840,000,000 shares of common stock, which represented 64% of the issued and outstanding shares of common stock, were sold to Robert Roon for the total price of $25,000. This resulted in a change in control of the Company. In connection with this transaction, also on September 11, 2012, Stephanie Wyss resigned from her position as Chief Executive Officer of the Company and Robert Roon was appointed as the new President as well as Chief Executive Officer, Secretary, and Treasurer of the Company.
In September, 2012, the Company authorized the cancellation of 315,176,400 shares owned by various shareholders and returned them to treasury.
On September 27, 2012, the Company issued 298,752,720 common shares for the acquisition of the exploration licenses at $0.000089 per share or $26,674. The price was determined based on the last known private placement memorandum price.
On October 5, 2012, the Company had entered into certain agreements with various shareholders to cancel an aggregate of 858,600,400 shares owned by them.
Capital Contribution
In May 2010, the Company’s former Chief Executive Officer contributed $100 for general working capital to the Company.
During the interim period ended November 30, 2012, the Company’s former Chief Executive Officer contributed $41,115 for general working capital to the Company.
Note 5 - Related Party Transactions
Free Office Space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statement.
Employment Agreement
On September 1, 2010, the Company entered into an employment agreement (“Employment Agreement”) with its then president and chief executive officer (“Employee”), which requires that the Employee to be paid a minimum of $500 per month for three (3) years from date of signing. Either employee or the Company has the right to terminate the Employment Agreement upon thirty (30) days’ notice to the other party. This agreement was mutually terminated in September 2012.
F-14
Brookfield Resources Inc.
(An Exploration Stage Company)
November 30, 2012 and 2011
Notes to the Financial Statements
(Unaudited)
_______________________________________________
Shareholder Advances
Cash shortfall was funded by the Company’s former majority shareholder and Chief Executive Officer, Stephanie Wyss. Cash shortfall in the next 12 months may be funded by the current majority shareholder and Chief Executive Officer; however, there was no agreement between Mr. Sacco and the Company with regard to the future funding of the Company, and Mr. Sacco is not obligated to provide the funding to the Company. In the event of no funding or insufficient funding from Mr. Sacco, the Company may have to scale back or stop its business development.
From February 29, 2012 through August 31, 2012, the Company received $14,500 from the former majority shareholder. All advances are due on demand and non-interest bearing. On September 11, 2012, as part of the change in control, Stephanie Wyss sold all her shares to Robert Roon and resigned from her position as Chief Executive Officer of the Company. At this time, the shareholder advance of $14,500 was converted to a capital contribution.
From September 1, 2012 through November 30, 2012, the Company received $42,226 from the majority shareholder. All advances are due on demand and non-interest bearing.
Note 6 - Subsequent Events
The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Overview
We were incorporated in the State of Nevada on April 27, 2010 as Movie Trailer Galaxy, Inc. and were based in Studio City, California. Our original business plan was to provide moviegoers with a comprehensive portal to preview the latest movie information.
On September 27, 2012, we entered into an Asset Purchase Agreement for the purchase, transfer and assignment of various exploration licenses from Matteo Sacco, our current CEO, President, CFO, Secretary and director. The exploration licenses were originally issued to Mr. Sacco from the Nova Scotia Department of Natural Resources.
Upon acquiring the exploration licenses, we discontinued our existing business plan of providing a comprehensive portal to preview the latest movie information.
On November 15, 2012 we changed our name to Brookfield Resources Inc.
Business Strategy and Objectives
We intend to undertake various tests to understand the natural resources that we believe will be found on the land that is covered by the exploration licenses. The tests include drilling, observation and the retention of mining consultants to analyze the land.
Our Operating Strategy
At such time as we receive positive information regarding the quality and amount of minerals on the land covered by the exploration licenses we will then be able to ascertain how we can explore and mine the minerals. Additionally, we will have to raise capital to explore, test, mine and transport the minerals, assuming that the quality and amount are of a commercial standard to warrant the exploration and mining of the land.
Competition
We have competition from many companies that are much larger than us. These companies are much larger than us and have greater resources to mine and explore the minerals that are on the claims that they are mining.
For us to compete we will have to raise additional capital to explore, test, mine and transport the minerals. There is no assurance we will be able to begin operations.
Revenue
Or ability to generate revenue will be dependent on our ability to raise the necessary capital to test and analyze the claims that we have. In the event we find minerals of a quality and quantity that will make mining of the materials commercially feasible, we will attempt to sell them in the marketplace using prices that are set on various world markets.
Employees
As of the date hereof, we have no full time employees. Our President and sole officer spends approximately 20 hours per week on Company matters. We plan to employ more qualified employees in the near future.
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Results of Operations For the Quarterly Period Ended November 30, 2012.
Revenues and Cost of Revenues. We had no revenues or cost of revenues for the period ended November 30, 2012. We are in the formation stage as we acquired our mining claims on September 27, 2012 and no revenue activities have yet begun.
Operating Expenses. For the period ended November 30, 2012 we incurred a total of $48,492 in operating expenses, comprised of Compensation expenses of $500, Professional Fee expenses of $10,245, and General and Administrative expenses of $37,747. In comparison, for the period ended November 30, 2011 we incurred a total of $8,637 in operating expenses, comprised of Compensation expenses of $1,500, Professional Fee expenses of $7,051, and General and Administrative expenses of $86. The reason for the decrease in operating expenses was our legal and accounting fees decreased.
Liquidity and Capital Resources
Our cash and cash equivalents totaled approximately $0 at November 30, 2012.
Net Cash Used in Operating Activities. We had ($68,841) cash used in operating activities for the three months ended November 30, 2012, as compared to ($3,586) cash used in operating activities for the three months ended November 30, 2011. The reason for the decrease in net cash used in operating activities is we have operating expenses and we are unable to generate revenue.
Net Cash Provided By/Used in Investing Activities. We did not use cash in investing activities for the three months ended November 30, 2012.
Net Cash Provided By Financing Activities. We generated $68,841 from financing activities for the three months ended November 30, 2012.
Critical Accounting Policies
None.
Recent Accounting Pronouncements
In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 “Comprehensive Income” (“ASU 2011-05”), which was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.
The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning after December 15, 2011.
In September 2011, the FASB issued the FASB Accounting Standards Update No. 2011-08 “Intangibles—Goodwill and Other: Testing Goodwill for Impairment” (“ASU 2011-08”). This Update is to simplify how public and nonpublic entities test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.
The guidance is effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.
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In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-10 “Property, Plant and Equipment: Derecognition of in Substance Real Estate-a Scope Clarification” (“ASU 2011-09”). This Update is to resolve the diversity in practice as to how financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling financial interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse debt of the subsidiaries.
The amended guidance is effective for annual reporting periods ending after June 15, 2012 for public entities. Early adoption is permitted.
In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.
The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-12 “Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). This Update is a deferral of the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits of those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time required to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary to reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were in place before the issuance of Update 2011-05.
All other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable
Item 4. Controls and Procedures.
Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, 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 Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon our evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective, as of the three months ended November 30, 2012, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.
Changes in Internal Control over Financial Reporting.
There were no changes in our system of internal controls over financial reporting during the three months ended November 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
Item 1a. Risk Factors.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
(a) Exhibits
Exhibit Number |
|
| Description |
31.1 |
|
| Certification of principal executive officer and principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act |
32.1 | * |
| Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MOVIE TRAILER GALAXY, INC. | |
|
|
|
Date: January 17, 2013 | By: | /s/ Matteo Sacco |
|
| Matteo Sacco, President |
|
| (Duly authorized officer, Principal Executive Officer and Principal Financial Officer) |
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