UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark One) |
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended: March 31, 2016 |
Or |
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[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ____________ to _____________ |
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Commission File Number: 333-176798 |
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HORIZON MINERALS CORP |
(Exact name of registrant as specified in its charter) |
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Delaware | 41-2281448 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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9101 West Sahara Avenue Suite 105 - 197 Las Vegas, Nevada 89117 (Address of principal executive offices) |
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(587) 984-2321 |
(Registrant's telephone number, including area code) |
___________ |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:
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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 Exchange Act)
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
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Common Stock, $0.0001 par value | 66,063,888 shares |
(Class) | (Outstanding as at May 16, 2016) |
i
HORIZON MINERALS CORP
Table of Contents
ii
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, which are included in the Company's Annual Report on Form 10-K, previously filed with the Securities and Exchange Commission on May 9, 2016.
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HORIZON MINERALS CORP.
BALANCE SHEETS
(EXPRESSED IN US DOLLARS)
| | | | | | | |
| | March 31, | | December 31, |
| | 2016 | | 2015 |
| | (Unaudited) | | |
| | | | |
Assets | | | | |
| | | | | | |
Current assets | | | | | | |
| Cash | | $ | 251 | | $ | 287 |
| Prepaids | | | 176 | | | 176 |
| | | | | | |
Total assets | | $ | 427 | | $ | 463 |
| | | | | | |
Liabilities and stockholders' deficit | | | | | | |
| | | | | | |
Current liabilities | | | | | | |
| Accounts payable | | $ | 86,980 | | $ | 74,312 |
| Accrued liabilities | | | 24,731 | | | 22,325 |
| Due to related party | | | 4,004 | | | 3,803 |
| | | | | | |
Total liabilities | | | 115,715 | | | 100,440 |
| | | | | | |
Stockholders' deficit | | | | | | |
| Common stock, par value $0.0001 per share, 200,000,000 shares authorized, 66,063,888 shares issued and outstanding as of March 31, 2016 and December 31, 2015 | | | 6,606 | | | 6,606 |
| Additional paid-in capital | | | 129,234 | | | 129,234 |
| Deficit accumulated during development stage | | | (251,128) | | | (235,817) |
Total stockholders' deficit | | | (115,288) | | | (99,977) |
| | | | | | |
Total liabilities and stockholders' deficit | | $ | 427 | | $ | 463 |
The accompanying notes are an integral part of these unaudited interim financial statements.
F-1
HORIZON MINERALS CORP.
STATEMENTS OF OPERATIONS
(EXPRESSED IN US DOLLARS)
(Unaudited)
| | | | | | |
| For the three months ended |
| March 31, |
| 2016 | | 2015 |
| | | | | |
Expenses: | | | | | |
| Filing fees | $ | 3,434 | | $ | 273 |
| General and administrative | | 42 | | | 71 |
| Professional fees | | 16,665 | | | 14,925 |
Total expenses | | 20,141 | | | 15,269 |
| | | | | |
Loss from operations | | (20,141) | | | (15,269) |
| | | | | |
Other item: | | | | | |
| Foreign currency transaction gain | | 4,830 | | | 357 |
Total other item | | 4,830 | | | 357 |
| | | | | |
Net and comprehensive loss | $ | (15,311) | | $ | (14,912) |
| | | | | |
Loss per common share: | | | | | |
| Loss per common share - basic and diluted | $ | (0.00) | | $ | (0.00) |
| | | | | |
Weighted average number of common shares outstanding - basic and diluted | | 66,063,888 | | | 66,063,888 |
The accompanying notes are an integral part of these unaudited interim financial statements.
F-2
HORIZON MINERALS CORP.
STATEMENTS OF STOCKHOLDERS’ DEFICIT
(EXPRESSED IN US DOLLARS)
(Unaudited)
| | | | | | | | | |
| Common Stock | Additional Paid-in | | |
| Shares | Amount | Capital | Deficit | Totals |
| | | | | |
Balance, December 31, 2014 | 66,063,888 | $ | 6,606 | $ | 129,234 | $ | (181,530) | $ | (45,690) |
| | | | | | | | | |
Net loss for the three months ended March 31, 2015 | - | | - | | - | | (14,912) | | (14,912) |
| | | | | | | | | |
Balance, March 31, 2015 | 66,063,888 | | 6,606 | | 129,234 | | (196,442) | | (60,602) |
| | | | | | | | | |
Net loss for the nine months ended December 31, 2015 | - | | - | | - | | (39,375) | | (39,375) |
| | | | | | | | | |
Balance, December 31, 2015 | 66,063,888 | | 6,606 | | 129,234 | | (235,817) | | (99,977) |
| | | | | | | | | |
Net loss for the three months ended March 31, 2016 | - | | - | | - | | (15,311) | | (15,311) |
| | | | | | | | | |
Balance, March 31, 2016 | 66,063,888 | $ | 6,606 | $ | 129,234 | $ | (251,128) | $ | (115,288) |
The accompanying notes are an integral part of these unaudited interim financial statements.
F-3
HORIZON MINERALS CORP.
STATEMENTS OF CASH FLOWS
(EXPRESSED IN US DOLLARS)
(Unaudited)
| | | | | | |
| For the three months ended |
| March 31, |
| 2016 | | 2015 |
| | | | | |
Operating activities | | | | | |
Net loss | $ | (15,311) | | $ | (14,912) |
| | | | | |
Non-cash item | | | | | |
| Foreign exchange loss | | 201 | | | - |
| | | | | |
Changes in operating assets and liabilities: | | | | | |
| Accounts payable | | 12,668 | | | 14,672 |
| Accrued liabilities | | 2,406 | | | 500 |
Net cash provided by (used in) operating activities | | (36) | | | 260 |
| | | | | |
Financing activities | | | | | |
| Repayment of advances | | - | | | (440) |
Net cash used in financing activities | | - | | | (440) |
| | | | | |
Net decrease in cash | | (36) | | | (180) |
Cash - beginning | | 287 | | | 831 |
Cash - ending | $ | 251 | | $ | 651 |
| | | | | |
Supplemental disclosures: | | | | | |
| Interest paid | $ | - | | $ | - |
| Income taxes paid | $ | - | | $ | - |
The accompanying notes are an integral part of these unaudited interim financial statements.
F-4
HORIZON MINERALS CORP.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(EXPRESSED IN US DOLLARS)
(Unaudited)
NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS
Horizon Minerals Corp. (the “Company”) was incorporated under the laws of the State of Delaware on May 11, 2011. The Company is currently seeking to acquire a business.
The Company’s financial statements are prepared on a going concern basis in accordance with US generally accepted accounting principles (“GAAP”) which contemplate the realization of assets and discharge of liabilities and commitments in the normal course of business. The Company has funded its operations through the issuance of capital stock and debt. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. The Company’s ability to continue its operations as a going concern, realize the carrying value of its assets, and discharge its liabilities in the normal course of business is dependent upon its ability to raise new capital sufficient to fund its commitments and ongoing losses, and ultimately on generating profitable operations. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.
NOTE 2 - BASIS OF PRESENTATION
The unaudited interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2015. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, these unaudited interim financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2015, included in the Company’s report on Form 10-K.
NOTE 3 - RELATED PARTY TRANSACTIONS
As at March 31, 2016, the Company was indebted to Mr. Robert Fedun, the sole director, CEO and CFO of the Company, in the amount of $70,678 (December 31, 2015 - $61,477). Of this balance, $4,004 (December 31, 2015 - $3,803) was included in due to related party, and $66,674 (December 31, 2015 - $57,674), associated with the services provided by Mr. Fedun, was included in accounts payable. Amounts due to related party are due on demand, bear no interest, and are unsecured.
During the three month period ended March 31, 2016, the Company accrued $9,000 (March 31, 2015 - $9,000) in consulting fees to Mr. Fedun. The consulting fees were recorded as part of professional fees on the Statement of Operations.
Subsequent to March 31, 2016, Mr. Fedun advanced the Company $2,727 (CAD$3,500) for working capital.
NOTE 4 - STOCKHOLDERS’ EQUITY
During the three month period ended March 31, 2016, the Company did not enter into any transactions that resulted in the issuance of its common stock.
F-5
NOTE 5 - SUBSEQUENT EVENT
Subsequent to March 31, 2016, an unrelated party made a $725 payment to a vendor of the Company on its behalf. The amount is due on demand, bears no interest and is unsecured.
F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about our business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, our actual results may differ materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, likelihood of us completing the transaction with Boomchat Inc., our managements’ ability to raise capital required to support our day-to-day operations, the retention of key personnel and changes in regulatory requirements.
There may be other risks and circumstances that our management may be unable to predict. When used in this Quarterly Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.
Overview
We were incorporated in Delaware on May 11, 2011. We currently have no business operations or significant assets. We are a development stage company and plan to identify and acquire a business.
We are currently a party to a share purchase agreement (the "Proposed Transaction”), dated for reference April 6, 2015, between the Company, Boomchat Inc., Dan Clayton, the sole shareholder of Boomchat, and Robert Fedun, our sole Director, President, CEO and the CFO.
Boomchat Inc. is a private Nevada corporation that provides technology solutions to smartphone users worldwide. Boomchat’s private image and video sharing solution is based on a newly developed scripting engine that can be deployed on multiple platforms, furthermore, it is written for secured cloud servers and can be deployed worldwide. The system will be available for download as an application that can be installed on a majority of smartphones and will enable its users to share private media on demand and distribute it to controlled lists of recipients for a pre-set time only.
Under the terms of the Proposed Transaction, we agreed to acquire all issued and outstanding shares of Boomchat in consideration for the issuance to Mr. Clayton of 40,000,000 shares of our common stock and payment to Boomchat of $50,000 to complete development of the Boomchat mobile chat application.
Concurrent with the closing of the Proposed Transaction, our President, Robert Fedun, agreed to surrender for cancellation 30,000,000 shares of our common stock held by him. Following the closing of the Proposed Transaction, we intend to change our name to Boomchat Inc. to reflect our new business, and Mr. Clayton will join our boar of directors and replace Mr. Fedun as our President. Closing of the transaction is subject to a number of conditions, including customary due diligence and the delivery by Boomchat of the audited financial statements which will be required to be filed with the SEC.
As of the date of the filing of this Quarterly Report on Form 10-Q, we have not finalized our due diligence process and there is no assurance that it will result in the Closing of the Proposed Transaction.
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Results of Operations
Summary of Financial Condition
The following table summarizes and compares our financial condition at March 31, 2016, to the year-ended December 31, 2015.
| | | | | |
| March 31, 2016 | | December 31, 2015 |
Working capital deficit | $ | (115,288) | | $ | (99,977) |
Current assets | $ | 427 | | $ | 463 |
Total liabilities | $ | 115,715 | | $ | 100,440 |
Common stock and additional paid in capital | $ | 135,840 | | $ | 135,840 |
Deficit | $ | 251,128 | | $ | 235,817 |
Selected Financial Results
Three Months Ended March 31, 2016 and 2015
| | | | | | |
| Three Months Ended March 31, | Percentage Increase / |
| 2016 | | 2015 | (Decrease) |
Operating expenses | | | | |
Filing fees | $ | 3,434 | | $ | 273 | 1,157.9% |
General and administrative | | 42 | | | 71 | (40.8)% |
Professional fees | | 16,665 | | | 14,925 | 11.7% |
Net operating expenses | | 20,141 | | | 15,269 | 31.9% |
Foreign exchange | | (4,830) | | | (357) | 1,252.8% |
Net loss | $ | 15,311 | | $ | 14,912 | 2.7% |
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Revenues
We did not generate any revenue during the three month periods ended March 31, 2016 and 2015. Due to the development stage of our operations, we do not expect to have significant operating revenue in the foreseeable future.
Operating Expenses
During the three months ended March 31, 2016, our expenses increased by $4,872 or 31.9% from $15,269 for the three months ended March 31, 2015 to $20,141 for the three months ended March 31, 2016. The increase was associated with higher regulatory compliance fees we incurred during our first fiscal quarter of 2016; this increase was partially offset by decrease in professional fees.
Net Loss
Our net losses for the three month periods ended March 31, 2016 and 2015 were $15,311 and $14,912, respectively. We anticipate incurring ongoing operating losses and cannot predict when, if at all, we may expect these losses to plateau or narrow.
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Liquidity and Capital Resources
Cash Flows
| | | | | |
| Three Months Ended March 31, 2016 | | Three Months Ended March 31, 2015 |
Cash provided by / (used in) operations | $ | (36) | | $ | 260 |
Cash used in financing activities | | - | | | (440) |
Net decrease in cash during the period | $ | (36) | | $ | (180) |
During the three months ended March 31, 2016, we used $36 in our day-to-day operating activities. Our net loss of $15,311 was offset by an increase in our accounts payable of $12,668, of which $9,000 was attributed to the increase in the amount due to our sole director and officer for consulting services, and by an increase in our accrued liabilities of $2,406. We did not have any financing or investing activities during the three month period then ended.
In the comparable period ended March 31, 2015, we generated $260 from our operations. Our net loss of $14,912 was offset by an increase in our accounts payable of $14,672, of which $9,000 was attributed to the increase in the amount due to our sole director and officer for consulting services, and by an increase in our accrued liabilities of $500. During the same period, we repaid $440 in advances with Mr. Fedun.
We do not have sufficient funds to maintain our operations for the next twelve months, as such, we continue with our ongoing efforts to raise additional capital by conducting additional issuances of our equity and debt securities for cash. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects. We cannot assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. As such, our principal accountants have expressed doubt about our ability to continue as a going concern because we have limited operations and have not fully commenced planned principal operations.
There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on our revenues from continuing operations.
We have not paid for expenses on behalf of our directors. Additionally, we believe that this fact shall not materially change.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Plant and Equipment
We currently do not own any significant plant or equipment that we would seek to sell in the near future.
Going Concern Consideration
Our auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated in the near future. Accordingly, we must raise capital from sources other than the actual sale of the product. We must raise capital to implement our project and stay in business.
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Item 3. Quantitative and Qualitative Disclosure about Market Risks
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the period covered by this Quarterly Report. Based on that evaluation, it was concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose 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 SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings.
Item 1A. Risk Factors
Our significant business risks are described in our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission on May 9, 2016.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We did not have any unregistered sales of equity securities during the quarter ended March 31, 2016.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
All Exhibits required to be filed with the Form 10-Q are included in this Quarterly Report or incorporated by reference to Horizon Mineral’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 333-176798.
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Exhibit Number | Name and/or Identification of Exhibit |
| |
3 | Articles of Incorporation & By-Laws |
| a. Articles of Incorporation (1) |
| b. Bylaws (1) |
10.1 | Letter Agreement dated March 15, 2014, among Horizon Minerals Corp. and Boomchat Inc.(2) |
10.2 | Share Purchase Agreement dated for reference April 6, 2015 among the Company, Dan Clayton, Boomchat Inc. and Robert Fedun (3) |
31 | Rule 13a-14(a)/15d-14(a) Certification |
32 | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350) |
99.1 | Audit Committee Charter (4) |
101 | Interactive Data File |
| (INS) XBRL Instance Document |
| (SCH) XBRL Taxonomy Extension Schema Document |
| (CAL) XBRL Taxonomy Extension Calculation Linkbase Document |
| (DEF) XBRL Taxonomy Extension Definition Linkbase Document |
| (LAB) XBRL Taxonomy Extension Label Linkbase Document |
| (PRE) XBRL Taxonomy Extension Presentation Linkbase Document |
(1) Incorporated by reference to the Registration Statement on Form S-1, previously filed with the SEC on September 13, 2011.
(2) Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on March 20, 2014.
(3) Incorporated by reference to the Current Report on Form 8-K, previously filed with the SEC on April 13, 2015.
(4) Incorporated by reference to the Annual Report on Form 10-K, previously filed with the SEC on May 9, 2016.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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HORIZON MINERALS CORP. |
(Registrant) |
|
Signature | Title | Date |
| | |
/s/ Robert Fedun Robert Fedun | (Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer) | May 16, 2016 |
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