Atacama Resources International (ACRL) 10-Q 2015 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2015 or [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to __________. Commission file number 333-192217
ATACAMA RESOURCES INTERNATIONAL, INC. (f/k/a Arrakis Mining Research, Inc.)
(Exact Name of Registrant as specified in its charter)
Florida	46-3105245
(State or jurisdiction of Incorporation or organization	(I.R.S Employer Identification No.)
10820 68th Place, Kenosha, WI	53142
(Address of principal executive offices) Registrant’s telephone number, including area code	(Zip Code) 613-868-6157

Indicate by check mark whether the registrant (1) 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.  (x) Yes (_) 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 (§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).   (_x_) Yes (__) 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” “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  (_) Non-accelerated filer (_) (Do not check if a smaller company)	Accelerated filer (_) 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 (__) No ( x ). The number of shares of the issuer’s common stock, par value $.0001 per share, outstanding as of August 13, 2015 was 31,725,000.

1

TABLE OF CONTENTS

		Page
Part I.  Financial Information
Item 1.	Condensed Financial Statements.	3
	Condensed Balance Sheets for the periods ending June 30, 2015 (unaudited) and December 31, 2014 (audited).	3
	Condensed Statements of Operations for the three and six months ended June 30, 2015 and June 30, 2014 (unaudited).	4
	Condensed Statements of Cash Flows for the six months ended June 30, 2015 and June 30, 2014 (unaudited).	5
	Notes to Condensed Financial Statements (unaudited).	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
Part II.  Other Information.
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Signatures		20

2

Part I.  Financial Information

Item 1.  Financial Statements.

ATACAMA RESOURCES INTERNATIONAL, INC. (f/k/a Arrakis Mining Research, Inc.) Condensed Balance Sheets
			June 30,		December 31,
			2015		2014
			(Unaudited)		(Audited)
ASSETS
Current Assets
	Cash and cash equivalents	$	128	$	1,693
	Prepaid expense		2,250		---
Total Current Assets			2,378		1,693
TOTAL ASSETS		$	2,378	$	1,693
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
	Accounts payable	$	41,987	$	36,400
	Accrued interest		41,708		31,099
	Due to related party		3,664		---
	Note payable – related party		17,229		2,500
	Notes payable		199,878		199,800
Total Current Liabilities			304,466		269,799
	TOTAL LIABILITIES		304,466		269,799
	COMMITMENTS AND CONTINGENCIES
Stockholders' Deficit
Common stock: $0.0001 par value 500,000,000 authorized;
	31,725,000 and 31,725,000 shares issued and outstanding, respectively		3,173		3,173
Additional paid in capital			666,127		666,127
Accumulated deficit			(971,388)		(937,406)
Total Stockholders' Deficit			(302,088)		(268,106)
	TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,378	$	1,693
See notes to unaudited condensed financial statements

3

ATACAMA RESOURCES INTERNATIONAL, INC. (f/k/a Arrakis Mining Research, Inc.) Condensed Statements of Operations (Unaudited)
			For the Three Months Ended				For the Six Months Ended
			June 30,				June 30,
			2015		2014		2015		2014
REVENUE		$	---	$	---	$	---	$	---
OPERATING EXPENSES
	Stock based compensation		---		---		---		32,500
	Exploration costs		3,748		---		4,079		---
	Professional fees		5,852		51,900		13,987		106,350
	Selling, general and administrative expenses		2,475		---		5,307		---
	Total operating expenses		12,075		51,900		23,373		138,850
Net loss from operations			(12,075)		(51,900)		(23,373)		(138,850)
Other income (expense)
	Interest expense		(5,401)		(5,050)		(10,609)		(10,045)
Net loss before income taxes			(17,476)		(56,950)		(33,982)		(148,895)
Income taxes			---		---
Net loss		$	(17,476)	$	(56,950)	$	(33,982)	$	(148,895)
Basic and diluted loss per share		$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Weighted average number of
	shares outstanding		31,725,000		31,725,000		31,725,000		31,725,000
See notes to unaudited condensed financial statements

4

ATACAMA RESOURCES INTERNATIONAL, INC. (f/k/a Arrakis Mining Research, Inc.) Condensed Statements of Cash Flows (Unaudited)
					For the Six Months Ended
					June 30,
					2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss			$	(33,982)	$	(148,895)
	Adjustment to reconcile net loss to net cash provided (used in) in operations:
			Stock based compensation		---		32,500
	Changes in assets and liabilities:
		(Increase) decrease in operating assets:
		Prepaid expense			(2,250)		94,350
		Increase (decrease) in operating liabilities:
		Accounts payable			5,587		9,500
		Due to related party			3,664		---
		Accrued interest			10,609		10,045
	Net Cash  provided by (used in) operating activities				(16,372)		(2,500)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from notes payable				14,807
	Proceeds from issuances of stock				---		---
	Net Cash provided by financing activates				14,807		---
Net change in cash and cash equivalents					(1,565)		(2,500)
Cash and cash equivalents
	Beginning of period				1,693		6,198
	End of period			$	128	$	3,698
Supplemental cash flow information
	Cash paid for interest			$	---	$	---
	Cash paid for taxes			$	---	$	---
Non-cash Transactions:
				$	---	$	---
See notes to unaudited condensed financial statements.

5

Atacama Resources International, Inc.

(f/k/a Arrakis Mining Research, Inc.)

Notes to Condensed Financial Statements

For the period ending June 30, 2015

(Unaudited)

NOTE 1. NATURE OF BUSINESS

ORGANIZATION

Atacama Resources International, Inc., f/k/a Arrakis Mining Research, Inc. (hereinafter “ARII”) is a company incorporated in the State of Florida in June 2013. We were formed as a consultant to the mining industry.  The mining industry is subject to constant change due to market trends, thereby making it extremely competitive. The mining industry is complex, because several segments are regulated by both federal and state governments. ARII’s approach assists general business operations with the growth and development, international expansion and marketing aspects of their business, allowing our potential customers to focus on the business aspects of operations. By using the services provided by ARII, our clients are free to focus on compliance with regulations within their industry, and to complete their primary business goals.

NOTE 2. GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company.  In addition, profitability will ultimately depend upon the level of revenues received from business operations.  However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

UNAUDITED INTERIM FINANICAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements please refer to our 2014 Annual Report on Form 10-K, filed on April 13, 2015.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

6

BASIS OF PRESENTATION AND USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents.  Cash and cash equivalents totaled $128 at June 30, 2015 and $1,693 at December 31, 2014.

CASH FLOWS REPORTING

The Company follows ASC 230, Statement of Cash Flows, 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 ASC 230, Statement of Cash Flows, 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.

EXPLORATION AND DEVELOPMENT COSTS

Costs of acquiring mining properties and any exploration and development costs are expensed as incurred unless proven and probable reserves exist and the property is a commercially mineable property in accordance with FASB ASC 930, Extractive Activities – Mining.  Mine development costs incurred either to develop new gold and silver deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized.  Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations.  Costs of abandoned projects are charged to operations upon abandonment.  The Company evaluates at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded.  The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.

The Company capitalizes costs for mining properties by individual property and defers such costs for later amortization only if the prospects for economic productions are reasonably certain.

Capitalized costs are expensed in the period when the termination has been made that economic production does not appear reasonably certain.

During the six months ending June 30, 2015 and 2014, the Company recorded exploration costs of $4,079 and $0, respectively.

RELATED PARTIES

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.  Related party transactions are summarized in Note 7.

FINANCIAL INSTRUMENTS

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

7

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

·

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities

·

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

·

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2015 and December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

REVENUE RECOGNITION

The Company follows ASC 605, 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.

The Company derives revenue from consulting arrangements with clients.  Revenue is generated by hourly fee structure or fixed contract costs, based on expected time to complete, additionally, costs incurred may be billed, as defined by the contractual arrangements.  

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

The Company accounts for income taxes under ASC 740, Income Taxes.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  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 income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.  No deferred tax assets or liabilities were recognized as of June 30, 2015 or December 31, 2014.

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per share is calculated in accordance with ASC 260, “Earnings Per Share.”  The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share.  Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding.  Dilutive potential common shares are additional common shares assumed to be exercised.

8

Table of Contents

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at June 30, 2015 and December 31, 2014.  As of June 30, 2015, the Company had no dilutive potential common shares.

SHARE-BASED EXPENSE

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.  

Share-based expense was $-0- for the six months ending June 30, 2015 and $32,500 for the six months ending June 30, 2014.

RECENT ACCOUNTING PRONOUNCEMENTS

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future financial statements.

We have reviewed the FASB issued Accounting Standard Update (“ASU 2014-10”) and have applied the standard as of the dates during the periods reported.

We have reviewed the FASB issued Accounting Standard Update (“ASU 2014-9”).  The Company does not believe that the new or modified principal will not have a material effect on these financial statements.

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

NOTE 4. INCOME TAXES

At June 30, 2015, the Company had a net operating loss carry–forward for Federal income tax purposes of approximately $938,888 that may be offset against future taxable income through 2032  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets   calculated at the effective rates note below, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by the valuation allowance.

9

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.

The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 34% and State tax rate of 3.6% to income before taxes), as follows:

		For the Period Ended June 30, 2015		For the Period Ended June 30, 2014
Tax expense (benefit) at the statutory rate	$	(12,000)	$	(40,000)
State income taxes, net of federal income tax benefit		(1,000)		(4,000)
Change in valuation allowance		13,000		44,000
Total	$	---	$	---

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

For the period ending June 30, 2015 and for the year ended December 31, 2014, the Company has net operating losses from operations. The carry forwards expire through the year 2032. The Company’s net operating loss carry forward may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code. A valuation allowance has been applied due to the uncertainty of realization.

The Company’s net deferred tax asset as of June 30, 2015 and December 31, 2014 is as follows:      

		June 30, 2015		December 31, 2014
Deferred tax assets	$	365,000	$	340,000
Valuation allowance		(365,000)		(340,000)
Net deferred tax asset	$	---	$	---

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the  period from inception ended December 31, 2013 through the year ended December 31, 2014.  The Company recognizes interest and penalties related to income taxes in income tax expense. The Company had incurred no penalties and interest through the year ended December 31, 2014.

NOTE 5. SHAREHOLDERS’ EQUITY

The Company, through approval of its Board of Directors, authorized common shares of 500,000,000 with a par value of $0.0001.

COMMON STOCK

On March 24, 2014, the Company issued 325,000 shares, at $0.10 per share, to Soellingen Advisory Group, Inc., a non-related party, in exchange for consulting services totaling $32,500.   

10

In August 2014, the Board of Directors cancelled 12 million shares that were issued in anticipation of services to be performed. The following shares were cancelled due to non-performance.  The shares were originally issued at par $0.0001.

1. Foster Smith

 6,000,000

2. Bruce Hartley

 2,000,000

3. Gerald Ernst

 2,000,000

4. Kavita Khandelwal

 2,000,000

Subsequently Management, on August 29, 2014, the Company issued 1,200,000 shares to Ken Olsen, Former CEO and director, 2,098,600 shares to Glenn Grant, CEO and director, 125,000 shares to Raymond Skaff, director, 1,648,840 shares to Nelson Riis, advisor and 6,927,560 shares to other non-related parties that have been instrumental in the progress of the company for services rendered.  The Company issued a total of 12 million shares at $0.05 per share for consulting services totaling $600,000.

There were 31,725,000 shares of common stock issued and outstanding at June 30, 2015.

NOTE 6. RELATED PARTY TRANSACTIONS

DUE TO RELATED PARTY

During the six months ended June 30, 2015, Glenn Grant, CEO and director paid certain expenses on behalf of the Company and is due reimbursement travel expenses.  As of June 30, 2015 the balance due to related party was $3,664.

NOTE PAYABLE

On December 4, 2014, Glenn Grant, advisor to the Company executed a demand note with the Company.  The note carries an Eight percent (8%) annual percentage rate.  The balance of the related party note as of June 30, 2015 and December 31, 2014 were $17,229 and $2,500, respectively.

EQUITY TRANSACTIONS

On June 15, 2013, through approval of its Board of Directors, the Company issued 6,000,000 shares, at par value $0.0001 to Glen Grant, CEO and director in exchange for services totaling $600.   

On August 29, 2014 through approval of its Board of Directors, the Company issued 2,098,600 shares at $0.05 per share to Glen Grant, CEO and director in exchange for services totaling $104,930.

11

NOTE 7. NOTES PAYABLE

Notes payable consisted of the following:

		June 30, 2015		December 31, 2014
Glenn Grant, CEO, President and director to the Company executed a demand note with the Company.  The note carries an Eight percent (8%) annual percentage rate.  Accrued interest at June 30, 2015 and December 31, 2014 was $579 and $16, respectively.	$	17,229	$	2,500
New Opportunity Business Solutions, Inc., a non-related party for consulting services to the Company. Atacama Resources International, Inc. (f/k/a Arrakis Mining Research, Inc.) (ARII) is a client of New Opportunity Business Solutions, Inc. The original amount of the note payable was $199,800.  The note states a 10% interest rate with no set maturity date and is due on demand. Payment of principal and interest is due on demand and is not contingent. However to the extent that the Company incurs expense to accomplish the goal of the consulting agreement, the obligation of the company shall be reduced an equal amount. The note is as support for the consulting fee which was owed by ARII but not paid as required.  Accrued interest at June 30, 2015 and December 31, 2014 was $41,129 and $31,083, respectively.		199,878		199,800
Total notes payable	$	217,107	$	202,300
Current portion	$	217,107	$	202,300

NOTE 8. PREPAID EXPENSE

The Company paid the law offices of Clifford J. Hunt, P.A. $2,250 retainer.  The prepaid balance was $2,250 and $-0-, on June 30, 2015 and December 31, 2014, respectively.     

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time the Company may be a party to litigation matters involving claims against the Company.   Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

NOTE 10. WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of common stock of the Company as of June 30, 2015.

NOTE 11. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment to or disclosure in the financial statements.

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Special Note Regarding Forward Looking Statements.

This quarterly report on Form 10-Q of Atacama Resources International, Inc. for the period ended June 30, 2015 contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby.  To the extent that such statements are not recitations of historical fact, such statements constitute forward looking statements which, by definition involve risks and uncertainties.  In particular, statements under the Sections; Description of Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements.  Where in any forward looking statements, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the cost and effects of legal proceedings.

You should not rely on forward looking statements in this quarterly report.  This quarterly report contains forward looking statements that involve risks and uncertainties.  We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements.  Prospective investors should not place undue reliance on these forward looking statements, which apply only as of the date of this quarterly report.  Our actual results could differ materially from those anticipated in these forward-looking statements.

Our Business Overview

Atacama Resources International, Inc., a Florida corporation, (the "Company") provides consulting services to companies and individuals participating in the mining industry.  The Company offers services intended to introduce and connect interested investors in North America with attractive early stage mining opportunities in Chile.  We have conducted our operations primarily in the mining friendly regions of The United States of America, Canada, and Chile.

Plan of Operation

Our plan of operation for the next twelve months will be to expand our client base. We market our consulting services to small and medium size businesses. As we continue to grow we will need to raise additional funds. We do anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. We do not have need for the purchase of any property or equipment at this time. Atacama Resources International, Inc. will not have any significant changes in the current number of employees.

Our CEO has agreed to continue to fund our operations as needed over the next 12 months until cash flows are sufficient to sustain operations.  Pursuant to the agreement it is binding on our CEO and he has agreed to only the return of his capital with no interest or other consideration. Thus far there has not been any need for funds provided by our CEO.  In addition, our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities after the completion of this offering.  We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933.  See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

13

Table of Contents

Implications of Being an Emerging Growth Company

We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

• A requirement to have only two years of audited financial statements and only two years of related MD&A;

• Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;

• Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

• No non-binding advisory votes on executive compensation or golden parachute arrangements.

We have already taken advantage of these reduced reporting burdens in this Form 10-Q, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.  We are choosing to utilize the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act.  This election allows our Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

We are a reporting company and file all reports required under sections 13 and 15d of the Exchange Act.

Critical Accounting Policies

We prepare our condensed financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions.  On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed financial statements.  

While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2014 Annual Report on Form 10-K.

14

Results of Operations for the three months ended June 30, 2015 and 2014.

Revenues

The Company had no revenues during the three months ended June 30, 2015 and 2014.  

Operating Expenses

Total Expenses.  Total expenses for the three months ended June 30, 2015 and 2014 were $17,476 and $56,950, respectively.  Total expenses consisted of exploration costs of $3,748 and $-0-, respectively; professional fees of $5,852 and $51,900, respectively; selling, general and administrative of $2,475 and $-0-, respectively and, interest expense of $5,401 and $5,050, respectively.  The decrease in total expenses was primarily due to the completion of the S1 registration process.  

Results of Operations for the six months ended June 30, 2015 and 2014.

Revenues

The Company had no revenues during the six months ended June 30, 2015 and 2014.  

Operating Expenses

Total Expenses.  Total expenses for the six months ended June 30, 2015 and 2014 were $33,982 and $148,895, respectively.  Total expenses consisted of stock based compensation of $-0- and $32,500, respectively; exploration costs of $4,079 and $-0-, respectively; professional fees of $13,987 and $106,350, respectively; selling, general and administrative of $5,307 and $-0-, respectively and, interest expense of $10,609 and $10,045, respectively.  The decrease in total expenses was primarily due to the completion of the S1 registration process.  

Financial Condition

Total Assets.  Total assets at were $2,378 and $1,693 at June 30, 2015 and December 31, 2014.  Total assets at June 30, 2015 and December 31, 2014 consisted of cash of $128 and $1,693, respectively and prepaid expense of $2,250 and $-0-, respectively.  The increase in total assets was due to an increase in prepaid expense.

Total Liabilities.  Total liabilities were $304,466 and $269,799 at June 30, 2015 and December 31, 2014.  Total liabilities at June 30, 2015 and December 31, 2014 consisted of accounts payable of $41,987 and $36,400, respectively; notes payable of $217,107 and $202,300, respectively; due to related party of $3,664 and $-0-, respectively and accrued interest of $41,708 and $31,099, respectively.  Total liabilities were due to the promissory note related to consulting contracts and a payable associated with the preparation of the S1 registration statement.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.  

The Company sustained a loss for the six months ending June 30, 2015 of $33,982.  The Company has an accumulated loss of $971,388 as of June 30, 2015.  Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of services.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We are presently unable to meet our obligations as they come due.  At June 30, 2015 we had working capital deficit of $302,088.  Our working capital deficit is due to the results of operations.

Net cash used in operating activities for the six months ended June 30, 2015 and 2014 was ($16,372) and ($2,500), respectively.   Net cash used in operating activities includes our net loss, stock issued for services, prepaid expense, accounts payable, due to related party and accrued interest.

15

Table of Contents

Net cash provided by financing activities for the six months ended June 30, 2015 and 2014 was $14,807 and $-0-, respectively.  Net cash provided by financing activities included proceeds from notes payable of $14,807 and $-0-, respectively.

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing.  However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability.  Our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities after the completion of this offering.  We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933.  See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

Capital Resources.

We had no material commitments for capital expenditures as of June 30, 2015.

Off-Balance Sheet Arrangements

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

(a)   

Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

With respect to the period ending June 30, 2015, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.

16

Based upon our evaluation regarding the period ending June 30, 2015, the Company’s management, including its Principal Executive Officer and Principal Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.  Material weaknesses noted are lack of an audit committee, lack of a majority of outside directors on the board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and management is dominated by two individuals, without adequate compensating controls. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  However, the Company’s management, including its Principal Executive Officer and Principal Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

(b)

Changes in Internal Controls.

There have been no changes in the Company’s internal control over financial reporting during the period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

For a full discussion of controls and procedures refer to Item 9A, Controls and Procedures, in our 2014 Annual Report on Form 10K.

17

Part II.  Other Information

Item 1.  Legal Proceedings.

None.

Item 1A.  Risk Factors

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under 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 Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number and Description				Location Reference
(a)	Financial Statements			Filed herewith
(b)	Exhibits required by Item 601, Regulation S-K
	(3.0)	Articles of Incorporation
		(3.1)	Initial Articles of Incorporation filed with S-1 Registration Statement on November 8, 2013.	See Exhibit Key
		(3.2)	Amendment to Articles of Incorporation dated January 15, 2015	See Exhibit Key
		(3.3)	Bylaws filed with S-1 Registration Statement on November 8, 2013	See Exhibit Key
	(10.0)	Material Contracts
		(10.1)	Consulting Agreement dated June 19, 2013	See Exhibit Key
	(11.0)	Statement re: computation of per share Earnings		Note 3 to Financial Stmts

18

	(14.0)	Code of Ethics	See Exhibit Key
	(31.1)	Certificate of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
	(31.2)	Certificate of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
(101.INS)		XBRL Instance Document	Filed herewith
(101.SCH)		XBRL Taxonomy Ext. Schema Document	Filed herewith
(101.CAL)		XBRL Taxonomy Ext. Calculation Linkbase Document	Filed herewith
(101.DEF)		XBRL Taxonomy Ext. Definition Linkbase Document	Filed herewith
(101.LAB)		XBRL Taxonomy Ext. Label Linkbase Document	Filed herewith
(101.PRE)		XBRL Taxonomy Ext. Presentation Linkbase Document	Filed herewith

Exhibit Key

Exhibit Key
3.1	Incorporated by reference herein to the Company’s S-1 Registration Statement filed with the Securities and Exchange Commission on November 8, 2013.
3.2	Incorporated by reference herein to the Company’s Form 8-K Current Report filed with the Securities and Exchange Commission on January 15, 2015.
3.3	Incorporated by reference herein to the Company’s S-1 Registration Statement filed with the Securities and Exchange Commission on November 8, 2013.
10.1	Incorporated by reference herein to the Company’s S-1 Registration Statement filed with the Securities and Exchange Commission on June 19, 2013.
14.0	Incorporated by reference herein to the Company’s S-1 Registration Statement filed with the Securities and Exchange Commission on November 8, 2013.

19

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

Atacama Resources International, Inc., (f/k/a Arrakis Mining Research, Inc.)

NAME	TITLE	DATE
/s/ Glenn Grant	Principal Executive Officer, Principal Accounting Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors	August 13, 2015
Glenn Grant

20