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 September 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 333-149000
Midex Gold Corp.
(Exact name of small business issuer as specified in its charter)
Nevada N/A
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
Kanonyele, Box 55758, Dar es Salaam, Tanzania N/A
(Address of principal executive offices) (Zip Code)
+255 788 364 496
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was require 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 is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-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]
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of November 23, 2009, the registrant's outstanding common stock consisted of
175,000,000 shares.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements. 3
ITEM 2. Management Discussion and Analysis of Financial
Condition / Plan of Operations. 10
ITEM 3. Quantitative and Qualitative Disclosure About Market Risks. 13
ITEM 4. Control and Procedures. 13
ITEM 4T. Controls and Procedures. 13
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings. 15
ITEM 2. Unregistered Sales of Equity Securities. 15
ITEM 3. Defaults Upon Senior Securities. 15
ITEM 4. Submission of Matters to a Vote of Security Holders. 15
ITEM 5. Other Information. 15
ITEM 6. Exhibits. 15
2
Midex Gold Corp.
(formerly Tripod International Inc.)
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
September 30, March 31,
2009 2009
$ $
-------- --------
(unaudited)
ASSETS
Current Assets
Cash -- 55,373
-------- --------
Total Assets -- 55,373
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable 6,385 --
Due to a Related Party (Note 3) 16,392 4,230
-------- --------
Total Liabilities 22,777 4,230
-------- --------
Stockholders' Deficit
Common Stock
Authorized: 250,000,000 common shares, with a par value of $0.001 per share
Issued and outstanding: 175,000,000 common shares 175,000 175,000
Additional Paid-In Capital (70,000) (70,000)
Accumulated Deficit During the Exploration Stage (127,777) (53,857)
-------- --------
Total Stockholders' Deficit (22,777) 51,143
-------- --------
Total Liabilities and Stockholders' Deficit -- 55,373
======== ========
Going Concern (Note 1)
(The accompanying notes are an integral part of these financial statements)
3
Midex Gold Corp.
(formerly Tripod International Inc.)
(A Development Stage Company)
Statements of Operations
(expressed in U.S. dollars)
(unaudited)
Accumulated from
February 6, 2008
For the Three For the Three For the Six For the Six (Date of
Months Ended Months Ended Months Ended Months Ended Inception) to
September 30, September 30, September 30, September 30, September 30,
2009 2008 2009 2008 2009
$ $ $ $ $
------------ ------------ ------------ ------------ ------------
Revenue -- -- -- -- --
Expenses
General and Administrative 33,468 2,509 73,920 8,653 127,777
Income tax provisions -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total Expenses 33,468 2,509 73,920 8,653 127,777
------------ ------------ ------------ ------------ ------------
Net Loss for the Period (33,468) (2,509) (73,920) (8,653) (127,777)
============ ============ ============ ============ ============
Loss Per Share - Basic and Diluted
Net Loss Per Share - Basic and Diluted -- -- -- --
============ ============ ============ ============
Weighted Average Shares Outstanding 175,000,000 175,000,000 175,000,000 175,000,000
============ ============ ============ ============
(The accompanying notes are an integral part of these financial statements)
4
Midex Gold Corp.
(formerly Tripod International Inc.)
(A Development Stage Company)
Statements of Cash Flows
(expressed in U.S. dollars)
(unaudited)
Accumulated from
February 6, 2008
For the Six For the Six (Date of
Months Ended Months Ended Inception) to
September 30, September 30, September 30,
2009 2008 2009
$ $ $
-------- -------- --------
Operating Activities
Net loss for the period (73,920) (8,653) (127,777)
Changes in operating assets and liabilities:
Accounts payable 6,385 -- 6,385
-------- -------- --------
Net Cash Used In Operating Activities (67,535) -- (121,392)
-------- -------- --------
Financing Activities
Proceeds from related parties 12,162 3,000 16,392
Proceeds from issuance of common shares -- 88,000 105,000
-------- -------- --------
Net Cash Provided By Financing Activities 12,162 91,000 121,392
-------- -------- --------
Increase (Decrease) in Cash (55,373) 82,347 --
Cash - Beginning of Period 55,373 5,148 --
-------- -------- --------
Cash - End of Period -- 87,495 --
======== ======== ========
Supplemental Disclosures
Interest paid -- -- --
Income tax paid -- -- --
======== ======== ========
(The accompanying notes are an integral part of these financial statements)
5
1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS
Midex Gold Corp. (formerly Tripod International Inc.) (the "Company") was
incorporated under the laws of the State of Nevada, U.S. on February 6,
2008. The name of the company was changed to Midex Gold Corp. on April 27,
2009. The Company is an Exploration Stage Company, as defined by Financial
Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 915, "DEVELOPMENT STAGE ENTITIES. The Company has not generated any
revenue to date and consequently its operations are subject to all risks
inherent in the establishment of a new business enterprise.
These financial statements have been prepared on a going concern basis,
which implies that the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. The Company has
generated no revenues to date and has never paid any dividends and is
unlikely to pay dividends or generate significant earnings in the immediate
or foreseeable future. As at September 30, 2009, the Company had a working
capital deficit of $22,777 and an accumulated deficit of $127,777. The
continuation of the Company as a going concern is dependent upon the
continued financial support from its shareholders, the ability to raise
equity or debt financing, and the attainment of profitable operations from
the Company's future business. These factors raise substantial doubt
regarding the Company's ability to continue as a going concern. These
financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of
liabilities that might be necessary should the Company be unable to
continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
These financial statements and related notes are presented in accordance
with accounting principles generally accepted in the United States, and are
expressed in US dollars. The Company's fiscal year-end is March 31.
b) Interim Financial Statements
These interim unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States for interim financial information and with the instructions to
Securities and Exchange Commission ("SEC") Form 10-Q. They do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. Therefore, these
financial statements should be read in conjunction with the Company's
audited financial statements and notes thereto for the year ended March 31,
2009, included in the Company's Annual Report on Form 10-K filed on June
29, 2009 with the SEC.
The financial statements included herein are unaudited; however, they
contain all normal recurring accruals and adjustments that, in the opinion
of management, are necessary to present fairly the Company's financial
position at September 30, 2009, and the results of its operations and cash
flows for the three and six month periods ended September 30, 2009 and
2008. The results of operations for the period ended September 30, 2009 are
not necessarily indicative of the results to be expected for future
quarters or the full year.
c) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States and 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. The Company regularly
evaluates estimates and assumptions related to deferred income tax asset
valuation allowances. The Company bases its estimates and assumptions on
current facts, historical experience and various other factors that it
believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily
apparent from other sources. The actual results experienced by the Company
may differ materially and adversely from the Company's estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.
d) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three
months or less at the time of issuance to be cash equivalents. As at
September 30, 2009, the Company had no cash equivalents.
6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC
260, EARNINGS PER SHARE, which requires presentation of both basic and
diluted earnings per share (EPS) on the face of the income statement. Basic
EPS is computed by dividing net income (loss) available to common
shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to
all dilutive potential common shares outstanding during the period using
the treasury stock method and convertible preferred stock using the
if-converted method. In computing Diluted EPS, the average stock price for
the period is used in determining the number of shares assumed to be
purchased from the exercise of stock options or warrants. Diluted EPS
excludes all dilutive potential shares if their effect is anti dilutive.
f) Income Taxes
Potential benefits of income tax losses are not recognized in the accounts
until realization is more likely than not. The Company has adopted ASC 740,
INCOME TAXES, as of its inception. Pursuant to ASC 740, the Company is
required to compute tax asset benefits for net operating losses carried
forward. The potential benefits of net operating losses have not been
recognized in these financial statements because the Company cannot be
assured it is more likely than not it will utilize the net operating losses
carried forward in future years.
g) Comprehensive Loss
ASC 220, COMPREHENSIVE INCOME, establishes standards for the reporting and
display of comprehensive loss and its components in the financial
statements. As at September 30, 2009 and March 31, 2009, the Company has no
items that represent comprehensive loss and, therefore, has not included a
schedule of comprehensive loss in the financial statements.
h) Financial Instruments
ASC 820, "FAIR VALUE MEASUREMENTS" and ASC 825, FINANCIAL INSTRUMENTS,
requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. It establishes a
fair value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instrument's
categorization within the fair value hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. It
prioritizes the inputs into three levels that may be used to measure fair
value:
LEVEL 1
Level 1 applies to assets or liabilities for which there are quoted prices
in active markets for identical assets or liabilities.
LEVEL 2
Level 2 applies to assets or liabilities for which there are inputs other
than quoted prices that are observable for the asset or liability such as
quoted prices for similar assets or liabilities in active markets; quoted
prices for identical assets or liabilities in markets with insufficient
volume or infrequent transactions (less active markets); or model-derived
valuations in which significant inputs are observable or can be derived
principally from, or corroborated by, observable market data.
LEVEL 3
Level 3 applies to assets or liabilities for which there are unobservable
inputs to the valuation methodology that are significant to the measurement
of the fair value of the assets or liabilities.
The Company's financial instruments consist principally of cash, accounts
payable and accrued liabilities, and amounts due to related parties.
Pursuant to ASC 820 and ASC 825, the fair value of our cash is determined
based on "Level 1" inputs, which consist of quoted prices in active markets
for identical assets. We believe that the recorded values of all of our
other financial instruments approximate their current fair values because
of their nature and respective maturity dates or durations.
7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
i) Recent Accounting Pronouncements
In October 2009, the FASB issued an amendment to the accounting standards
related to certain revenue arrangements that include software elements.
This standard clarifies the existing accounting guidance such that tangible
products that contain both software and non-software components that
function together to deliver the product's essential functionality, shall
be excluded from the scope of the software revenue recognition accounting
standards. Accordingly, sales of these products may fall within the scope
of other revenue recognition standards or may now be within the scope of
this standard and may require an allocation of the arrangement
consideration for each element of the arrangement. This standard is
effective commencing January 1, 2011 and is not expected to have a material
effect on the Company's financial statements.
In October 2009, the FASB issued an amendment to the accounting standards
related to the accounting for revenue in arrangements with multiple
deliverables including how the arrangement consideration is allocated among
delivered and undelivered items of the arrangement. Among the amendments,
this standard eliminated the use of the residual method for allocating
arrangement considerations and requires an entity to allocate the overall
consideration to each deliverable based on an estimated selling price of
each individual deliverable in the arrangement in the absence of having
vendor-specific objective evidence or other third party evidence of fair
value of the undelivered items. This standard also provides further
guidance on how to determine a separate unit of accounting in a
multiple-deliverable revenue arrangement and expands the disclosure
requirements about the judgments made in applying the estimated selling
price method and how those judgments affect the timing or amount of revenue
recognition. This standard is effective commencing January 1, 2011 and is
not expected to have a material effect on the Company's financial
statements.
In August 2009, the FASB issued an amendment to the accounting standards
related to the measurement of liabilities that are recognized or disclosed
at fair value on a recurring basis. This standard clarifies how a company
should measure the fair value of liabilities and that restrictions
preventing the transfer of a liability should not be considered as a factor
in the measurement of liabilities within the scope of this standard. This
standard is effective for the Company on October 1, 2009 and is not
expected to have a material effect on the Company's financial statements.
j) Recently Adopted Accounting Pronouncements
On September 30, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP.
These changes establish the FASB Accounting Standards Codification
(Codification) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with GAAP. Rules and
interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of authoritative GAAP
for SEC registrants. The FASB will no longer issue new standards in the
form of Statements, FASB Staff Positions, or Emerging Issues Task Force
Abstracts; instead the FASB will issue Accounting Standards Updates.
Accounting Standards Updates will not be authoritative in their own right
as they will only serve to update the Codification. These changes and the
Codification itself do not change GAAP. Other than the manner in which new
accounting guidance is referenced, the adoption of these changes had no
impact on the Company's financial statements.
Effective June 30, 2009, the Company adopted a new accounting standard
issued by the FASB related to the disclosure requirements of the fair
value of the financial instruments. This standard expands the
disclosure requirements of fair value (including the methods and
significant assumptions used to estimate fair value) of certain
financial instruments to interim period financial statements that were
previously only required to be disclosed in financial statements for
annual periods. In accordance with this standard, the disclosure
requirements have been applied on a prospective basis and did not have
a material impact on the Company's financial statements.
k) Comparative Figures
Certain comparative figures have been reclassified in order to conform to
the current year's financial statement presentation.
8
3. RELATED PARTY TRANSACTION
As at September 30, 2009, the Company owed $16,392 (March 31, 2009 -
$4,230) to a director of the Company for funding of general operations. The
amounts owing are unsecured, non-interest bearing, and due on demand.
4. COMMON SHARES
On July 31, 2009, the Company and its Board of Directors approved a
five-to-one (5:1) forward stock split of all issued and outstanding common
shares, with an effective date of August 10, 2009. The effect of the
forward stock split increased the number of issued and outstanding common
shares from 35,000,000 shares to 175,000,000 shares, and the forward stock
split has been applied on a retroactive basis since the Company's inception
date.
5. SUBSEQUENT EVENTS
In accordance with ASC 855, we have evaluated subsequent events through
November 23, 2009, the date of issuance of the unaudited interim
consolidated financial statements, and did not have any material
recognizable subsequent events.
9
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SAFE HARBOR STATEMENT
This report on Form 10-Q contains certain forward-looking statements. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of these provisions, including any projections of
earnings, revenues, or other financial items; any statements of the plans,
strategies, and objectives of management for future operation; any statements
concerning proposed new products, services, or developments; any statements
regarding future economic conditions or performance; statements of belief; and
any statement of assumptions underlying any of the foregoing. Such
forward-looking statements are subject to inherent risks and uncertainties, and
actual results could differ materially from those anticipated by the
forward-looking statements.
These forward-looking statements involve significant risks and uncertainties,
including, but not limited to, the following: competition, promotional costs,
and risk of declining revenues. Our actual results could differ materially from
those anticipated in such forward-looking statements as a result of a number of
factors. These forward-looking statements are made as of the date of this
filing, and we assume no obligation to update such forward-looking statements.
The following discusses our financial condition and results of operations based
upon our consolidated financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States.
It should be read in conjunction with our financial statements and the notes
thereto included elsewhere herein.
The following discussion should be read in conjunction with our consolidated
financial statements, including the notes thereto, appearing elsewhere in this
Form 10-Q. The discussions of results, causes and trends should not be construed
to imply any conclusion that these results or trends will necessarily continue
into the future.
OVERVIEW
We were incorporated in the State of Nevada on February 6, 2008 under the name
Tripod International, Inc. On April 27, 2009 we changed our name to Midex Gold
Corp. We are engaged in the business of developing a select portfolio of
near-term gold and diamond production projects in Tanzania.
Our shares of common stock trade on the Over-the-Counter Bulletin Board under
the symbol "MXGD.OB". We do not have any subsidiaries.
Please note that throughout this Quarterly Report, and unless otherwise noted,
the words "we," "our," "us," the "Company," or "Midex Gold" refers to Midex Gold
Corp.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2009, we had cash of $nil and a working capital deficit of
$22,777. As of September 30, 2009 our accumulated deficit was $127,777. For the
three months ended September 30, 2009 our net loss was $33,468 compared to
$2,509 during the same period in 2008. This increase was due to higher general
and administrative expenses.
10
Our loss was funded by shareholder loans. During the six months ended September
30, 2009, we raised in net proceeds $nil through financing activities and our
cash position decreased by $55,373.
We used net cash of $67,535 in operating activities for the six months ended
September 30, 2009 compared to net cash of $nil in operating activities for the
same period in 2008. We did not use any money in investing activities for the
six months ended September 30, 2009 nor did we use any money for investing
activities during the same period in 2008.
During the six months ended September 30, 2009 our monthly cash requirement was
approximately $11,255, compared to approximately $nil for the same period in
2008. We expect to require a total of approximately $500,000 to fully carry out
our business plan over the next twelve months beginning December 2009 as set out
in this table:
Description Estimated Expense
----------- -----------------
Legal and Auditing Expenses $ 75,000
Office Rent and Expenses $ 12,500
General Administration $ 25,000
Geological Consulting $ 60,000
Technical Consulting $ 90,000
Field Contractors $120,000
Field Labor $ 10,000
Lab Expenses $ 27,500
Travel $ 60,000
Miscellaneous Expenses $ 20,000
--------
TOTAL $500,000
========
We intend to meet our cash requirements for the next 12 months through external
sources: a combination of debt financing and equity financing through private
placements. We are currently not in good short-term financial standing. We
anticipate that we may not generate any revenues in the near future and we will
not have enough positive internal operating cash flow until we can generate
substantial revenues, which may take the next few years to fully realize. There
is no assurance we will achieve profitable operations. We have historically
financed our operations primarily by cash flows generated from the sale of our
equity securities and through cash infusions from officers and outside investors
in exchange for debt and/or common stock.
These financial statements have been prepared on the assumption that we are a
going concern, meaning we will continue in operation for the foreseeable future
and will be able to realize assets and discharge liabilities in the ordinary
course of operations. Different bases of measurement may be appropriate when a
company is not expected to continue operations for the foreseeable future. Our
continuation as a going concern is dependent upon our ability to attain
profitable operations and generate funds there-from, and/or raise equity capital
or borrowings sufficient to meet current and future obligations. Management
plans to raise equity financings over the next twelve months to finance
operations. There is no guarantee that we will be able to complete any of these
objectives. We have incurred losses from operations since inception and at
September 30, 2009, have a working capital deficiency and an accumulated deficit
that creates substantial doubt about our ability to continue as a going concern.
11
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND FROM INCEPTION TO SEPTEMBER 30,
2009.
LIMITED REVENUES
Since our inception on February 6, 2008 to September 30, 2009, we did not earn
any revenues. As of September 30, 2009, we have an accumulated deficit of
$127,777 and we did not earn any revenues during the three months ending on
September 30, 2009. At this time, our ability to generate any significant
revenues continues to be uncertain. Our financial statements contain an
additional explanatory paragraph in Note 1, which identifies issues that raise
substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustment that might result from the
outcome of this uncertainty.
NET LOSS
We incurred a net loss of $33,468 for the three months ended September 30, 2009,
compared to a net loss of $2,509 for the same period in 2008. This increase in
net loss was due to higher general and administrative expenses. From inception
on February 6, 2008 to September 30, 2009, we have incurred a net loss of
$127,777. Our basic and diluted loss per share was $0.00 for the three months
ended September 30, 2009, and $0.00 for the same period in 2008.
EXPENSES
Our total operating expenses increased from $2,509 to $33,468 for the three
months ended September 30, 2009 compared to the same period in 2008. This
increase in expenses is due to higher general and administrative fees. Since our
inception on February 6, 2008 to September 30, 2009, we have incurred total
operating expenses of $127,777.
Our general and administrative expenses consist of bank charges, travel, meals
and entertainment, office maintenance, communication expenses (internet, fax,
and telephone), courier, postage costs, office supplies. Our general and
administrative expenses increased from $2,509 to $33,468 for the three months
ended September 30, 2009 compared to the same period in 2008. Since our
inception on February 6, 2008 until September 30, 2009 we have spent $127,777 on
general and administrative expenses.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO
THE SIX MONTHS ENDED SEPTEMBER 30, 2008 AND FROM INCEPTION TO SEPTEMBER 30,
2009.
LIMITED REVENUES
We did not earn any revenues during the six months ending on September 30, 2009,
nor did we earn any revenues during the same period in 2008. At this time, our
ability to generate any significant revenues continues to be uncertain.
NET LOSS
We incurred a net loss of $73,920 for the six months ended September 30, 2009,
compared to a net loss of $8,653 for the same period in 2008. This increase in
net loss was due to higher general and administrative expenses.
12
EXPENSES
Our total operating expenses increased from $8,653 to $73,920 for the six months
ended September 30, 2009 compared to the same period in 2008. This increase in
expenses is due to higher general and administrative fees.
Our general and administrative expenses consist of bank charges, travel, meals
and entertainment, office maintenance, communication expenses (internet, fax,
and telephone), courier, postage costs, office supplies. Our general and
administrative expenses increased from $8,653 to $73,920 for the six months
ended September 30, 2009 compared to the same period in 2008.
INFLATION
The amounts presented in the financial statements do not provide for the effect
of inflation on our operations or financial position. The net operating losses
shown would be greater than reported if the effects of inflation were reflected
either by charging operations with amounts that represent replacement costs or
by using other inflation adjustments.
OFF-BALANCE SHEET ARRANGEMENTS
As of September 30, 2009, we had no off-balance sheet transactions that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Not applicable.
ITEM 4. CONTROL AND PROCEDURES
Not applicable
ITEM 4T. CONTROL AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures have been designed to ensure that information
required to be disclosed by the Company is collected and communicated to
management to allow timely decisions regarding required disclosures. The Chief
Executive Officer and the Chief Financial Officer have concluded, based on their
evaluation as of September 30, 2009 that, as a result of the following material
weaknesses in internal control over financial reporting as described further in
our Annual Report on Form 10-K filed with the SEC on March 19, 2009, disclosure
controls and procedures were ineffective in providing reasonable assurance that
material information is made known to them by others within the Company:
13
a) We did not maintain sufficient personnel with an appropriate level of
technical accounting knowledge, experience, and training in the application of
generally accepted accounting principles commensurate with our complexity and
our financial accounting and reporting requirements. We have limited experience
in the areas of financial reporting and disclosure controls and procedures.
Also, we do not have an independent audit committee. As a result, there is a
lack of monitoring of the financial reporting process and there is a reasonable
possibility that material misstatements of the consolidated financial
statements, including disclosures, will not be prevented or detected on a timely
basis; and
b) Due to our small size, we do not have a proper segregation of duties in
certain areas of our financial reporting process. The areas where we have a lack
of segregation of duties include cash receipts and disbursements, approval of
purchases and approval of accounts payable invoices for payment. This control
deficiency, which is pervasive in nature, results in a reasonable possibility
that material misstatements of the financial statements will not be prevented or
detected on a timely basis.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the fiscal quarter ended September 30, 2009 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS
Our management, including the CEO and CFO, does not expect that our disclosure
controls and procedures or our internal control over financial reporting will
necessarily prevent all fraud and material error. An internal 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 the control system must reflect the fact that there are resource
constraints, and the benefits 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. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, and/or the degree of compliance with the
policies or procedures may deteriorate.
14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of November 23, 2009 there are no material pending legal proceedings, other
than ordinary routine litigation incidental to our business, to which we or any
of our subsidiaries are a party or of which any of our properties is the
subject. Also, our management is not aware of any legal proceedings contemplated
by any governmental authority against us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Number Description
- ------ -----------
31.1 Certification of Chief Executive Officer and Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and Chief Executive 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 our behalf by the
undersigned thereunto duly authorized.
MIDEX GOLD CORP.
(REGISTRANT)
Date: November 23, 2009 /s/ Morgan Magella
-------------------------------------------------
Morgan Magella
Chief Executive Officer, Chief Financial Officer,
Director
(Authorized Officer for Registrant)
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