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 JULY 31, 2010
Commission file number 333-165302
CINDISUE MINING CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
11255 Tierrasanta Blvd., Unit 78
San Diego, CA 92124
(Address of principal executive offices, including zip code)
Telephone (858)278-1166 Facsimile (904)369-5658
(Telephone number, including area code)
Robert C. Weaver, Jr., Esq.
Attorney at Law
721 Devon Court
San Diego, CA 92109
Telephone (858)488-4433 Facsimile (509)267-8258
(Name and Address of Agent for Service)
Check whether the issuer (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 required to file such reports), and (2) has been
subject to such filing requirements for the last 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 (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).? YES [ ] NO [ ]
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,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
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 [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 3,000,000 shares as of September 1,
2010
ITEM 1. FINANCIAL STATEMENTS
The financial statements for the quarters ended July 31, 2010 immediately
follow.
2
Cindisue Mining Corp.
(An Exploration Stage Company)
Balance Sheets
- --------------------------------------------------------------------------------
As of As of
July 31, January 31,
2010 2010
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 46 $ 8,000
-------- --------
TOTAL CURRENT ASSETS 46 8,000
-------- --------
TOTAL ASSETS $ 46 $ 8,000
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 4,050 $ 300
Advances from Officers -- 299
-------- --------
TOTAL CURRENT LIABILITIES 4,050 599
LONG-TERM LIABILITIES
Note payable 1,000 --
-------- --------
TOTAL LONG-TERM LIABILITIES 1,000 --
TOTAL LIABILITIES 5,050 599
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.0001 par value, 100,000,000 shares
authorized; 3,000,000 shares issued and outstanding
as of July 31, 2010 and January 31, 2010 300 300
Additional paid-in capital 14,700 14,700
Deficit accumulated during exploration stage (20,004) (7,599)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (5,004) 7,401
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 46 $ 8,000
======== ========
The accompanying notes are an integral part of these financial statements
3
Cindisue Mining Corp.
(An Exploration Stage Company)
Statements of Operations (Unaudited)
- --------------------------------------------------------------------------------
January 8, 2010
Three Months Six Months (inception)
Ended Ended through
July 31, July 31, July 31,
2010 2010 2010
---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ --
---------- ---------- ----------
TOTAL REVENUES -- -- --
GENERAL & ADMINISTRATIVE EXPENSES
Administrative expenses 1,502 3,305 3,904
Professional fees 3,800 9,100 9,100
Exploration costs -- -- 7,000
---------- ---------- ----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 5,302 12,405 20,004
---------- ---------- ----------
Loss from Operation (5,302) (12,405) (20,004)
---------- ---------- ----------
Other Income (Expense) -- -- --
---------- ---------- ----------
Net Income (Loss) $ (5,302) $ (12,405) $ (20,004)
========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,000,000 3,000,000
========== ==========
The accompanying notes are an integral part of these financial statements
4
Cindisue Mining Corp.
(An Exploration Stage Company)
Statement of Changes in Shareholders' Equity
- --------------------------------------------------------------------------------
Deficit
Common Stock Additional During
-------------------- Paid-in Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
BALANCE, JANUARY 8, 2010 (INCEPTION) -- $ -- $ -- $ -- $ --
Commn stock issued, January 22, 2010 at
$.005 per share 3,000,000 300 14,700 -- 15,000
Loss for the period beginning January 8, 2010
(inception) to January 31, 2010 (7,599) (7,599)
---------- ---------- ---------- ---------- ----------
BALANCE, JANUARY 31, 2010 3,000,000 $ 300 $ 14,700 $ (7,599) $ 7,401
========== ========== ========== ========== ==========
Net Loss, April 30, 2010 (7,103) (7,103)
---------- ---------- ---------- ---------- ----------
BALANCE, APRIL 30, 2010 (UNAUDITED) 3,000,000 $ 300 $ 14,700 $ (14,702) $ 298
========== ========== ========== ========== ==========
Net Loss, six months ended July 31, 2010 (12,405) (12,405)
---------- ---------- ---------- ---------- ----------
BALANCE, JULY 31, 2010 (UNAUDITED) 3,000,000 $ 300 $ 14,700 $ (20,004) $ (5,004)
========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements
5
Cindisue Mining Corp.
(An Exploration Stage Company)
Statements of Cash Flows (Unaudited)
- --------------------------------------------------------------------------------
January 8, 2010
Six Months (inception)
Ended through
July 31, July 31,
2010 2010
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(12,405) $(20,004)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase in Accounts payable and accrued liabilities 3,750 4,050
Decrease in Advance from Officers (299) --
-------- --------
Net cash provided by (used in) operating activities (8,954) (15,954)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by (used in) investing activities -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in note payable 1,000 1,000
Issuance of common stock -- 300
Additional paid-in capital -- 14,700
-------- --------
Net cash provided by (used in) financing activities 1,000 16,000
-------- --------
Net increase (decrease) in cash (7,954) 46
Cash at beginning of period 8,000 --
-------- --------
Cash at end of period $ 46 $ 46
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ -- $ --
======== ========
Income Taxes $ -- $ --
======== ========
The accompanying notes are an integral part of these financial statements
6
Cindisue Mining Corp.
(An Exploration Stage Company)
Notes to Financial Statements
July 31, 2010
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Cindisue Mining Corp. (the "Company") was incorporated on January 8, 2010 under
the laws of the State of Delaware. The Company's activities to date have been
limited to organization and capital. The Company has been in the exploration
stage since its formation and has not yet realized any revenues from its planned
operations.
The Company is primarily engaged in the acquisition and exploration of mining
properties. The Company has acquired Ford 1-4 mineral claims in Esmeralda
County, NV for exploration and has formulated a business plan to investigate the
possibilities of a viable mineral deposit.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS
The accompanying interim unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In our opinion, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and six months period ended July 31, 2010 are
not necessarily indicative of the results that may be expected for the year
ending January 31, 2011. For further information, refer to the financial
statements and footnotes thereto included in our Form 10-K Report for the fiscal
year ended January 31, 2010.
ACCOUNTING BASIS
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
7
Cindisue Mining Corp.
(An Exploration Stage Company)
Notes to Financial Statements
July 31, 2010
- --------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
The Company is an exploration stage mining company and has not yet realized any
revenue from its operations. Mineral property acquisition costs are initially
capitalized in accordance with ASC 805-20-55-37, previously referenced as the
FASB Emerging Issues Task Force ("EITF") Issue 04-2. The Company assesses the
carrying costs for impairment under ASC 930 at each fiscal quarter end. When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs incurred to
develop such property will be capitalized. The Company has determined that all
property payments are impaired and written off the acquisition costs to project
expenses. Once capitalized, such costs will be amortized using the units of
production method over the estimated life of the probable reserve.
To date, mineral property exploration costs have been expensed as incurred. To
date the Company has not established any proven or probable reserves on its
mineral properties.
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization, when appropriate, using both
straight-line and declining balance methods over the estimated useful life of
the assets (five to seven years). Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
together with the related accumulated
Depreciation is removed from the appropriate accounts and the resultant gain or
loss is included in net income.
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB Accounting
Standards Codification ("ASC") No.740, "Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
8
Cindisue Mining Corp.
(An Exploration Stage Company)
Notes to Financial Statements
July 31, 2010
- --------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of ASC 825-10-50 and ASC 270-10-50, the
Company has determined the estimated fair value of financial instruments using
available market information and appropriate valuation methodologies. The fair
value of financial instruments classified as current assets or liabilities
approximate their carrying value due to the short-term maturity of the
instruments.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that
could share in the losses of the Company. Because the Company does not have any
potentially dilutive securities, the accompanying presentation is only of basic
loss per share.
NOTE 3 - PROVISION FOR INCOME TAXES
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carry-forwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company recorded
a valuation allowance.
As of July 31, 2010
-------------------
Deferred tax assets:
Net Operating Loss $ 20,004
Tax Rate 40%
Gross deferred tax assets $ 8,002
Valuation allowance $ (8,002)
--------
Net deferred tax assets $ 0
========
9
Cindisue Mining Corp.
(An Exploration Stage Company)
Notes to Financial Statements
July 31, 2010
- --------------------------------------------------------------------------------
NOTE 4 - COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is not presently involved in any litigation.
NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recently issued accounting pronouncements will have no significant impact on the
Company and its reporting methods.
NOTE 6 - GOING CONCERN
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses.
The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred cumulative net losses of
$20,004 since its inception and requires capital for its contemplated
operational and exploration activities to take place. The Company's ability to
raise additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements of the Company do not include any adjustments that may
result from the outcome of these aforementioned uncertainties.
NOTE 7 - RELATED PARTY TRANSACTIONS
Donovan L. Cooper, the sole officer and director of the Company, may in the
future, become involved in other business opportunities as they become
available, thus he may face a conflict in selecting between the Company and his
other business opportunities. The Company has not formulated a policy for the
resolution of such conflicts.
Donovan L. Cooper, the sole officer and director of the Company, will not be
paid for any underwriting services that he performs on behalf of the Company
with respect to the Company's S-1 offering. He will also not receive any
interest on any funds that he advances to the Company for offering expenses
prior to the offering being closed which will be repaid from the proceeds of the
offering.
10
NOTE 8 - NOTE PAYABLE
The Company received cash in the amount of $1,000 from EFM Venture Group, Inc,
an unrelated party. This amount is represented by one unsecured promissory note
dated July 31, 2010. This loan is at 4% interest with principle and interest all
due on July 31, 2012.
NOTE 9 - STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of Statement of Financial Accounting Standards 123. Transactions
with employees' stock issuance are in accordance with paragraphs (16-44) of
Statement of Financial Accounting Standards 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
On January 22, 2010, the Company issued a total of 3,000,000 shares of common
stock to one director for cash in the amount of $0.005 per share for a total of
$15,000
As of July 31, 2010 and January 31, 2010, the Company had 3,000,000 shares of
common stock issued and outstanding.
NOTE 10 - STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of July 31, 2010:
Common stock, $ 0.0001 par value: 100,000,000 shares authorized; 3,000,000
shares issued and outstanding.
NOTE 11 - MINERAL CLAIMS
On January 28, 2010, the Company acquired a 100% interest in the Ford 1-4
minerals claims located in Esmeralda County, Nevada.
The claims and related geological report were acquired for $7,000. These costs
have been expensed as exploration costs during the period ended January 31,
2010.
NOTE 12 - SUBSEQUENT EVENTS
In accordance with ASC 855, Subsequent Events, the Company has evaluated
subsequent events through the date of issuance of the reviewed financial
statements. During this period, the Company did not have any material
recognizable subsequent events.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this report and actual results may differ materially from historical
results or our predictions of future results.
RESULTS OF OPERATIONS
We are still in our exploration stage and have generated no revenue to date.
We incurred operating expenses of $5,302 for the three months ended July 31,
2010. These expenses consisted of general operating expenses and professional
fees. As we were incorporated on January 8, 2010 there are no comparative
expenses from the previous year.
Our net loss from inception (January 8, 2010) through July 31, 2010 was $20,004.
We received our initial funding of $15,000 through the sale of common stock to
Donovan L. Cooper, our officer and director, who purchased 3,000,000 shares of
our common stock at $0.005 per share on January 22, 2010.
The following table provides selected financial data about our company for the
period ended July 31, 2010.
Balance Sheet Data: 7/31/10
------------------- -------
Cash $ 46
Total assets $ 46
Total liabilities $ 5,050
Shareholders' equity $(5,004)
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at July 31, 2010 was $46, with outstanding liabilities of
$5,050, consisting of $4,050 in accounts payable and $1,000 in a loan payable to
an unrelated party. We will require the funding from our offering pursuant to a
Registration Statement on Form S-1 as filed with the Securities and Exchange
Commission on March 8, 2010. If we experience a shortage of funds in the next
twelve months we may utilize funds from our director, who has agreed to advance
funds for operations, however he has no formal commitment, arrangement or legal
obligation to advance or loan funds to us.
12
PLAN OF OPERATION
Our exploration target is to find exploitable minerals on our property. Our
success depends on achieving that target. There is the likelihood of our mineral
claims containing little or no economic mineralization or reserves of gold,
silver and other minerals. There is the possibility that our claims do not
contain any reserves and funds that we spend on exploration will be lost. Even
if we complete our current exploration program and are successful in identifying
a mineral deposit, we will be required to expend substantial funds to bring our
claims to production. We are unable to assure you we will be able to raise the
additional funds necessary to implement any future exploration or extraction
program even if mineralization is found.
Our current cash balance is $46. We believe our cash balance, along with loans
from our director, is sufficient to fund our limited levels of operations until
we receive funding. If necessary, Mr. Cooper, our officer and director, has
verbally agreed to loan the company funds to allow us to pay for professional
fees, including fees payable in connection with the filing of this registration
statement, offering costs, operation expenses and reclamation costs in the event
we experience a shortage of funds during exploration and abandon the claims,
however, he has no formal commitment, arrangement or legal obligation to advance
or loan funds to the company. In order to achieve our business plan goals, we
will need the funding from our offering. We are an exploration stage company and
have generated no revenue to date. We have sold $15,000 in equity securities to
pay for our minimum level of operations.
Our plan of operation for the twelve months is to complete the first two phases
of the exploration program on our claims consisting of geological mapping, soil
sampling and rock sampling. In addition to the $18,000 we anticipate spending
for Phases 1 and 2, as outlined below, we anticipate spending an additional
$9,000 on professional fees, including fees payable in connection with the
filing of this registration statement and complying with reporting obligations,
and $ 2,500 in general administrative costs. Total expenditures over the next 12
months are therefore expected to be approximately $29,500. If we experience a
shortage of funds prior to funding during the next 12 months, Mr. Cooper, our
officer and director, has verbally agreed to loan the company funds to allow us
to pay for professional fees, operation expenses and reclamation costs in the
event we experience a shortage of funds during exploration and abandon the
claims, however, he has no formal commitment, arrangement or legal obligation to
advance or loan funds to the company.
We engaged Mr. James W. McLeod, P. Geo., to prepare a geological evaluation
report on the Ford Property. Mr. McLeod's report summarizes the results of the
history of the exploration of the mineral claims, the regional and local geology
of the mineral claims and the mineralization and the geological formations
identified as a result of the prior exploration in the claim areas. The
geological report also gives conclusions regarding potential mineralization of
the mineral claims and recommends a further geological exploration program on
the mineral claims. The exploration program recommended by Mr. McLeod is as
follows:
PHASE 1
Prospecting and MMI soil geochemistry. The estimated
cost for this program is all inclusive $ 8,000
13
PHASE 2
Magnetometer and VLF electromagnetic, grid controlled
surveys over the areas of interest determined by the Phase 1
survey. Included in this estimated cost is transportation,
accommodation, board, grid installation, the two
geophysical surveys, maps and report 10,000
--------
Total $ 18,000
========
The above program costs are management's estimates based upon the
recommendations of the professional consulting geologist's report and the actual
project costs may exceed our estimates..
If we are successful in raising the funds from this offering we plan to commence
Phase 1 of the exploration program on the claims in the fall of 2010. We have a
verbal agreement with James McLeod, the consulting geologist, who prepared the
geology report on our claims, to retain his services for our planned exploration
program. We expect this phase to take two weeks to complete and an additional
three months for the consulting geologist to receive the results from the assay
lab and prepare his report. If Phase 1 of the exploration program is successful,
we anticipate commencing Phase 2 in spring 2011. We expect this phase to take
three weeks to complete and an additional three months for the consulting
geologist to receive the results from the assay lab and prepare his report.
Due to a typographical error, Cindisue Mining Corp. refiled its mining claim on
May 12, 2010.
We will require additional funding to proceed with any subsequent work on the
claims, we have no current plans on how to raise the additional funding. We
cannot provide investors with any assurance that we will be able to raise
sufficient funds to proceed with any work after the first two phases of the
exploration program.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any 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 4. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
14
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
* Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
* Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and
* Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of July 31, 2010 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of July 31, 2010.
15
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2010. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2010.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
16
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
Incorporated by Reference
Exhibit No. Exhibit or Filed Herewith
- ----------- ------- -----------------
3.1 Articles of Incorporation Incorporated by reference to
the Registration Statement on
Form S-1 filed with the SEC on
March 8, 2010, File No.
333-165302
3.2 Bylaws Incorporated by reference to
the Registration Statement on
Form S-1 filed with the SEC on
March 8, 2010, File No.
333-165302
31.1 Section 302 Certification of Filed herewith
Chief Executive Officer
31.2 Section 302 Certification of Filed herewith
Chief Financial Officer
32 Section 906 Certification of Filed herewith
Chief Executive Officer and
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
September 1, 2010 Cindisue Mining Corp.
/s/ Donovan L. Cooper
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By: Donovan L. Cooper
(Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer,
President, Secretary, Treasurer & Sole
Director)
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