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 December 31, 2012
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number: 333-139482
VIKING MINERALS INC.
(Exact name of Registrant as specified in its charter)
Nevada 98-0492900
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
7558 W. Thunderbird Ste. 486
Peoria, AZ, 85381 Telephone: 602-885-9792
(Address of principal executive offices) (Registrant's telephone number,
including area code)
Former Name, Address and Fiscal Year, If Changed Since Last Report
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 past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (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 [X]
We had a total of 169,597,164 shares of common stock issued and outstanding at
March 13, 2013.
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial statements included herein are unaudited but reflect, in
management's opinion, all adjustments, consisting only of normal recurring
adjustments that are necessary for a fair presentation of our financial position
and the results of our operations for the interim periods presented. Because of
the nature of our business, the results of operations for the quarterly period
ended December 31, 2012 are not necessarily indicative of the results that may
be expected for the full fiscal year.
2
VIKING MINERALS INC.
(A Pre-Exporation Stage Company)
Condensed Balance Sheets
As of As of
December 31, March 31,
2012 2012
------------ ------------
(Unaudited)
Assets
Current assets
Cash $ -- $ --
------------ ------------
Total current assets -- --
------------ ------------
Total Assets $ -- $ --
============ ============
Liabilities
Current liabilities
Accounts payable (Including related party amounts of $17,500) $ 45,757 $ 56,099
Advances from related parties 15,571 7,106
Advance 5,050 25,000
------------ ------------
Total current liabilities 66,378 88,205
------------ ------------
Total Liabilities 66,378 88,205
------------ ------------
Stockholders' Deficit
Common Stock, $0.001 par value; 400,000,000 common shares
authorized; 166,058,181 and 108,000 shares issued and outstanding
as of December 31, 2012 and March 31, 2012, respectively 166,058 108
Additional paid-in capital 30,254,942 27,392
Deficit accumuated during the pre-exploration stage (30,487,378) (115,705)
------------ ------------
Total stockholders' deficit (66,378) (88,205)
------------ ------------
Total liabilites and stockholders' deficit $ -- $ --
============ ============
The accompanying notes are an integral part
of these condensed financial statements.
3
VIKING MINERALS INC.
(A Pre-Exporation Stage Company)
Condensed Statements of Operations
(Unaudited)
From inception
For the three month For the nine month (March 24, 2006)
period ended period ended to
December 31, December 31, December 31, December 31, December 31,
2012 2011 2012 2011 2012
------------ ------------ ------------ ------------ ------------
Revenue $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
Expenses
Impairment loss on investment in
joint venture -- -- 131,000 -- 181,624
General and administrative 1,905 2,029 13,123 27,800 78,204
------------ ------------ ------------ ------------ ------------
Total Operating Expenses 1,905 2,029 144,123 27,800 259,828
Other Expense:
Loss on extinguishment of debt 322,500 -- 30,227,550 -- 30,227,550
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ (324,405) $ (2,029) $(30,371,673) $ (27,800) $(30,487,378)
============ ============ ============ ============ ============
Basic & Diluted (Loss) per Common Share $ (0.00) $ (0.02) $ (0.31) $ (0.15)
------------ ------------ ------------ ------------
Weighted Average Number of Common Shares
(basic and diluted) 161,166,696 108,000 99,331,273 182,096
The accompanying notes are an integral part
of these condensed financial statements.
4
VIKING MINERALS INC.
(A Pre-Exploration Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
From inception
For the nine month (March 24, 2006)
period ended to
December 31, December 31, December 31,
2012 2011 2012
------------ ------------ ------------
OPERATING ACTIVITIES
Net income (loss) $(30,371,673) $ (27,800) $(30,487,378)
Adjustments to reconcile net loss to net
cash used in operating activites
Impairment loss on investment in joint venture 131,000 -- 131,000
Loss on extinguishment of debt 30,227,550 -- 30,227,550
Impairment loss on mineral claim 50,624
Stock issued for services -- -- 7,500
Changes in operating assets and liabilities:
Accounts payable 4,658 23,695 60,757
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (8,465) (4,105) (9,947)
INVESTING ACTIVITES
Purchase of mineral claim -- -- (50,624)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES -- -- (50,624)
FINANCING ACTIVITIES
Stock issued for cash -- -- 20,000
Advances from related parties 8,465 4,105 15,571
Proceeds from advance -- -- 25,000
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,465 4,105 60,571
NET INCREASE (DECREASE) IN CASH -- -- --
Cash at beginning of period -- -- --
------------ ------------ ------------
CASH AT END OF PERIOD $ -- $ -- $ --
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Stock issued for services $ -- $ -- $ 7,500
============ ============ ============
Stock issued for joint venture investment $ 131,000 $ 131,000
============ ============ ============
Stock issued for extinguishment of debt $ 30,262,500 $ 30,262,500
============ ============ ============
The accompanying notes are an integral part
of these condensed financial statements.
5
VIKING MINERALS INC.
(A Pre-Exploration Stage Company)
Notes to the Condensed Financial Statements
December 31, 2012
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The company was incorporated under the laws of the state of Nevada on March 24,
2006 with 75,000,000 authorized common shares with a par value of $0.001. In
January 2011 the company filed an amendment with the state of Nevada to increase
the authorized shares to 400,000,000 shares of common stock at a par value of
$0.001 per share.
The company was organized for the purpose of acquiring and developing mineral
claims and is in the pre-exploration stage.
The interim financial statements for the three and nine months ended December
31, 2012 and 2011 are unaudited. These financial statements are prepared in
accordance with requirements for unaudited interim periods, and consequently do
not include all disclosures required to be in conformity with accounting
principles generally accepted in the United States of America. The results of
operations for the interim periods are not necessarily indicative of the results
for the full year. In management's opinion all adjustments necessary for a fair
presentation of the Company's financial statements are reflected in the interim
periods included, and are of a normal recurring nature. These interim financial
statements should be read in conjunction with the financial statements included
in our Annual Report on Form 10-K, for the year ended March 31, 2012, as filed
with the SEC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING METHOD
The company recognizes income and expenses based on the accrual method of
accounting.
DIVIDEND POLICY
The company has not yet adopted a policy regarding payment of dividends.
INCOME TAX
The company utilizes the liability method of accounting for income taxes. Under
the liability method deferred tax assets and liabilities are determined based on
the differences between financial reporting and the tax bases of the assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect, when the differences are expected to reverse. An allowance against
deferred tax assets is recorded, when it is more likely than not that such tax
benefits will not be realized.
FINANCIAL AND CONCENTRATIONS RISK
The company has no financial and concentrations risks.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common and
common equivalent shares outstanding as if shares had been issued on the
exercise of the common share rights, unless the exercise becomes antidilutive,
and then the basic and diluted per share amounts are the same. As of December
31, 2012, there are no dilutive securities outstanding.
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STATEMENT OF CASH FLOWS
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be cash
equivalents.
REVENUE RECOGNITION
Revenue is recognized on the sale and delivery of a product or the completion of
a service provided.
ADVERTISING AND MARKET DEVELOPMENT
The company expenses advertising and market development costs as research data
expenses.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company reviews and evaluates long-lived assets for impairment when events
or changes in circumstances indicate that the related carrying amounts may not
be recoverable. The assets are subject to impairment consideration under ASC
360-10-35-17 if events or circumstances indicate that their carrying amount
might not be recoverable. When the Company determines that an impairment
analysis should be done, the analysis will be performed using the rules of ASC
930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or
Disposal of Long-Lived Assets.
ENVIRONMENTAL REQUIREMENTS
At the report date environmental requirements related to a formally held mineral
claim are unknown and therefore any estimate of future costs cannot be made.
MINERAL PROPERTY ACQUISITIONS COSTS
Costs of acquisition and option costs of mineral rights are capitalized upon
acquisition. Mine development costs incurred to develop new ore deposits, to
expand the capacity of mines, or to develop mine areas substantially in advance
of current production are also capitalized once proven and probable reserves
exist and the property is a commercially mineable property. Costs incurred to
maintain current production or to maintain assets on a standby basis are charged
to operations. If the Company does not continue with exploration after the
completion of the feasibility study, the mineral rights will be expensed at that
time. Costs of abandoned projects are charged to mining costs including related
property and equipment costs. To determine if these costs are in excess of their
recoverable amount periodic evaluation of carrying value of capitalized costs
and any related property and equipment costs are based upon expected future cash
flows and/or estimated salvage value in accordance with Accounting Standards
Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
Various factors could impact our ability to achieve forecasted production
schedules. Additionally, commodity prices, capital expenditure requirements and
reclamation costs could differ from the assumptions the Company may use in cash
flow models from exploration stage mineral interests involves further risks in
addition to those factors applicable to mineral interests where proven and
proven and probable reserves have been identified, due to the lower level of
confidence that the identified mineralized material can ultimately be mined
economically.
ESTIMATES AND ASSUMPTIONS
Management uses estimates and assumptions in preparing financial statements in
accordance with general accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
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FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments are considered by management to be
their estimated fair values due to their short term maturities.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect that the adoption of any recent accounting
pronouncements will have a material impact on its financial statements.
3. COMMON STOCK
At inception the company issued 10,000 private placement common shares for cash
of $20,000. On May 18, 2010 the company issued an additional 100 shares for
services. The value of these shares was calculated by using 75 hours of
consulting at a charge rate of $100 per hour.
In January 2011, the company executed a forward split of its common stock on the
basis of 35 new common shares for each existing 1 common share. The record date
for the action was January 27, 2011, and the payment date was January 28, 2011.
The forward split was payable as a dividend. All share references in these
financial statements have been retroactively adjusted for this forward split.
On June 23, 2011, the company received notice that 245,500 common outstanding
shares were cancelled. After this event the current total issued and outstanding
number of shares was 108,000 common shares.
On July 5, 2012, the company executed a reverse split decreasing shares by 1 for
1000. After this stock split, the total number of common shares issued and
outstanding was 108,000. All share references in these financial statements have
been retroactively adjusted for this reverse split.
On July 10, 2012, the company completed an agreement with GMM Global
Multi-Mining Diversified Group Limited ("GMM") wherein GMM assigned and
transferred a 60% interest in a joint venture to the company for 131,000,000
shares of the company's common stock (valued at $131,000, per the agreement) and
$500,000 cash. The 131,000,000 shares of common stock were issued on July 10,
2012; however, the Company failed to pay the required $500,000 and forfeited its
right to the 60% interest. The Company recorded a loss on impairment of
$131,000.
On July 12, 2012, the company completed a transaction whereby it issued
19,950,000 shares of its common stock for $19,950 in debt. The debt was
comprised of prior advances from an unrelated third party. This transaction was
accounted for as an extinguishment of debt, in accordance with ASC 470-50. The
shares were valued at $1.50 per share, which was the price of the Company's
common stock on July 12, 2012. The difference between the price and the net
carrying amount of the extinguished debt was recognized as a loss on
extinguishment of debt in the statement of operations, in the amount of
$29,905,050.
On October 31, 2012, the company completed a transaction whereby it issued
15,000,000 shares of its common stock for $15,000 in debt. The debt was
comprised of advances from unrelated third parties. This transaction was
accounted for as an extinguishment of debt, in accordance with ASC 470-50. The
shares were valued at $0.0225 per share, which was the price of the Company's
common stock on October 31, 2012. The difference between the price and the net
carrying amount of the extinguished debt was recognized as a loss on
extinguishment of debt in the statement of operations, in the amount of
$322,500.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officer-directors have acquired less then 1% of the outstanding common capital
stock of the company.
During the nine months ended December 31, 2012, the Director advanced $8,465 to
the Company. These advances are non-interest bearing and payable on demand.
Also, included in accounts payable are amounts payable to the Director of
$17,500 for accrued management fees.
8
5. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The company does not have a sufficient
working capital for its planned activity, and to service its debt, which raises
substantial doubt about its ability to continue as a going concern.
Continuation of the company as a going concern is dependent upon obtaining
additional working capital and the management of the company has developed a
strategy which it believes will accomplish this objective through advances from
an officer-director, and additional equity investments, which will enable the
company to continue operations for the coming year.
6. SUBSEQUENT EVENTS
On January 15, 2013, the Company executed an asset purchase agreement with
Trinity Alps Resources Inc. to acquire five past-producing Gold Mines as
detailed in a 43-101 technical report, located 80 miles southwest of Yreka,
California for an agreed sum of $15,000,000 for a 100% un-divided interest.
Under the terms of the agreement, the Company shall pay $ 6,100,000 on or before
March 31, 2013 and the balance of $8,900,000 is to be paid over 18 months in
equal payments of $494,444 each month, commencing 30 days after all regulatory
approvals. As of the date of these financial statements, this agreement has not
closed.
On January 31, 2013, the company completed a transaction whereby it issued
33,389,000 shares of its common stock for $33,389 in debt. The debt was
comprised of advances from unrelated third parties.
9
ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This section of this report includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this report. These forward looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
OVERVIEW
Viking Minerals Inc. was incorporated in the State of Nevada as a for-profit
company on March 24, 2006. The Company is a development stage company that is
presently seeking mineral claims for development.
RESULTS OF OPERATIONS
The Company has not yet generated any revenue from its operations. The Company
incurred operating expenses of $1,905 compared to $2,029 for the three months
ended December 31, 2012 and 2011, respectively. The Company incurred operating
expenses of $144,123 compared to $27,800 for the nine months ended December 31,
2012 and 2011, respectively. The increase in expenses is mainly related to an
impairment loss on investment in joint venture that the Company recorded in
2012, of $131,000.
The Company reported a net loss of $324,405 and $2,029 for the three months
ended December 31, 2012 and 2011, respectively. The increase in net loss is
attributed to the loss on extinguishment of debt of $322,500, that was recorded
in the current quarter. The Company reported a net loss of $30,371,673 for the
nine months ended December 31, 2012, as compared to a net loss of $27,800 for
the nine months ended December 31, 2011. The increase in net loss is attributed
to an impairment loss on investment in joint venture of $131,000 and the loss on
extinguishment of debt of $30,227,550, that was recorded in 2012.
PLAN OF OPERATION
Our current cash holdings will not satisfy our liquidity requirements and we
will require additional financing to pursue our planned business activities. We
are in the process of seeking equity or debt financing to fund our operations
over the next 12 months. Management cautions that financing may not be available
to us on acceptable terms or at all, and thus we could fail to satisfy our
future cash requirements.
If we are unsuccessful in raising the additional proceeds through equity
financing we will then have to seek additional funds through debt financing,
which would be very difficult for a new development stage company to secure. If
the company cannot raise proceeds via a financing through its common stock or
secure debt financing it would be required to cease business operations. As a
result, investors in the company would lose all of their investment.
Management does not plan to hire additional employees at this time. Our
President will be responsible for current operations. We will use third party
consultants should we require assistance in any activities.
OFF BALANCE SHEET ARRANGMENT
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.
10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
ITEM 4. CONTROLS AND PROCEDURES
The management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting, as required by
Sarbanes-Oxley (SOX) Section 404 A. 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.
As of December 31, 2012 management assessed the effectiveness of the Company's
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in 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 control 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 the Company's
management considered to be material weaknesses under the standards of the
Public Company Accounting Oversight Board were: (1) lack of a functioning audit
committee and lack of a majority of outside directors on the Company's 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; (3) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (4) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by the Company's Chief Financial Officer in connection with the review of our
financial statements as December 31, 2012 and communicated the matters to our
management.
Management believes that the material weaknesses set forth in items (2), (3) and
(4) above did not affect the Company's financial results. However, management
believes that the lack of a functioning audit committee and lack of a majority
of outside directors on the Company's board of directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures can affect the Company's results and its financial
statements for the future years.
We are committed to improving our financial organization. As part of this
commitment, 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
the Company: i) Appointing one or more outside directors to our board of
directors who shall be appointed to the audit committee of the Company resulting
in a fully functioning audit committee who will undertake the oversight in the
establishment and monitoring of required internal controls and procedures; and
ii) Preparing and implementing sufficient written policies and checklists which
will set forth procedures for accounting and financial reporting with respect to
the requirements and application of US GAAP and SEC disclosure requirements.
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 the Company's Board. In addition, management believes that preparing and
implementing sufficient written policies and checklists will remedy the
following material weaknesses (i) insufficient written policies and procedures
for accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements; and (ii) ineffective
controls over period end financial close and reporting processes. Further,
11
management believes that the hiring of additional personnel who have the
technical expertise and knowledge will result proper segregation of duties and
provide more checks and balances within the department. Additional personnel
will also provide the cross training needed to support the Company if personnel
turn over issues within the department occur. This coupled with the appointment
of additional outside directors will greatly decrease any control and procedure
issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal
controls and procedures and our internal controls over financial reporting on an
ongoing basis and are committed to taking further action and implementing
additional enhancements or improvements, as necessary and as funds allow.
There have been no changes in our internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of Rules
13a-15 or 15d-15 under the Exchange Act that occurred during the small business
issuer's last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
31.1 Certification by Chief Executive Officer and Chief Financial Officer
required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act,
promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith
32.1 Certification by Chief Executive Officer and Chief Financial Officer,
required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and
Section 1350 of Chapter 63 of Title 18 of the United States Code,
promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
filed herewith
----------
(1) Filed with the SEC as an exhibit to our Form SB-1 Registration Statement
originally filed on December 19, 2006.
12
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: March 13, 2013
Signature Title
--------- -----
By: /s/ Charles Irizarry Chief Executive Officer, Chief Financial
--------------------------- Officer, President, Secretary, Treasurer,
Charles Irizarry and Director (Principal Executive Officer
and Principal Accounting Officer)
13