UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2008
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ To ____________________
Commission file number 000-49768
DANA RESOURCES
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(Exact name of registrant as specified in its charter)
WYOMING N/A
------- ---
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
PUSHKINSKA 20-3
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KIEV, UKRAINE
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(Address of principal executive offices) (Zip Code)
380 44 331 6201
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former 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 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, a non-accelerated filer, or a smaller reporting company.
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 { }
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes { } No { }
As of May 15, 2008, the registrant's outstanding common stock consisted of
50,200,710 shares.
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION...............................................3
Item 1. Financial Statements................................................3
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations...............................................................8
Item 4. Controls and Procedures.............................................9
Item 4T. Controls and Procedures............................................9
PART II - OTHER INFORMATION...................................................9
Item 1. Legal Proceedings...................................................9
Item 1A. Risk Factors.......................................................9
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.........9
Item 3. Defaults Upon Senior Securities....................................10
Item 4. Submission of Matters to a Vote of Security Holders................10
Item 5. Other Information..................................................10
Item 6. Exhibits...........................................................10
2
PART I - FINANCIAL INFORMATION
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.
All currency references in this report are in US dollars unless otherwise
noted.
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements of Dana Resources ("Dana", "we", "our",
"us") follow.
Dana Resources
(A Development Stage Company)
March 31, 2008
Index
Balance Sheets.....................................................................F-1
Statements of Operations...........................................................F-2
Statements of Cash Flows...........................................................F-3
Notes to the Financial Statements..................................................F-4
3
Dana Resources
(A Development Stage Company)
Balance Sheets
(Expressed in US dollars)
March 31, June 30,
2008 2007
(unaudited) (audited)
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 23 $ 484
------------ -------------
Total assets $ 23 $ 484
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable $ - $ 13,160
Accounts payable - related party - 23,800
------------ -------------
Total liabilities - 36,960
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Contingencies and Commitments (Note 1 and 8)
Stockholders' equity (deficit)
Preferred stock, unlimited shares authorized, no par value; - -
No shares issued and outstanding
Common stock, unlimited shares authorized, no par value; 717 16,000
50,200,710 and 1,120,000,000 shares issued and outstanding,
respectively
Additional paid-in capital 82,374 500
Subscription receivable - (11,000)
Accumulated deficit during the development stage (83,068) (41,976)
------------ -------------
Total Stockholders' Equity (Deficit) 23 (36,476)
------------ -------------
Total Liabilities and Stockholders' Equity (Deficit) $ 23 $ 484
============ =============
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-1
Dana Resources
(A Development Stage Company)
Statements of Operations
(Expressed in US dollars)
(unaudited)
For the For the For the From From
Three Months Three Months Nine Months Inception Inception
Ended Ended Ended (July 21, 2006) July 21, 2006
March 31, March 31, March 31, to March 31, to March 31,
2008 2007 2008 2007 2008
------------ ------------ ------------ ------------ ------------
Revenue $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
Expenses
General and administrative 14,013 19,019 46,751 27,909 88,728
------------ ------------ ------------ ------------ ------------
Loss from operations (14,013) (19,019) (46,751) (27,909) (88,728)
------------ ------------ ------------ ------------ ------------
Other Income (expenses)
Gain on settlement of debt 5,660 - 5,660 - 5,660
------------ ------------ ------------ ------------ ------------
Net (loss) for the period $ (8,353) $ (19,019) $ (41,091) $ (27,909) $ (83,068)
============ ============ ============ ============ ============
Net loss per share - basic - - - -
============ ============ ============ ============ ============
Weighted average common shares 661,515,000 1,120,000,000 892,010,000 1,120,000,000
outstanding ============ ============= ============ ============= ============
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-2
Dana Resources
(A Development Stage Company)
Statements of Cash Flows
(Expressed in US dollars)
(unaudited)
For the From From
Nine Months Inception Inception
Ended (July 21, 2006) (July 21, 2006)
March 31, to March 31, to March 31,
2008 2007 2008
----------- ----------- -----------
Operating activities
Net loss for the period $ (41,091) $ (27,909) $ (83,068)
Adjustment to reconcile net loss to net cash used in operating
activities:
Gain on forgiveness of debt (5,660) - (5,660)
Changes in operating assets and liabilities:
Accounts payable (7,501) 8,160 5,659
Due to related party 27,519 14,800 51,820
----------- ----------- -----------
Net cash used in operating activities (26,733) (4,949) (31,249)
----------- ----------- -----------
Financing activities
Contribution to capital 15,272 - 15,272
Proceeds from common stock subscribed 11,000 5,500 16,000
----------- ----------- -----------
Net cash provided by financing activities 26,272 5,500 31,272
----------- ----------- -----------
Increase (decrease) in cash (461) 551 23
Cash - beginning of period 484 - -
----------- ----------- -----------
Cash - end of period $ $ $
23 551 23
=========== =========== ===========
Non cash disclosures
Forgiveness of debt 51,319 500 51,819
Income taxes paid - - -
=========== =========== ===========
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-3
1. Nature of Operations and Continuance of Business
Dana Resources (the "Company") was organized under the laws of the State of
Wyoming on July 21, 2006 under its former name DanaPC.com. The Company
business was developing a web site to give consumers information on commonly
encountered problems with personal computers. The Company intends to
acquire natural resource properties in the future. The Company has not yet
generated any revenues from planned principal operations and is considered a
development stage company as defined in Statement of Financial Accounting
Standards No. 7. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future will depend upon
the financial requirements of the Company and other relevant factors.
The Company has amended its articles of incorporation to change its name to
"Dana Resources" and effected a 70-for-1 forward stock split as of February
20, 2008. The purpose of the name change was to reflect the Company's
intention to acquire natural resource properties. No property has been
acquired yet. Refer to Note 8.
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 June 30.
b) Interim Financial Statements
The 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 June 30, 2007.
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 March 31, 2008 and June 30, 2007, and the results
of its operations and cash flows for the nine months ended March 31,
2008 and 2007. The results of operations for the nine months ended March
31, 2008 are not necessarily indicative of the results to be expected
for future quarters or the full year.
c) 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.
d) Advertising Costs
Advertising costs are charged to operations when incurred. The Company
has not yet incurred any advertising costs.
F-4
2. Summary of Significant Accounting Policies (continued)
e) Stock-Based Compensation
The Company has one stock-based employee compensation plan (See Note 3).
The Company accounts for its plan under the recognition and measurement
principles of SFAS 123R, "Share Based Payment" and related
Interpretations. The Company has not issued any stock options or
warrants.
f) Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes"
(See note 4).
g) Loss Per Share
The computation of loss per share is based on the weighted average
number of shares outstanding during the period presented in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" (See note 7).
h) Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of contingent assets
and liabilities at the date of the financial statements, and the
reported amount of revenues and expenses during the reported period.
Actual results could differ from those estimated.
i) Recently Enacted Accounting Standards
In March 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 161, "Disclosures about Derivative Instruments and Hedging
Activities - an amendment to FASB Statement No. 133". SFAS No. 161 is
intended to improve financial standards for derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors
to better understand their effects on an entity's financial position,
financial performance, and cash flows. Entities are required to provide
enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations; and
(c) how derivative instruments and related hedged items affect an
entity's financial position, financial performance, and cash flows. It
is effective for financial statements issued for fiscal years beginning
after November 15, 2008, with early adoption encouraged. The Company is
currently evaluating the impact of SFAS No. 161 on its financial
statements, and the adoption of this statement is not expected to have a
material effect on the Company's financial statements.
In December 2007, the FASB issued SFAS 160, "Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51" which
applies to all entities that prepare consolidated financial statements,
except not-for-profit organizations, but will affect only those entities
that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary. The statement is
effective for annual periods beginning after December 15, 2008.
In July 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"),
"Accounting for Uncertainty in Income Taxes," which clarifies the
accounting for uncertainty in income taxes recognized in the financial
statements in accordance with SFAS No. 109, "Accounting for Income
Taxes." FIN 48 is effective for fiscal years beginning after December
15, 2006. The adoption of this statement did not have an effect on the
Company's financial statements.
F-5
3. Capital Stock
a) Common Stock
The Company has authorized an unlimited number of shares of no par value
common stock and preferred stock. In July 2006, in connection with its
organization, the Company issued 16,000,000 (pre-split) shares of common
stock to various individuals including 9,642,847 (pre-split) shares
which were issued to an officer/shareholder of the Company. The shares
were issued for a subscription receivable of $11,000 and for cash of
$5,000 (or $.001 per (pre-split) share). The subscription receivable
was paid in part during August 2007 and again in October 2007.
In November 2006, an entity related to a stockholder performed legal
services valued at $500 in connection with the Company's registration
statement on Form SB-2. The related payable was forgiven by the law
firm and was accounted for as a contribution to capital.
The Company effected a 70-for-1 forward stock split as of February 20,
2008. Certain shareholders have cancelled shares held by them in
connection with the forward stock split. These shares represent all of
the 5,640,000 (pre-split) shares subject to a Lockup Agreement dated
July 31, 2007 as well as 9,642,847 (pre-split) shares owned by the
officer and director. The total number of cancelled shares is 15,282,847
shares, resulting in 717,153 shares outstanding before the forward stock
split and 50,200,710 shares after giving effect to the stock split. All
share amounts have been retroactively restated for all periods
presented.
For the period ended March 31, 2008, a director of the Company has
contributed $15,272 for working capital purposes and has waived any
rights of repayment.
b) Stock Option Plan
In July 2006, the Board of Directors adopted and the stockholders at
that time approved the 2006 Stock Option Plan ("the Plan"). The Plan
provides for the granting of qualified and non-qualified stock options
to purchase up to 2,000,000 shares of common stock to directors,
officers, advisors and employees of the Company as well as to employees
of companies that do business with the Company. Awards under the plan
will be granted as determined by the Stock Option Committee of the Board
of Directors. The Plan limits awards to directors, officers and
employees to $100,000 of compensation per year. The options will expire
after 10 years or 5 years if the option holder owns at least 10% of the
common stock of the Company. The exercise price of a non-qualified
option must be at least 85% of the market price. The exercise price of
a qualified option must be at least equal to the market price or 110% of
the market price if the option holder owns at least 10% of the common
stock of the Company. At March 31, 2008, no awards had been made and
total awards available to be granted from the Plan amounted to 2,000,000
shares.
4. Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". SFAS
No. 109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.
The Company has available at March 31, 2008 an unused operating loss
carryforward of approximately $83,000 which may be applied against future
taxable income and which expires in 2026. The amount of and ultimate
realization of the benefits from the operating loss carryforwards for income
tax purposes is dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of which
cannot be determined. Because of the uncertainty surrounding the
realization of the net deferred tax assets, the Company has established a
valuation allowance equal to their tax effect and, therefore, no deferred
tax asset has been recognized.
F-6
5. Related Party Transactions
a) The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his
offices, as needed, at no expense to the Company.
b) An officer and shareholder advanced $1,800 to pay web development costs
in the quarter ended March 31, 2007. The same officer and shareholder
has accrued salary of $45,000 for the fifteen months ended March 31,
2008 at the rate of $3,000 per month.
c) During the quarter ended March 31, 2008, the outstanding accounts
payable and amounts due to related parties were forgiven by the
shareholders, treated as contributed capital, totaling $51,319.
6. Going concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America,
which contemplate continuation of the Company as a going concern. However,
the Company was only recently formed and has not yet been successful in
establishing profitable operations. As of March 31, 2008, the Company had no
revenues and an accumulated deficit of $83,068. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any necessary
additional funds not provided by operations through loans or through
additional sales of their common stock. There is no assurance that the
Company will be successful in raising this additional capital or in
achieving profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these uncertainties.
7. Loss Per Share
The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Shares (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB
98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share
is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of shares of common stock
outstanding during the period. The calculation of diluted net loss per share
gives effect to common stock equivalents; however, potential common shares
are excluded if their effect is anti-dilutive. For the period from October
18, 2006 (Date of inception) through March 31, 2008, the Company had no
potentially dilutive securities.
8. Commitment
The Company entered into a letter of intent dated March 8, 2008 to acquire
19 precious and base metal mining claims in Peru for 25,000,000 shares of
common stock and the payment of a 1.5% net smelter royalty. The closing is
to take place within two months, subject to due diligence by both parties.
9. Subsequent Events
On April 17, 2008, the Company received a loan of $2,929 bearing interest at
5% per annum and due on April 17, 2009, or after the Company's next private
placement, whichever is earlier.
On April 22, 2008, the Company received a loan of $1,800 bearing interest at
5% per annum and due on April 22, 2009, or after the Company's next private
placement, whichever is earlier.
On April 28, 2008, Yuriy Semenov resigned as President and Chief Financial
Operator and resigned as Director on April 29, 2008.
On April 29, 2008, the Company appointed Len De Melt as the new President
and Chief Financial Operator and entered into a management agreement dated
April 29, 2008 with the President of the Company for the provision of
management services at $5,000 per month for an indefinite term.
On May 1, 2008, the Company issued 25,000,000 common shares to two non-U.S.
persons in relation to a letter of intent to purchase certain mineral
claims. The shares are being held in escrow pending closing of the purchase
and will be cancelled if closing does not occur.
F-7
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
We were incorporated in Wyoming on July 21, 2006 as Danapc.com. Formerly our
business was to build and market an educational website on the subject of
personal computing. Until recently our activities have been limited to
organizational matters and developing our former website, www.danapc.com.
Though that website may still be accessible at the time this report is filed,
we are in the process of de-activating it. On February 20, 2008 we amended our
articles of incorporation to change our name to Dana Resources. The change of
our name coincided with our decision to abandon our former business activities
and to engage in the acquisition, exploration and development of mineral
properties.
We are a "shell company" as defined in Rule 405 under the Securities Act of
1933 and Rule 12b-2 under the Securities Exchange Act of 1934 since we have
only conducted nominal operations and have only nominal assets.
Also on February 20, 2008, we amended our articles of incorporation to effect a
70-for-1 forward stock split which was paid on February 21, 2008. Our share
price changed to reflect the forward split on February 21, 2008. The rights of
our shareholders were not changed as a result of the forward split. The new
CUSIP number for our common stock is 235845-10-4. Additionally, certain of
our shareholders cancelled shares held by them in connection with the forward
stock split. The cancelled shares represent all of the 5,640,000 (pre-split)
shares that were subject to a Lockup Agreement dated July 31, 2007, as well as
9,642, 847 (pre-split) shares owned by our former officer and director. The
total number of cancelled shares is 15,282,847 shares, resulting in 717,153
shares outstanding before the forward stock split and 50,200,710 shares after
the forward stock split became effective.
On March 8, 2008, we entered into a letter of intent to acquire 19 precious and
base metal Peruvian mining claims from SMRL Angelo XXI. Subject to
satisfactory completion of due diligence by the parties, we have agreed to pay
25 million restricted shares of our common stock and grant a 1.5% net smelter
royalty to SMRL Angelo XXI as consideration for acquiring the properties. The
closing was to take place within two months of the date of the agreement but
has been delayed by the parties until due diligence is completed. The
properties include patented and unpatented claims in the provinces of
Chumbivilcas, Recuay, Huancabamba, and Huando, Peru. We are currently carrying
out due diligence of the properties and, as at March 15, 2008, we have not
acquired.
On April 28, 2008, Mr. Len De Melt was appointed as a Director of Dana
Resources for an indefinite term. On April 29, 2008, Mr. De Melt was appointed
as our President, Secretary, Treasurer, Chief Executive Officer, and Principal
Accounting Officer.
Mr. De Melt's appointments were concurrent with the resignation of Mr. Yuri
Semenov as a Director and as President, Treasurer, Chief Executive Officer and
Principal Acocunting Officer. Mr. Semenov's resignation as a Director reduced
the number of members of the company's Board of Directors to one. Mr. Semenov's
resignations were not prompted by any dispute with us.
On April 29, 2008, we entered into a Management Agreement with Mr. De Melt
dated April 29, 2008 regarding his services as President, Secretary, Treasurer,
Chief Executive Officer and Principal Accounting Officer. Pursuant to that
agreement, Mr. De Melt will provide management services for an indefinite term,
which may be terminated upon thirty (30) days written notice by either party.
We are obligated to pay to Mr. De Melt $5,000 per month as compensation for
each month during which he provides his services pursuant to the agreement.
Mr. De Melt is 62 years old, and has been self-employed as an engineering
consultant for the past five years. Mr. De Melt is an engineering technologist
with nearly 30 years of experience in the mining industry. Mr. De Melt is
currently the Chairman and a Director of Nilam Resources Inc (OTCBB: NILR.OB).
He does not hold any other directorships in any other companies subject to U.S.
reporting requirements.
Mr. Jehu Hand resigned as our corporate Secretary on February 22, 2008.
RESULTS OF OPERATIONS
Revenue
Since Inception (July 21, 2006) to March 31, 2008, we have not generated any
revenues. We had total assets of $23, no liabilities, and an accumulated
deficit of $83,068 as of March 31, 2008.
We anticipate that we will not earn any revenues during the current fiscal year
or in the foreseeable future, as we do not have any operations and are
presently engaged in seeking acquisitions of natural resource properties or
other strategic transactions. We anticipate that our business will incur
significant losses in the next two years. We believe that our success depends
on the completion of our proposed acquisitions or other strategic transactions,
and our ability to develop any properties that we acquire.
Net Loss
Since Inception (July 21, 2006) to March 31, 2008, we incurred net loss of
$83,068. For the three months ended March 31, 2008, we had net loss of $8,353
compared to a net loss of $19,019 for the same period in 2007. For the nine
months ended March 31, 2008 we had net losses of $41,091 compared to $27,909
for the same period in 2007. The increase in net loss and corresponding
decrease in net loss in fiscal 2008 resulted from increase in general and
administrative expenses.
Expenses
From Inception (July 21, 2006) to March 31, 2008, we accumulated total expenses
of $88,728. Our expenses are general and administrative expenses, which
include professional fees, management fees and other administrative fees. Our
general and administrative expenses decreased by $5,006 from $19,019 for the
three months ended March 31, 2007 to $14,013 for the same period in 2008. The
decrease in expenses was a result of decreased day to day operating activities
due to the transition of our business activities. Our general and
administrative expenses increased, however,by $18,842 to $46,751 for the nine
months ended March 31, 2008 compared to $27,909 for the same period in 2007.
The increase in expenses was due to an overall increase in our administrative
activities during the current fiscal year.
Our professional fees are $3,220 and $7,500 for the three months ended March
31, 2008 and 2007, respectively. The decrease in professional fees was due to
less legal and auditing services provided.
Our management fees are $9,000 and $9,000 for the three months ended March 31,
2008 and 2007, respectively. There was no change.
Our other general and administrative expenses are $1,793 and $2,519
respectively for the three months ended March 31, 2008 and 2007. Our other
general and administrative expenses include cost of travel, meals and
entertainment, office maintenance, communication expenses (cellular, internet,
fax, and telephone), office supplies, courier and postage costs.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2008, we had a working capital of $23 and cash of $23 in our
bank accounts. We had book tangible assets of $23 or $0 per share as of March
31, 2008. Our net loss of $88,728 from July 21 2006 (date of inception) to
March 31, 2008 was mostly funded by our equity financing.
Since Inception (July 21, 2006) to March 31, 2008, we raised gross proceeds of
$16,000 in cash from the sale of our securities.
During the nine months ended March 31, 2008, we received net cash of $26,272
from our financing activities, compared to net cash of $5,500 for the same
period in 2007. During the nine months ended March 31, 2008, we used net cash
of $26,733 in our operating activities, compared to net cash of $4,949 for the
same period in 2007. We currently do not have any investing activities. The
decrease in cash during the nine months ended March 31, 2008 was $461 compared
to an increase of $551 for the same period in 2007.
We are reviewing potential acquisitions or strategic alliances. If we are
successful in acquiring a natural resources property or entering into a
strategic partnership, we will incur additional costs for personnel and
business expansion. In order for us to attract and retain quality personnel,
our management anticipates it will need to offer competitive salaries, issue
common stock to consultants and employees, and grant stock options to future
employees. We estimate that our expenses over the next 12 months (beginning May
2008) will be approximately $500,000 as listed in the table that follows. These
estimates may change significantly depending on the nature of our future
business activities.
8
DESCRIPTION ESTIMATED AMOUNT
Expenses for completion of natural resources property acquisition $60,000
Natural Resource Property Exploration Expenses $200,000
General and administration expenses (including management fees and consultant fees) $100,000
Investor relations costs $50,000
Travel expenses $40,000
Professional fees $50,000
Total $500,000
We have not generated any revenues to date. We anticipate that we will not
generate any revenues in the near future and we do not anticipate 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.
As of March 31, 2008, we had cash of $23 on hand. The balance of our cash
requirements for the next 12 months (beginning May 2008) is approximately
$500,000. We intend to meet the balance of our cash requirements for the next
12 months through external sources: a combination of debt financing and equity
financing through private placements. We currently do not have any arrangements
in place for the completion of any further private placement financings and
there is no assurance that we will be successful in completing any further
private placement financings. There is no assurance that any financing will be
available or if available, on terms that will be acceptable to us. We may not
raise sufficient funds to fully carry out any business plan or maintain our
operations.
Obtaining additional financing will be subject to a number of factors including
market conditions, investor acceptance of our business plan and investor
sentiment. These factors may make the timing, amount, terms and conditions of
additional financing unattractive or unavailable to us. If financing is not
available on satisfactory terms, we may be unable to continue, develop or
expand our operations. If we are unable to raise additional financing, we will
have to significantly reduce our spending, delay or cancel planned activities
or substantially change our current corporate structure. In such an event, we
intend to implement expense reduction plans in a timely manner. However, these
actions would have material adverse effects on our business, revenues,
operating results, and prospects, resulting in a possible failure of our
business. If we raise funds through equity or convertible securities, our
existing stockholders may experience dilution and our stock price may decline.
We have never generated any revenues and incurred significant operating losses
from operations. We anticipate we will continue to experience net negative cash
flows from operations and will be required to obtain additional financing to
fund operations through equity securities' offerings and debt financing to the
extent necessary to provide working capital. Our continuation as a going
concern is dependent upon our ability to generate sufficient cash flow from
stockholders or other outside sources to sustain operations and meet our
obligations on a timely basis and ultimately to attain profitability. We have
limited capital with which to pursue our business plan. There can be no
assurance that our future operations will be significant and profitable, or
that we will have sufficient resources to meet our objectives.
These factors raise substantial doubt about our ability to continue as a going
concern. Our auditors have issued a going concern opinion. This means that our
auditors believe there is substantial doubt that we can continue as an on-going
business for the next twelve months. The financial statements do not include
any adjustments that might result from the uncertainty about our ability to
continue our business. If we are unable to obtain additional financing from
outside sources and eventually produce enough revenues, we may be forced to
sell our assets, curtail or cease our operations.
KNOWN MATERIAL TRENDS AND UNCERTAINTIES
On March 8, 2008, we entered into a letter of intent to acquire 19 precious and
base metal mining claims in Peru from SMRL Angelo XXI. Subject to satisfactory
completion of due diligence by the parties, we have agreed to pay 25 million
restricted shares of our common stock and grant a 1.5% net smelter royalty to
SMRL Angelo XXI in consideration of the properties. The closing is to take
place within two months of the date of the agreement but has been delayed by
the parties in order to carry out additional due diligence. The properties
include patented and unpatented claims in the provinces of Chumbivilcas,
Recuay, Huancabamba, and Huando, Peru. We are currently carrying out due
diligence of the properties.
Our management is unable to predict whether or when any acquisition or
strategic alliances transactions will occur or the likelihood of any particular
transaction being completed on favorable terms and conditions. We may be unable
to obtain the necessary financing to complete any future transactions and could
financially overextend ourselves. Joint ventures or acquisitions may present
financial, managerial and operational challenges, including the expansion and
integration of operations and personnel. Any failure to integrate new
businesses or manage any new obligations or assets successfully could adversely
affect our business and financial performance.
OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2008, 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 DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of disclosure controls and procedures
Our Chief Executive Officer and Chief Financial Officer evaluated our
"disclosure controls and procedures" (as defined in Rule 13a-14 (c) of the
Securities Exchange Act of 1934 (the "Exchange Act") as of a date within 90
days before the filing date of this report and has concluded that as of the
evaluation date, our disclosure controls and procedures are effective to ensure
that information we are required to disclose in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules
and forms.
(b) Changes in internal controls
Subsequent to the date of their evaluation, there were no significant changes
in our internal controls over financial reporting or in other factors that
could significantly affect these controls. There were no significant
deficiencies or material weaknesses in our internal controls so no corrective
actions were taken.
ITEM 4T. CONTROLS AND PROCEDURES.
This quarterly report does not include a report of management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party against us. None of our directors,
officers or affiliates are (i) a party adverse to us in any legal proceedings,
or (ii) have an adverse interest to us in any legal proceedings. Management is
not aware of any other legal proceedings that have been threatened against us.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
There were no unregistered sales of our equity securities during the three
months ended March 31, 2008.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
On May 1, 2008, we issued 25,000,000 restricted common shares to two non-U.S.
persons in relation to the letter of intent between us and SMRL Angelo XXI to
acquire 19 precious and base metal mining claims in Peru. The shares were
issued in anticipation of closing the purchase and are being held in escrow
until such time. The shares will be cancelled in the event closing does not
occur. The 25,000,000 shares are not included in the total number of issued
and outstanding shares disclosed in this report.
ITEM 6. EXHIBITS.
Exhibit Exhibit
Number Description
3.3 Articles of Amendment (1)
10.2 Letter of Intent between Dana Resources and SMRL Angelo XXI dated March
8, 2008 (2)
31.1 Certification of the Chief Executive Officer and Chief Financial Officer
Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes- Oxley Act of 2002
(1) Incorporated by reference as Exhibit 3.3 of our Report on Form 8-K/A filed
on May 15, 2008.
(2) Incorporated by reference as exhibit 10.2 of our Report on Form 8-K filed
on March 13, 2008.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DANA RESOURCES
(Registrant)
/s/ Len De Melt
---------------
Date: May 20, 2008 Len De Melt
President, Chief Executive Officer, Chief
Financial Officer, Principal Accounting Officer
(Authorized Officer and Principal Financial Officer)