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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 31, 2004
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[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
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Commission File Number 0-26709
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BROOKMOUNT EXPLORATIONS INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0201259
--------------------------------- -----------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
400 Burrard Street, Suite 1400
Vancouver, British Columbia V6C 3G2
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 604-643-1745
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None
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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 Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 10,130,048 shares of $0.001 par
value common stock outstanding as of August 31, 2004.
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
August 31, 2004
(Stated in US Dollars)
(Unaudited)
-----------
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
August 31, 2004 and November 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
August 31, November 30,
ASSETS 2004 2003
------ ---- ----
Current
Cash $ 30,286 $ 37,429
Prepaid expenses 953 689
Resource property cost advances - 15,130
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31,239 53,248
Capital assets 262 -
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$ 31,501 $ 53,248
=============== ==============
LIABILITIES
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Current
Accounts payable $ 9,145 $ 12,575
Due to related parties 50,538 51,066
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59,683 63,641
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STOCKHOLDERS' DEFICIENCY
------------------------
Common stock, $0.001 par value
200,000,000 shares authorized
10,130,048 (November 30, 2003: 9,708,900) shares outstanding 10,130 9,709
Additional paid in capital 423,131 210,658
Deficit accumulated during the pre-exploration stage ( 461,443) ( 230,760)
---------------- ---------------
( 28,182) ( 10,393)
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$ 31,501 $ 53,248
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SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and nine months ended August 31, 2004 and 2003
and for the period December 9, 1999 (Date of Incorporation) to August 31, 2004
(Stated in US Dollars)
(Unaudited)
-----------
December 9,
1999 (Date of
Three months ended Nine months ended Incorporation)
August 31, August 31, to August 31,
2004 2003 2004 2003 2004
---- ---- ---- ---- ----
Expenses
General and administrative
$ 67,451 $ 30,648 $ 230,683 $ 43,940 $ 461,443
------------ ------------- ------------ ---------- -----------
Net loss for the period $ ( 67,451) $ ( 30,648) $ ( 230,683) $ (43,940) $ ( 461,443)
============ ============= ============ ========== ===========
Basic and diluted loss per share
$ ( 0.01) $ ( 0.00) $ ( 0.01) $ ( 0.00)
============ ============= ============ ===========
Weighted average number of shares
outstanding 10,130,048 9,282,400 10,130,048 9,282,400
============ ============= ============ ==========
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the nine months ended August 31, 2004 and 2003
and for the period December 9, 1999 (Date of Incorporation) to August 31, 2004
(Stated in US Dollars)
(Unaudited)
-----------
December 9,
1999 (Date of
Nine months ended Incorporation)
August 31, to August 31,
2004 2003 2004
---- ---- ----
Cash Flows from Operating Activities
Net loss for the period $ ( 230,683) $ ( 43,490) $ ( 461,443)
Add items not affecting cash:
Amortization - 52 -
Capital contributions - expenses - 2,250 29,250
Changes in non-cash working capital balances related to
operations
Prepaid expenses ( 264) - ( 953)
Accounts payable ( 3,430) ( 3,731) 9,145
Due to related parties ( 528) ( 1,029) 50,538
Resource property cost advances 15,130 - -
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( 219,775) ( 46,398) ( 373,463)
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Cash Flows used in Investing Activity
Acquisition of capital assets ( 262) ( 698) ( 262)
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Cash Flows from Financing Activity
Capital stock issued 212,894 47,625 404,011
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Increase (decrease) in cash during the period ( 7,143) 529 30,286
Cash, beginning of the period 37,429 3 -
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Cash, end of the period $ 30,286 $ 532 $ 30,286
============ ============ =============
Supplemental disclosure of cash flow
information
Cash paid for:
Interest $ - $ - $ -
============ ============ =============
Income taxes $ - $ - $ -
============ ============ =============
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the period December 9, 1999 (Date of Incorporation) to August 31, 2004
(Stated in US Dollars)
(Unaudited)
-----------
Deficit
Accumulated
During the
Common Shares Additional Pre-
----------------------------- Paid-in exploration
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
Capital stock issued for cash
- at $0.001 3,500,000 $ 3,500 $ - $ - $ 3,500
------------- ---------- --------- ---------- ----------
Balance, as at November 30, 1999 3,500,000 3,500 - - 3,500
Capital stock issued for cash
- at $0.002 5,750,000 5,750 5,750 - 11,500
- at $0.20 32,400 32 6,448 - 6,480
Contributions to capital by - - 9,000 - 9,000
officers
Net loss for the period - - - ( 31,327) 31,327
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Balance, as at November 30, 2000 9,282,400 9,282 21,198 ( 31,327) ( 847)
Contributions to capital by - - 9,000 - 9,000
officers
Net loss for the period - - - ( 17,215) ( 17,215)
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Balance, as at November 30, 2001 9,282,400 9,282 30,198 ( 48,542) ( 9,062)
Contributions to capital by - - 9,000 - 9,000
officers
Net loss for the period - - - ( 17,811) ( 17,811)
------------- ---------- --------- ---------- -----------
Balance, as at November 30, 2002 9,282,400 9,282 39,198 ( 66,353) ( 17,873)
Capital stock issued for cash
- at $0.25 176,500 177 43,948 - 44,125
- at $0.50 250,000 250 125,262 - 125,512
Contributions to capital by - - 2,250 - 2,250
officers
Net loss for the period - - - (164,407) (164,407)
------------- ---------- --------- --------- -----------
Balance, as at November 30, 2003 9,708,900 9,709 210,658 (230,760) ( 10,393)
Capital stock issued for cash
- at $0.50 421,148 421 212,473 - 212,894
Net loss for the period - - - (230,683) (230,683)
------------- ---------- --------- --------- ------------
Balance, as at August 31, 2004 10,130,048 $ 10,130 $ 423,131 $ (461,443) $ (28,182)
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SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
August 31, 2004
(Stated in US Dollars)
(Unaudited)
Note 1 Interim Reporting
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The accompanying unaudited interim financial statements have been
prepared by Brookmount Explorations Inc. (the "Company") pursuant
to the rules and regulations of the United States Securities and
Exchange Commission. Certain information and disclosures normally
included in annual financial statements prepared in accordance
with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management, all adjustments and
disclosures necessary for a fair presentation of these financial
statements have been included. Such adjustments consist of normal
recurring adjustments. These interim financial statements should
be read in conjunction with the audited financial statements of
the Company for the fiscal period ended November 30, 2003, as
filed with the United States Securities and Exchange Commission.
The results of operations for the nine months ended August 31,
2004 are not indicative of the results that may be expected for
the full year.
Note 2 Continuance of Operations
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The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. At August 31, 2004, the Company had a working
capital deficiency of $28,444, which is not sufficient to meet its
planned business objectives or to fund mineral property
expenditures and ongoing operations for the next twelve months.
The Company has accumulated losses of $461,443 since its
commencement. Its ability to continue as a going concern is
dependent upon the ability of the Company to obtain the necessary
financing to meet its obligations and pay its liabilities arising
from normal business operations when they come due.
Note 3 Commitments
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Abitibi West County, Quebec, Canada
The Company acquired five mineral claims located in the Chazel
Township, in the Province of Quebec. The Company must file
assessment work with a minimum value of CDN$6,000 not later than
November 14, 2004.
BROOKMOUNT EXPLORATIONS INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
August 31, 2004
(Stated in US Dollars)
(Unaudited)
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Note 3 Commitments - (cont'd)
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Mercedes Property, Junin, Peru
Pursuant to a property acquisition agreement dated for reference
July 3, 2003, the Company may acquire a 100% interest in 2,611
hectares located in Central Peru for consideration of $20,000 cash
and 5,000,000 common shares. As at August 31, 2004, the Company
has not paid the cash or issued the shares and the agreement has
not closed.
Note 4 Common Stock
------------
Pursuant to an offering memorandum dated July 23, 2003, the
Company undertook to sell a minimum of 1,000,000 common shares at
$0.50 per share. At August 31, 2004, the Company had sold 671,148
common shares for proceeds of $338,406. This amount has been
included in share capital at August 31, 2004.
Note 5 Subsequent Event
----------------
Subsequent to August 31, 2004, the Company received proceeds of
$28,900 for share subscriptions pursuant to the offering
memorandum (Note 4).
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this Risk Factors section and elsewhere in this annual report.
Item 3. Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was conducted by the sole director of the
Company, who also acts as the Company's President, the Chief Executive Officer,
and the Chief Financial Officer.
Based upon that evaluation, the Company concluded that the disclosure controls
and procedures are effective. There have been no significant changes in the
Company's internal controls or in other factors, which could significantly
affect internal controls subsequent to the date the Company carried out its
evaluation.
Plan of Operation
Our plan of operations for the twelve months following the date of this annual
report is to complete initial exploration programs on the Brookmount and
Mercedes properties. We anticipate that these programs will cost $10,000 and
$220,000 respectively.
In addition, we anticipate spending $18,000 on professional fees, $144,000 on
salaries and wages, $20,000 on travel costs, $20,000 on promotional expenses and
$60,000 on other administrative expenses.
Total expenditures over the next 12 months are therefore expected to be
$472,000. We will not be able to proceed with either exploration program, or
meet our administrative expense requirements, without additional financing.
We will not be able to complete the initial exploration programs on our mineral
properties without additional financing. We currently do not have a specific
plan of how we will obtain such funding; however, we anticipate that additional
funding will be in the form of equity financing from the sale of our common
stock. We may also seek to obtain short-term loans from our directors, although
no such arrangement has been made. At this time, we cannot provide investors
with any assurance that we will be able to raise sufficient funding from the
sale of our common stock or through a loan from our directors to meet our
obligations over the next twelve months. We do not have any arrangements in
place for any future equity financing.
Results Of Operations for Nine-Month Period Ended August 31, 2004
We incurred operating expenses in the amount of $230,683 for the nine-month
period ended August 31, 2004, as compared to $43,490 for the comparative period
in 2003. At quarter end, we had cash on hand of $30,286. Our liabilities at the
same date totalled $59,683 and consisted of accounts payable of $9,145 and
$50,538 due to related parties.
PART II- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
During the nine-month period ended August 31, 2004, the Company accepted
subscriptions for a total of 427,148 shares of common stock for $0.50 each
pursuant to a private placement offering.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
During the three-month period ended August 31, 2004, the Company did not file
any current reports on Form 8-K.
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.
Brookmount Explorations Inc.
/s/ Peter Flueck
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Peter Flueck
President, Chief Executive
Officer and Director
(Principal Executive Officer)
Dated: October 14, 2004
Brookmount Explorations Inc.
/s/ Zaf Sungur
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Zaf Sungur
C.O.O., Secretary, treasurer
and principal accounting
officer
Dated: October 14, 2004