UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2003
-------------------
( ) 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 0-26709
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BROOKMOUNT EXPLORATIONS INC.
------------------------------
(Exact name of registrant as specified in charter)
Nevada 98-0201259
------ ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
118 - 3420 Bell Avenue
Burnaby, B.C., Canada V3J 1M7
----------------------- -----------------
(Address of principal executive offices) (Zip Code)
604-308-6152
-------------------------------------
Registrant's telephone number, including area code
(Former name, address, and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has 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
registrant was required to file such reports), Yes [X] No [ ] and ( ) has
been subject to filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Outstanding as of February 28, 2003
---------- ----------------------------------------
Common Stock, $0.001 per share 9,282,400
=========
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INDEX
Page
Number
---------------------------------------------------------
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements 3
Balance Sheet as at February 28, 2003. 4
Statement of Operations
For the three months ended February 28, 2003 and 2002,
and the period from December 9, 1999 (Date of
Inception) to February 28, 2003. . . . . . . . . 5
Statement of Cash Flows
For the three months ended February 28, 2003 and 2002
and the period from December 9, 1999 (Date of
Inception) to February 28, 2003 . . . . 6
Notes to the Financial Statements. . . 7
ITEM 2. . Management's Discussion and Analysis or Plan of
Operation 10
PART 11. . . . OTHER INFORMATION 17
ITEM 1. . LEGAL PROCEEDINGS 17
ITEM 2. . CHANGES IN SECURITIES 17
ITEM 3. . DEFAULTS UPON SENIOR SECURITIES 17
ITEM 4. . SUBMISSION OF MATTERS TO A VOTE OF
. . . SECURITY HOLDERS 17
ITEM 5. . OTHER INFORMATION 17
ITEM 6. . EXHIBITS AND REPORTS ON FORM 8-K 17
SIGNATURES . . 18-22
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheet of Brookmount Explorations Inc. (an exploration
stage company) at February 28, 2003 and the related statements of operations and
statements of cash flow for the three months ended February 28, 2003 and 2002
and for the period from December 9, 1999 (date of incorporation) to February 28,
2003 have been prepared by the Company's management in conformity with
accounting principles generally accepted in the United States of America and
they do not include all information and notes to the financial statements
necessary for a complete presentation of the financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the quarter ended February 28, 2003, are not necessarily
indicative of the results that can be expected for the year ending November 30,
2003.
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BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
BALANCE SHEET
FEBRUARY 28, 2003 AND NOVEMBER 30, 2002
(Unaudited - Prepared by Management)
FEBRUARY 28, NOVEMBER 30,
2003 3002
------------ ------------
ASSETS
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 3
--------- ----------
Total Current Assets. . . . . . . . . . . . . . . . - 3
--------- ----------
$ - $ 3
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties . . . . . . . . . . . . . . $ 3,870 $ 3,580
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 17,637 14,296
--------- ----------
Total Current Liabilities . . . . . . . . . . . . . 21,507 17,876
--------- ----------
STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001
par value, 9,282,400 shares issued and outstanding
9,282 9,282
Capital in excess of par value . . . . . . . . . . . . . . . . 41,448 39,198
Deficit accumulated during the exploration stage . . . . . . . (72,237) (66,353)
--------- ----------
Total Stockholders' Deficiency . . . . . . . . . . (21,507) (17,873)
--------- ----------
$ - $ 3
========
The accompanying notes are an integral part of these unaudited financial
statements
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BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2003 AND 2002,
AND FOR THE PERIOD DECEMBER 9, 1999
(DATE OF INCEPTION) TO FEBRUARY 28, 2003
(Unaudited - Prepared by Management)
THREE MONTHS THREE MONTHS
ENDED ENDED FROM INCEPTION
FEBRUARY 28, FEBRUARY 28, TO FEBRUARY 28,
2003 2002 2003
------------- ------------- --------------
REVENUES. . . . . . $ - $ - $ -
EXPENSES. . . . . . 5,884 4,673 72,237
--------- ---------- -----------
NET LOSS. . . . . . $ ( 5,884) $ ( 4,673) $ (72,237)
========= =========== ===========
NET LOSS PER
COMMON SHARE
Basic . . . . . . . $ - $ -
========= ===========
AVERAGE OUTSTANDING
SHARES
Basic . . . . . . . 9,282,400 9,282,400
========= =========
The accompanying notes are an integral part of these unaudited financial
statements.
-5-
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2003 AND 2002 AND FOR THE PERIOD FROM
DECEMBER 9, 1999 (DATE OF INCEPTION) TO FEBRUARY 28, 2003
(Unaudited - Prepared by Management)
FOR THE THREE FOR THE THREE FROM INCEPTION
MONTHS ENDED MONTHS ENDED TO
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
2003 2002 2003
------------ ------------- ---------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . $ (5,884) $ (4,673) $ (72,237)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Change in accounts payable - related
party. . . . . . . . . . . . . . . 290 - 3,870
Change in accounts payable . . . . . . . 3,341 2,406 17,637
Capital contributions - expenses . . . . 2,250 2,250 29,250
--------- --------- ----------
Net Cash Increase (Decrease) from . .
Operations. . . . . . . . . . (3) (17) (21,480)
---------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
- - -
--------- --------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock . - - 21,480
--------- --------- ---------
Net Increase in Cash. . . . . . . . . . . . . (3) (17) -
Cash at Beginning of Period . . . . . . . . . 3 96 -
---------- --------- ---------
CASH AT END OF PERIOD . . . . . . . . . . . . $ - $ 79 $ -
========== ========= =========
SCHEDULE OF NONCASH OPERATING ACTIVITIES
Capital contributions - expenses $ 2,250 $ 2,250 $ 29,250
====== ====== =======
The accompanying notes are an integral part of these unaudited financial
statements.
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BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2003
(Unaudited - Prepared by Management)
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
December 9, 1999 with the authorized common shares of 200,000,000 shares at
$0.001 par value.
The Company was organized for the purpose of acquiring and developing
mineral properties. At the report date mineral claims, with unknown
reserves, had been acquired. The Company has not established the existence
of a commercially minable ore deposit and therefore has not reached the
development stage and is considered to be in the exploration stage.
Since its inception the Company has completed Regulation D offerings of
9,282,400 shares of its common capital stock for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
-------------------
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 Taxes
-------------
On February 28, 2003 the Company had a net operating loss carry forward of
$72,237. The tax benefit of $21,671 from the loss carry forward has been
fully offset by a valuation reserve because the use of the future tax
benefit is undeterminable since the Company has no operations. The net
operating loss will expire in 2023.
Earnings (Loss) Per Share
----------------------------
Earnings (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding.
-7-
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2003
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Amortization of Capitalized Mineral Claims Costs
-----------------------------------------------------
Costs of acquisition, exploration, carrying, and retaining unproven
properties are expensed as incurred. Costs incurred in proving and
developing a commercially minable ore reserve ready for production are
capitalized and amortized over the life of the mineral deposit or over a
shorter period if the property is shown to have an impairment in value.
Expenditures for mine equipment will be capitalized and depreciated over
their useful lives.
Environmental Requirements
---------------------------
At the report date environmental requirements related to the mineral claims
acquired (Note 3) are unknown and therefore an estimate of any future cost
cannot be made.
Comprehensive Income
---------------------
The Company adopted Statement of Financial Accounting Standard No. 130. The
adoption of this standard had no impact on the total stockholder's equity
on February 28, 2003.
Recent Accounting Pronouncements
----------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Financial Instruments
----------------------
The carrying amounts of financial instruments, including cash, and accounts
payable are considered by management to be their estimated fair values.
Estimates and Assumptions
---------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally 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.
-8-
BROOKMOUNT EXPLORATIONS INC.
( An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2003
(Unaudited - Prepared by Management)
3. MINERAL CLAIM
The Company acquired five mineral claims located in Chazel Township,
Abitibi West County in the province of Quebec, with an expiration date of
January 31, 2002.
The claims have not been proven to have a commercially minable ore reserve
and therefore all costs of explorations and retaining the properties have
been expensed.
The claims may be renewed by the Company by the completion of assessment
work of $6,000 Cdn or the payment of $6,000 Cdn. The claims expired on
January 31, 2002, and were subsequently renewed on November 14, 2002 for
two years. They will expire on November 14, 2004.
4. RELATED PARTY TRANSACTIONS
Related parties acquired 38% of the common stock issued.
5. GOING CONCERN
The Company will need additional working capital to be successful in its
planned activities and 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 additional equity funding, and long term financing,
which will enable the Company to operate for the coming year.
-9-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB contains statements that constitute
"forward-looking statements". These statements appear in a such places as
"Management's Discussion and Analysis or Plan of Operation." Such statements
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may vary materially from those
in the forward-looking statements as a result of various factors. These factors
include the effectiveness of management's strategies and decisions, general
economic and business conditions, new or modified statutory or regulatory
requirements and changing metal prices and market conditions. This report
identifies other factors that could cause such differences. No assurance can be
given that these are all of the factors that could cause actual results to vary
materially from the forward-looking statements. In addition, readers should
refer to Risk Factors.
The attached financial statements are stated in United States dollars and are
prepared using generally accepted accounting principles normally used in the
United States of America.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
1. PENNY STOCK RULES
Under Rule 15g-9, a broker or dealer may not sell a "penny stock" (as defined in
Rule 3a51-1) to, or effect the purchase of a penny stock by any person unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved the
person's account for transactions in penny stocks in accordance with
Rule 15g-9 and (b) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock
to be purchased.
The United States Securities and Exchange Commission (the "Commission") adopted
regulations that generally define a penny stock to be any equity security other
than a security excluded from such definition by Rule 3a51-1. Such exemptions
include, but are not limited to (a) an equity security issued by an issuer that
has (i) net tangible assets of at least $2,000,000, if such issuer has been in
continuous operations for at least three years; (ii) net tangible assets of at
least $5,000,000, if such issuer has been in continuous operation for less than
three years; or (iii) average revenue of at least $6,000,000 for the preceding
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three years; (b) except for purposes of Section 7(b) of the Exchange Act and
Rule 419, any security that has a price of $5.00 or more; and (c) a security
that is authorized or approved for authorization upon notice of issuance for
quotation on the National Association of Securities Dealers ("NASD") Automated
Quotation System ("NASDAQ"). It is likely the Company's common stock will be
subject to the regulations on penny stocks; consequently, the market liquidity
for its common stock may be adversely affected by such regulations. This, in
turn, will affect shareholders ability to sell their shares.
2. TRADING MARKET FOR THE COMPANY'S SHARES
There is no current trading market for shares of the Company's common stock (the
"Shares") and there can be no assurance that a trading market will develop, or,
if such a trading market does develop, that it will be sustained. The Shares,
to the extent that a market develops for the Shares at all, will likely appear
in what is customarily known as the "pink sheets" or on the NASD
over-the-counter Bulletin Board (the "OTCBB"), which may limit the marketability
and liquidity of the Shares.
To date, neither the Company nor anyone acting on behalf of the Company has
taken any affirmative steps to request or encourage any broker/dealer to act as
a market maker for the Company's common stock. The Company has had no
discussions or understandings, with any "market makers" regarding the
participation of any such market maker in the future trading market, if any, in
the Company's common stock.
3. POTENTIAL FUTURE RULE 144 SALES
Of the 200,000,000 shares of the Company's common stock authorized, there are
presently 3,500,000 shares issued and outstanding which are "restricted
securities" as that term is defined under the Securities Act of 1933, as amended
(the "Securities Act"), and in the future may be sold in compliance with Rule
144 of the Act, or pursuant to a Registration Statement filed under the Act.
Rule 144 provides, in essence, that a person holding restricted securities for a
period of 1 year may sell those securities in unsolicited brokerage transactions
or in transactions with a market maker, in an amount equal to 1% of the
outstanding common stock every 3 months. Additionally, Rule 144 requires that an
issuer of securities make available adequate current public information with
respect to the issuer. Such information deemed available if the issuer satisfies
the reporting requirements of Sections 13 or 15(d) of the Exchange Act and of
Rule 15c2-11 thereunder. Rule 144 also permits, under certain circumstances, a
sale of shares by a person who is not an affiliate of ours and who has satisfied
a 2 year holding period without any quantity limitation and whether or not there
is adequate current public information available. Investors should be aware that
sales under Rule 144, or pursuant to a registration statement filed under the
Securities Act, may have a depressive effect on the market price of the
Company's common stock in any market that may develop for such shares.
4. POSSIBLE ISSUANCE OF ADDITIONAL SHARES
The Company's Certificate of Incorporation, authorizes the issuance of
200,000,000 shares of common stock. The Company's Board of Directors has the
power to issue any or all of such additional shares without stockholder approval
for such consideration as it determines. Management presently anticipates that
-11-
it may choose to issue a substantial but as yet undetermined amount of the
Company's shares in connection with some form of future financing.
5. RISK ASSOCIATED WITH OPERATIONS IN FOREIGN COUNTRIES
The Company's business plan is to seek to acquire further mineral properties.
Management's discretion is unrestricted, and the Company may participate in any
acquisition of a mineral property that may in the opinion of management meet the
Company's business objectives. The Company has not limited the scope of its
search to a particular region or country. The Company has acquired a mineral
property outside the United States and may acquire further properties outside
the United States. Accordingly, by acquiring the Brookmount claim in a foreign
jurisdiction, the Company's operations may be adversely affected to the extent
of the existence of unstable economic, social and/or political conditions in
such foreign regions and countries.
6. TIME SPENT BY THE OFFICERS AND DIRECTORS ON THE AFFAIRS OF THE COMPANY
The Company's officers and directors devote only a limited amount of time to the
Company's business activities. At this time it is difficult to determine the
number of hours each director and officer will devote to the activities of the
Company.
7. INEXPERIENCE OF MANAGEMENT
It is possible that due to the Company's management's inexperience in managing a
public company, it will be unable to effectively manage the expansion of its
operations, that its systems, procedures or controls will not be adequate to
support its operations or that the Company's management will be unable to
achieve the rapid execution necessary to fully exploit the market opportunity
for its products and services. Any inability to manage growth effectively could
hinder the Company's future success.
8. CONFLICT OF INTEREST
Certain officers and directors are engaged in various business ventures. Thus,
there may be conflicts of interest in the allocation of time between the
Company's business and such other businesses. These activities may conflict with
the interests of the Company. As a result of their other interests, they may
personally benefit from decisions or recommendations made with respect to the
business of the Company. Whereas conflicts may arise, management is aware of its
fiduciary duty to the Company and will act in good faith and endeavor on an
equitable basis to resolve any conflicts which may arise, on an equitable basis.
9. NO DECLARATION OF DIVIDENDS SINCE INCEPTION
The Company has not paid any dividends and does not contemplate or anticipate
paying any dividends on its common stock in the foreseeable future.
-12-
10. NO OPERATING HISTORY OR REVENUE FROM THE BROOKMOUNT CLAIM
The Company has had no operating history and has generated no revenues or
earnings from the Brookmount claim. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues. This may result in the Company
incurring a net operating loss, which will increase continuously until the
Brookmount claim proves to have an ore body and is commercially viable. There
is no assurance that the Company can identify such ore body on its claim.
11. LACK OF DIVERSIFICATION
The Company's proposed operations, even if successful, will in all likelihood
result in the Company engaging in the exploration of the Brookmount claim.
Consequently, the Company's activities will be limited to those engaged in the
exploration of the Brookmount claim or another property in the future it might
acquire. The Company's inability to diversify its activities into a number of
areas may subject the Company to economic fluctuations within the mining
industry and therefore increase the risks associated with the Company's
operations.
12. THE COMPANY'S MINERAL PROPERTY CONTAINS NO PROVEN RESERVES
The property in which the Company holds a right to minerals thereon is
considered to be in the exploration stage only and does not contain a known body
of commercial ore. Failure to locate ore reserves may adversely affect the
economic viability of the Brookmount claim and the Company's operation.
13. TITLE TO THE PROERTY
It is possible the Company's title to the Brookmount claim, in which it has the
mineral rights will be challenged by third parties. The Company has not
obtained title insurance for the Brookmount claim. It is possible that the
title to the Brookmount claim may be challenged or impugned.
14. COMPETITION IN THE MINERAL INDUSTRY
The Company faces intense competition in its industry, which may adversely
affect its ability to participate in certain agreements with other parties. The
mineral resources industry is intensely competitive and the Company must compete
with many companies that have greater financial resources and technical
facilities than itself. Significant competition exists for the limited number
of mineral acquisition opportunities available in the Abitibi West County mining
region of Quebec where the Brookmount claim is located. As a result of this
competition, the Company's ability to acquire additional attractive mining
property interests on terms it consider acceptable may be impaired.
The Company will require supplies to explore the Brookmount claim. Competition
might be at a level where the Company is unable to acquire the supplies it
requires when required. It might have to suspend its exploration plans if the
Company does not have access to all of the supplies and materials it needs.
-13-
15. MINERAL PRICES FLUCTUATE BEYOND THE CONTROL OF THE COMPANY
The mining industry in general is intensely competitive and it is possible that,
even if commercial quantities of mineral resources are developed, a profitable
market will not exist for their sale. Factors beyond the Company's control may
affect the marketability of any minerals discovered. It is possible that the
price of gold will not remain stable. Significant price movements over short
periods of time may be affected by numerous factors beyond the Company's
control, including international economic and political trends, expectations of
inflation, currency exchange fluctuations (specifically, the U.S. dollar
relative to other currencies), interest rates and global or regional consumption
patterns, speculative activities and increased production due to improved mining
and production methods. The effect of these factors on the price of minerals and
therefore the economic viability of any of the Company's exploration projects
cannot accurately be predicted.
16. ENVIRONMENTAL REGULATIONS
All phases of the Company's operations in Quebec will be subject to
environmental regulations. Environmental legislation in Quebec are evolving in a
manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. It is possible that
future changes in environmental regulation will adversely affect the Company's
operations as compliance will be more burdensome and costly.
The Brookmount Claim
----------------------
The Company owns one mineral property known as the "Brookmount" claim located in
Chazel Township near Rouyn-Noranda, northwestern Quebec, Canada. Originally the
claim was staked on December 20, 1999 by George Fournier but lapsed during 2002
without any exploration work being undertaken on it. On November 14, 2002 the
Company re-staked the claim in order to continue to have the mineral rights to
the claim. The Company does not actually own the claim itself; only the mineral
rights thereto. The actual land is owned by the Government of Quebec.
In early 2000, the Company retained J.G. Burns, Professional Geologist, of
Timmins, Ontario, to summarize the geology and mineral potential on its mineral
claim near Rouyn-Noranda, Quebec. His report is dated February 23, 2000. The
mineral claim was recorded 100% in the name of Brookmount on December 20, 1999
and subsequently registered with the Ministry of Mines for Quebec. After the
re-staking of the claim as noted above, the Company will have the rights to the
minerals on the claim until November 14, 2004.
The claim covers approximately 500 acres located within Chazel Township, 45
miles north north east from the city of Rouyn-Noranda, Quebec. Five claims
located in Lots 50-54, Range III, Chazel Township, Abitibi West County, Quebec
comprise the property. Assessment work of $6,000 must be submitted to the
Ministry of Mines by September 15, 2004 or 60 days prior to the claims expiry
date of November 14, 2004. This will keep the claim in good standing for
another two years.
-14-
Since the original staking of the claim, no exploration work has been done on
the property and therefore the Company has no idea if there are any minerals on
the claim itself.
Liquidity and Capital Resources
----------------------------------
As at February 28, 2003, the Company had no assets other than the Brookmount
claim which has been assigned no book value in the financial statements, and
liabilities of $21,507. The liabilities of $21,507 consist of amounts due to
directors of $3,870 and accounts payable of $17,637, including amounts for
accounting and auditing of $10,950, transfer agent, $3,858, Edgar filing fees of
$1,500 and miscellaneous of $1,329.
During the three months since the fiscal year end, the Company has incurred the
following expenses:
Expenditures Amount
Accounting and audit. i $2,000
Bank charges. . . . . 3
Edgar filings . . . . ii 200
Management fees . . . iii 1,500
Office. . . . . . . . iv 30
Rent. . . . . . . . . v 600
Telephone . . . . . . vi 150
Transfer agent's fees vii 1,401
------
Total expenses $ 5,884
=========
i. The Company accrues $500 in fees to its auditors, Sellers and Andersen LLC
for the review of this Form 10-QSB. It has adjusted its accruals for the audit
of the years ended November 30, 2001 and 2002 by $500 per year, an increase from
$1,400 to $1,900 each year. In addition, the Company has accrued $500 for the
accountant to prepare the applicable working papers and other information to be
submitted to the auditors for their review of this Form 10-QSB.
ii. The Company has accrued $200 for the filing of this Form 10-QSB on Edgar
by its accountant.
iii. The Company does not compensate its directors for the service they
perform for the Company since it does not have adequate funds to do so.
Nevertheless, management realizes that it should give recognition to the
services performed by the directors and officers and therefore has accrued $500
per month. This amount has been expensed in the current period with the
offsetting credit being allocated to "Capital in Excess of Par Value" on the
balance sheet. The Company will not, in the future, be responsible for paying
either cash or settling this debt by way of shares.
iv. The Company has paid $25 to the State of Nevada for its annual business
license. The balance represents miscellaneous office expenses.
v. The Company does not incur any rental expense since it uses the personal
residence of its President. Similar to management fees, rent expense should be
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reflected as an operating expense. Therefore, the Company has accrued $200 per
month as an expense with an offsetting credit to "Capital in Excess of Par
Value".
vi. The Company does not have its own telephone number but uses the telephone
number of its President. Similar to management fees and rent, the Company
accrues an amount of $50 per month to represent the charges for telephone with
an offsetting entry to "Capital in Excess of Par Value".
vii. During the period the Company renewed its annual billing from the Nevada
Agency & Trust Company for acting as transfer agent for the year in the amount
of $1,200. The Company has also accrued interest charges of $151 on the balance
payable and a late charge of $50 on the filing of the list of officers with the
Secretary of State for Nevada.
The Company estimates the following funds will be required during the next
twelve months to meet its future and current obligations:
Requirements for Current Accounts Required funds for
Expenditures Twelve Months Payable Twelve Months
--------------------- ----------------- ----------------------
--------------
Accounting and audit. 1 $ 5,650 $ 10,950 $ 16,600
Bank charges. . . . . 100 - 100
Filing fees . . . . . 2 1,060 1,500 2,560
Office. . . . . . . . 3 200 1,329 1,529
Transfer agent's fees 4 1,600 3,858 5,458
------------------------- -------------- -------
Estimated expenses. . $ 8,610 $ 17,637 $ 26,247
================= ========================= ============
No recognition has been given to management fees, rent or telephone since at the
present time these expenses are not cash oriented.
1. Presently the Company accrues $500 for its accountant and $500 for its
auditors to review the Form 10-QSB. For the Form 10-KSB, the Company accrues
$750 for its accountant to prepare the required working papers and $1,900 for
the auditors to examine the year-end financial statements and to render a report
thereon. During the current period no payments were made to the auditors or
accountants.
2. The Company is charged $200 for the filing of its Form 10-KSB and a
similar price for each of its 10-QSB's. In addition, the State of Nevada
charges $260 for filing the list of directors and officers each year.
3. Estimate for the year relating to photocopying, faxing and delivery.
4. Each year, the Company is charged a fee of $1,200 by its transfer agent to
act on its behalf. In addition, there will be interest of $400 accrued on the
outstanding balance.
If directors and officers no longer supply the required funds to the Company, it
might be very difficult for it to meet its current debt obligations and maintain
itself for the forthcoming year. If this is the case, the Company might not be
able to continue as a going concern.
-16-
The Company does not anticipate acquiring any significant assets in the
foreseeable future.
At present, the directors devote time to the affairs of the Company as required.
There are no plans to hire any employees in the foreseeable future.
Results of Operations
-----------------------
To date the Company has had no operations. No exploration activities have been
undertaken on the Brookmount claim during this quarter.
PART 11. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving the Company or its mineral
claim. No director, officer or affiliate of the Company is (i) a party adverse
to the Company in any legal proceedings, or (ii) has an adverse interest to the
Company in any legal proceedings. Management is not aware of any other legal
proceedings pending or that have been threatened against the Company or its
mineral claim.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
There has been no change in securities since the Company fiscal year end.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
No report is required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders during the current period.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS, REPORTS ON FORM 8-K AND SECTION 14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
1. Certificate of Incorporation, Articles of Incorporation and By-laws
1.1 Certificate of Incorporation (incorporated by reference from the
Company's Registration Statement on Form 10-SB filed on December 27,
2000).
1.2 Articles of Incorporation (incorporated by reference from the
Company's Registration Statement on Form 10-SB filed on December 27,
2000).
1.3 By laws (incorporated by reference from the Company's Registration
Statement on Form 10-SB filed on December 27, 2000).
-17-
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.
(Registrant)
June 18, 2003
By: /s/ "Vic Stilwell"
--- -------------------
Vic Stilwell
President and Director
June 18, 2003
By: /s/ "Norman Goodson
--- -------------------
Norman Goodson
Secretary Treasurer and Director
-18-
CERTIFICATION PURSUANT TO
SECTION 301 (A) OF THE SARBANES-OXLEY ACT OF 2002
I, Vic Stilwell, certify that:
1. I have received this quarterly report of Form 10-QSB of Brookmount
Explorations Inc., the registrant;
2. Based on my knowledge, this quarterly report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report.
3. Based on my knowledge, the financial statements, other than financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made know to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusion about effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the
registrant's board of directors:
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal control; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regards to significant deficiencies and
material weaknesses.
June 18, 2003
/s/ "Vic Stilwell"
----------------------------
Vic Stilwell, President and Director
-19-
PRESIDENT'S CERTIFICATION
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on the Form 10-QSB of Brookmount
Explorations Inc. for the three months ended February 28, 2003, as filed with
the Securities and Exchange Commission on the date hereof, I, Vic Stilwell,
President and Director, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
his knowledge and belief:
1. The Quarterly Report fully complies with the requirements of Section 13 (a)
or 15 (d) of the Securities and Exchange Act of 1934, as amended; and
2. The information contained in this Quarterly Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company.
June 18, 2003
/s/ "Vic Stilwell"
----------------------
Vic Stilwell
President and Director
-20-
CERTIFICATION PURSUANT TO
SECTION 301 (A) OF THE SARBANES-OXLEY ACT OF 2002
I, Norman Goodson, certify that:
1. I have received this quarterly report of Form 10-QSB of Brookmount
Explorations Inc., the registrant;
2. Based on my knowledge, this quarterly report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report.
3. Based on my knowledge, the financial statements, other than financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made know to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusion about effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the
registrant's board of directors:
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal control; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regards to significant deficiencies and
material weaknesses.
June 18, 2003
/s/ "Norman Goodson"
------------------------
Norman Goodson, Secretary Treasurer and
Director
-21-
SECRETARY TREASURER'S CERTIFICATION
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on the Form 10-QSB of Brookmount
Explorations Inc. for the three months ended February 28, 2003, as filed with
the Securities and Exchange Commission on the date hereof, I, Norman Goodson,
Secretary Treasurer and Director, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to
the best of his knowledge and belief:
1. The Quarterly Report fully complies with the requirements of Section 13 (a)
or 15 (d) of the Securities and Exchange Act of 1934, as amended; and
2. The information contained in this Quarterly Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company.
June 18, 2003
/s/ "Norman Goodson"
-----------------------------
Norman Goodson
Secretary Treasurer and Director
-22-