10-Q 1 g2574.txt QTRLY REPORT FOR THE QTR ENDED 7-31-08 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED July 31, 2008 Commission file number 333-130286 AMERICAN BONANZA RESOURCES CORP. (Exact name of registrant as specified in its charter) NEVADA (State or other jurisdiction of incorporation or organization) Suite 1214 - 675 West Hastings Street Vancouver, BC V6B 1N2 (Address of principal executive offices including zip code) (604) 681-8123 (telephone number, including area code) Suite 206 - 455 Granville Street Vancouver, BC V6C1T1 (Former address of principal executive offices) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES [X] NO [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,000,000 shares as of July 31, 2008 ITEM 1. FINANCIAL STATEMENTS The un-audited quarterly financial statements for the period ended July 31, 2008, prepared by the company, immediately follow. 2 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Balance Sheets --------------------------------------------------------------------------------
As of As of July 31, October 31, 2008 2007 -------- -------- (Unaudited) ASSETS CURRENT ASSETS Cash $ 63,961 $ 71,302 -------- -------- TOTAL CURRENT ASSETS 63,961 71,302 -------- -------- $ 63,961 $ 71,302 ======== ======== LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Due to Director $ 100 $ 100 Accounts Payable 2,000 -- -------- -------- TOTAL CURRENT LIABILITIES 2,100 100 -------- -------- TOTAL LIABILITIES 2,100 100 STOCKHOLDERS' EQUITY (DEFICIT) Common stock, ($0.001 par value, 75,000,000 shares authorized; 3,000,000 shares issued and outstanding as of July 31, 2008 and October 31, 2007) 3,000 3,000 Additional paid-in capital 102,000 102,000 Deficit accumulated during exploration stage (43,139) (33,798) -------- -------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 61,861 71,202 -------- -------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 63,961 $ 71,302 ======== ========
See Notes to Financial Statements 3 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Statements of Operations (Unaudited) --------------------------------------------------------------------------------
May 2, 2005 Nine Months Nine Months Three Months Three Months (inception) Ended Ended Ended Ended through July 31, July 31, July 31, July 31, July 31, 2008 2007 2008 2007 2008 ---------- ---------- ---------- ---------- ---------- REVENUES Revenues $ -- $ -- $ -- $ -- $ -- ---------- ---------- ---------- ---------- ---------- TOTAL REVENUES -- -- -- -- -- OPERATING EXPENSES Administrative Expenses 2,341 12,013 612 9,962 23,186 Professional fees 7,000 5,000 2,000 1,500 19,953 ---------- ---------- ---------- ---------- ---------- TOTAL OPERATING COSTS 9,341 17,013 2,612 11,462 43,139 ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ (9,341) $ (17,013) $ (2,612) $ (11,462) $ (43,139) ========== ========== ========== ========== ========== BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.01) $ (0.00) $ (0.00) ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 3,000,000 3,000,000 3,000,000 3,000,000 ========== ========== ========== ==========
See Notes to Financial Statements 4 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Statement of Changes in Stockholders' Equity From May 2, 2005 (Inception) through July 31, 2008 --------------------------------------------------------------------------------
Deficit Accumulated Common Additional During Common Stock Paid-in Exploration Stock Amount Capital Stage Total ----- ------ ------- ----- ----- BALANCE, MAY 2, 2005 -- $ -- $ -- $ -- $ -- Stock issued for cash on May 2, 2005 @ $0.01 per share 1,000,000 1,000 4,000 5,000 Net loss, October 31, 2005 (81) (81) --------- ------- --------- -------- -------- BALANCE, OCTOBER 31, 2005 1,000,000 1,000 4,000 (81) 4,919 --------- ------- --------- -------- -------- Stock issued for cash pursuant to SB-2 offering @ $.05 per share 2,000,000 2,000 98,000 100,000 Net loss, October 31, 2006 (14,450) (14,450) --------- ------- --------- -------- -------- BALANCE, OCTOBER 31, 2006 3,000,000 3,000 102,000 (14,531) 90,469 --------- ------- --------- -------- -------- Net loss, October 31, 2007 (19,268) (19,268) --------- ------- --------- -------- -------- BALANCE, OCTOBER 31, 2007 3,000,000 3,000 102,000 (33,798) 71,202 --------- ------- --------- -------- -------- Net loss, July 31, 2008 (9,341) (9,341) --------- ------- --------- -------- -------- BALANCE, JULY 31, 2008 (UNAUDITED) 3,000,000 $ 3,000 $ 102,000 $(43,139) $ 61,861 ========= ======= ========= ======== ========
See Notes to Financial Statements 5 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Statements of Cash Flows (Unaudited) --------------------------------------------------------------------------------
May 2, 2005 Nine Months Nine Months (inception) Ended Ended through July 31, July 31, July 31, 2008 2007 2008 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (9,341) $ (17,013) $ (43,139) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Changes in operating assets and liabilities: Increase (decrease) in Accounts Payable 2,000 -- 2,000 Increase (decrease) in Payable to Director -- -- 100 (Increase) decrease in Deposit -- 5,000 -- --------- --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (7,341) (12,013) (41,039) CASH FLOWS FROM INVESTING ACTIVITIES NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- -- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock -- -- 3,000 Additional paid-in capital -- -- 102,000 --------- --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- -- 105,000 --------- --------- --------- NET INCREASE (DECREASE) IN CASH (7,341) (12,013) 63,961 CASH AT BEGINNING OF PERIOD 71,302 85,570 -- --------- --------- --------- CASH AT END OF PERIOD $ 63,961 $ 73,556 $ 63,961 ========= ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during year for: Interest $ -- $ -- $ -- ========= ========= ========= Income Taxes $ -- $ -- $ -- ========= ========= =========
See Notes to Financial Statements 6 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Notes to Financial Statements (Unaudited) July 31, 2008 NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS American Bonanza Resources Corp. (the Company) was incorporated under the laws of the State of Nevada on May 2, 2005. The Company was formed to engage in the acquisition, exploration and development of natural resource properties. The Company is in the exploration stage. Its activities to date have been limited to capital formation, organization, development of its business plan, staking of mining claims and completion of the first phase of its exploration program. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF ACCOUNTING The Company's financial statements are prepared using the accrual method of accounting. The Company has elected an October 31, year-end. B. BASIC EARNINGS PER SHARE In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective May 2, 2005 (inception). Basic net loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company. C. CASH EQUIVALENTS The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. D. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In accordance with FASB 16 all adjustments are normal and recurring. 7 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Notes to Financial Statements (Unaudited) July 31, 2008 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. INCOME TAXES Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. NOTE 3. GOING CONCERN The accompanying financial statements are presented on a going concern basis. The Company had no operations during the period from May 2, 2005 (inception) to July 31, 2008 and generated a net loss of $43,139. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 4. WARRANTS AND OPTIONS There were 4,000,000 warrants exercisable at a price of $.10 per share which expired March 2, 2008 without being exercised. There are currently no outstanding options to acquire any additional shares of common. NOTE 5. RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. Beginning January 1, 2006 the Company has been paying a director $100 per month for use of office space and services. The officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities as they become available, he may face a conflict in selecting between the Company and his other business interests. The Company has not formulated a policy for the resolution of such conflicts. 8 NOTE 6. INCOME TAXES As of July 31, 2008 ------------------- Deferred tax assets: Net operating tax carryforwards $ 14,667 Other 0 -------- Gross deferred tax assets 14,667 Valuation allowance (14,667) -------- Net deferred tax assets $ 0 ======== Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. NOTE 7. NET OPERATING LOSSES As of July 31, 2008, the Company has a net operating loss carryforwards of approximately $43,139. Net operating loss carryforward expires twenty years from the date the loss was incurred. NOTE 8. MINERAL PROPERTY On October 17, 2005 the Company staked mining claims located east of Lillooet Lake and 25 kilometres southeast of Pemberton in South-Western British Columbia. NOTE 9. STOCK TRANSACTIONS Transactions, other than employees' stock issuance, are in accordance with paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees' stock issuance are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable. On May 2, 2005 the Company issued a total of 1,000,000 shares of common stock to two directors for cash in the amount of $0.005 per share for a total of $5,000. Concluding on August 18, 2006 2,000,000 units from the Company's registered SB-2 offering had been sold reflecting 2,000,000 shares of common stock. 9 AMERICAN BONANZA RESOURCES CORP. (An Exploration Stage Company) Notes to Financial Statements (Unaudited) July 31, 2008 NOTE 9. STOCK TRANSACTIONS (CONTINUED) As of July 31, 2008 the Company had 3,000,000 shares of common stock issued and outstanding. NOTE 10. STOCKHOLDERS' EQUITY The stockholders' equity section of the Company contains the following classes of capital stock as of July 31, 2008: Common stock, $ 0.001 par value: 75,000,000 shares authorized; 3,000,000 shares issued and outstanding. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. FORWARD LOOKING STATEMENTS This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. We are an exploration stage company and have not yet generated or realized any revenues. BUSINESS American Bonanza Resources Corp. was incorporated in the State of Nevada on May 2, 2005 to engage in the acquisition, exploration and development of natural resource properties. We are an exploration stage company with no revenues and limited operating history. Our independent auditor has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern. The Company carried out the first phase of exploration on one unpatented mineral claim, consisting of 25 units (each unit equaling approximately 25 hectares) staked and recorded online as per the British Columbia Regulations as event number 4051703, tenure number 521269. The results of Phase I were not promising and management determined it was in the best interests of the shareholders to abandon the property and actively pursue another property on which exploration could be conducted or other potential business opportunities, better utilizing our remaining cash assets. RESULTS OF OPERATIONS We have generated no revenues since inception and have incurred $43,139 in expenses through July 31, 2008. The following table provides selected financial data about our company for the period ended July 31, 2008. Balance Sheet Data: 7/31/08 ------------------- ------- Cash $63,961 Total assets $63,961 Total liabilities $ 2,100 Shareholders' equity $61,861 Cash provided by financing activities since inception through July 31, 2008 was $105,000, $5,000 from the sale of shares to our officer and director in May 2005 and $100,000 resulting from the sale of our common stock in our initial public offering to 34 independent investors in August 2006. 11 PLAN OF OPERATION Our cash in the bank at July 31, 2008 was $63,961. We incurred operating expenses of $2,612 and $11,462 for the three months ended July 31, 2008 and 2007, respectively. As we had no revenues our net loss for the same periods equaled our expenses. These expenses consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. Our net loss since inception through July 31, 2008 was $43,139. We do not intend to purchase any significant property or equipment, nor incur any significant changes in employees during the next 12 months. Our management has been analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. This analysis has included securing another property for exploration, sourcing additional forms of financing to continue our business as is, or mergers and/or acquisitions. At this stage in our operations, we believe either course is acceptable, as our operations have not been profitable and our future prospects for our business are not good without further financing. If we decide to focus on a merger/acquisition our preliminary focus would be on potential business opportunities with established business entities for the merger of a target business with our company. In certain instances, a target business may wish to become a subsidiary of our company or may wish to contribute assets to our company rather than merge. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail. In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company and our existing business will close down. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors. We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. 12 At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a combination or merger with another business opportunity, or whether the opportunity's operations will be profitable. As of the date hereof, we have not been successful in our exploration efforts. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our company may have more difficulties raising capital for our existing operations than for a new business opportunity. We have not entered into any formal written agreements for a business combination or opportunity. If any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission. If we are unable to secure adequate capital to continue our business or alternatively, complete a merger or acquisition, our shareholders will lose some or all of their investment and our business will likely fail. LIQUIDITY AND CAPITAL RESOURCES Our cash balance at July 31, 2008 was $63,961, with $2,100 in outstanding current liabilities. Total expenditures over the next 12 months are expected to be approximately $30,000. We are an exploration stage company and have generated no revenue to date. ITEM 4. CONTROLS AND PROCEDURES. Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared. Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken. 13 PART II. OTHER INFORMATION ITEM 6. EXHIBITS. The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Form SB-2 Registration Statement, filed under SEC File Number 333-130286, at the SEC website at www.sec.gov: Exhibit No. Description ----------- ----------- 3.1 Articles of Incorporation* 3.2 Bylaws* 31.1 Sec. 302 Certification of Principal Executive Officer 31.2 Sec. 302 Certification of Principal Financial Officer 32.1 Sec. 906 Certification of Principal Executive Officer 32.2 Sec. 906 Certification of Principal Financial Officer SIGNATURES Pursuant to the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. September 8, 2008 American Bonanza Resources Corp, Registrant By: /s/ Thomas Gelfand --------------------------------------------------- Thomas Gelfand, President, Chief Executive Officer, Principal Accounting Officer, Chief Financial Officer, Secretary and Chairman of the Board In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. September 8, 2008 American Bonanza Resources Corp, Registrant By: /s/ Thomas Gelfand --------------------------------------------------- Thomas Gelfand, President, Chief Executive Officer, Principal Accounting Officer, Chief Financial Officer, Secretary and Chairman of the Board 14