NEVADA
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20-8051714
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(State or other jurisdiction of
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I.R.S. Employer
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incorporation or organization)
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Identification No.
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PART I: FINANCIAL INFORMATION
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||
Item 1: Financial Statements:
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||
Balance Sheets as of June 30, 2012 and September 30, 2011 (unaudited)
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4
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Statements of Expenses for the three months and nine months ended June 30, 2012 and 2011, and from October 25, 2005 (inception) to June 30, 2012 (unaudited)
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5
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Statements of Cash Flows for the nine months ended June 30, 2012 and 2011, and from October 25, 2005 (inception) to June 30, 2012 (unaudited)
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6
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Notes to the Financial Statements (unaudited)
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7
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Item 2: Management's Discussion and Analysis or Plan of Operations
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8
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Item 3: Quantitative and Qualitative Disclosures About Market Risk
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9
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Item 4: Controls and Procedures
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9
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Item 1: Legal Proceedings
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10
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Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
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10
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Item 3: Defaults upon Senior Securities
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10
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10
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||
Item 5: Other Information
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10
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Item 6: Exhibits and Reports on Form 8-K
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10
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Signatures
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11
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JUNE 30, 2012
(Unaudited)
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SEPTEMBER 30,2011
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash
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$
|
857
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$
|
649
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||||
Total current assets
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857
|
649
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||||||
TOTAL ASSETS
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$
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857
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$
|
649
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||||
Current liabilities:
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||||||||
Accounts payable
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$
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1,347
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$
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1,496
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||||
Advances from company officers
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19,036
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11,036
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||||||
Total Current Liabilities
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20,383
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12,532
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||||||
TOTAL LIABILITIES
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20,383
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12,532
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||||||
Stockholders' Equity (Deficit)
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||||||||
Preferred Stock, $.001 par value; 10,000,000 shares authorized,
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||||||||
10,000,000 shares issued and outstanding
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10,000
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10,000
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||||||
Common Stock, $.001 par value; 190,000,000 shares authorized,
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||||||||
6,882,273 shares issued and outstanding at June 30, 2012 and at September 30, 2011
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6,882
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6,882
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||||||
Additional paid-in capital
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168,065
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168,065
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||||||
Deficit accumulated during the development stage
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(204,473
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)
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(196,830
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)
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||||
Total Stockholders' Equity (Deficit)
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(19,526
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)
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(11,883
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)
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||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$
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857
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$
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649
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October 25, 2005
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||||||||||||||||||||
Three Months Ended
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Nine Months Ended
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(Inception) to
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||||||||||||||||||
June 30
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June 30
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June 30,
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||||||||||||||||||
2012
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2011
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2012
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2011
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2012
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||||||||||||||||
Expenses:
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||||||||||||||||||||
Exploration costs
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$
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-
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$
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-
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$
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-
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$
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-
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$
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37,956
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||||||||||
General and administrative expenses
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2,495
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2,279
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7,643
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31,778
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229,061
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|||||||||||||||
Total Operating Expenses
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2,495
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2,279
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7,643
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31,778
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267,017
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|||||||||||||||
Net operating (loss)
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(2,495
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)
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(2,279
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)
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(7,643
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)
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(31,778
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)
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(267,017
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)
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||||||||||
Operating Income (Expense)
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||||||||||||||||||||
Interest income
|
-
|
-
|
-
|
-
|
64,960
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|||||||||||||||
Gain on extinguishment of accounts payable
|
-
|
-
|
-
|
-
|
5,669
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|||||||||||||||
Interest expense
|
-
|
-
|
-
|
-
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(8,085
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)
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||||||||||||||
Total Other Income and (Expense)
|
-
|
-
|
-
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-
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62,543
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|||||||||||||||
Net Loss
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$
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(2,495
|
)
|
$
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(2,279
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)
|
$
|
(7,643
|
)
|
$
|
(31,778
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)
|
$
|
(204,473
|
)
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|||||
Net Loss per Common Share - Basic and Diluted
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$
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(0.00
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)
|
$
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(0.00
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)
|
$
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(0.00
|
)
|
$
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(0.00
|
)
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||||||||
Per Share Information:
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||||||||||||||||||||
Weighted Average Number of Common Stock
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||||||||||||||||||||
Shares Outstanding - Basic and Diluted
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6,882,273
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6,282,273
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6,882,273
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6,282,273
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October 25, 2005
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||||||||||||
For Nine Months Ended
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(Inception) to
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|||||||||||
June 30,
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June 30,
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|||||||||||
2012
|
2011
|
2012
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||||||||||
Cash Flows from Operating Activities:
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||||||||||||
Net Loss
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$
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(7,643
|
)
|
$
|
(31,778
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)
|
$
|
(204,473
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||||||
Stocks issued for services
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-
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22,200
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68,031
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|||||||||
Deprecation
|
-
|
-
|
3,795
|
|||||||||
Gain on extinguishment of accounts payable
|
-
|
-
|
(5,669
|
)
|
||||||||
Imputed interest on shareholder advance
|
-
|
-
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2,711
|
|||||||||
Increase (decrease) in interest receivable
|
-
|
-
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(33,259
|
)
|
||||||||
Increase (decrease) in accounts payable
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(149)
|
-
|
7,016
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|||||||||
Net Cash Flows Used in Operating Activities
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(7,792
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)
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(9,578
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)
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(161,848
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)
|
||||||
Cash Flows from Investing Activities:
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||||||||||||
Purchase of assets
|
-
|
-
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(1,795
|
)
|
||||||||
Net Cash Flows Used for Investing Activities
|
-
|
-
|
(1,795
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)
|
||||||||
Cash Flows from Financing Activities:
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||||||||||||
Stocks issued for cash
|
-
|
-
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3,045,464
|
|||||||||
Shares Rescinded
|
-
|
-
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(2,400,000
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)
|
||||||||
Repayment for advance from company officer
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-
|
-
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(500,000
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)
|
||||||||
Advance from company officer
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8,000
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10,000
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19,036
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|||||||||
Net Cash Flows Provided by Financing Activities
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8,000
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10,000
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164,500
|
|||||||||
Net Increase (Decrease) in Cash
|
208
|
422
|
857
|
|||||||||
Cash and cash equivalents - Beginning of period
|
649
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1,549
|
-
|
|||||||||
Cash and cash equivalents - End of period
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$
|
857
|
$
|
1,971
|
$
|
857
|
||||||
SUPPLEMENTARY INFORMATION
|
||||||||||||
Interest Paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Taxes Paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Supplement disclosure of non cash investing and financing activities:
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||||||||||||
Reduction of note in connection with share rescission
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$
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500,000
|
31.1
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Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
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Certification of the Chief Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2
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Certification of the Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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July 20, 2012
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Sunrise Holdings Limited
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By:
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/s/ Xuguang Sun
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Xuguang Sun, Chief Executive Officer and President
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Date: July 20, 2012
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/s/ Xuguang Sun
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Xuguang Sun, Chief Executive Officer and President
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Date: July 20, 2012
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/s/ Shaojun Sun
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Shaojun Sun, Chief Financial Officer
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Date: July 20, 2012
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/s/ Xuguang Sun
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Xuguang Sun, Chief Executive Officer and President
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Date: July 20, 2012
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/s/ Shaojun Sun
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Shaojun Sun, Chief Financial Officer
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Subsequent Events
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3 Months Ended |
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Jun. 30, 2012
|
|
Notes to Financial Statements | |
Subsequent Events |
Note 4 - Subsequent Events
There have been no reportable subsequent events through the date of issuance of this report. |
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Related Party Transactions
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3 Months Ended |
---|---|
Jun. 30, 2012
|
|
Notes to Financial Statements | |
Related Party Transactions |
Note 3 - Related Party Transactions
For the three months ended June 30, 2012, an officer of the Company advanced $2,000 to the Company to pay for the general and administrative expenses. For the nine months ended June 30, 2012, an officer of the Company advanced $8,000 to the Company to pay for the general and administrative expenses. These advances are unsecured, non-interest bearing and have no fixed terms of repayment. |
Balance Sheets (USD $)
|
Jun. 30, 2012
|
Sep. 30, 2011
|
---|---|---|
Current assets: | ||
Cash | $ 857 | $ 649 |
Total current assets | 857 | 649 |
TOTAL ASSETS | 857 | 649 |
Current liabilities: | ||
Accounts payable | 1,347 | 1,496 |
Advances from company officers | 19,036 | 11,036 |
Total Current Liabilities | 20,383 | 12,532 |
TOTAL LIABILITIES | 20,383 | 12,532 |
Stockholders' Equity: | ||
Preferred Stock, $.001 par value; 10,000,000 shares authorized,10,000,000 shares issued and outstanding | 10,000 | 10,000 |
Common Stock, $.001 par value; 190,000,000 shares authorized, 6,882,273 shares issued and outstanding at June 30, 2012; 6,882,273 shares issued and outstandingat September 30, 2011 | 6,882 | 6,882 |
Additional paid-in capital | 168,065 | 168,065 |
Deficit accumulated during the development stage | (204,473) | (196,830) |
Total Stockholders' Equity (Deficit) | (19,526) | (11,883) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 857 | $ 649 |
Summary of Significant Accounting Policies
|
3 Months Ended |
---|---|
Jun. 30, 2012
|
|
Notes to Financial Statements | |
Summary of Significant Accounting Policies |
Note 1 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited interim consolidated financial statements of Sunrise Holdings Limited have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and the rules of the Securities and Exchange Commission, and should be read in conjunction with Sunrise's audited 2011 annual financial statements and notes thereto filed with the SEC on form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Sunrise's 2011 annual financial statements have been omitted. The Company's fiscal year end is September 30.
Use of Estimates
The preparation of financial statements in conformity with U.S. 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Interim Financial Statements
These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of June 30, 2012, there were no cash equivalents.
Income Taxes
The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.
There was no current or deferred income tax expense or benefits for the periods ending September 30, 2011 and June 30, 2012.
Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260, Earnings per Share . ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at June 30, 2012, the Company had no potentially dilutive shares.
Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company's financial instruments consist principally of cash, and amounts due to related parties. Pursuant to ASC 820 and 825, the fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
Recently Issued Accounting Standards
In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), "Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives." The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity's first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.
In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), "Consolidation (Topic 810): Amendments for Certain Investment Funds." The amendments in this Update are effective as of the beginning of a reporting entity's first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company's adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.
In February 2010, the FASB issued ASU No. 2010-09 "Subsequent Events (ASC Topic 855)" "Amendments to Certain Recognition and Disclosure Requirements" ("ASU No. 2010-09"). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company's financial position and results of operations.
In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06, "Improving Disclosures about Fair Value Measurements." ASU No. 2010-06 amends FASB Accounting Standards Codification ("ASC") 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers' disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company's financial statements.
In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Company's financial statements.
In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company's financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations |
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Going Concern
|
3 Months Ended |
---|---|
Jun. 30, 2012
|
|
Notes to Financial Statements | |
Going Concern |
Note 2 - Going Concern
Sunrise's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $204,473 and has insufficient working capital to meet operating needs for the next twelve months as of June 30, 2012, all of which raise substantial doubt about Sunrise's ability to continue as a going concern. |
Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2012
|
Sep. 30, 2011
|
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, share authorized | 10,000,000 | 10,000,000 |
Preferred Stock, share issued | 10,000,000 | 10,000,000 |
Preferred Stock, share outstanding | 10,000,000 | 10,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, share authorized | 190,000,000 | 190,000,000 |
Common Stock, share issued | 6,882,273 | 6,882,273 |
Common Stock, share outstanding | 6,882,273 | 6,882,273 |
Document and Entity Information
|
3 Months Ended | |
---|---|---|
Jun. 30, 2012
|
Jul. 20, 2012
|
|
Document And Entity Information | ||
Entity Registrant Name | Sunrise Holdings LTD | |
Entity Central Index Key | 0001394130 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2012 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,882,273 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2012 |
Statements of Operations (USD $)
|
3 Months Ended | 9 Months Ended | 80 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
|
Expenses: | |||||
Exploration costs | $ 37,956 | ||||
General and administrative expenses | 2,495 | 2,279 | 7,643 | 31,778 | 229,061 |
Total Operating Expenses | 2,495 | 2,279 | 7,643 | 31,778 | 267,017 |
Net operating loss | (2,495) | (2,279) | (7,643) | (31,778) | (267,017) |
Other Income (Expense) | |||||
Interest income | 64,960 | ||||
Gain on extinguishment of accounts payable | 5,669 | ||||
Interest expense | (8,085) | ||||
Total Other Income and (Expense) | 62,543 | ||||
Net Loss | $ (2,495) | $ (2,279) | $ (7,643) | $ (31,778) | $ (204,473) |
Net Loss per Common Share - Basic and Diluted | $ 0 | $ 0 | $ 0 | $ 0 | |
Per Share Information: | |||||
Weighted Average Number of Common Stock Shares Outstanding - Basic and Diluted | 6,882,273 | 6,282,273 | 6,882,273 | 6,282,273 |
Summary of Significant Accounting Policies (Policies)
|
3 Months Ended |
---|---|
Jun. 30, 2012
|
|
Notes to Financial Statements | |
Basis of Presentation | Basis of Presentation
The accompanying unaudited interim consolidated financial statements of Sunrise Holdings Limited have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and the rules of the Securities and Exchange Commission, and should be read in conjunction with Sunrise's audited 2011 annual financial statements and notes thereto filed with the SEC on form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Sunrise's 2011 annual financial statements have been omitted. The Company's fiscal year end is September 30. |
Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with U.S. 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Interim Financial Statements
These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. |
Cash and Cash Equivalents | Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of June 30, 2012, there were no cash equivalents. |
Income Taxes | Income Taxes
The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.
There was no current or deferred income tax expense or benefits for the periods ending September 30, 2011 and June 30, 2012. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260, Earnings per Share . ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at June 30, 2012, the Company had no potentially dilutive shares. |
Financial Instruments | Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company's financial instruments consist principally of cash, and amounts due to related parties. Pursuant to ASC 820 and 825, the fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards
In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), "Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives." The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity's first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.
In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), "Consolidation (Topic 810): Amendments for Certain Investment Funds." The amendments in this Update are effective as of the beginning of a reporting entity's first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company's adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.
In February 2010, the FASB issued ASU No. 2010-09 "Subsequent Events (ASC Topic 855)" "Amendments to Certain Recognition and Disclosure Requirements" ("ASU No. 2010-09"). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company's financial position and results of operations.
In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06, "Improving Disclosures about Fair Value Measurements." ASU No. 2010-06 amends FASB Accounting Standards Codification ("ASC") 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers' disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of ASU 2010-06 did not have a material impact on the Company's financial statements.
In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Company's financial statements.
In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company's financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations |