10-Q 1 g3454.txt QTRLY REPORT FOR THE QTR ENDED 7-31-09 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2009 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number 333-152754 QUARTZ VENTURES INC. (Exact name of registrant as specified in its charter) Nevada 71-1029846 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 29115 North 144th Street, Scottsdale, AZ 85262 (Address of principal executive offices) (Zip Code) 480-229-3668 (Registrant's telephone number, including area code) N/A (Former name, former address and former 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), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [ ] NO Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of "large accelerated filer", "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] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act [X] YES [ ] NO APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [ ] YES [ ] NO Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] YES [ ] 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 latest practicable date. 5,440,000 common shares issued and outstanding as of September 14, 2009 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Our unaudited interim financial statements for the three month period ended July 31, 2009 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. 2 QUARTZ VENTURES, INC. (An Exploration Stage Company) FINANCIAL STATEMENTS July 31, 2009 (Unaudited) Page Number ----------- PART I FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Condensed Balance Sheets - July 31, 2009 (Unaudited) and April 30, 2009 4 Unaudited Condensed Statements of Losses - Three Months Ended July 31, 2009 and July 31, 2008 and from the period July 22, 2005 (date of inception) to July 31, 2009 5 Unaudited Condensed Statements of Stockholders Deficit for the period from July 22, 2005 (date of inception) to July 31, 2009 6 Unaudited Condensed Statements of Cash Flows - Three Months Ended July 31, 2009, and July 31, 2008 and from the period July 22, 2005 (date of inception) to July 31, 2009 7 Notes to Unaudited Condensed Financial Statements 8 3 QUARTZ VENTURES, INC. (An Exploration Stage Company) Condensed Balance Sheets --------------------------------------------------------------------------------
July 31, April 30, 2009 2009 -------- -------- (Unaudited) ASSETS CURRENT ASSETS Cash $ 21,790 $ -- -------- -------- TOTAL ASSETS $ 21,790 $ -- ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank overdraft $ -- $ 2,695 Loans payable 30,500 23,500 -------- -------- TOTAL CURRENT LIABILITIES 30,500 26,195 -------- -------- STOCKHOLDERS' DEFICIENCY Capital stock Authorized: 75,000,000 common shares with a par value of $0.001 Issued and outstanding: 5,440,000 common shares as of July 31, 2009 and April 30, 2009 5,440 5,440 Additional paid-in-capital 49,560 27,560 Deficit accumulated during the exploration stage (63,710) (59,195) -------- -------- TOTAL STOCKHOLDERS' DEFICIENCY (8,710) (26,195) -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 21,790 $ -- ======== ========
The accompanying notes are an integral part of these unaudited condensed financial statements 4 QUARTZ VENTURES, INC. (A Exploration Stage Company) Condensed Statements of Losses (Unaudited) --------------------------------------------------------------------------------
Cumulative from July 22, 2005 Three Months Three Months (Date of Ended Ended Inception) to July 31, July 31, July 31, 2009 2008 2009 ---------- ---------- ---------- COSTS AND EXPENSES: Bank charges and interest $ 75 $ 109 $ 620 Filing and transfer agent fees -- 1,240 5,340 Mineral property 912 3,319 14,325 Office expenses 78 104 698 Professional fees 3,450 9,950 42,727 ---------- ---------- ---------- Total operating expenses 4,515 14,722 63,710 ---------- ---------- ---------- Net loss from operations (4,515) (14,722) (63,710) ---------- ---------- ---------- Net loss before provision for income taxes (4,515) (14,722) (63,710) ---------- ---------- ---------- Income taxes (benefit) -- -- -- ---------- ---------- ---------- Net loss $ (4,515) $ (14,722) $ (63,710) ========== ========== ========== LOSS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00) ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (BASIC AND FULLY DILUTED) 5,440,000 5,440,000 ========== ==========
The accompanying notes are an integral part of these unaudited condensed financial statements 5 QUARTZ VENTURES, INC. (A Exploration Stage Company) Condensed Statement of Stockholders' Equity From July 22, 2005 (Date of Inception) to July 31, 2009 (Unaudited) --------------------------------------------------------------------------------
Deficit Accumulated Number of Additional During the Common Par Paid-in Development Shares Value Capital Stage Total ------ ----- ------- ----- ----- August 3, 2005 Subscribed for cash at $0.001 3,000,000 $ 3,000 $ -- $ -- $ 3,000 August 31, 2005 Subscribed for cash at $0.01 400,000 400 3,600 -- 4,000 September 20, 2005 Subscribed for cash at $0.01 700,000 700 6,300 -- 7,000 October 11, 2005 Subscribed for cash at $0.01 600,000 600 5,400 -- 6,000 November 30, 2005 Subscribed for cash at $0.01 600,000 600 5,400 -- 6,000 December 15, 2005 Subscribed for cash at $0.05 140,000 140 6,860 -- 7,000 Net Loss -- -- -- (568) (568) ---------- ------- -------- --------- -------- Balance, April 30, 2006 5,440,000 5,440 27,560 (568) 32,432 Net loss -- -- -- (8,100) (8,100) ---------- ------- -------- --------- -------- Balance, April 30, 2007 5,440,000 5,440 27,560 (8,668) 24,332 Net loss -- -- -- (6,145) (6,145) ---------- ------- -------- --------- -------- Balance, April 30, 2008 5,440,000 5,440 27,560 (14,813) 18,187 Net loss -- -- -- (44,382) (44,382) ---------- ------- -------- --------- -------- Balance, April 30, 2009 5,440,000 5,440 27,560 (59,195) (26,195) Cancellation of shares (3,000,000) (3,000) -- -- (3,000) June 4, 2009 Subscribed for cash at $0.008 3,000,000 3,000 22,000 -- 25,000 Net loss -- -- -- (4,515) (4,515) ---------- ------- -------- --------- -------- Balance, July 31, 2009 5,440,000 $ 5,440 $ 49,560 $ (63,710) $ (8,710) ========== ======= ======== ========= ========
The accompanying notes are an integral part of these unaudited condensed financial statements 6 QUARTZ VENTURES, INC. (A Exploration Stage Company) Condensed Statements of Cash Flows (Unaudited) --------------------------------------------------------------------------------
Cumulative from July 22, 2005 Three Months Three Months (Date of Ended Ended Inception) to July 31, July 31, July 31, 2009 2008 2009 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (4,515) $(14,722) $(63,710) -------- -------- -------- Net cash used in operations (4,515) (14,722) (63,710) -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Loan 7,000 12,000 30,500 Net Shares subscribed for cash 22,000 -- 55,000 -------- -------- -------- Net cash provided by financing activities 29,000 12,000 85,500 -------- -------- -------- Net (decrease) increase in cash and equivalents (24,485) (2,722) 21,790 (Bank overdraft) Cash at the beginning of the period (2,695) 18,187 -- -------- -------- -------- Cash at the end of the period $ 21,790 $ 15,465 $ 21,790 ======== ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for: Interest $ -- $ -- $ -- ======== ======== ======== Taxes $ -- $ -- $ -- ======== ======== ========
The accompanying notes are an integral part of these unaudited condensed financial statements 7 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 1. BUSINESS AND BASIS OF PRESENTATION Quartz Ventures, Inc. ("the Company") was incorporated on July 22, 2005 under the laws of State of Nevada, U.S. with an authorized capital of 75,000,000 common shares with a par value of $0.001. The Company's has a April 30, year end. The Company is in the exploration stage of its resource business. The Company commenced operations in 2006 by issuing shares and acquiring a mineral property located in the Province of British Columbia, Canada. The Company has not yet determined whether this property contains reserves that are economically recoverable. The recoverability of costs incurred for acquisition and exploration of the property will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreement and to complete the development of the property and upon future profitable production or proceeds for the sale thereof. These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $63,710 as at July 31, 2009 and further losses are anticipated in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. CASH AND CASH EQUIVALENTS For purposes of Statement of Cash Flows the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalent. EXPLORATION STAGE COMPANY The Company complies with the Financial Accounting Standards Board Statement No. 7, its characterization of the Company as an exploration stage enterprise. MINERAL INTERESTS Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified. To date the Company has not established any proven or probable reserves on its mineral properties. The Company has adopted the provisions of SFAS No. 143 "Accounting for Asset Retirement Obligations" which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. As at July 31, 2009, any potential costs relating to the retirement of the Company's mineral property interest has not yet been determined. 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 period. Actual results could differ from those estimates. 8 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FOREIGN CURRENCY TRANSLATION The financial statements are presented in United States dollars. In accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non monetary assets and liabilities are translated at the exchange rates prevailing on the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash and accounts payable and accrued liabilities approximates their fair value because of the short maturity of these instruments. Unless otherwise noted, it is management's opinion the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. ENVIRONMENTAL COSTS Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitments to plan of action based on the then known facts. INCOME TAXES The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At July 31, 2009, full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded. BASIC AND DILUTED LOSS PER SHARE The Company computes loss per share in accordance with SFAS No. 128, "Earnings per Share" which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal. RESEARCH AND DEVELOPMENT The Company accounts for research and development costs in accordance with the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs". Under SFAS 2, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred expenditures $0 for the period from July 22, 2005 (date of inception) to July 31, 2009. 9 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE RECOGNITION The Company will recognize revenue in accordance with Staff Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which superseded Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS ("SAB101"). SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"), MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing EITF 00-21 on the Company's d financial position and results of operations was not significant. From the date of inception through July 31, 2009, the Company has not generated any revenue to date. ADVERTISING The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the period ended July 31, 2009 and July 31, 2008 LIQUIDITY The Company has incurred net losses of $63,710 from its inception on July 22, 2005 through July 31, 2009. As of July 31, 2009, the Company's has excess of current liabilities over its current assets by $8,710. STOCK-BASED COMPENSATION In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment", which replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and superseded APB Opinion No. 25, "Accounting for Stock Issued to Employees". In January 2005, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 107, "Share-Based Payment", which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. SFAS No. 123R was to be effective for interim or annual reporting periods beginning on or after June 15, 2005, but in April 2005 the SEC issued a rule that will permit most registrants to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next reporting period as required by SFAS No. 123R. The pro-forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Under SFAS No. 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption. The transition methods include prospective and retroactive adoption options. Under the retroactive options, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options and restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. The Company adopted the modified prospective approach of SFAS No. 123R for the year ended April 30, 2006. The Company did not record any compensation expense for the period ended July 31, 2009 as there were no stock options outstanding prior to the adoption or at July 31, 2009. 10 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) RECENT ACCOUNTING PRONOUNCEMENTS In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, "Fair Value Measurements". The adoption of SFAS No. 159 is not expected to have a material impact on the Company financial position, results of operations or cash flows. In June 2007, the FASB ratified the consensus in EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities" (EITF 07-3), which requires that nonrefundable advance payments for goods or services that will be used or rendered for future research and development (R&D) activities be deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. EITF 07-3 will be effective for fiscal years beginning after December 15, 2007. The Company does not expect that the adoption of EITF 07-3 will have a material impact on its financial position, results of operations or cash flows SFAS No. 141(R), "Business Combinations" -- This statement includes a number of changes in the accounting and disclosure requirements for new business combinations occurring after its effective date. The changes in accounting requirements include: acquisition costs will be expensed as incurred; noncontrolling (minority) interests will be valued at fair value; acquired contingent liabilities will be recorded at fair value; acquired research and development costs will be recorded at fair value as an intangible asset with indefinite life; restructuring costs will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and changes in income tax uncertainties after the acquisition date will generally affect income tax expense. The statement is effective for new business combinations occurring on or after the first reporting period beginning on or after December 15, 2008. The adoption of SFAS No. 141(R) is not expected to have a material impact on our financial position, results of operations or cash flows. SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements: An Amendment of ARB No. 51" -- This statement changes the accounting and reporting for noncontrolling (minority) interests in subsidiaries and for deconsolidation of a subsidiary. Under the revised basis, the noncontrolling interest will be shown in the balance sheet as a separate line in equity instead of as a liability. In the income statement, separate totals will be shown for consolidated net income including noncontrolling interest, noncontrolling interest as a deduction, and consolidated net income attributable to the controlling interest. In addition, changes in ownership interests in a subsidiary that do not result in deconsolidation are equity transactions if a controlling financial interest is retained. If a subsidiary is deconsolidated, the parent company will now recognize gain or loss to net income based on fair value of the noncontrolling equity at that date. The statement is effective prospectively for fiscal years and interim periods beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of SFAS No. 160 is not expected to have a material impact the financial position, results of operations or cash flows. 11 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) SFAS No. 161. In March 2008, the Financial Accounting Standards Board (the "FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, "Disclosures about Derivative Instruments and Hedging Activities - An Amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS 133; and (c) derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires: disclosure of the objectives for using derivative instruments in terms of underlying risk and accounting designation; disclosure of the fair values of derivative instruments and their gains and losses in a tabular format; disclosure of information about credit-risk-related contingent features; and cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The Company does not expect that the adoption of this standard will have a material impact on its financial position, results of operations or cash flows. In May 2008, the FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" ("SFAS No. 162"). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The Company does not expect the adoption of SFAS No. 162 will have a material effect on our financial position, results of operations or cash flows. In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) No. 03-6-1, "DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES." Under the FSP, unvested share-based payment awards that contain rights to receive non-forfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The FSP is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. The Company did not have a material impact with the adoption of EITF No, 03-6-1 in 2009 on its financial position, results of operations or cash flows. In October 2008, the FASB issued FSP SFAS No. 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active." This position clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. It also reaffirms the notion of fair value as an exit price as of the measurement date. This position was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption had no impact on the Company's financial statements. In December 2008, the FASB issued FSP 132(R)-1, Employers' Disclosures about Postretirement Benefit Plan Assets, which is effective for fiscal years ending after December 15, 2009. FSP 132(R)-1 requires disclosures about fair value measurements of plan assets that would be similar to the disclosures about fair value measurements required by SFAS 157. . The Company does not expect the adoption of FSP 132(R)-1 to have a material effect on its financial position, results of operations or cash flows. In December 2008, the FASB issued FSP SFAS 140-4 and FIN 46(R)-8, Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities. The FSP requires extensive additional disclosure by public entities with continuing involvement in transfers of financial assets to special-purpose entities and with variable interest entities (VIEs), including sponsors that have a variable interest in a VIE. This FSP became effective for the first reporting period ending after December 15, 2008 and did not have any material impact on the Company's financial statements. In January 2009, the FASB issued Financial Statement of Position ("FSP") Issue No. EITF 99-20-1, "Amendments to the Impairment Guidance of EITF Issue No. 99-20" ("FSP EITF No. 99-20-1"). FSP EITF No. 99-20-1 amends the impairment guidance in EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets" to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The Company adopted FSP EITF No. 99-20-1 and it did not have a material impact on the financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements. 12 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In April 2009, the FASB issued FSP FAS 157-4, DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING TRANSACTIONS THAT ARE NOT ORDERLY , provides guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157 ("SFAS 157"), FAIR VALUE MEASUREMENTS . FSP FAS 157-4 reaffirms what SFAS 157 states is the objective of fair value measurement, to reflect how much an asset would be sold for in an orderly transaction at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, INTERIM DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, enhances consistency in financial reporting by increasing the frequency of fair value disclosures. This relates to fair value disclosures for any financial instruments that are not currently reflected on the consolidated balance sheet at fair value. FSP FAS 107-1 and APB 28-1 now require that fair value disclosures be made on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, RECOGNITION AND PRESENTATION OF OTHER-THAN-TEMPORARY IMPAIRMENTS, provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. This FSP is intended to bring greater consistency to the timing of impairment recognition and to provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. This FSP also requires increased and timelier disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In May 2009, the FASB issued SFAS No. 165, Subsequent Events ("SFAS No. 165"). SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009. The Company did not have a material impact with the adoption of SFAS No. 165 in 2009 on its financial position, results of operations or cash flows. In June 2009 the FASB issued SFAS 166, "Accounting for Transfers of financial Assets -- an amendment of FASB Statement No. 140" (SFAS 166). SFAS 166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS No. 166 is applicable for annual periods after November 15, 2009 and interim periods therein and thereafter. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In June 2009 the FASB issued SFAS 167, "Amendments to FASB Interpretation No. 46(R)" (SFAS 167). SFAS 167 eliminates Interpretation 46(R)'s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity's status as a variable interest entity, a company's power over a variable interest entity, or a company's obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying Interpretation 46(R)'s provisions. SFAS No. 167 is applicable for annual periods after November 15, 2009 and interim periods thereafter. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements. 13 QUARTZ VENTURES, INC. (An Exploration Stage Company) Notes To The Condensed Financial Statements July 31, 2009 (Unaudited) -------------------------------------------------------------------------------- 3. MINERAL INTERESTS On January 15, 2007, the Company entered into a purchase and sale agreement to acquire a 100% interest in two mineral claims located in the Alberni Mining Division, BC for total consideration of $8,000. The mineral interest is held in trust for the Company by the vendor of the property. Upon request from the Company the title will be recorded in the name of the Company with the appropriate mining recorder. The property is good standing as at July 31, 2009. 4. COMMON STOCK The total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of one tenth of one cent ($0.001) per share and no other class of shares is authorized. As of July 31, 2009 and 2008 the company has issued and outstanding 5,440,000 shares of common stock. During the year ended April 30, 2006, the Company issued 5,440,000 shares of common stock for total cash proceeds of $33,000. At July 31, 2009, there were no outstanding stock options or warrants. Effective on June 4, 2009, there was a change in control of the Company. In accordance with a verbal arrangement between the Company and a certain shareholder, Glenn Ennis, who is the record holder of an aggregate of 3,000,000 shares of restricted common stock (55.1% of the total issued and outstanding), Mr. Ennis returned to the Company the 3,000,000 shares of common stock for $3,000. The share certificate issued to Mr. Ennis was cancelled and the 3,000,000 shares of common stock were returned to treasury. Effective as of June 4, 2009, Mr.Polyhronopoulos the President/Chief Executive Officer/Chief Financial Officer/Secretary and member of Board of Directors of the Company acquired an aggregate of 3,000,000 shares of restricted common stock of the Company in consideration of $25,000 in accordance with the terms and provisions of a subscription agreement. 5. LOANS PAYABLE As at July 31, 2009, a related party loaned $30,500 to the Company, bearing no interest and with no specific terms of repayments. 6. INCOME TAXES As of July 31, 2009, the Company had net operating loss carry forwards of approximately $64,000 that may be available to reduce future years' taxable income through 2027. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. Components of deferred tax assets as of April 30, 2009 are as follows: Net operating loss carryforward $ 16,640 Valuation allowance (16,640) -------- Net deferred tax asset $ -- ======== In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure of such positions. Effective January 1, 2007, the Company adopted the provisions of FIN 48, as required. As a result of implementing FIN 48, there has been no adjustment to the Company's financial statements and the adoption of FIN 48 did not have a material effect on the Company's financial statements for the period ended July 31, 2009. 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors". In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock. As used in this quarterly report and unless otherwise indicated, the terms "we", "us", "our" and "Quartz" mean Quartz Ventures Inc. CORPORATE HISTORY We were incorporated in the State of Nevada, USA, on July 22, 2005. We are an exploration stage company engaged in the acquisition, and exploration of mineral properties with a view to exploiting any mineral deposits we discover that demonstrate economic feasibility. On the date of our incorporation, July 22, 2005, Mr. Glenn Ennis was our sole officer and director. On July 15, 2008, Mr. Ennis resigned as the President, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary, but continued to remain a member of the board of directors. As a result of Mr. Ennis' resignation, we appointed Mr. Richard Goodhart as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of our board of directors. On January 15, 2007, we entered into a purchase and sale agreement with David Heyman to acquire a100% interest in two mineral claims located in the Alberni Mining Division, British Columbia, Canada for total consideration of $8,000.00 (collectively, the "Claim"). As of the date of this Annual Report, the claims are in good standing and held in trust for us by the vendor of the property, David Heyman. Upon our request, Mr. Heyman will have the claims recorded in our name with the appropriate mining recorder. We had paid $5,000 to a geologist for analysis of the property underlying our claims. On September 25, 2008, we appointed Mr. Fred DaSilva to our board of directors. Effective January 20, 2009, Mr. Richard Goodhard resigned as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a director of our company. Also on January 20, 2009, Mr. Glenn Ennis resigned as a director of our company. As a result of the resignations of Mr. Goodhard and Mr. 15 Ennis, we appointed Mr. Fred DaSilva as our President, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary. We also appointed Mr. Rick Shykora as a director of our company. On June 4, 2009, certain shareholders of our company, pursuant to a written consent resolution of the shareholders, removed Mr. Rick Shykora as a director of our company and Mr. DeSilva as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a director of our company. As a result of the removal of Mr. DeSilva and Mr. Shykora on June 4, 2009, we appointed Mr. Georgios Polyhronopoulos as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a director of our company. As of the date of this quarterly report on 10-Q, Mr. Polyhronopoulos is our sole director and officer. Effective June 4, 2009, there was a change in control of our company. In accordance with a verbal arrangement between our company Mr. Glenn Ennis, a former director and officer of our company, Mr. Ennis returned an aggregate of 3,000,000 restricted shares of our common stock for cancellation. Also effective June 4, 2009, Mr. Polyhronopoulos, our sole director and officer, acquired an aggregate of 3,000,000 restricted shares of our common stock in consideration of $25,000.00. The shares were issued to one (1) U.S. person, as that term is defined in Regulation S of the Securities Act of 1933, relying on Section 4(2) of the Securities Act and/or Rule 506 of Regulation D, promulgated under the United States Securities Act of 1933, as amended. OUR CURRENT BUSINESS We are an exploration stage mining company engaged in the exploration of minerals on a property located in British Columbia, Canada. Our current operational focus is to conduct exploration activities on our property in British Columbia. ALBERNI MINING CLAIM GEOLOGICAL REPORT We had obtained a geological report on the property underlying our Claim. The geology report dated February 19, 2007 recommended renewed work in the project area with the objective being to delineate viable targets for diamond drilling. The first priority should be a comprehensive review of reports and maps pertaining to all past exploration work, including surface surveys, drilling, trenching and underground exploration followed by a field examination of the subject area. The review will include preparation of compilations of all available maps and sections pertaining to the property adjusted to common scales to permit accurate comparisons of data from different projects. The geophysical data, in particular the chargeability surveys previously carried out, should be professionally re-evaluated and an effort should be made to re-locate the survey grids. Their positions along with those of all known mineral occurrences, trenches, drill holes, adits and geographical features should be established with the aid of GPS instruments. Completion of this phase is expected to identify gaps in data and areas where additional effort is needed and to permit design of an appropriate program of additional work. The nature and extent of any follow-up work will be contingent on the results of the review but it is recommended that provision be made for a preliminary program of geological mapping, fill-in soil sampling and possibly trenching particularly in the areas of the chargeability anomalies. Consideration should be given to the application of mobile metal ion geochemistry as an approach to overcoming apparent difficulties with heavy overburden in parts of the property. An estimate of the cost of the proposed initial review and field examination is $13,000. Provision of an additional budget of $71,000 is recommended for the contingent exploration work that would be required to complete the follow-up surveys. PROPERTY DESCRIPTION The property consists of two contiguous claims listed in the table below: 16 CLAIM NUMBER AND NAME AREA (IN HECTARES) EXPIRY DATE --------------------- ------------------ ----------- 548275 - Horse's Wither 442.845 December 30, 2008 549813-Fetlock 42.176 January 18, 2009 TOTAL AREA: 485.021 -- EXPLORATION PROGRAM We will engage a geologist to provide a further analysis of the property and potential for minerals. Our initial program should subsequently be to prospect the property locating all signs of unreported previous work and record the results by global positioning system (GPS) coordinates. After all previous work areas have been accurately located, a geologist can rapidly produce a detailed geological map of the property delineating the favourable areas. Samples should be carefully collected from all exposure of the formation and analyses performed. The requirement to raise further funding for exploration beyond that obtained for the next six month period continues to depend on the outcome of geological and engineering testing occurring over this interval. If results provide the basis to continue development and geological studies indicate high probabilities of sufficient production quantities, we will attempt to raise capital to further our mining program, build production infrastructure, and raise additional capital for further land acquisitions. This includes the following activity: * Review all available information and studies. * Digitize all available factual information. * Complete an NI 43-101 Compliant Report with a qualified geologist familiar with mineralization. * Determine feasibility and amenability of extracting the minerals via an ISL operation. * Create investor communications materials, corporate identity. * Raise funding for mineral development. * Target further leases for exploration potential and obtain further funding to acquire new development targets. For the three month period ended July 31, 2009, we incurred $0 in exploration costs. CASH REQUIREMENTS There is limited historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services. Over the next twelve months we intend to use any funds that we may have available to fund our operations and conduct further analysis of the property and potential for minerals. We expect to review other potential exploration projects from time to time as they are presented to us. Not accounting for our working capital deficit of $8,710, we require additional funds of approximately $250,000 at a minimum to proceed with our plan of operation over the next twelve months, exclusive of any acquisition or exploration costs. As we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities. 17 Our auditors have issued a going concern opinion for our year ended April 30, 2009. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. As we had cash in the amount of $21,790 and a working capital deficit in the amount of $8,710 as of July 31, 2009, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months. We plan to complete debt financings and/or private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operation and to fund our working capital deficit in order to enable us to pay our accounts payable and accrued liabilities. We currently do not have any arrangements in place for the completion of any debt financings or private placement financings and there is no assurance that we will be successful in completing any debt financing or private placement financing. Our success or failure will be determined by what we find under the ground. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and can't raise it, we will either have to suspend activities until we do raise the cash, or cease activities entirely. Other than as described in this paragraph, we have no other financing plans. Over the next twelve months we intend to use any funds that we may have available funds to fund our operations and conduct exploration on our Alberni Mining Claim as follows: ESTIMATED NET EXPENDITURES DURING THE NEXT TWELVE MONTHS General, Administrative $ 15,000 Exploration Expenses 175,000 Professional fees 25,000 Additional Working Capital 35,000 -------- TOTAL $250,000 ======== The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations. PURCHASE OF SIGNIFICANT EQUIPMENT We do not intend to purchase mineral ore processing equipment over the twelve months ending July 31, 2010. 18 CORPORATE OFFICES We do not own any real property. Our executive office is located at 29115 North 144th Street, Scottsdale, AZ 85262. We are provided with 250 square feet for our offices at no cost. We believe that our office arrangements provide adequate space for our foreseeable future needs. EMPLOYEES Currently our only employees are our directors, officers, office administrator and an investor relations consultant. We do not expect any material changes in the number of employees over the next 12 month period. We do and will continue to outsource contract employment as needed. CRITICAL ACCOUNTING POLICIES Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials. EXPLORATION STAGE COMPANY Our company complies with the Financial Accounting Standards Board Statement No. 7, its characterization of our company as an exploration stage enterprise. MINERAL INTERESTS Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified. To date our company has not established any proven or probable reserves on its mineral properties. Our company has adopted the provisions of SFAS No. 143 "Accounting for Asset Retirement Obligations" which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. As at July 31, 2009, any potential costs relating to the retirement of our company's mineral property interest has not yet been determined. ENVIRONMENTAL COSTS Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or our company's commitments to plan of action based on the then known facts. INCOME TAXES Our company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At July 31, 2009, full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded. 19 BASIC AND DILUTED LOSS PER SHARE Our company computes loss per share in accordance with SFAS No. 128, "Earnings per Share" which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. Our company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal. GOING CONCERN We have suffered recurring losses from operations. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations. Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. RESULTS OF OPERATIONS THREE MONTHS ENDED JULY 31, 2009 AND 2008 The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended July 31, 2009 which are included herein. THREE MONTH SUMMARY ENDING JULY 31, 2009 AND 2008 Three Months Ended July 31, 2009 2008 -------- -------- Revenue $ Nil $ Nil Operating Expenses $ 4,515 $ 14,722 Net Loss $ (4,515) $(14,722) EXPENSES Our operating expenses for the three month periods ended July 31, 2009 and 2008 are outlined in the table below: Three Months Ended July 31, 2009 2008 -------- -------- Bank charges and interest $ 75 $ 109 Filing and transfer agent fees $ Nil $ 1,240 Mineral property $ 912 $ 3,319 Office expenses $ 78 $ 104 Professional fees $ 3,450 $ 9,950 20 Operating expenses for the three months ended July 31, 2009, decreased by 69% as compared to the comparative period in 2008 primarily as a result of a decrease in mineral exploration costs and impairment of mineral property costs. REVENUE We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter. LIQUIDITY AND FINANCIAL CONDITION WORKING CAPITAL At At July 31, April 31 2009 2009 -------- -------- Current assets $ 21,790 $ Nil Current liabilities 30,500 26,195 -------- -------- Working capital deficit $ (8,710) $(26,195) ======== ======== CASH FLOWS Three Months Ended July 31, July 31, 2009 2008 -------- -------- Net Cash Used in Operating Activities $ (4,515) $(14,722) Net Cash Used in investing activities Nil Nil Net Cash Provided by Financing Activities 29,000 12,000 -------- -------- Net (decrease) in cash during period $(24,485) $ (2,722) ======== ======== OPERATING ACTIVITIES Net cash used in operating activities was ($4,515) in the three months ended July 31, 2009 compared with net cash used in operating activities of ($14,722) in the same period in 2008. INVESTING ACTIVITIES Net cash used in investing activities was $Nil in the three months ended July 31, 2009 compared to net cash used in investing activities of $Nil in the same period in 2008. FINANCING ACTIVITIES Net cash provided by financing activities was $29,000 in the three months ended July 31, 2009 compared to $12,000 in the same period in 2008. CONTRACTUAL OBLIGATIONS As a "smaller reporting company", we are not required to provide tabular disclosure obligations. OFF-BALANCE SHEET ARRANGEMENTS We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders. 21 RECENTLY ISSUED ACCOUNTING STANDARDS In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, "Fair Value Measurements". The adoption of SFAS No. 159 did not have a material impact on our company's financial position, results of operations or cash flows. In June 2007, the FASB ratified the consensus in EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities" (EITF 07-3), which requires that nonrefundable advance payments for goods or services that will be used or rendered for future research and development (R&D) activities be deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. EITF 07-3 will be effective for fiscal years beginning after December 15, 2007. Our company does not expect that the adoption of EITF 07-3 will have a material impact on its financial position, results of operations or cash flows. SFAS No. 141(R), "Business Combinations" -- This statement includes a number of changes in the accounting and disclosure requirements for new business combinations occurring after its effective date. The changes in accounting requirements include: acquisition costs will be expensed as incurred; noncontrolling (minority) interests will be valued at fair value; acquired contingent liabilities will be recorded at fair value; acquired research and development costs will be recorded at fair value as an intangible asset with indefinite life; restructuring costs will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and changes in income tax uncertainties after the acquisition date will generally affect income tax expense. The statement is effective for new business combinations occurring on or after the first reporting period beginning on or after December 15, 2008. The adoption of SFAS No. 141(R) is not expected to have a material impact on our financial position, results of operations or cash flows. In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements: An Amendment of ARB No. 51" -- This statement changes the accounting and reporting for noncontrolling (minority) interests in subsidiaries and for deconsolidation of a subsidiary. Under the revised basis, the noncontrolling interest will be shown in the balance sheet as a separate line in equity instead of as a liability. In the income statement, separate totals will be shown for consolidated net income including noncontrolling interest, noncontrolling interest as a deduction, and consolidated net income attributable to the controlling interest. In addition, changes in ownership interests in a subsidiary that do not result in deconsolidation are equity transactions if a controlling financial interest is retained. If a subsidiary is deconsolidated, the parent company will now recognize gain or loss to net income based on fair value of the noncontrolling equity at that date. The statement is effective prospectively for fiscal years and interim periods beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of SFAS No. 160 is not expected to have a material impact the financial position, results of operations or cash flows. In March 2008, the Financial Accounting Standards Board (the "FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, "Disclosures about Derivative Instruments and Hedging Activities - An Amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS 133; and (c) derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires: disclosure of the objectives for using derivative instruments in terms of underlying risk and accounting designation; disclosure of the fair values of derivative instruments and their gains and losses in a tabular format; disclosure of information about credit-risk-related contingent features; and cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed. SFAS 161 is effective for fiscal 22 years and interim periods beginning after November 15, 2008. Our company does not expect that the adoption of this standard will have a material impact on its financial position, results of operations or cash flows. In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No. 162"). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." Our company does not expect the adoption of SFAS No. 162 will have a material effect on our financial position, results of operations or cash flows. In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) No. 03-6-1, "DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES." Under the FSP, unvested share-based payment awards that contain rights to receive non-forfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The FSP is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. The Company did not have a material impact with the adoption of EITF No, 03-6-1 in 2009 on its financial position, results of operations or cash flows. In October 2008, the FASB issued FSP SFAS No. 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active." This position clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. It also reaffirms the notion of fair value as an exit price as of the measurement date. This position was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption had no impact on the Company's financial statements. In December 2008, the FASB issued FSP 132(R)-1, Employers' Disclosures about Postretirement Benefit Plan Assets, which is effective for fiscal years ending after December 15, 2009. FSP 132(R)-1 requires disclosures about fair value measurements of plan assets that would be similar to the disclosures about fair value measurements required by SFAS 157. . The Company does not expect the adoption of FSP 132(R)-1 to have a material effect on its financial position, results of operations or cash flows. In December 2008, the FASB issued FSP SFAS 140-4 and FIN 46(R)-8, Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities. The FSP requires extensive additional disclosure by public entities with continuing involvement in transfers of financial assets to special-purpose entities and with variable interest entities (VIEs), including sponsors that have a variable interest in a VIE. This FSP became effective for the first reporting period ending after December 15, 2008 and did not have any material impact on the Company's financial statements. In January 2009, the FASB issued Financial Statement of Position ("FSP") Issue No. EITF 99-20-1, "Amendments to the Impairment Guidance of EITF Issue No. 99-20" ("FSP EITF No. 99-20-1"). FSP EITF No. 99-20-1 amends the impairment guidance in EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets" to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The Company adopted FSP EITF No. 99-20-1 and it did not have a material impact on the financial statements.In April 2009, the FASB issued FSP FAS 157-4, DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING TRANSACTIONS THAT ARE NOT ORDERLY , provides guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157 ("SFAS 157"), FAIR VALUE MEASUREMENTS . FSP FAS 157-4 reaffirms what SFAS 157 states is the objective of fair value measurement, to reflect how much an asset would be sold for in an orderly transaction at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. 23 In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, INTERIM DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, enhances consistency in financial reporting by increasing the frequency of fair value disclosures. This relates to fair value disclosures for any financial instruments that are not currently reflected on the consolidated balance sheet at fair value. FSP FAS 107-1 and APB 28-1 now require that fair value disclosures be made on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, RECOGNITION AND PRESENTATION OF OTHER-THAN-TEMPORARY IMPAIRMENTS, provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. This FSP is intended to bring greater consistency to the timing of impairment recognition and to provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. This FSP also requires increased and timelier disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In May 2009, the FASB issued SFAS No. 165, Subsequent Events ("SFAS No. 165"). SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009. The Company did not have a material impact with the adoption of SFAS No. 165 in 2009 on its financial position, results of operations or cash flows. In June 2009 the FASB issued SFAS 166, "Accounting for Transfers of financial Assets -- an amendment of FASB Statement No. 140" (SFAS 166). SFAS 166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor's interest in transferred financial assets. SFAS No. 166 is applicable for annual periods after November 15, 2009 and interim periods therein and thereafter. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. In June 2009 the FASB issued SFAS 167, "Amendments to FASB Interpretation No. 46(R)" (SFAS 167). SFAS 167 eliminates Interpretation 46(R)'s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity's status as a variable interest entity, a company's power over a variable interest entity, or a company's obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying Interpretation 46(R)'s provisions. SFAS No. 167 is applicable for annual periods after November 15, 2009 and interim periods thereafter. The Company does not expect this pronouncement to have a material impact on its results of operations, financial position, or cash flows. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements. ITEM 4. CONTROLS AND PROCEDURES MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the SECURITIES EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange 24 Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief executive officer (our principal executive officer and our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure. As of July 31, 2009, the end of our first quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief executive officer (our principal executive officer and our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief executive officer (our principal executive officer and our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have been no changes in our internal controls over financial reporting that occurred during the quarter ended July 31, 2009 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company. ITEM 1A. RISK FACTORS Much of the information included in this annual report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements". RISKS ASSOCIATED WITH MINING OUR PROPERTY IS IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT WE CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTY IN COMMERCIALLY EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY REVENUES FROM OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS THAT WE EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL. Despite exploration work on our mineral property, we have not established that it contains any mineral reserve, nor can there be any assurance that we will be able to do so. If we do not, our business could fail. A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an 25 individual prospect ever having a "reserve" that meets the requirements of the Securities and Exchange Commission's Industry Guide 7 is extremely remote; in all probability our mineral resource property does not contain any 'reserve' and any funds that we spend on exploration will probably be lost. Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable. MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON OUR PROPERTIES, OUR BUSINESS MAY FAIL. Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral property or for the construction and operation of a mine on our property at economically viable costs. If we cannot accomplish these objectives, our business could fail. We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral property. IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON OUR PROPERTY IN A COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR BUSINESS COULD FAIL. If we do discover mineral resources in commercially exploitable quantities on our property, we will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail. MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS. WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN ADVERSE IMPACT ON OUR COMPANY. Mineral exploration, development and production involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development and production of resources, 26 including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company. MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS. We expect to derive revenues, if any, either from the sale of our mineral resource property or from the extraction and sale of metals such as lithium. The price of those commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of metals, and therefore the economic viability of any of our exploration properties and projects, cannot accurately be predicted. THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO REDUCE OR CEASE OPERATIONS. The mineral exploration, development, and production industry is largely un-integrated. We compete with other exploration companies looking for mineral resource properties. While we compete with other exploration companies in the effort to locate and acquire mineral resource properties, we will not compete with them for the removal or sales of mineral products from our property if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce. In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations. RISKS RELATED TO OUR COMPANY WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN EVALUATION OF OUR BUSINESS AND PROSPECTS. We have been in the business of exploring mineral resource properties since 2007 and we have not yet located any mineral reserve. As a result, we have never had any revenues from our operations. In addition, our operating history has been restricted to the acquisition and exploration of our mineral properties and this does not provide a meaningful basis for an evaluation of our prospects if we ever determine that we have a mineral reserve and commence the construction and operation of a mine. We have no way to evaluate the likelihood of whether our mineral property contains any mineral reserve or, if it does that we will be able to build or operate a mine successfully. We anticipate that we will continue to incur operating costs without realizing any revenues during the period when we are exploring our properties. We therefore expect to continue to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from mining operations and any disposition of our property, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. 27 THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL PROPERTIES AS A GOING CONCERN. We have not generated any revenue from operations since our incorporation and we anticipate that we will continue to incur operating expenses without revenues unless and until we are able to identify a mineral resource in a commercially exploitable quantity on our mineral property and build and operate a mine. We had cash in the amount of $21,790 as of July 31, 2009. At July 31, 2009, we had a working capital deficit of $8,710. We incurred a net loss of $4,515 for our quarter ended July 31, 2009 and $63,710 since inception. We will have to raise additional funds to meet our currently budgeted operating requirements for the next 12 months. As we cannot assure a lender that we will be able to successfully explore and develop our mineral property, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity and debt securities, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue exploration of our mineral property, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these were to occur, there is a substantial risk that our business would fail. These circumstances lead our independent registered public accounting firm, in their report dated August 07, 2009, to comment about our company's ability to continue as a going concern. Management has plans to seek additional capital through a private placement of our capital stock. These conditions raise substantial doubt about our company's ability to continue as a going concern. Although there are no assurances that management's plans will be realized, management believes that our company will be able to continue operations in the future. RISKS ASSOCIATED WITH OUR COMMON STOCK WITHOUT A PUBLIC MARKET THERE IS NO LIQUIDITY FOR OUR SHARES AND OUR SHAREHOLDERS MAY NEVER BE ABLE TO SELL THEIR SHARES WHICH WOULD RESULT IN A TOTAL LOSS OF THEIR INVESTMENT. Our common shares are not listed on any exchange or quotation system and we do not have a market maker who will assist us in having our shares quoted on the OTCBB. At the present, time none of our selling security holders are able to sell their shares other than through private transactions. Selling shares privately might result in our selling security holders not receiving the price per share that they might have obtained if the shares were quoted on the OTCBB. Management intends to seek out a market maker. This will occur as follows: * We will have to identify a market maker who will file a Form 211 for us which will start the process with the FINRA and hopefully eventually obtaining a quotation on the OTCBB; and * We will have to be current in our financial statements to be quoted on the OTCBB and hence we will be responsible for filing Forms 10-K and 10-Q on a periodic basis as required. We do not know how long this process will take, but we estimate a period of between six to twelve months. There is the distinct possibility that our company will never be quoted on the OTCBB. WE MIGHT IN THE FUTURE HAVE TO SELL SHARES BY WAY OF PRIVATE PLACEMENTS OR THROUGH A PUBLIC OFFERING WHICH WILL HAVE THE EFFECT OF DILUTING OUR SHAREHOLDERS' CURRENT PERCENTAGE OWNERSHIP IN OUR COMPANY. If, in the future, we decide to sell shares to raise additional capital for operations, our shareholders current percentage ownership in our company will be diluted unless they participate in the purchase of shares equivalent to their present ownership in our company. If they do not participate in either a future private placement or public offering their percentage interest in our company will be diluted. 28 OTHER RISKS TRENDS, RISKS AND UNCERTAINTIES We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS Exhibit Number Description ------ ----------- (3) ARTICLES OF INCORPORATION AND BY-LAWS 3.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form S-1 filed on August 4, 2008) 3.2 Bylaws (incorporated by reference from our Registration Statement on Form S-1 filed on August 4, 2008) (10) MATERIAL CONTRACTS 10.1 Purchase and Sale Agreement dated January 15, 2007 (incorporated by reference from our Registration Statement on Form S-1 filed on August 4, 2008) 10.2 Form of Private Placement Subscription Agreement (incorporated by reference from our Registration Statement on Form S-1 filed on August 4, 2008) (31) RULE 13A-14(D)/15D-14(D) CERTIFICATIONS 31.1* Section 302 Certification (32) SECTION 1350 CERTIFICATIONS 32.1* Section 906 Certification ---------- * Filed herewith. 29 SIGNATURES Pursuant to the requirements of Section 13 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. QUARTZ VENTURES INC. Date: September 14, 2009 /s/ Georgios Polyhronopoulos --------------------------------------------------- Georgios Polyhronopoulos President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) 30