10-Q 1 cocmf_10q.htm QUARTERLY REPORT 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q


 

[ X ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended: July 31, 2014


[    ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______to_______


Commission File Number 000-54800

 

CORECOMM SOLUTIONS INC.

(Exact name of registrant as specified in its charter)

 

British Columbia, Canada

(State or other jurisdiction

of incorporation or organization)

99-0364150

(I.R.S. Employer

Identification No.)

 

810-789 West Pender Street, Vancouver, BC V6C 1H2

(Address of principal executive offices) (Zip Code)

 

(604) 722-0041

(Registrant’s telephone number, including area code)


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 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 (§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).[X] Yes    [   ] No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filed,” “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 Act). [   ] Yes    [X] No


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of September 10, 2014 the number of shares of the registrant’s common stock outstanding was 7,541,661.










TABLE OF CONTENTS

 




Part I - Financial Information

1

 

 

  Item 1.  Financial Statements.

1

    Balance Sheets

1

    Statements of Operations

2

    Statement of Stockholders' Deficit

3

    Statements of Cash Flows

4

    Notes to the Interim Financial Statements

5

  Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

8

  Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

13

  Item 4.  Controls and Procedures.

13

 

 

Part II - Other Information

14

 

 

  Item 1.  Legal Proceedings.

14

  Item 1a.  Risk Factors.

14

  Item 2.  Unregistered Sales of Equity Securities And Use of Proceeds.

20

  Item 3.  Defaults Upon Senior Securities.

20

  Item 4.  Mine Safety Disclosures

20

  Item 5.  Other Information.

20

  Item 6.  Exhibits.

20

































ii




PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements.


CORECOMM SOLUTIONS INC.

(Formerly Venza Gold Corp.)

BALANCE SHEETS


  

July 31, 2014

 

October 31, 2013

  

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

Cash

$

5,275

 

$

4,266

GST recoverable

 

493

 

 

1,960

 

 

5,768

 

 

6,226

 

 

 

 

 

 

Unproved mineral property

 

11,697

 

 

11,697

Total assets

$

17,465

 

$

17,923

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

  

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

100,517

 

$

56,623

Accrued liabilities

 

16,529

 

 

9,014

Advances payable

 

2,367

 

 

-

Due to related parties

 

10,372

 

 

7,816

Total liabilities

 

129,785

 

 

73,453

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

Common stock, no par value, unlimited authorized

 

 

 

 

 

7,541,661 and 6,916,661 issued and outstanding at

 

 

 

 

 

July 31, 2014 and October 31, 2013, respectively

 

523,375

 

 

472,000

Additional paid in capital

 

(26,180)

 

 

(26,180)

Accumulated other comprehensive income (loss)

 

2,548

 

 

(63)

Deficit

 

(612,063)

 

 

(501,287)

Total stockholder's deficit

 

(112,320)

 

 

(55,530)

Total liabilities and stockholders' deficit

$

17,465

 

$

17,923














The accompanying notes are an integral part of these interim financial statements



1



CORECOMM SOLUTIONS INC.

(Formerly Venza Gold Corp.)

STATEMENTS OF OPERATIONS

(UNAUDITED)


  

Three months ended

 

Nine months ended

  

July 31, 2014

July 31, 2013

 

July 31, 2014

July 31, 2013

  

 

 

 

 

 

Operating expenses

 

 

 

 

 

Administration

$

6,978

$

953

 

$

46,065

$

3,453

Accounting

 

1,853

 

2,523

 

 

7,960

 

5,633

Bank charges

 

86

 

312

 

 

509

 

477

Consulting

 

-

 

6,006

 

 

3,738

 

18,385

Corporate communications

 

-

 

500

 

 

1,676

 

500

Management fees

 

-

 

7,215

 

 

12,876

 

20,715

Mineral exploration

 

1,843

 

9,837

 

 

1,843

 

11,837

Office

 

790

 

3,917

 

 

3,448

 

10,370

Professional fees

 

4,532

 

3,843

 

 

18,949

 

9,243

Regulatory and filing

 

1,470

 

918

 

 

11,382

 

22,274

Research and development

 

-

 

-

 

 

1,122

 

-

Travel and entertainment

 

-

 

1,045

 

 

935

 

1,045

Foreign exchange

 

(15)

 

(134)

 

 

273

 

921

 

 

 

 

 

 

 

 

 

 

Net loss

 

(17,537)

 

(36,935)

 

 

(110,776)

 

(104,853)

 

 

 

 

 

 

 

 

 

 

 Translation to reporting currency

 

671

 

(756)

 

 

2,611

 

(756)

Comprehensive loss

$

(16,866)

$

(37,691)

 

$

(108,165)

$

(105,609)

  

 

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

$

0.00

$

0.01

 

$

0.02

$

0.02

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

7,236,441

 

6,919,661

 

 

7,178,793

 

6,919,661






















The accompanying notes are an integral part of these interim financial statements



2



CORECOMM SOLUTIONS INC.

(Formerly Venza Gold Corp.)

STATEMENT OF STOCKHOLDERS' DEFICIT

(UNAUDITED)


 

 

 

 

Additional

Paid-in

Accumulated

Other

Comprehensive

Accumulated

 

 

 

Shares

Amount

Capital

Loss

Deficit

Total

 

 

 

 

 

 

 

 

Balance at October 31, 2012

6,916,661

$

472,000

$

(27,180)

$

-

$

(348,123)

$

96,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donated services

 -

 

-

 

972

 

-

 

-

 

972

 

Translation to reporting currency

 -

 

-

 

-

 

(756)

 

-

 

(756)

 

Net loss for the nine months ended July 31, 2013

-

 

-

 

-

 

-

 

(104,853)

 

(104,853)

Balance at July 31, 2013

6,916,661

 

472,000

 

(26,208)

 

(756)

 

(452,976)

 

(7,940)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donated services

-

 

-

 

28

 

-

 

-

 

28

 

Translation to reporting currency

-

 

-

 

-

 

693

 

-

 

693

 

Net loss for the three months ended October 31, 2013

-

 

-

 

-

 

-

 

(48,311)

 

(48,311)

Balance at October 31, 2013

6,916,661

 

472,000

 

(26,180)

 

(63)

 

(501,287)

 

(55,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued

625,000

 

51,375

 

-

 

-

 

-

 

51,375

 

Translation to reporting currency

-

 

-

 

-

 

2,611

 

-

 

2,611

 

Net loss for the nine months ended July 31, 2014

-

 

-

 

-

 

-

 

(110,776)

 

(110,776)

Balance at July 31, 2014

7,541,661

$

523,375

$

(26,180)

$

2,548

$

(612,063)

$

(112,320)



























The accompanying notes are an integral part of these interim financial statements




3



CORECOMM SOLUTIONS INC.

(Formerly Venza Gold Corp.)

STATEMENTS OF CASH FLOWS

(UNAUDITED)


  

Nine months ended

 

July 31, 2014

 

July 31, 2013

Cash flow used in in operating activities

 

 

 

Net loss

$

(110,776)

 

$

(104,853)

 

 

 

 

 

 

Donated services

 

-

 

 

972

 

 

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

GST recoverable

 

1,467

 

 

(443)

Prepaids

 

-

 

 

(937)

Accounts payable and accrued liabilities

 

52,647

 

 

(8,375)

Due to related parties

 

2,913

 

 

-

Net cash used in operating activities

 

(53,749)

 

 

(113,636)

  

 

 

 

 

 

Cash flows provided by financing activities

 

 

 

 

 

Shares issued

 

51,375

 

 

-

Advances received

 

2,367

 

 

-

Net cash provided by financing activities

 

53,742

 

 

-

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

1,016

 

 

(756)

 

 

 

 

 

 

Net  increase (decrease) in cash

 

1,009

 

 

(114,392)

  

 

 

 

 

 

Cash, beginning

 

4,266

 

 

117,120

  

 

 

 

 

 

Cash, ending

$

5,275

 

$

2,728

 

 

 

 

 

 

  

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Cash paid during the period

 

 

 

 

 

Taxes

$

-

 

$

-

Interest

$

-

 

$

-















The accompanying notes are an integral part of these interim financial statements




4



CORECOMM SOLUTIONS INC.

(Formerly Venza Gold Corp.)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JULY 31, 2014

(UNAUDITED)



NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

Nature of Operations

CoreComm Solutions Inc. (the “Company”) is an exploration stage company. The Company’s principal business is the acquisition and exploration of mineral resources in British Columbia, Canada. The Company has not determined whether its properties contain mineral reserves that are economically recoverable.  


Basis of presentation

The unaudited interim financial statements of the Company are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended October 31, 2013, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements for the year ended October 31, 2013 included in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and nine months ended July 31, 2014, are not necessarily indicative of the results that may be expected for the year ending October 31, 2014.


Reclassifications

Certain prior period amounts in the accompanying unaudited interim financial statements have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the results of operations or financial position for any period presented.


Going Concern

The accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations.  The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.  These unaudited interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.  Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.


Recent Accounting Pronouncements

The Company has elected to early adopt the guidance in FASB Topic 915 and no longer provides the disclosure for development stage companies. Accordingly, the figures for the period from inception to the current period are no longer provided. Other recent accounting pronouncements with future effective dates are not expected to have an impact on the Company’s financial statements.








5




NOTE 2 - RELATED PARTY TRANSACTIONS


The Company incurred the following transactions with related parties that are not disclosed elsewhere in the financial statements:


 

 

Nine Months Ended July 31,

 

 

2014

 

2013

Management fees incurred to a former director

 

$

--

 

$

17,755

Consulting and management fees incurred to a former officer

 

 

--

 

 

7,500

Mineral exploration and management fees incurred to a director

 

 

4,142

 

 

11,837

Management fees incurred to a former Chief Executive Officer

 

 

8,278

 

 

--

Management fees incurred to a former Chief Financial Officer

 

 

2,299

 

 

--

Total transactions with related parties

 

$

14,719

 

$

37,092


At July 31, 2014, the Company owed $10,372 (2013 - $7,816) to related parties. The amounts bear no interest, are unsecured and due on demand.


On July 31, 2014, as part of the private placement announced on July 25, 2014, the Company issued 80,000 shares of its common stock for the total proceeds of $6,000 to its Chief Executive and Chief Financial Officer (Note 5).



NOTE 3 - LICENSE AGREEMENT


On December 2, 2013, the Company entered into the License Agreement with an arms-length party (the “Vendor”) allowing the Company to commercialize a web-based technology used for performing complex search queries on the internet in the education market for English and Spanish users.


In consideration of the License Agreement, the Company was required to make cash payments totaling $500,000 and issue a total of 2,857,142 common shares of the Company according to the following schedule:

 

·

$100,000 by April 1, 2014;

·

$200,000 by August 1, 2014;

·

$200,000 by January 1, 2015; and

·

2,857,142 common shares no later than the day following the closing of the proposed private placement for 5,000,000 common shares of the Company at $0.10 per share.


The Company failed to make its April 1, 2014 license payment, which resulted in termination of the License Agreement.



NOTE 4 - UNPROVED MINERAL PROPERTIES


At July 31, 2014, the Company held interest in three mineral exploration claims located in vicinity of Osoyoos, British Columbia. To keep the claims in good standing, the Company is required to incur exploration expenses of approximately $678 per year for the next two years and $5,540 per year thereafter.



NOTE 5 - COMMON STOCK


On January 8, 2014, the Company completed a private placement and issued 300,000 shares for gross proceeds of $30,000 and paid finders a cash commission totalling $3,000 associated with this offering.


On July 31, 2014, the Company completed a private placement and issued 325,000 common shares at a price of $0.075 per share for gross proceeds of $24,375. The Company did not pay any commission in connection with this offering (Note 2).





6




NOTE 6 - SUBSEQUENT EVENT


On September 8, 2014, The Company approved a proposed private placement offering of up to 500,000 common shares at a price of $0.20 per share for gross proceeds of $100,000 (the “Offering”).  The Offering will be made to persons who are not residents of the United States and are otherwise not “U.S. Persons” as that term is defined in Rule 902(k) of Regulation S of the U.S. Securities Act of 1933 (the “U.S. Securities Act”).  


















































7



Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Forward-Looking Statements


This Quarterly Report on Form 10-Q filed by CoreComm Solutions Inc. contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. These risks include, among other things:


general economic conditions;

our ability to raise enough money to continue our operations;

changes in regulatory requirements that adversely affect our business;

changes in the prices for minerals that adversely affect our business; and

other uncertainties, all of which are difficult to predict and many of which are beyond our control.


We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this report. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should refer to, and carefully review, the information in future documents we file with the United States Securities and Exchange Commission (the “SEC”).


General


You should read this discussion and analysis in conjunction with our interim unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the fiscal year ended October 31, 2013 included in our Annual Report on Form 10-K. The inclusion of supplementary analytical and related information may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.


Overview


We were incorporated on August 4, 2010 under the laws of the State of Nevada under the name “SOS Link Corporation”. On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to “Venza Gold Corp.”.  The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.  On January 6, 2014, we changed our name to “CoreComm Solutions Inc.”


As of the date of this Quarterly Report on Form 10-Q, our principal business is the acquisition and exploration of mineral resources in British Columbia, Canada.  We hold 100% interest in the OS Gold Claim located in vicinity of Osoyoos, British Columbia, Canada. Subject to the availability of financing, we plan to conduct a geophysical magnetometer survey of the OS Gold Claim over the area covered by our previous geochemical soil surveys.


Recent Corporate Events


The following corporate developments have occurred during the third quarter ended July 31, 2014, and up to the date of the filing of this Quarterly Report:





8



Changes in Directors and Officers


On April 11, 2014, James Hyland resigned as our Chief Financial Officer and director; and on May 21, 2014, Patrick Fitzsimmons resigned as our Chief Executive Officer, President and director. These resignations were not due to, and were not caused by, in whole or in part, any disagreements with the Company, whether related to the Company’s operations, policies, practices or otherwise. On May 21, 2014, in order to fill the vacancies caused by Mr. Fitzsimmons' and Mr. Hyland’s resignations, we appointed Nelson Da Silva as our Chief Executive Officer, Chief Financial Officer, President and a director.


Private Placements


On July 25, 2014, we terminated the Foreign and US offerings announced on December 2, 2013. At the same time we approved an offering of up to 400,000 common shares of the Company at a price of $0.075 per common share pursuant to the provisions of Regulation S of the United States Securities Act of 1933, as amended. On July 31, 2014, we closed this private placement by issuing a total of 325,000 common shares at a price of $0.075 per share for gross proceeds of $24,375.  


Proposed Private Placement Offering


On September 8, 2014, our board of directors have approved a proposed private placement offering of up to 500,000 common shares at a price of $0.20 per share for gross proceeds of $100,000 (the “Offering”).  The Offering will be made to persons who are not residents of the United States and are otherwise not “U.S. Persons” as that term is defined in Rule 902(k) of Regulation S of the U.S. Securities Act of 1933 (the “U.S. Securities Act”).  The proceeds of the Offering will be used for working capital purposes.


The above does not constitute an offer to sell or a solicitation of an offer to buy any of our securities in the United States. The securities have not been registered under the U.S. Securities Act and may not be offered or sold within the United States or to U.S. persons unless an exemption from such registration is available.


Summary of financial condition


The following table summarizes and compares our financial condition at July 31, 2014 and October 31, 2013.


  

July 31, 2014

October 31, 2013

Working capital

$(124,017)

$(67,227)

Current assets

$5,768

$6,226

Unproved mineral property

$11,697

$11,697

Total liabilities

$129,785

$73,453

Common stock and additional paid in capital

$497,195

$445,820

Deficit

$(612,063)

$(501,287)


Results of Operation


Our operating results for the three and nine months ended July 31, 2014 and 2013 and the changes in the operating results between those periods are summarized in the table below.


Three and Nine Months Summary


 

Three Months Ended

July 31,

Percentage

Increase /

Nine Months Ended

July 31,

Percentage

Increase /

 

2014

2013

(Decrease)

2014

2013

(Decrease)

Operating expenses

$  17,537

$36,935

(52.5)%

$110,776

$ 104,853

5.6 %

Translation to reporting currency

(671)

756

188.8%

(2,611)

756

445.4%

Comprehensive loss

$   16,866

$ 37,691

(55.3)%

$108,165

$  105,609

2.4 %




9




Revenue


During the three and nine months ended July 31, 2014 and 2013 we did not have any revenue generating operations.  We are presently an exploration stage company engaged in the search for mineral reserves. We can provide no assurance that we will be able to discover any commercially exploitable levels of mineral resources on our property, or, even if such resources are discovered, that we will be able to enter into commercial production of our mineral properties.


Operating Expenses


Our operating expenses for the three and nine months ended July 31, 2014 and 2013 consisted of the following:


 

Three Months Ended

July 31,

Percentage

Increase /

Nine Months Ended

July 31,

Percentage

Increase /

 

2014

2013

(Decrease)

2014

2013

(Decrease)

Operating expenses:

 

 

 

 

 

 

Administration

$     6,978

$      953

632.2%

$    46,065

$      3,453

1234.1%

Accounting

1,853

2,523

(26.6)%

7,960

5,633

41.3%

Bank charges

86

312

(72.4)%

509

477

6.7%

Consulting

-

6,006

(100.0)%

3,738

18,385

(79.7)%

Corporate communications

-

500

(100.0)%

1,676

500

235.2%

Management fees

-

7,215

(100.0)%

12,876

20,715

(37.8)%

Mineral exploration

1,843

9,837

(81.3)%

1,843

11,837

(84.4)%

Office

790

3,917

(79.8)%

3,448

10,370

(66.8)%

Professional fees

4,532

3,843

17.9%

18,949

9,243

105.0%

Regulatory and filing

1,470

918

60.1%

11,382

22,274

(48.9)%

Research and development

-

-

n/a

1,122

-

n/a

Travel and entertainment

-

1,045

(100.0)%

935

1,045

(10.5)%

Foreign exchange (gain) / loss

(15)

(134)

(88.8)%

273

921

(70.4)%

Net loss:

$  17,537

$  36,935

(52.5)%

$  110,776

$  104,853

5.6%


Operating expenses


Our operating expenses decreased by $19,398, or 52.5% from $36,935, for the three months ended July 31, 2013 to $17,537 for the three months ended July 31, 2014. The decrease was associated with our attempts to control our overall operating expenses and low level of exploration activities on our mineral property.


Our operating expenses increased by $5,923, or 5.6%, from $104,853 for the nine months ended July 31, 2013 to $110,776 for the nine months ended July 31, 2014. The increases in our operating expenses were mainly associated with our entry into a License Agreement with Make Sence Inc. (the “MSI License Agreement”) to commercialize the Correlation Technology platform in the worldwide K-12 education market, which was terminated on April 12, 2014. The due diligence process associated with the MSI License Agreement led to the increases in our administrative, accounting and professional fees. These increases were partially offset by decreased regulatory and filing fees. The higher regulatory fees during the nine months period ended July 31, 2013 were associated with listing of our common shares on the OTC Bulletin Board. In addition, during the nine months ended July 31, 2014, we kept our exploration activities at minimum level, which resulted in a lower mineral exploration and office expenses.






10




Translation to reporting currency


Translation to reporting currency results from the difference between our functional currency, being the Canadian dollar, and reporting currency, being the United States dollar, and is caused by fluctuation in foreign exchange between these two currencies as well as different accounting treatment between various financial instruments.


Liquidity and Capital Resources

 

GOING CONCERN

 

The unaudited interim financial statements included in this Quarterly Report have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. Based upon our current plans, we expect to incur operating losses in future periods. At July 31, 2014, we had a working capital deficit of $124,017 and accumulated losses of $612,063 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. These unaudited interim financial statements do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern. Therefore, we may be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.


Working Capital


  

 

At July 31,

2014

 

 

At October

31, 2013

Current assets

 

$

5,768

 

 

$

6,226

Current liabilities

 

 

129,785

 

 

 

73,453

Working capital deficit

 

$

124,017

 

 

$

67,227


During the nine months ended July 31, 2014, our working capital deficit increased by $56,790, from $67,227 at October 31, 2013 to $124,017 at July 31, 2014. The increase in working capital deficit was primarily related to  increases in accounts payable and accrued liabilities as well as amounts due to related parties, which were mainly associated with the elevated work load require to complete our due diligence process under MSI License Agreement.


Cash Flows

 

  

 

Nine months ended

July 31,

  

 

2014

 

 

2013

Net cash used in operating activities

 

$

(53,749)

 

 

$

(113,636)

Net cash from financing activities

 

 

53,742

 

 

 

-

Effect of exchange rate changes on cash

 

 

1,016

 

 

 

(756)

Net increase / (decrease) in cash during period

 

$

1,009

 

 

$

(114,392)


Net cash used in operating activities. During the nine months ended July 31, 2014, we used $53,749 to support our operating activities. This cash was used to cover our operating loss of $110,776. The cash used in operations was offset by increases in our accounts payable and accrued liabilities of $52,647, increases in the amounts due to related parties of $2,913 and a $1,467 increase in GST recoverable.




11




During the nine months ended July 31, 2013, we used $113,636 to support our operating activities. This cash was used to cover our operating loss of $104,853, to increase our prepaids and GST recoverable by $937 and $443, respectively, as well as decrease our accounts payable and accrued liabilities by $8,375.


Net cash provided by financing activities. During the nine months ended July 31, 2014, we issued 625,000 shares of our common stock for gross proceeds of $54,375 pursuant to Regulation S of the Securities Act of 1933, as amended (the “Act”). The subscribers represented that they were not “U.S. Persons” as that term is defined in Regulation S of the Act. We paid a finder, who was not a US Person, a finder’s fee totaling $3,000 in connection with this issuance.


During the second quarter we received CAD$2,600 ($2,367) as advance from an unrelated party.


We did not have any financing activities during the nine months ended July 31, 2013.


Capital Resources


Future exploration of our mineral claims is subject to our ability to obtain the necessary funding. We expect to raise funds through sales of debt or equity securities. We have no committed sources of capital.  If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations.


As of July 31, 2014, we had cash on hand of $5,275, which raises substantial doubt about our continuation as a going concern.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.


Critical Accounting Policies


The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.  


The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.  As an “emerging growth company,” we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company," affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), or upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.


Our significant accounting policies are disclosed in the notes to the audited financial statements for the year ended October 31, 2013. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:


Revenue Recognition


Revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the income is determinable and collectability is reasonably assured.



12



Foreign Currency Translation and Transaction


Our functional currency is the Canadian dollar and reporting currency is the United States dollar.  We translate assets and liabilities to US dollars using year-end exchange rates, translate unproved mineral properties using historical exchange rates, and translate revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in US dollars. We have not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.


Fair Value of Financial Instruments


Our financial instruments include cash, accounts receivable, accounts payable and amounts due to related parties. We believe the fair value of these financial instruments approximate their carrying values due to their short maturities.


Concentration of Credit Risk


Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable.


At July 31, 2014, we had approximately $5,275 in cash on deposit with a large chartered Canadian bank, of which $3,288 was insured.  As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution.  We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.


Recent Accounting Standards and Pronouncements


We have elected to early adopt the guidance in FASB Topic 915 and no longer provide the disclosure for development stage companies. Accordingly, our financial statements no longer present the figures for the period from inception to the current period. Other recent accounting pronouncements with future effective dates are not expected to have an impact on our financial statements.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.


Not Applicable.


Item 4.  Controls and Procedures.


Disclosure Controls and Procedures


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report.  The evaluation was undertaken in consultation with our accounting personnel.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.


Changes in Internal Control over Financial Reporting


There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the quarter ended July 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.




13




PART II-OTHER INFORMATION


Item 1.  Legal Proceedings.


None.


Item 1A.  Risk Factors.


IN ADDITION TO THE FACTORS DISCUSSED ELSEWHERE IN THIS QUARTERLY REPORT, THE FOLLOWING RISKS AND UNCERTAINTIES COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.  ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.


We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease our operations and if we do not obtain sufficient financing, our business will fail.


We were incorporated on August 4, 2010 and have been involved primarily in the acquisition and exploration of mineral properties. We have no exploration history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon: (i) our ability to locate a profitable mineral property, and (ii) our ability to generate revenues.


In order to continue our operations we will be required to raise additional capital through financing, which would be subject to a number of factors, including the market prices for the mineral property and base and precious metals.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.  Since our inception, we have used our common shares to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.


Because we are an exploration stage company, our business has a high risk of failure.


We are an exploration stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to complete our exploration activities. The success of our business operations will depend upon our ability to obtain further financing to complete our exploration programs and to attain profitable operations. If we are not able to complete a successful exploration program and attain sustainable profitable operations, our business will fail.


Our auditors have expressed substantial doubt about our ability to continue as a going concern; as a result we could have difficulty finding additional financing.


Our financial statements have been prepared assuming that we will continue as a going concern.   Except for the interest revenue, we have not generated any revenue from our main operations since inception and have accumulated losses.  As a result, our auditors have expressed substantial doubt about our ability to continue as a going concern.  Our ability to continue our operations depends on our ability to complete equity or debt financings or generate profitable operations.  Such financings may not be available or may not be available on reasonable terms.  Our financial statements do not include any adjustments that could result from the outcome of this uncertainty.






14



Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.


Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  Our mineral properties do not contain a known body of commercial ore and, therefore, any program conducted on our mineral properties would be an exploratory search of ore.  There is no certainty that any expenditures made in the exploration of our mineral properties will result in discoveries of commercial quantities of ore.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  If the results of our exploration program do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources to purchase such claims. If we do not have sufficient capital resources and are unable to obtain sufficient financing, we may be forced to abandon our operations.


We have no known mineral reserves and if we cannot find any, we may have to cease operations.


We are in the initial phase of our exploration program for the OS Gold Claim.  It is unknown whether this property contains viable mineral reserves.  If we do not find a viable mineral reserve, or if we cannot exploit the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we may have to cease operations and our investors may lose their investments.  Mineral exploration is a highly speculative endeavor.  It involves many risks and is often non-productive.  Even if mineral reserves are discovered on our properties, our production capabilities will be subject to further risks and uncertainties including:


(i)

Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;

(ii)

Availability and costs of financing;

(iii)

Ongoing costs of production; and

(iv)

Environmental compliance regulations and restraints.


The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near the OS Gold Claim, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.  


Because we have not commenced business operations, we face a high risk of business failure.


We have not earned any revenues from business operations as of the date of this report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.


Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.


The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards. The payment of such liabilities may result in our inability to complete our planned exploration program and/or obtain additional financing to fund our exploration program.



15



Because the prices of metals fluctuate, if the price of metals for which we are exploring decreases below a specified level, it may no longer be profitable to explore for those metals and we will cease operations.


Metal prices are determined by such factors as expectations for inflation, the strength of the United States dollar, global and regional supply and demand, and political and economic conditions and production costs in metals producing regions of the world.  The aggregate effect of these factors on metal prices is impossible for us to predict. In addition, the prices of metals such as lead, zinc, copper, silver, gold or uranium are sometimes subject to rapid short-term and/or prolonged changes because of speculative activities. The current demand for and supply of these metals affect the metal prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of these metals primarily consists of new production from mining. If the prices of the metals are, for a substantial period, below our foreseeable cost of production, it may not be economical for us to continue operations and investors could lose their entire investment.


We sometimes hold a significant portion of our cash in United States dollars, which could weaken our purchasing power in other currencies and limit our ability to conduct our exploration programs.


Currency fluctuations could affect the costs of our operations and affect our operating results and cash flows.  Gold and copper are sold throughout the world based principally on the U.S. dollar price, but most of our operating expenses are incurred in Canadian dollar.  The appreciation of Canadian dollar against the U.S. dollar can increase the costs of our operations.


In order to maintain our mineral rights we will be required to make annual payments with the Ministry of Mines or complete assessment work on these mineral properties.


Our prospecting activities are dependent upon the grant of appropriate mineral tenures and regulatory commitments, which may be withdrawn or made subject to limitations.  Mineral claims are renewable, subject to certain expenditure requirements.  Although we believe that we will obtain the necessary prospecting licenses and permits, including but not limited to drill permits, there can be no assurance that they will be granted or as to the favorability of the terms of any such grant.  Furthermore, we are required to expend required amounts on our mineral claims in order to maintain them in good standing.  If we are unable to expend these amounts, we may lose our title thereto on the expiry date(s) of the relevant mineral claims.  There is no assurance that, in the event of losing our title to a mineral claim, we will be able to re-register the mineral claim before a third party registers its interest first.


Our mineral properties may become subject to aboriginal rights which may affect title to our mineral properties.


In British Columbia, aboriginal rights may be claimed on Crown properties or other types of tenure with respect to which mining rights have been conferred.  We are not aware of any other aboriginal land claims having been asserted or any legal actions relating to native issues having been instituted with respect to any of the land which is covered by our claims.


The legal basis of a land claim is a matter of considerable legal complexity and the impact of a land claim settlement and self-government agreements cannot be predicted with certainty.  In addition, no assurance can be given that a broad recognition of aboriginal rights by way of a negotiated settlement or judicial pronouncement would not have an adverse effect on our activities.  Such impact could be marked and, in certain circumstances, could delay or even prevent our exploration or mining activities.


There are environmental risks associated with mineral exploration.


Inherent with mining operations is an environmental risk.  The legal framework governing this area is constantly developing, therefore we are unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise).  Our proposed activities, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation.  There is also a risk that our operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to our activities and, in particular, the proposed exploration and mining by us within the Province of British Columbia, Canada.



16




We face significant competition in the mineral exploration industry.


We compete with other mining and exploration companies possessing greater financial resources and technical facilities than we do.  Due to our weaker competitive position, we may have greater difficulty in hiring and retaining qualified personnel to conduct our planned exploration activities, which could cause delays in our exploration programs.  In addition, there is significant competition for a limited number of mineral properties.   Due to our weaker financial position, we may be unable to acquire rights to new mineral properties on a continuing basis.


We have not reviewed the quality or accuracy of historical drilling and sampling reported on our properties.


We have not verified the quality and accuracy of the historical sampling and drilling reported, and we caution readers not to rely upon them. Mr. Diakow has reviewed the data on mineral claims and technical data supplied by the British Columbia Ministry of Mines, Minfile Data Base, and other sources of public technical information. It is important to note that the claims were acquired by map designation by Mr. Diakow. There is no assurance that our properties will be of merit since our exploration programs are based on historical data.


If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail


Our success will largely depend on our ability to hire highly qualified personnel with experience in geological exploration. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business.


The recently enacted JOBS Act will allow us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.


We are and we will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Exchange Act. For so long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" as described in further detail in the risk factors below. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. If we avail ourselves of certain exemptions from various reporting requirements, as is currently our plan, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.


Our election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, our company, as an “emerging growth company”, can adopt the standard for the private company. This may make comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible, as possible different or revised standards may be used.



17




The recently enacted JOBS Act will also allow our company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. We meet the definition of an “emerging growth company” and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

·

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

·

be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;

·

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and

·

be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditors report on the financial statements.

 

Although we are still evaluating the JOBS Act, we currently intend to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as it qualifies as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “emerging growth company”, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of its common stock may be adversely affected.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.  Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.





18




Because our directors are not independent they can make and control corporate decisions that may be disadvantageous to other common shareholders.

 

Our shares of common stock are listed on OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements.  For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 – Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a director’s independent judgment. Gerald Diakow is considered an independent director. As aside from shares held by him, he has no ongoing interest or relationship with us other than serving as a director. Nelson Da Silva is not an independent director because of his position as CEO, CFO and President.

 

 We do not expect to declare or pay dividends in the foreseeable future.


We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future. We intend to retain any earnings to develop, carry on, and expand our business.


“Penny stock” rules may make buying or selling our common stock difficult, and severely limit its marketability and liquidity.


Because our securities are considered a penny stock, shareholders will be more limited in their ability to sell their shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:


1.

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

2.

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.

contains a toll-free telephone number for inquiries on disciplinary actions;

5.

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.

contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.


The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.



19



Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.


On July 31, 2014, we issued a total of 325,000 common shares of the Company at a price of $0.075 per share for gross proceeds of $24,375.  The issuance was completed pursuant to the provisions of Regulation S of the Securities Act of 1933 (the “Act”).  We did not engage in a distribution of this offering in the United States. Each of the subscribers represented that they were not a US person as defined in Regulation S of the Act and that they were not acquiring the shares for the account or benefit of a US person.


Item 3.  Defaults upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures


Not applicable.


Item 5.  Other Information.


Proposed Private Placement Offering


On September 8, 2014, our board of directors have approved a proposed private placement offering of up to 500,000 common shares at a price of $0.20 per share for gross proceeds of $100,000 (the “Offering”).  The Offering will be made to persons who are not residents of the United States and are otherwise not “U.S. Persons” as that term is defined in Rule 902(k) of Regulation S of the U.S. Securities Act of 1933 (the “U.S. Securities Act”).  The proceeds of the Offering will be used for working capital purposes.


The above does not constitute an offer to sell or a solicitation of an offer to buy any of our securities in the United States. The securities have not been registered under the U.S. Securities Act and may not be offered or sold within the United States or to U.S. persons unless an exemption from such registration is available.


Item 6.  Exhibits.


The following table sets out the exhibits either filed herewith or incorporated by reference.


Exhibit

Description

3.1

Notice of Articles.(1)

3.2

Articles.(1)

3.3

Certificate of Continuation.(2)

10.1

Consulting Agreement dated October 1, 2011 between the Company and Denis Zyrianov. (1)

10.2

Property Purchase Agreement dated April 11, 2012 between the Company and Gerald Diakow.(1)

10.3

Consulting Agreement dated February 1, 2013 between the Company and Ralph Biggar. (4)

10.4

License Agreement between the Company and Make Sence, Inc. dated December 2, 2013. (5)

16.1

Code of Ethics. (3)

31

Certification pursuant to Rule 13a-14(a) and 15d-14(a).(5)

32

Certification pursuant to Section 1350 of Title 18 of the United States Code.(5)

99.1

Audit Committee Charter(3)

101

The following financial statements from the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2014, formatted in XBRL:

(i)  Balance Sheets;

(ii)  Statements of Operations;

(iii)  Statement of Stockholders’ Deficit

(iv)  Statements of Cash Flows;

(v)  Notes to the Interim Financial Statements.





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Notes:

(1)

Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012.

(2)

Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012.

(3)

Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013.

(4)

Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013.

(5)

Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 4, 2013.

(6)

Filed herewith.



















































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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated:  September 10, 2014

 

  

CORECOMM SOLUTIONS INC.

  

  

  

  

  

  

By:

/s/ Nelson Da Silva

  

                                                                

  

Nelson Da Silva,

Chief Executive Officer, Chief Financial Officer and President

  

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated

 

Signature

Title

Date

  

  

  

/s/ Nelson Da Silva

President, Chief Executive Officer,

September 10, 2014

   Nelson Da Silva

(Principal Executive Officer), Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

and Member of the Board of Directors

  

  

  

  

/s/ Gerald Diakow

Member of the Board of Directors

September 10, 2014

   Gerald Diakow

 

 

 


























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