þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarter ended June 30, 2013
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________ to _________
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Nevada
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30-0233726
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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324 South 400 West, Suite 250
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Salt Lake City, Utah
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84101
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated Filer ¨ | Accelerated filer ¨ |
Non-accelerated Filer ¨ (Do not check if smaller reporting company) | Smaller reporting company þ |
As of August 9, 2013, the registrant had 55,787,554 shares of common stock, par value $0.001, issued and outstanding.
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PART I — FINANCIAL INFORMATION
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Page
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Item 1. Unaudited Condensed Financial Statements
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Condensed Balance Sheets as of June 30, 2013 and March 31, 2013
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3
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Condensed Statements of Operations for the Three Months Ended June 30, 2013 and 2012
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4
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Condensed Statements of Cash Flows for the Three Months Ended June 30, 2013 and 2012
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5
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Notes to Condensed Financial Statements
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6
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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10
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Item 3. Qualitative and Quantitative Disclosures About Market Risk
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14
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Item 4. Controls and Procedures
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14
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PART II — OTHER INFORMATION
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Item 1A. Risk Factors
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14
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Item 6. Exhibits
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14
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Signatures
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14
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Notes
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June 30, 2013 | March 31, 2013 | ||||
ASSETS
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||||||
CURRENT ASSETS
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||||||
Cash and cash equivalents
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3
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$ |
10,019,943
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$ |
10,463,531
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Total current assets
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10,019,943
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10,463,531
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LONG TERM ASSETS
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||||||
Other fixed assets, net
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69,375
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98,356
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Total long term assets
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69,375
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98,356
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TOTAL ASSETS
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$ |
10,089,318
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$ |
10,561,887
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||
CURRENT LIABILITIES
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||||||
Accounts payable
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$ |
434,711
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$ |
373,202
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Taxes payable, accrued liabilities and other payables
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38,127
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22,568
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Deferred consulting and distribution payments
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4
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8,607,365
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8,613,665
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Total current liabilities
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9,080,203
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9,009,435
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SHAREHOLDERS’ EQUITY
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||||||
Preferred stock - $0.001 par value; 20,000,000 shares authorized; no shares issued or outstanding
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-
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-
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||||
Common stock - $0.001 par value; 500,000,000 shares authorized;
55,787,554 and 55,787,554 shares outstanding, respectively
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55,788
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55,788
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||||
Additional paid in capital
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89,363,319
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89,363,319
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Accumulated deficit
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(88,409,992)
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(87,866,655)
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Total shareholders’ equity
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1,009,115
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1,552,452
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ |
10,089,318
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$ |
10,561,887
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Three months ended June 30, | ||||||
Notes
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2013 (unaudited) |
2012 (unaudited) |
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REVENUES
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$ |
-
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$ |
-
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COSTS AND OPERATING EXPENSES
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||||||
General and administrative
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514,965
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732,078
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Interest expense
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-
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-
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Amortization and depreciation
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28,981
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28,980
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Total costs and operating expenses
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543,946
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761,058
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LOSS FROM OPERATIONS
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(543,946)
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(761,058)
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OTHER INCOME
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||||||
Foreign exchange gain, net
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-
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31
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Interest income
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-
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1,498
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Other income, net
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609
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9,215
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Total other income
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609
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10,744
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NET LOSS
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$ |
(543,337)
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$ |
(750,314)
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BASIC AND DILUTED NET LOSS PER COMMON SHARE
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5
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$ |
(0.01)
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$ |
(0.01)
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Three months ended June 30,
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||||||
Notes
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2013
(unaudited)
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2012
(unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||
Net loss
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$
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(543,337)
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$
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(750,314)
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Adjustments to reconcile net income to net cash provided by operating activities:
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||||||
Depreciation and amortization
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28,981
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28,980
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Changes in operating assets and liabilities
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||||||
Decrease in prepaid expenses and other assets
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-
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544,718
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Increase in accounts payable
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61,509
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45,827
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Increase in taxes payables and accrued liabilities
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15,559
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20,098
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Net cash used in operating activities
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(437,288)
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(110,691)
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of other fixed assets
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-
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-
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Net cash provided by investing activities
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-
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-
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Cash distribution
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5
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(6,300)
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(1,782,857)
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Net cash used in financing activities
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(6,300)
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(1,782,857)
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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(443,588)
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(1,893,548)
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CASH AND CASH EQUIVALENTS at beginning of period
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10,463,531
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39,372,278
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CASH AND CASH EQUIVALENTS at end of period
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$
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10,019,943
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$
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37,478,730
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Vehicles
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3-5 years
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Office equipment
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3-5 years
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Software
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3-4 years
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Furniture and fixtures
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2-7 years
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Three months ended
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|||||
June 30, 2013 | June 30, 2012 | ||||
Net loss
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$ |
(543,337)
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$ |
(750,314)
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Basic weighted-average common shares outstanding
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55,787,554
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55,787,554
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Basic loss per common share
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$ |
(0.01)
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$ |
(0.01)
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For the three months ended June 30, 2013 |
For the three months ended June 30, 2012 |
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Costs and Operating Expenses:
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General and administrative
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$ |
514,965
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$ |
732,078
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Amortization and depreciation
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28,981
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28,980
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Total
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$ |
543,946
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$ |
761,058
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Three months ended June 30, 2013 |
Three months ended June 30, 2012 |
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Net cash used in operating activities
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$ |
(437,288)
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$ |
(110,691)
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Net cash provided by investing activities
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$ |
-
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$ |
-
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Net cash used in financing activities
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$ |
(6,300)
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$ |
(1,782,857)
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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$ |
(443,588)
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$ |
(1,893,548)
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Payments Due By Period | ||||||||||||||
Contractual obligations
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Total | Less than 1 year | 2-3 years | 4-5 years | After 5 years | |||||||||
Initial cash distribution payable(1)
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$ |
6,672,623
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$ |
6,672,623
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$ |
-
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$ |
-
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$ |
-
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Second cash distribution payable(1)
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1,934,742
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1,934,742
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-
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-
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-
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TOTAL
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$ |
8,607,365
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$ |
8,607,365
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$ |
-
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$ |
-
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$ |
-
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Exhibit No.
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Description of Exhibit
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Exhibit 31.1
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Certification of Principal Executive Officer Pursuant to
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Rule 13a-14(a)
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Exhibit 31.2
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Certification of Principal Financial Officer Pursuant to
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Rule 13a-14(a)
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Exhibit 32.1
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Certification of Principal Executive Officer Pursuant to
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18 U.S.C. Section 1350
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Exhibit 32.2
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Certification of Principal Financial Officer Pursuant to
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18 U.S.C. Section 1350
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Exhibit 101.INS
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XBRL Instance Document
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Exhibit 101.SCH
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XBRL Taxonomy Extension Schema Document
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Exhibit 101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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Exhibit 101.DEF
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XBRL Taxonomy Definition Linkbase Document
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Exhibit 101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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BMB MUNAI, INC.
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Date:
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August 12, 2013
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/s/ Askar Tashtitov | |
Askar Tashtitov
President
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Date:
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August 12, 2013
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/s/ Evgeniy Ler | |
Evgeniy Ler
Chief Financial Officer
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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August 12, 2013
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/s/ Askar Tashtitov | |
Askar Tashtitov
President
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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August 12, 2013
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/s/ Evgeniy Ler | |
Evgeniy Ler
Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Date:
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August 12, 2013
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/s/ Askar Tashtitov | |
Askar Tashtitov
President
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(1)
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The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Date:
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August 12, 2013
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/s/ Evgeniy Ler | |
Evgeniy Ler
Chief Financial Officer
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STATEMENTS OF OPERATIONS (Unaudited) (USD $)
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3 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Income Statement [Abstract] | ||
REVENUES | $ 0 | $ 0 |
COSTS AND OPERATING EXPENSES | ||
General and administrative | 514,965 | 732,078 |
Amortization and depreciation | 28,981 | 28,980 |
Total costs and operating expenses | 543,946 | 761,058 |
LOSS FROM OPERATIONS | (543,946) | (761,058) |
OTHER INCOME | ||
Foreign exchange gain, net | 0 | 31 |
Interest income | 0 | 1,498 |
Other income, net | 609 | 9,215 |
Total other income | 609 | 10,744 |
NET LOSS | $ (543,337) | $ (750,314) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ (0.01) | $ (0.01) |
5. EARNINGS PER SHARE INFORMATION
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE INFORMATION | The calculation of the basic earnings per share is based on the following data:
As of June 30, 2013 and 2012, there were no options, warrants, or restricted stock grants outstanding.
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1. DESCRIPTION OF BUSINESS
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3 Months Ended |
---|---|
Jun. 30, 2013
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Notes to Financial Statements | |
DESCRIPTION OF BUSINESS | BMB Munai, Inc., (the Company or BMB Munai) is a Nevada corporation that originally incorporated in the State of Utah in 1981. From 2003 to 2011 the Companys business activities focused on oil and natural gas exploration and production in the Republic of Kazakhstan (also referred to herein as the ROK or Kazakhstan) through its wholly-owned subsidiary Emir Oil LLP.
On September 19, 2011 the Company completed the sale of all of its interests in Emir Oil (the Sale).
Since September 2011, the Companys principal business operations have been focused on satisfying its post-closing undertakings in connection with the Sale, which were completed in September 2012 and exploring opportunities to exploit the expertise of the Companys management staff and return value to the Companys stockholders.
The Company does not anticipate generating revenue until such time as it is able to identify and exploit new business opportunities. No assurance can be given that the Company will be able to identify or exploit any new business opportunity, or that the Company will have the funds then available to it that will enable it to seek to take advantage of any such opportunity. These factors raise substantial doubt about the Companys ability to continue as a going concern.
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3. CASH AND CASH EQUIVALENTS
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3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes to Financial Statements | |
CASH AND CASH EQUIVALENTS | As of June 30, 2013 and March 31, 2013 cash and cash equivalents included deposits in U.S. banks in the amount of $10,019,943 and $10,463,531, respectively. The Companys deposits in U.S. banks are in non-FDIC insured accounts which means they are not insured to the $250,000 FDIC insurance limit. To mitigate this risk, the Company has placed all of its U.S. deposits in a money market account that invests in U.S. Government backed securities.
As of June 30, 2013 the Company placed $6,462,531 in an investment account. The Company can convert this amount into cash in a short period of time not exceeding one week. |
2. SIGNIFICANT ACCOUNTING POLICIES (Policies)
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3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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|||||||||
Significant Accounting Policies Policies | |||||||||
Going concern | Going concern
As a result of the Sale, the Company has no subsidiaries and no continuing operations that result in positive cash flow, which raises substantial doubt about its ability to continue as a going concern.
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Subsequent event | Subsequent event
The Companys management has evaluated the subsequent events through the date the financial statements were issued and has found no subsequent events to report. |
||||||||
Use of estimates | Use of estimates
The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the unaudited condensed financial statements and revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates and affect the results reported in these unaudited condensed financial statements. |
||||||||
Concentration of credit risk | Concentration of credit risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash. The Company places its cash with high credit quality financial institutions. |
||||||||
Functional Currency | Functional currency
The Company makes its principal investing and financing transactions in U.S. Dollars and the U.S. Dollar is therefore its functional currency.
|
||||||||
Foreign currency translation | Foreign currency translation
Transactions denominated in foreign currencies are reported at the rates of exchange prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. Dollars at the rates of exchange prevailing at the balance sheet dates. Any gains or losses arising from a change in exchange rates subsequent to the date of the transaction are included as an exchange gain or loss in the unaudited condensed statements of operations. |
||||||||
Cash and cash equivalents | Cash and cash equivalents
The Company considers all demand deposits, money market accounts and marketable securities purchased with an original maturity of three months or less to be cash and cash equivalents. The fair value of cash and cash equivalents approximates their carrying amounts due to their short-term maturity. |
||||||||
Other fixed assets | Other fixed assets
Other fixed assets are valued at historical cost adjusted for impairment loss less accumulated depreciation. Historical cost includes all direct costs associated with the acquisition of the fixed assets.
Depreciation of other fixed assets is calculated using the straight-line method based upon the following estimated useful lives:
Maintenance and repairs are charged to expense as incurred. Renewals and betterments are capitalized as leasehold improvements, which are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the lease.
Other fixed assets of the Company are evaluated annually for impairment. If the sum of expected undiscounted cash flows is less than net book value, unamortized costs of other fixed assets will be reduced to a fair value. Based on the Companys analysis at June 30, 2013, no impairment of other assets is necessary.
|
||||||||
Income (Loss) per common share | Income (Loss) per common share
Basic income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share reflects the potential dilution that could occur if all contracts to issue common stock were converted into common stock, except for those that are anti-dilutive. |
||||||||
Recent accounting pronouncements | Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements are expected to cause a material impact on the Companys financial condition or the results of operations. |
4. SHAREHOLDER'S EQUITY
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes to Financial Statements | |
SHAREHOLDER'S EQUITY | Shareholder distributions
On October 24, 2011 the Company made an initial cash distribution of $1.04 per share to common stockholders of record on October 10, 2011 from the proceeds of the Sale. The total amount calculated for this distribution to common stockholders was $58,019,056.
On October 30, 2012 the Company declared and made a second cash distribution of $0.30 per share to common stockholder of record on October 15, 2012 following the completion of its post-closing obligations in connection with the Sale. The total amount distributed to common stockholders in connection with this second cash distribution was $16,736,266.
As of June 30, 2013, the amount paid from the first distribution was $51,346,433 with $6,672,623 payable, and the amount paid from the second distribution was $14,801,523 with $1,934,743 payable. These payables have been accrued and included in deferred consulting and distribution payments on the balance sheet. |