Attached files
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, DC
20549
FORM
10-Q
x QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly
period ended January
31, 2010
or
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition
period from ______________________ to ______________________
Commission File
Number: 333-153111
Shengrui Resources Co.
Ltd.
(Exact name of
registrant as specified in its charter)
|
Nevada
|
None
|
|
|
(State or
other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
270 – 11331 Coppersmith
Way
Richmond, British Columbia,
Canada V7A 5J9
(Address of
principal executive offices)
(604)
214-7706
(Registrant’s
telephone number, including area code)
_____________________________________________________
(Former name,
former address and former fiscal year, if changed since last
report)
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was require to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes þ No
o
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 (of for such shorter period that the registrant
was required to submit and post such files). Yes þ No
o
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of
“large accelerated filer”, “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
Large accelerated
filer o Accelerated
filer o Non-accelerated
filer o Smaller reporting company þ
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes þ No
o
APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check
mark whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act subsequent to the
distribution of securities under a plan confirmed by a
court. Yes o No
o
APPLICABLE ONLY TO
CORPORATE ISSUERS:
As of March 15,
2010 the registrant’s outstanding common stock consisted of 5,456,400
shares.
TABLE
OF CONTENTS
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1
The unaudited
interim financial statements of Shengrui Resources Co. Ltd. (formerly known as
Double Halo Resources Inc.) follow. All currency references in this
report are to US Dollars unless otherwise noted.
Table
of Contents
|
Balance
Sheets
|
F-1
|
|
Statement of
Operations and Comprehensive Loss
|
F-2
|
|
Statement of
Cash Flows
|
F-3
|
|
Statements of
Shareholders' Equity (Deficiency)
|
F-4
|
|
Notes to the
Financial Statements
|
F-5
|
2
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
BALANCE
SHEET
(Expressed in US
Dollars)
(Unaudited)
|
January
31, 2010
|
October
31, 2009
|
|||||||
|
ASSETS
|
||||||||
|
Current
|
||||||||
|
Cash and cash
equivalents
|
$ | - | $ | 319 | ||||
| $ | - | $ | 319 | |||||
|
LIABILITIES
|
||||||||
|
Current
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ | 70,766 | $ | 57,730 | ||||
|
Due to
related parties (Note
3)
|
48,040 | 45,428 | ||||||
| 118,806 | 103,158 | |||||||
|
SHAREHOLDERS'
DEFICIENCY
|
||||||||
|
Capital stock
(100,000,000 shares authorized, $0.0001 par value, 5,456,400 shares issued
and outstanding [October 31, 2009 – 5,456,400]) (Note 4)
|
546 | 546 | ||||||
|
Additional
paid-in capital
|
622,177 | 622,177 | ||||||
|
Deficit
|
(741,529 | ) | (725,562 | ) | ||||
| (118,806 | ) | (102,839 | ) | |||||
| $ | - | $ | 319 | |||||
Nature and
continuance of operations (Note 1)
The accompanying
notes are an integral part of these financial statements.
F-1
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
STATEMENT OF
OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in US
Dollars)
(Unaudited)
| Period from inception on October 31, 2006 to January 31, 2010 | For the three months ended January 31, 2010 | For the three months ended January 31, 2009 | |||||||
|
Expenses
|
|||||||||
|
General and
administrative expenses
|
$ | 4,040 | $ | 319 | $ | 180 | |||
|
Management
fees
|
13,500 | - | 1,500 | ||||||
|
Rent
|
13,500 | - | 1,500 | ||||||
|
Stock-based
compensation
|
449,550 | - | - | ||||||
|
Professional
fees
|
246,990 | 15,648 | 8,131 | ||||||
|
Bank charges
and interest
|
647 | - | - | ||||||
|
Foreign
exchange loss
|
4,302 | - | - | ||||||
| 732,529 | 15,967 | 11,311 | |||||||
| (732,529 | ) | (15,967 | ) | (11,311 | ) | ||||
|
Write-off of
exploration advances
|
(20,000 | ) | - | - | |||||
|
Gain on
settlement of debt
|
36,000 | - | - | ||||||
|
Write-off of
exploration costs
|
(25,000 | ) | - | - | |||||
|
Net
loss for the period
|
$ | (741,529 | ) | $ | (15,967 | ) | $ | (11,311 | ) |
|
Earnings
per share
|
|||||||
|
Basic
|
$ | (0.003 | ) | $ | (0.002 | ) | |
|
Weighted
average number of shares outstanding
|
5,456,000 | 5,456,000 | |||||
The accompanying
notes are an integral part of these financial
statements.
F-2
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
STATEMENT OF CASH
FLOWS
(Expressed in US
Dollars)
(Unaudited)
|
Period
from inception on October 31, 2006 to
January
31, 2010
|
For
the three months ended January
31, 2010
|
For
the three months ended January
31, 2009
|
||||||||
|
Cash
flow from operating activities
|
||||||||||
|
Net loss for
the period
|
$ | (741,529 | ) | $ | (15,967 | ) | $ | (11,311 | ) | |
|
Add back
non-cash operating activities:
|
||||||||||
|
Gain on
settlement of debt
|
(36,000 | ) | - | - | ||||||
|
Donated
rent
|
13,500 | - | 1,500 | |||||||
|
Donated
services
|
13,500 | - | 1,500 | |||||||
|
Write-off of
exploration advances
|
20,000 | - | - | |||||||
|
Consulting
fees
|
25,930 | - | - | |||||||
|
Stock-based
compensation
|
449,550 | - | - | |||||||
|
Write-off of
exploration costs
|
25,000 | - | - | |||||||
|
Changes in
non-cash working capital
|
||||||||||
|
Exploration
advances
|
(20,000 | ) | - | - | ||||||
|
Accounts
payable and accrued liabilities
|
106,766 | 13,036 | 7,810 | |||||||
|
Due to
related parties
|
- | - | 12,521 | |||||||
|
Net
cash provided by (used in) operating activities
|
(143,283 | ) | (2,931 | ) | 12,020 | |||||
|
Cash
flow from investing activities
|
||||||||||
|
Acquisition
of oil and gas properties
|
(50,930 | ) | - | - | ||||||
|
Net
cash used in investing activities
|
(50,930 | ) | - | - | ||||||
|
Cash
flow from financing activities
|
||||||||||
|
Advances from
related parties
|
94,123 | 2,612 | - | |||||||
|
Capital stock
subscribed
|
71,660 | - | - | |||||||
|
Proceeds from
the issuance of capital stock
|
42,780 | - | - | |||||||
|
Repurchase of
capital stock
|
(14,350 | ) | - | - | ||||||
|
Net
cash provided by financing activities
|
194,213 | 2,612 | - | |||||||
|
Net
change in cash and cash equivalents during the period
|
- | (319 | ) | 12,020 | ||||||
|
Cash
and cash equivalents, beginning of period
|
- | 319 | 323 | |||||||
|
Cash
and cash equivalents, end of period
|
$ | - | $ | - | $ | 12,343 | ||||
The accompanying
notes are an integral part of these financial
statements.
F-3
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
STATEMENT OF
SHAREHOLDERS’ DEFICIENCY
(Expressed in US
Dollars)
(Unaudited)
|
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
|
Common
stock
|
Additional
Paid
|
Common
stock
|
during
the
|
shareholders’
|
||||||||||||||||||||
|
Number of shares
|
Amount
|
in
Capital
|
subscribed
|
exploration
stage
|
(deficiency)
|
|||||||||||||||||||
|
Balance,
October 31, 2008
|
5,456,400 | $ | 546 | $ | 573,094 | $ | - | $ | (601,053 | ) | $ | (27,413 | ) | |||||||||||
|
Donated
services and rent
|
- | - | 3,000 | - | - | 3,000 | ||||||||||||||||||
|
Extinguishment
of related party debt
|
- | - | 46,083 | - | - | 46,083 | ||||||||||||||||||
|
Net
loss
|
- | - | - | (124,509 | ) | (124,509 | ) | |||||||||||||||||
|
Balance,
October 31, 2009
|
5,456,400 | 546 | 622,177 | - | (725,562 | ) | (102,839 | ) | ||||||||||||||||
|
Net
loss
|
- | - | - | - | (15,967 | ) | (15,967 | ) | ||||||||||||||||
|
Balance,
January 31, 2010
|
5,456,400 | $ | 546 | $ | 622,177 | $ | - | $ | (741,529 | ) | $ | (118,806 | ) | |||||||||||
The accompanying
notes are an integral part of these financial
statements.
F-4
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
NOTES TO THE
FINANCIAL STATEMENTS
(Expressed in US
Dollars)
January 31,
2010
1. NATURE
AND CONTINUANCE OF OPERATIONS
Shengrui Resources
Co. Ltd. (formerly Double Halo Resources Inc.) (the “Company”) was incorporated
in the State of Nevada on October 30, 2006. The Company is an Exploration Stage
Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.
7, “Accounting and Reporting for Development Stage Enterprises”. The Company’s
principal business was the acquisition and exploration of oil and gas resources.
It has changed its principal business to the acquisition and exploration of
mineral resources.
These consolidated
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has never generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at January 31, 2010 the Company has accumulated losses of $741,529 since
inception. These factors raise substantial doubt regarding the Company’s ability
to continue as a going concern. These financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
2. SIGNIFICANT
ACCOUNTING POLICIES
The accompanying
unaudited consolidated financial statements have been prepared by the Company in
conformity with accounting principles generally accepted in the United States of
America applicable to interim financial information and with the rules and
regulations of the United States Securities and Exchange
Commission.
Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed, or omitted, pursuant to such rules and regulations. In the
opinion of management, the unaudited interim financial statements include all
adjustments necessary for the fair presentation of the results of the interim
periods presented. All adjustments are of a normal recurring nature, except as
otherwise noted below. These financial statements should be read in conjunction
with the Company’s audited financial statements and notes thereto for the year
ended October 31, 2009. The results of operations for the interim periods are
not necessarily indicative of the results of operations for any other interim
period or for a full fiscal year.
Recent
accounting pronouncements
In May 2009, the
FASB issued authoritative guidance regarding subsequent events. The
authoritative guidance establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. The authoritative
guidance requires disclosure of the date through which subsequent events have
been evaluated and whether that date represents the date the financial
statements were issued or were available to be issued. The authoritative
guidance is effective for interim and annual periods ending after June 15, 2009.
There was no significant impact on the Company’s financial
statements.
F-5
SHENGRUI
RESOURCES CO. LTD.
(Formerly
Double Halo Resources Inc.)
(An Exploration
Stage Company)
NOTES TO THE
FINANCIAL STATEMENTS
(Expressed in US
Dollars)
January 31,
2010
2. SIGNIFICANT
ACCOUNTING POLICIES (continued)
In June 2009, the
FASB issued Statement No. 168, “The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles”, a replacement of
FASB Statement No. 162 (the “Codification”). The Codification, which was
launched on July 1, 2009, became the single source of authoritative
non-governmental U.S. generally accepted accounting principles (“GAAP”),
superseding various existing authoritative accounting pronouncements. The
Codification is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The Company adopted the Codification
for its reporting period ending on October 31, 2009. The adoption of the
Codification had no significant impact on the Company’s financial
statements.
In August 2009, the
FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and
Disclosures (Topic 820) Measuring Liabilities at Fair Value” (“Update 2009-05”).
Update 2009-05 clarifies that in circumstances in which a quoted price in an
active market for an identical liability is not available, a reporting entity is
required to measure fair value of such liability using one or more of the
techniques prescribed by the update. The Company is currently
assessing the impact of this new standard on its financial
statements.
3. RELATED
PARTY TRANSACTIONS
a) At
January 31, 2010, the Company was indebted to a related company with one or more
directors in common for $48,040 (October 31, 2009 - $45,428), representing
expenditures paid on behalf of the Company. This amount is unsecured,
non-interest bearing, due on demand and has no specific terms of
repayment.
4. COMMON
STOCK
a) During the year
ended October 31, 2007, the Company issued 7,800 shares of common stock for
$780.
b) During the year
ended October 31, 2007, the Company received subscriptions of $71,660 for
716,000 shares of common stock issued pursuant to a private placement at $0.10
per share.
c) During the year
ended October 31, 2007, the Company received subscriptions of $450 from the
President of the Company for 4,500,000 shares of common stock pursuant to a
private placement at $0.0001 per share. On March 19, 2008, the shares were
issued. At October 31, 2007, $450 was included in common stock subscribed.
Stock-based compensation was recorded during the year ended October 31, 2008,
representing the difference between the fair value of the common shares and the
consideration received.
d) On January 15,
2008, the Company issued 1,072,100 shares of common stock pursuant to a private
placement at $0.10 per share for proceeds of $107,210. At October 31, 2007, the
Company had included proceeds from this private placement of $71,210 in common
stock subscribed.
e) On June 12,
2008, the Company received subscriptions of $6,000 for 20,000 shares of common
stock pursuant to a private placement at $0.30 per share. On June 22, 2008, the
shares were issued.
f) On October 23,
2008, the Company repurchased 143,500 common shares for cash consideration of
$14,350, which were surrendered for cancellation pursuant to rescission
agreements dated October 23, 2008.
F-6
Forward Looking
Statements
This quarterly
report contains forward-looking statements that involve risks and uncertainties.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology including
"could", "may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential" and the negative of these terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially.
While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested in this report.
As
used in this quarterly report, the terms "we", "us", "our", and "Shengrui" mean
Shengrui Resources Co. Ltd., unless otherwise indicated.
All dollar amounts
in this annual report refer to U.S. dollars unless otherwise
indicated.
Business
Overview
We
were incorporated as a Nevada company on October 30, 2006. Until recently, we
were engaged in the acquisition and exploration of oil and gas properties.
Currently, we are engaged in the development of business interests in China with
the goal of completing the acquisition of one or more operating companies in the
mineral resource industry. On August 10, 2009, we initiated a proposal to
acquire 100% of the issued and outstanding shares of Helongjiang Jiu Xin Mining
Investment Co. Ltd., a private mining company located in Harbin, Heilongjiang
Province, China, but we have not yet entered into any formal agreements with
respect to this acquisition.
Our business
activities in China are directed by Jianshu Tang, our President, and Haifeng
Wong, our Secretary, both of whom are residents of the People’s Republic of
China, while our activities in North America are directed by Arthur Skagen, our
Chief Executive Officer, and Donald Fairholm, our Chief Financial Officer. Mr.
Skagen and Mr. Fairholm also manage our operations and supervise our other
planned acquisition activities.
We
formerly had one wholly owned subsidiary, Patch Oilsands Ltd., a British
Columbia corporation through which we acquired properties in Leismer, Alberta.
On April 16, 2009 we transferred 100% of the shares of Patch Oilsands Ltd. to
Pacific Bridge Capital Ltd., a company over which Arthur Skagen, our Chief
Executive Officer and Director, has sole voting and investment power, pursuant
to a consulting agreement in exchange for services rendered. Our common stock is
quoted on the OTC Bulletin Board under the symbol “SRUI”.
We
intend to build our business by developing business interests within the
People's Republic of China (the “PRC”). We are currently exploring business
opportunities in the mineral and natural resource sector as well as other
sectors, and although we are focusing our attention on the PRC we also intend to
develop business interests in North America as opportunities arise.
Going
Concern
Our financial
statements for the three months ended January 31, 2010 have been prepared on a
going concern basis and contain an additional explanatory paragraph in Note 1
which identifies issues that raise substantial doubt about our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
We
have not generated any revenues, have achieved losses since our inception, and
rely upon the sale of securities to fund our operations. We may not generate any
revenues even if we complete the acquisition of one or more operating companies,
and we are dependent on obtaining outside financing in order to maintain our
operations and continue our proposed activities. If we are unable to raise
equity or secure alternative financing, we may not be able to continue our
operations and our business plan may fail.
If
our operations and cash flow improve, management believes that we can continue
to operate. However, no assurance can be given that management's actions will
result in profitable operations or an improvement in our liquidity situation.
The threat of our ability to continue as a going concern will cease to exist
only when our revenues have reached a level able to sustain our business
operations.
Results of
Operations
Results
of Operations for the Three Months Ended January 31, 2010
For the three
months ended January 31, 2010 we did not generate any revenues and we incurred a
net loss of $15,967, compared to a net loss of $11,311 for the same period in
fiscal 2009. Our net loss per share for the three months ended January 31, 2010
was $0.003, compared to a net loss per share of $0.002 for the same period in
fiscal 2009.
Our total expenses
for the three months ended January 31, 2010 were $15,967, compared to total
expenses of $11,311 for the same period in fiscal 2009, for a net increase of
approximately 41%. Our total expenses for the three months ended January 31,
2010 consisted of $15,648 in professional fees and $319 in general and
administrative expenses, whereas our total expenses for the same period in
fiscal 2009 consisted of $8,131 in professional fees, $1,500 in management fees,
$1,500 in rent and $180 in general and administrative expenses. Our general and
administrative expenses consist primarily of transfer agent fees and general
office expenses. Our professional fees include legal, accounting and auditing
fees.
Results
of Operations for the Period from October 30, 2006 (Date of Inception) to
January 31, 2010
From our inception
on October 30, 2006 to January 31, 2010 we did not generate any revenues and we
incurred a net loss of $741,529.
From our inception
on October 30, 2006 to January 31, 2010 we incurred total expenses of $741,529,
including $246,990 in professional fees, $13,500 in management fees, $13,500 in
rent, $449,550 in stock-based compensation, $4,302 in foreign exchange losses,
$647 in bank charges and interest and $4,040 in general and administrative
expenses. We also received $36,000 in the form of gain on the settlement of
debt, wrote off $25,000 in oil and gas exploration costs because we allowed our
interest in a property located in Worsley, Alberta to expire and wrote off
$20,000 in exploration advances as we determined that it was not feasible to
continue exploring and developing the oil and gas properties in which we held an
interest.
3
Liquidity and Capital
Resources
We
have limited operational history. As of January 31, 2010 we had no cash or cash
equivalents, $118,806 in total liabilities and a working capital deficit of
$118,806. As of January 31, 2010 we had an accumulated deficit of
$741,529.
We
are solely dependent on the funds raised through our equity financing. Our net
loss of $741,529 from our inception on October 30, 2006 to January 31, 2010 was
funded by equity financing. Since our inception on October 30, 2006, we have
raised gross proceeds of $100,090 in cash from the sale of our
securities.
From our inception
on October 30, 2006 to January 31, 2010 we spent $143,283 on operating
activities, including $13,500 in donated rent, $13,500 in donated services,
$20,000 in the write-off of exploration advances, $25,930 in consulting fees,
$449,500 in stock-based compensation, $25,000 in the write-off of exploration
costs and $106,766 in accounts payable. During that time, we also
received $36,000 in the form of gain on the settlement of debt and $20,000 in
exploration advances.
During the three
months ended January 31, 2010 we spent $2,931 on operating activities, including
$13,606 in accounts payable. During the same period in fiscal 2009 we spent
$12,020 on operating activities, including $1,500 in donated rent, $1,500 in
donated services, $7,810 in accounts payable and $12,521 due to related
parties.
From our inception
on October 30, 2006 to January 31, 2010 we spent $50,930 on investing
activities. We did not spend any money on investing activities during the three
months ended January 31, 2010 or 2009. All of our investing activities
since inception were related to the acquisition of oil and gas
properties.
From our inception
on October 30, 2006 to January 31, 2010 we received $194,213 from financing
activities, including $42,780 in proceeds from the issuance of our common stock,
$71,660 from subscriptions for our common stock and $94,123 in advances from
related parties. From our inception on October 30, 2006 to January 31, 2010 we
also spent $14,350 on repurchases of our common stock.
During the three
months ended January 31, 2010 we received $2,612 from financing activities, all
of which was in the form of advances from related parties. During the same
period in fiscal 2009 we did not receive any money from financing
activities.
Our decrease in
cash for the three months ended January 31, 2010 was $319 due to a combination
of our operating, investing and financing activities.
For the next 12
months we intend to:
|
·
|
develop a
website;
|
|
·
|
develop
business interests in China; and
|
|
·
|
leverage
those business interests in China to complete the acquisition of one or
more operating companies in the mineral resource
industry.
|
Our planned
operation and exploration expenditures over the next 12 months are summarized as
follows:
|
Description
|
Potential
Completion
Date
|
Estimated
Expenses
($)
|
|
Develop a
website
|
April
2010
|
10,000
|
|
Develop
business interests in China
|
April
2010
|
220,000
|
|
Complete the
acquisition of one or more operating mineral resource
companies
|
12
months
|
250,000
|
|
Professional
fees
|
12
months
|
120,000
|
|
Marketing
expenses
|
12
months
|
60,000
|
|
General and
administrative expenses
|
12
months
|
24,000
|
|
Total
|
684,000
|
4
Our general and
administrative expenses for the year will consist primarily of transfer agent
fees, investor relations expenses, bank and interest charges and general office
expenses. The professional fees are related to our regulatory filings throughout
the year and the acquisition of any company in which we may acquire an
interest.
Based on our
planned expenditures, we require additional funds of approximately $684,000 to
proceed with our business plan over the next 12 months. If we secure less than
the full amount of financing that we require, we will not be able to carry out
our complete business plan and we will be forced to proceed with a scaled back
business plan based on our available financial resources.
We
intend to raise the balance of our cash requirements for the next 12 months from
private placements, loans from related parties or possibly a registered public
offering (either self-underwritten or through a broker-dealer). If we are
unsuccessful in raising enough money through such efforts, we may review other
financing possibilities such as bank loans. At this time we do not have a
commitment from any broker-dealer to provide us with financing. There is no
assurance that any financing will be available to us or if available, on terms
that will be acceptable to us.
Even though we plan
to raise capital through equity or debt financing, we believe that the latter
may not be a viable alternative for funding our operations as we do not have
tangible assets to secure any such financing. We anticipate that any additional
funding will be in the form of equity financing from the sale of our common
stock. However, we do not have any financing arranged and we cannot provide any
assurance that we will be able to raise sufficient funds from the sale of our
common stock to finance our operations or planned exploration activities. In the
absence of such financing, we will not be able to develop business interests in
China to the extent that we would like or complete any formal business
acquisitions, and we may be forced to abandon our business plan.
We
also hope to obtain additional financing as part of any acquisition agreement
that we may ultimately negotiate. However, there is no guarantee that we will
enter into a definitive acquisition agreement, and if we successfully complete
an acquisition our capital requirements and business plans may change
substantially.
Off-Balance Sheet
Arrangements
We
have no significant off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to stockholders.
Inflation
The amounts
presented in the financial statements do not provide for the effect of inflation
on our operations or financial position. The net operating losses shown would be
greater than reported if the effects of inflation were reflected either by
charging operations with amounts that represent replacement costs or by using
other inflation adjustments.
Audit
Committee
The functions of
the audit committee are currently carried out by our Board of Directors, who has
determined that we do not have an audit committee financial expert on our Board
of Directors to carry out the duties of the audit committee. The Board of
Directors has determined that the cost of hiring a financial expert to act as a
director and to be a member of the audit committee or otherwise perform audit
committee functions outweighs the benefits of having a financial expert on the
audit committee.
Not
applicable.
Not
applicable.
Evaluation of Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed 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 rules and forms of the Securities and Exchange Commission (the “SEC”),
and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure.
As
of the end of the period covered by this report, our management, with the
participation of our Chief Executive Officer and Chief Financial Officer,
carried out an evaluation of the effectiveness of our disclosure controls and
procedures. Based upon this evaluation, our Chief Executive Officer and our
Chief Financial Officer concluded that our disclosure controls and procedures
were are not effective to ensure that information we are required to disclose in
the reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms.
Changes in Internal
Control
During the three
months ended January 31, 2010 there were no changes in our internal control over
financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the
Exchange Act) that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
5
We
are not aware of any legal proceedings to which we are a party. None of our
directors, officers, affiliates, any owner of record or beneficially of more
than 5% of our voting securities, or any associate of any such director,
officer, affiliate or security holder are (i) a party adverse to us in any legal
proceedings, or (ii) have a material interest adverse to us in any legal
proceedings. We are not aware of any other legal proceedings that have been
threatened against us.
None.
None.
None.
None.
|
Exhibit
Number
|
Exhibit
Description
|
SIGNATURES
Pursuant to the
requirements of the Exchange Act, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
|
Shengrui Resources Co.
Ltd.
|
|
|
(Registrant)
|
|
|
Date:
March 15, 2010
|
/s/
Arthur Skagen
|
|
Arthur
Skagen
|
|
|
Chief
Executive Officer, Director
|
6