Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For the Period ended December 31, 2010
Commission File Number 333-171307
PLACER DEL MAR, LTD.
(Name of small business issuer in its charter)
Nevada 72-1600437
(State of Incorporation) (IRS Employer ID Number)
302 Washington Street #351
San Diego, CA 92103-4221
(775) 352-3839
(Address and telephone number of principal executive offices)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [ ] NO [ ]
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,"
"non-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]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,720,000 shares of common stock, par
value $0.001, as of January 18, 2011
ITEM 1. FINANCIAL STATEMENTS
The un-audited quarterly financial statements for the three and six month
periods ended December 31, 2010, prepared by the company, immediately follow.
2
PLACER DEL MAR, LTD
(An Exploration Stage Company)
Balance Sheets
(Stated in US Dollars)
--------------------------------------------------------------------------------
(Unaudited) (Audited)
As of As of
December 31, 2010 June 30, 2010
----------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 35,191 $ 1,292
Accounts Receivable 70,200 --
--------- ---------
TOTAL CURRENT ASSETS 105,391 1,292
--------- ---------
OTHER ASSETS
Mineral Rights License, net 333,736 --
--------- ---------
TOTAL OTHER ASSETS 333,736 --
--------- ---------
TOTAL ASSETS $ 439,127 $ 1,292
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 400 $ 9,600
Loan from shareholder 81,800 59,300
Current portion of mineral rights liabilities, net discount of 20,039 26,623 --
--------- ---------
TOTAL CURRENT LIABILITIES 108,823 68,900
--------- ---------
LONG TERM LIABILITIES
Mineral Rights Liability, net discounts of 43,622 309,716 --
--------- ---------
TOTAL LONG TERM LIABILITIES 309,716 --
--------- ---------
TOTAL LIABILITIES $ 418,539 $ 68,900
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 50,000,000 shares
authorized; 1,720,000 shares issued and outstanding
as of December 31, 2010 and June 30, 2010 1,720 1,720
Additional paid-in capital 42,480 42,480
Deficit accumulated during exploration stage (23,612) (111,808)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 20,588 (67,608)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 439,127 $ 1,292
========= =========
See Notes to Financial Statements
3
PLACER DEL MAR, LTD
(An Exploration Stage Company)
Statements of Operations (Unaudited)
(Stated in US Dollars)
--------------------------------------------------------------------------------
May 13, 2005
Six Months Three Months Six Months Three Months (inception)
Ended Ended Ended Ended Through
December 31, December 31, December 31, December 31, December 31,
2010 2010 2009 2009 2010
---------- ---------- ---------- ---------- ----------
REVENUES
Revenues $ 107,200 $ 107,200 $ -- $ -- $ 107,200
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES 107,200 107,200 -- -- 107,200
---------- ---------- ---------- ---------- ----------
OPERATING COSTS
Exploration Expense -- -- -- -- 23,474
Amortization of mining rights license 930 930 -- -- 930
Administrative expenses 16,401 7,359 48 24 104,735
---------- ---------- ---------- ---------- ----------
TOTAL OPERATING COSTS 17,331 8,289 48 24 129,139
OTHER INCOME (LPSS)
Interest expenses (1,673) (1,673) -- -- (1,673)
---------- ---------- ---------- ---------- ----------
TOTAL OTHER INCOME (LOSS) (1,673) (1,673) -- -- (1,673)
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 88,196 $ 97,238 $ (48) $ (24) $ (23,612)
========== ========== ========== ========== ==========
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE $ 0.05 $ 0.06 $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,720,000 1,720,000 1,720,000 1,720,000
========== ========== ========== ==========
See Notes to Financial Statements
4
PLACER DEL MAR, LTD
(An Exploration Stage Company)
Statements of Changes in Stockholders' Equity (unaudited)
From May 13, 2005 (Inception) through December 31, 2010
(Stated in US Dollars)
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Exploration
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
BALANCE, MAY 13, 2005 -- $ -- $ -- $ -- $ --
Stock issued for cash on May 20, 2005
@ $0.01 per share 1,000,000 1,000 9,000 10,000
Stock issued for cash on June 14, 2005
@ $0.01 per share 420,000 420 3,780 4,200
Stock issued for cash on June 30, 2005
@ $0.10 per share 200,000 200 19,800 20,000
Net loss, June 30, 2005 (3,500) (3,500)
---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 2005 1,620,000 1,620 32,580 (3,500) 30,700
---------- ---------- ---------- ---------- ----------
Stock issued for services on May 22, 2006
@ $0.10 per share 100,000 100 9,900 10,000
Net loss, June 30, 2006 (25,885) (25,885)
---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 2006 1,720,000 1,720 42,480 (29,385) 14,815
---------- ---------- ---------- ---------- ----------
Net loss, June 30, 2007 (29,105) (29,105)
---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 2007 1,720,000 1,720 42,480 (58,490) (14,290)
---------- ---------- ---------- ---------- ----------
Net Loss June 30, 2008 (18,023) (18,023)
---------- ---------- ---------- ---------- ----------
BALANCE, JUNE 30, 2008 1,720,000 1,720 42,480 (76,513) (32,313)
---------- ---------- ---------- ---------- ----------
Net Loss June 30, 2009 (24,649) (24,649)
---------- ---------- ---------- ---------- ----------
BALANCE JUNE 30, 2009 1,720,000 1,720 42,480 (101,162) (56,962)
---------- ---------- ---------- ---------- ----------
Net Loss June 30, 2010 (10,646) (10,646)
---------- ---------- ---------- ---------- ----------
BALANCE JUNE 30, 2010 1,720,000 1,720 42,480 (111,808) (67,608)
---------- ---------- ---------- ---------- ----------
Net Profit December 31, 2010 88,196 88,196
---------- ---------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 2010 (UNAUDITED) 1,720,000 $ 1,720 $ 42,480 $ (23,612) $ 20,588
========== ========== ========== ========== ==========
See Notes to Financial Statements
5
PLACER DEL MAR, LTD
(An Exploration Stage Company)
Statements of Cash Flows (Unaudited)
(Stated in US Dollars)
--------------------------------------------------------------------------------
May 13, 2005
Six Months Three Months Six Months Three Months (inception)
Ended Ended Ended Ended Through
December 31, December 31, December 31, December 31, December 31,
2010 2010 2009 2009 2010
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 88,196 $ 97,238 $ (48) $ (24) $ (23,612)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Discount of long-term liabilities 1,673 1,673 -- -- 1,673
Amortization of mineral rights license 930 930 -- -- 930
Stock issued for services -- -- -- -- 10,000
Changes in operating assets and liabilities:
Accounts receivable (70,200) (70,200) -- -- (70,200)
Accounts payable and accrued expenses (9,200) -- -- -- 400
---------- ---------- ---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 11,399 29,641 (48) (24) (80,809)
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan from shareholder 22,500 2,500 200 -- 81,800
Issuance of common stock -- -- -- -- 1,620
Additional paid-in capital -- -- -- -- 32,580
---------- ---------- ---------- ---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 22,500 2,500 200 -- 116,000
---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 33,899 32,141 152 (24) 35,191
CASH AT BEGINNING OF PERIOD 1,292 3,050 38 214 --
---------- ---------- ---------- ---------- ----------
CASH AT END OF PERIOD $ 35,191 $ 35,191 $ 190 $ 190 $ 35,191
========== ========== ========== ========== ==========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase in mining rights license
and long-term liabilities 334,666 334,666 -- -- 334,666
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ -- $ -- $ --
========== ========== ========== ========== ==========
Income Taxes $ -- $ -- $ -- $ -- $ --
========== ========== ========== ========== ==========
See Notes to Financial Statements
6
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Placer Del Mar, Ltd. (the "Company") was incorporated in the State of Nevada on
May 13, 2005, and its year-end is June 30. The Company is "An Exploration Stage
Company" as defined by Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 918, DEVELOPMENT STAGE ENTITIES. The Company
obtained a mineral rights option agreement on June 3, 2005. The Company has
ongoing exploration activities on the property and is considered to be a Smaller
Reporting Company for U.S. Securities and Exchange Commission filing purposes.
Management believes that based upon the definition of a Shell Company set forth
in Footnote 172 to Amended Rule 144, The Company is not a Shell Company because
they have a limited operating history, were a start-up company, and as such,
does not have "no or nominal operations. Specifically, the Company's inception
date was May, 13th 2005. The Company began operations in September of 2006 and
has had ongoing operations and has spent $128,209 to date on operations to
confirm viable minerals within the claim. These funds have been expensed due to
PCAOB and GAAP rules. The Company will continue to dedicate funds through
ongoing trenching seeking to identify and exploit any minerals within the mining
claim asset. Further the Company paid an upfront fee of $2,000 for the Placer
Del Mar claim, and retain 99% of the net smelter returns from any viable
minerals within the claim. It is subject to a net smelter return of 1% to Mr.
Almarez.
On December 8, 2010 the Company entered into a Mineral Extraction Agreement with
Roca Cantera Y Marmol, Canteras Acabados Finos related to the extraction of only
Mexican Shellstone-Limestone ("Conchuela") on the property. As of December 31,
2010 the Company had reported revenue of $107,200 from the Conchuela extraction.
The Company is engaged in the exploration of mineral properties with a view to
exploit any mineral deposits they discover that demonstrate economic viability.
The Company will continue our operations in Phase One exploring for mainly gold,
tungsten, perlite, sulfides, titanium, and silver while Roca Cantera Y Marmol
continues its mineral extraction of Conchuela.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting.
BASIC EARNINGS (LOSS) PER SHARE
The Company computes net income (loss) per share in accordance with ASC 260,
EARNINGS PER SHARE. ASC 260 specifies the computation, presentation and
disclosure requirements for earnings (loss) per share for entities with publicly
held common stock. The Company has adopted the provisions of ASC 260 effective
May 13, 2005 (inception).
Basic net earnings (loss) per share amounts are computed by dividing the net
earnings (loss) by the weighted average number of common shares outstanding.
Diluted earnings (loss) per share are the same as basic earnings (loss) per
share due to the lack of dilutive items in the Company.
CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
7
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MINERAL PROPERTY COSTS
The Company continues to conduct exploration and trenching activities that began
on September 27, 2006 and has realized $107,200 in revenues from its ongoing
operations. All exploration expenditures are expensed as incurred. Costs of
acquisition and option costs of mineral rights are capitalized upon acquisition.
Mine development costs incurred to develop new ore deposits, to expand the
capacity of mines, or to develop mine areas substantially in advance of current
production are also capitalized once proven and probable reserves exist and the
property is a commercially mineable property. Costs incurred to maintain current
production or to maintain assets on a standby basis are charged to operations.
If the Company does not continue with exploration after the completion of the
feasibility study, the mineral rights will be expensed at that time. Costs of
abandoned projects are charged to mining costs including related property and
equipment costs. To determine if these costs are in excess of their recoverable
amount periodic evaluation of carrying value of capitalized costs and any
related property and equipment costs are based upon expected future cash flows
and/or estimated salvage value in accordance with Accounting Standards
Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. In accordance with FASB 16 all
adjustments are normal and recurring.
INCOME TAXES
Income taxes are provided in accordance with ASC 740, INCOME TAXES. A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss carry forwards. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-11,
which is included in the Codification under ASC 815. This update clarifies the
type of embedded credit derivative that is exempt from embedded derivative
bifurcation requirements. Only an embedded credit derivative that is related to
the subordination of one financial instrument to another qualifies for the
exemption. This guidance became effective for the Company's interim and annual
reporting periods beginning January 1, 2010. The adoption of this guidance did
not have a material impact on the Company's financial statements.
In February 2010, the FASB issued ASU No. 2010-09, which is included in the
Codification under ASC 855, SUBSEQUENT EVENTS ("ASC 855"). This update removes
the requirement for an SEC filer to disclose the date through which subsequent
events have been evaluated and became effective for interim and annual reporting
periods beginning January 1, 2010. The adoption of this guidance did not have a
material impact on the Company's financial statements.
8
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In January 2010, the FASB issued ASU No. 2010-06, which is included in the
Codification under ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES ("ASC 820").
This update requires the disclosure of transfers between the observable input
categories and activity in the unobservable input category for fair value
measurements. The guidance also requires disclosures about the inputs and
valuation techniques used to measure fair value and became effective for interim
and annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
In May 2009, the FASB issued ASC No. 855 "Subsequent Events". ASC No. 855
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. ASC No. 855 sets forth (1) The period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, (2) The circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements and (3) The disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. ASC No. 855
was effective for interim or annual financial periods ending after June 15,
2009. The Company has evaluated subsequent events through December 31, 2010
which represents the date on which the financial statements were issued.
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. While the Company had reported revenue
of $107,200 in the quarter ended December 31, 2010, the Company generated a net
loss of $23,612 during the period from May 13, 2005 (inception) to December 31,
2010. This condition raises substantial doubt about the Company's ability to
continue as a going concern. The Company will require additional funding for
exploration beyond Phase 1, this additional funding may be raised through debt
or equity offerings. Management has yet to decide what type of offering the
Company will use or how much capital the Company will attempt to raise. There is
no guarantee that the Company will be able to raise any capital through any type
of offerings.
NOTE 4. WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares of
common.
NOTE 5. RELATED PARTY TRANSACTION
The Company neither owns nor leases any real or personal property. The company
has obtained a mineral rights option agreement. The officer/director of the
Company is retired. It is possible he could become involved in other business
activities as they become available. This could create a conflict between the
Company and his other business interests. The Company has not formulated a
policy for the resolution of such a conflict should one arise.
9
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 5. RELATED PARTY TRANSACTION (CONTINUED)
Loan from shareholder represents a loan from a related party. As of December 31,
2010 the loan balance is $81,800. Per the terms of the loan, Mr. Bravo agrees to
provide funding to Placer Del Mar, Ltd. in the amount necessary to continue the
current Phase One of the company's business plan. These funds shall continue
through Phase One for a period of twenty-four months, beginning April 2010, or
until such time as the company's geologist determines that further geological
exploration is not warranted. The loan is in an amount up to $6,000 per month to
allow the company to continue its exploration process and pay other operating
and filing expenses. All funds provided to Placer Del Mar by Mr. Bravo are
unsecured and he has agreed to forego any penalties or interest should Placer
Del Mar be unable to repay any funds provided to the Company.
NOTE 6. INCOME TAXES
As of December 31, 2010
-----------------------
Deferred tax assets:
Net operating tax carryforward $ 23,612
Tax rate 34%
--------
Gross deferred tax assets 8,028
Valuation allowance (8,028)
--------
Net deferred tax assets $ 0
========
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.
NOTE 7. NET OPERATING LOSSES
As of December 31, 2010, the Company has a net operating loss carryforward of
$23,612. Net operating loss carryforward expires twenty years from the date the
loss was incurred.
NOTE 8. MINERAL PROPERTY
Pursuant to a mineral property option agreement dated June 3, 2005, the Company
was granted an option to acquire the sole and exclusive right, privilege and
option to explore the claim together with the sole and exclusive right,
privilege and option to purchase the mineral rights under certain terms and
conditions.
A) CASH PAYMENTS
Cash payment of $2,000 upon execution of the agreement.
B) PROPERTY PAYMENTS AND ASSESSMENT WORK
Pay, or cause to paid, to grantor, or on grantor's behalf as the Company may
determine, all property payments and assessment work required to keep the
Concessions and this Option in good standing during the term of this agreement.
10
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 8. MINERAL PROPERTY (CONTINUED)
The Company entered Mineral Rights Revenue Sharing Agreement with Mr. Almarez.
Under the terms of the Mineral Rights Revenue Sharing Agreement (as amended on
December 8, 2010), Mr. Almarez gives and grants to Placer Del Mar the sole and
exclusive right to establish mineral claims on the Property, recorded as an
asset of the company with a related liability, subject to a payment of $400,000
(present value is 334,666) by Placer to Mr. Almarez to be paid in equal payments
over sixty (60) months in the amount of $6,666 beginning no later than June 1,
2011 for the exclusive right to begin extracting only Conchuela from the
Property commencing December 8, 2010. Such payments shall be lieu of the
original 1% Net Smelter Returns royalty originally reserved in favour of Mr.
Almarez in the Mineral Rights Revenue Sharing Agreement dated April 24, 2006 and
relate only to the mining and extraction of Conchuela. All minerals, other than
Conchuela, mined or extracted from the Property remain subject to the 1% Net
Smelter Returns royalty as stated in the original Mineral Rights Revenue Sharing
Agreement dated April 24, 2006.
The term of the option shall be for a period of 30 years from the signing date
of this agreement, renewable upon the anniversary date of this agreement for an
additional 30 year period at the sole discretion of the Company for a one-time
payment of $100,000.
The total estimated square footage of the Conchuela reserves is not known at
this time. The Company recorded $334,666 as mineral rights license and amortizes
them for 30 year option period.
NOTE 9. MINERAL EXTRACTION AGREEMENT FOR CONCHUELA
On December 8, 2010 the Company entered into a Mineral Extraction Agreement with
Roca Cantera Y Marmol, Canteras Acabados Finos related to the extraction of only
Mexican Shellstone-Limestone ("Conchuela") on the property. Payments to Placer
for the extraction of Conchuela will commence no later than December 31, 2010
for the exclusive right to begin extracting only Conchuela from the Property
commencing December 8, 2010. The term of this Mineral Extraction Rights
Agreement is for a period of five years, renewable upon the anniversary date of
the agreement for an additional 25 year period at the sole discretion of Placer
del Mar for a one-time payment of $55,000.
Under the terms of the Mineral Extraction Agreement Roca Cantera Y Marmol,
Canteras Acabados Finos will pay Placer del Mar $0.88 per square foot for all
Conchuela extracted from the Property commencing with extraction activities
beginning on December 8, 2010. The first section consists of one acre with a
surface area of 43,560 square feet and is one of 46.2 acres included in this
Agreement. Payments shall be calculated on the total number of square feet
extracted each month from the Property and due and payable to us within thirty
days, with a minimum monthly payment of $8,000. As of December 31, 2010 the
Company have generated $107,200 in revenue from the Conchuela extraction.
NOTE 10. STOCK TRANSACTIONS
On May 20, 2005 the Company issued 1,000,000 shares of common stock for cash at
$0.01 per share.
On June 14, 2005 the Company issued 420,000 shares of common stock for cash at
$0.01 per share
On June 30, 2005 the Company issued 200,000 shares of common stock for cash at
$0.10 per share.
On May 22, 2006 the Company issued 100,000 shares of common stock for services
at $0.10 per share.
As of December 31, 2010 the Company had 1,720,000 shares of common stock issued
and outstanding.
11
PLACER DEL MAR, LTD.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2010
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
NOTE 11. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of December 31, 2010:
* Common stock, $ 0.001 par value: 50,000,000 shares authorized;
1,720,000 shares issued and outstanding.
NOTE 12. SUBSEQUENT EVENTS
The Company evaluated all events or transactions that occurred after December
31, 2010 up through date the Company issued these financial statements. During
this period, the Company did not have any material recognizable subsequent
events.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. Any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act. The words "believes," "anticipates," "plans," "seeks,"
"expects," "intends" and similar expressions identify some of the
forward-looking statements. Forward-looking statements are not guarantees of
performance or future results and involve risks, uncertainties and assumptions.
The factors discussed elsewhere in this Form 10-Q could also cause actual
results to differ materially from those indicated by the Company's
forward-looking statements. Placer Del Mar, Ltd. undertakes no obligation to
publicly update or revise any forward-looking statements.
OVERVIEW OF OUR BUSINESS
Placer Del Mar, Ltd. was incorporated in Nevada on May 13, 2005 for the purpose
of mining and mineral exploration. Placer Del Mar, Ltd. has a mineral rights
revenue sharing agreement with Jorge Alberto Almarez of 157 Calle Federico,
Rosarito B.C. Mexico to explore a property owned by him for mainly gold,
tungsten, perlite, sulfides, titanium, and silver. Our revenue sharing agreement
grants us the right to free access and exploration of the property together with
the right to file a mining claim on the property located 15 miles southeast of
Playas del Rosarito, Baja California, Mexico. The Placer Del Mar mining claim
was filed on April 24, 2006 with the Mexican government. From the dates of June,
6th 2005 through April, 24th 2006, Placer Del Mar owned an option which granted
Placer the right to exercise a mining claim on the Almarez property. On April
24th 2006 Placer Del Mar exercised its option according to the terms of the
option agreement. The terms of the option agreement were: $2,000 was paid to Mr.
Almarez for the option, and Placer was to pay Almarez 10% net smelter returns
royalty for any mineralization found on the property. On April 24th, 2006 Placer
Del Mar entered into a new agreement with Almarez, which granted full ownership
of the mineral rights located on the Almarez property to Placer Del Mar subject
to a 1 % net smelter returns royalty reserved in favor of Mr. Almarez for any
and all minerals extracted by Placer from the property. Almarez continues to own
the land. Placer Del Mar owns any possible mineralization on the land or beneath
the surface subject to the royalty for Almarez. The principal executive offices
of Placer Del Mar, Ltd. is located at 302 Washington Street #351, San Diego, CA
92103. The telephone number is (775) 352-3839.
The Company continues the exploration and trenching activities that began on
September 27, 2006. Further exploration will be required before the Company is
able to determine the economic viability of the property for mainly gold,
tungsten, perlite, sulfides, titanium, and silver.
On December 8, 2010, Placer Del Mar entered into a Mineral Extraction Agreement
with Roca Cantera Y Marmol, Canteras Acabados Finos related to the extraction of
only Mexican Shellstone-Limestone ("Conchuela") on the property per its rights
as Operator and right to appoint a nominee under the Mineral Rights Revenue
Sharing Agreement dated April 24, 2006 between Placer Del Mar and Mr. Almarez as
amended on December 8, 2010. While Roca Cantera Y Marmol continues its mineral
extraction of Conchuela, we will continue our operations in Phase One exploring
for mainly gold, tungsten, perlite, sulfides, titanium, and silver. Any revenues
13
derived from the Conchuela extraction will be used to help pay for our operating
and exploration expenses. At this time we are unable to estimate how much total
revenue will be generated from the Conchuela extraction, however, per our
agreement with Roca Cantera Y Marmol they are to pay us a minimum of $8,000 per
month commencing no later than December 31, 2010. As of December 31, 2010 we
have generated $107,200 in revenues from the Conchuela extraction.
Under the terms of the Mineral Rights Revenue Sharing Agreement (as amended on
December 8, 2010), Mr. Almarez hereby gives and grants to Placer Del Mar the
sole and exclusive right to establish mineral claims on the Property, recorded
as an asset of the company with a related liability, subject to a payment of
$400,000 by Placer to Mr. Almarez to be paid in equal payments over sixty (60)
months in the amount of $6,666 beginning no later than June 1, 2011 for the
exclusive right to begin extracting only Conchuela from the Property commencing
December 8, 2010. Such payments shall be lieu of the original 1% Net Smelter
Returns royalty originally reserved in favor of Mr. Almarez in the Mineral
Rights Revenue Sharing Agreement dated April 24, 2006 and relate only to the
mining and extraction of Conchuela. All minerals, other than Conchuela, mined or
extracted from the Property remain subject to the 1% Net Smelter Returns royalty
as stated in the original Mineral Rights Revenue Sharing Agreement dated April
24, 2006. The total estimated square footage of the Conchuela reserves is not
known at this time. The Company recorded $334,666 as a mineral rights license
and amortizes them for a 30 year option period.
Since inception through June 30, 2010 we received funding of $34,200 through the
sale of common stock. Mr. Bravo, an officer and director, purchased 1,000,000
shares of our common stock at $0.01 per share for cash of $10,000 and he
received 100,000 shares of the company's common stock valued at $10,000 ($0.10
per share) in exchange for filing a mineral claim on the company's behalf. We
offered and sold 420,000 common stock shares at $0.01 per share for cash of
$4,200 to 42 non-affiliated private investors. We offered and sold 200,000
common stock shares at $0.10 per share for cash of $20,000 to 4 non-affiliated
private investors.
Our independent auditors have issued an audit opinion for Placer Del Mar which
includes a statement expressing substantial doubt as to our ability to continue
as a going concern.
On July 20, 2007 our Registration Statement on Form SB-2 was declared effective.
On October 3, 2008 FINRA cleared Placer Del Mar for an unpriced quotation on the
OTC Bulletin Board under the symbol PDMT. On May 20, 2009 the company filed Form
15, Notice of Suspension of Duty to File Reports. On September 15, 2010 the
company filed a Form 10 Registration Statement with SEC to reinstate company. On
December 21, 2010 the Company filed a Registration Statement on Form S-1 which
was declared effective of January 3, 2011.
DESCRIPTION OF BUSINESS
The Company continues exploration and trenching activities that began on
September 27, 2006 exploring for mainly gold, tungsten, perlite, sulfides,
titanium, and silver. Prior to beginning Phase One of our exploration program,
we retained 3 GEO Geological Services, a professional geological firm, to
complete an initial review of the claim and to provide us with a geological
report respecting the claim that included exploration recommendations. Our
president filed a mineral claim with the Mexican government on April 24, 2006 on
behalf of the company.
14
From May 2009 through March 2010 Mr. Bravo was unable to provide funds to the
Company while he handled his personal financial affairs. Without his funding, or
other sources of cash, we did not have sufficient funds to continue operations
due to Mr. Bravo's inability to continue to loan the Company funds at that time
and determined it was in the best interests to put our exploration program, that
we began in September 2006, on hold. In April 2010 we reactivated our program
and resumed trenching activities due to Mr. Bravo's improved personal financial
condition and his ability to again provide us with funding. Phase One will
require approximately another twenty one months to complete. Once Phase One is
completed, the company's geologist has verbally assured us his firm will be
ready to conduct geological and geophysical studies that will be conducted on
the claim at an estimated cost of $1,890 per month for a total cost of $17,000.
A senior geologist will conduct the studies at a cost of $450 per month for a
total cost of $4,000. The cost for assays is $450 per month for a total cost of
$4,000. The total estimated costs of $100,000 for Phase One includes $2,000 for
a geological study and $70,000 to $80,000 for ongoing trenching. Through
December 31, 2010 we have spent $23,474 on Phase One exploration activities,
$3,920 spent in the year ended June 30, 2006, $8,054 spent in the year ended
June 30, 2007, $2,500 spent in the year ended June 30, 2008 and $9,000 spent in
the year ended June 30, 2010. We believe our current cash balance of $35,191,
plus revenues and loans from Mr. Bravo as needed, will be sufficient to fund
completion of Phase One. Mr. Bravo has provided us with a written agreement to
loan the company sufficient funds to continue the company's business plan, Phase
One exploration costs, offering costs, filing fees, and correspondence with our
shareholders in an amount of up to $6,000 per month for twenty-four months (a
total of $144,000), beginning in April 2010. Mr. Bravo has assured us in writing
he has sufficient financial resources to provide the company with the required
capital to complete Phase One.
Mr. Bravo loaned the company $2,500 during the quarter ended December 31, 2010
and will continue to loan the company funds on a month by month basis, as
needed. The total amount owed Mr. Bravo at December 31, 2010 is $81,800. Per the
terms of the loan, Mr. Bravo agrees to provide funding to Placer Del Mar, Ltd.
in the amount necessary to continue the current Phase One of the company's
business plan. These funds shall continue through Phase One for a period of
twenty-four months, beginning April 2010, or until such time as the company's
geologist determines that further geological exploration is not warranted. The
loan is in an amount up to $6,000 per month to allow the company to continue its
exploration process and pay other operating and filing expenses. All funds
provided to Placer Del Mar by Mr. Bravo are unsecured and he has agreed to
forego any penalties or interest should Placer Del Mar be unable to repay any
funds provided to the Company.
If economically viable minerals are discovered in Phase One, we intend to
initiate Phase Two of our plan during the second quarter of 2012. Initial costs
for our Phase Two plan are as follows; mechanical trenching $12,500 per month
for four months for a total cost of $50,000, drilling costs of $12,500 per month
for a total cost of $50,000, fuel costs of $2,500 totaling $10,000, waste
removal costs of $1,000 per month totaling $4,000, labor costs of $5,000 per
month for four months totaling $20,000, and a onetime cost of $25,000 for mining
permits. We have not yet applied for mining permits. We intend to apply for
mining permits upon discovery of economically viable minerals. The estimated
time to complete the application process and obtain permits for mining is thirty
days. Total cost for Phase Two of our program is $159,000. We will require
additional funding in order to proceed with the excavation of any minerals and
15
any subsequent recommended work on the claim. As of this date we have not
identified a source for this additional funding. If we are not successful in the
discovery of minerals our operations will cease and investors will likely lose
their money.
On December 8, 2010, Placer Del Mar entered into a Mineral Extraction Agreement
with Roca Cantera Y Marmol, Canteras Acabados Finos related to the extraction of
only Mexican Shellstone-Limestone ("Conchuela") on the property per its rights
as Operator and right to appoint a nominee under the Mineral Rights Revenue
Sharing Agreement dated April 24, 2006 between Placer Del Mar and Mr. Almarez as
amended on December 8, 2010. While Roca Cantera Y Marmol continues its mineral
extraction of Conchuela, we will continue our operations in Phase One exploring
for mainly gold, tungsten, perlite, sulfides, titanium, and silver. Any revenues
derived from the Conchuela extraction will be used to help pay for our operating
and exploration expenses. At this time we are unable to estimate how much total
revenue will be generated from the Conchuela extraction, however, per our
agreement with Roca Cantera Y Marmol they are to pay us a minimum of $8,000 per
month commencing no later than December 31, 2010. As of December 31, 2010 we
have generated $107,200 in revenue from the Conchuela extraction.
RECENT RULE CHANGES EFFECTING FORM S-8, FORM 8-K AND RULE 144 OF THE SECURITIES
ACT OF 1933.
On June 29, 2005, the Securities and Exchange Commission adopted final rules
amending Form S-8 and the Form 8-K . The amendments expanded the definition of a
shell company ("Shell Company") to be broader than a company with no or nominal
operations/assets or assets consisting of cash and cash equivalents, the
amendments prohibit the use of a Form S-8 (a form used by a corporation to
register securities issued to an employee, director, officer, consultant or
advisor, under certain circumstances), and revised the requirements for Form 8-K
so that a Shell Company became required to include current Form 10 Information,
including audited financial statements, in the filing on Form 8-K reporting the
acquisition of the business opportunity. The rules are designed to assure that
investors in Shell companies that acquire operations or assets have access on a
timely basis to the same kind of information as is available to investors in
public companies with continuing operations.
On February 15, 2008, the Securities and Exchange Commission adopted final rules
amending Rule 144 (and Rule 145). The amendments imposed certain restrictions on
securities issued by a Company that was ever a Shell Company. Footnote 172 to
Amended Rule 144 exempted certain Issuers from the definition of a Shell
Company:
"Rule 144(i) does not prohibit the resale of securities under Rule 144 that were
not initially issued by a reporting or a non-reporting Shell Company or an
issuer that has been at any time previously such a company, even when the issuer
is a reporting or non-reporting Shell Company at the time of sale. Contrary to
commenter's' concerns, Rule 144(i)(1)(i) is not intended to capture a "startup
company," or, in other words, a company with a limited operating history, in the
definition of a reporting or non-reporting Shell Company, as we believe that
such a company does not meet the condition of having "no or nominal operations."
We believe that based upon the definition of a Shell Company set forth in
Footnote 172, we are not a Shell Company because we have a limited operating
history, were a start-up company, and as such, we do not have "no or nominal
16
operations. Specifically, our inception date was May, 13th 2005. We began
operations in September of 2006. We have had ongoing operations and have spent
$129,139 to date on our operations to confirm viable minerals within the claim.
These funds have been expensed due to PCAOB and GAAP rules. We will continue to
dedicate funds through ongoing trenching seeking to identify and exploit any
minerals within our mining claim asset. Further we paid an upfront fee of $2,000
for the Placer Del Mar claim, and retain 99% of the net smelter returns from any
viable minerals within the claim. It is subject to a net smelter return of 1% to
Mr. Almarez.
LIQUIDITY AND CAPITAL RESOURCES
Our cash in the bank at December 31, 2010 was $35,191 with $70,200 in accounts
receivable. There was no cash provided by financing activities for the period
ended December 31, 2010. Cash provided by financing since inception was $10,000
from the sale of shares to our officer and $24,200 resulting from the sale of
our common stock to 46 independent investors and $81,800 from loan from
shareholder. We believe our existing cash balance, revenue from the Conchuela
extraction and any funds loaned from Mr. Bravo will be sufficient to fund our
operations for the next twelve months during our exploration stage. Through
December 31, 2010 we have spent $23,474 on Phase One exploration activities. In
addition to our existing cash, Mr. Bravo has provided us with a written
agreement to loan the company sufficient funds to continue the company's
business plan Phase One exploration costs, offering costs, filing fees, and
correspondence with our shareholders in an amount of up to $6,000 per month for
the next twenty-four months (a total of $144,000), beginning in April 2010. From
April 2010 to December 31, 2010 Mr. Bravo loaned the company $23,800, leaving
$120,200 available to the Company until March 2012. The cumulative total amount
of the loan at September 30, 2010 was $81,800. No amount of funds, loaned to the
Company by Mr. Bravo, has been repaid as of the date of this filing.
In the event we are unable to continue to generate revenue from the Conchuela
extraction and Mr. Bravo does not provide the funding as discussed above, our
business will likely fail, we may cease operations, and investors will likely
lose their money.
RESULTS OF OPERATIONS
The Company continues to conduct exploration and trenching activities that began
on September 27, 2006. We have generated $107,200 in revenues and have incurred
$130,812 in expenses from ongoing operations since inception through December
31, 2010, resulting in a net loss of $23,612.
The following table provides selected financial data about our company for the
period ended December 31, 2010.
Balance Sheet Data: 12/31/2010
------------------- ----------
Cash $ 35,191
Total assets $439,127
Total liabilities $418,539
Shareholders' equity $ 20,588
17
During the three month periods ended December 31, 2010 and 2009 we generated
$107,200 and $0 in revenues, respectively. During the three month period ended
December 31, 2010 we incurred $8,289 in general and administrative expenses and
$1,673 in interest expense. For the three month period ended December 31, 2009
we incurred $24 in general and administrative expenses. The increase in revenue
and expenses from 2009 to 2010 was due to the resumption of our exploration
activities and the extraction of Conchuela from the property.
During the six month periods ended December 31, 2010 and 2009 we generated
$107,200 and $0 in revenues, respectively. During the six month period ended
December 31, 2010 we incurred $17,331 in general and administrative expenses and
$1,673 in interest expense. For the six month period ended December 31, 2009 we
incurred $48 in general and administrative expenses. The increase in revenue and
expenses from 2009 to 2010 was due to the resumption of our exploration
activities and the extraction of Conchuela from the property.
GOING CONCERN
Our auditors have expressed the opinion that in our current state, there is
substantial doubt about our ability to continue as a going concern.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is accumulated and communicated to our management, including our
principal executive and financial officer, recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms relating to
our company, particularly during the period when this report was being prepared.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter ended December 31, 2010 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
18
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously discussed in
Item 1A of the Company's Form 10, as amended, which included the audited
financial statements for the year ended June 30, 2010.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no sales of unregistered securities during the period covered by this
report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There were no defaults upon senior securities during the period covered by this
report.
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
There was no information required to be disclosed on Form 8-K during the period
covered by this report.
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our Registration Statement on
Form S-1, filed under SEC File Number 333-171307, at the SEC website at
www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31 Sec. 302 Certification of Principal Executive & Financial Officer
32 Sec. 906 Certification of Principal Executive & Financial Officer
19
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form 10-Q and authorized this report to be signed on
its behalf by the undersigned, in the city of San Diego, state of California, on
January 18, 2011.
Placer del Mar, Ltd.
/s/ Humberto Bravo
-------------------------------------
By: Humberto Bravo
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/ Humberto Bravo January 18, 2011
------------------------------------------------ ----------------
Humberto Bravo, President & Director Date
(Principal Executive Officer, Principal
Financial Officer, Principal Accounting Officer)
/s/ Mario Laguna January 18, 2011
------------------------------------------------ ----------------
Mario Laguna, Director Date
2