CLEAN TRANSPORTATION GROUP, INC. - FORM 10-K - March 29, 2011

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EX-32.1 - CERT 906 - CEO, CFO - CLEAN TRANSPORTATION GROUP, INC.ex32-1.htm
EX-31.1 - CERT 302 - CEO, CFO - CLEAN TRANSPORTATION GROUP, INC.ex31-1.htm
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

   x
Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2010

   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:   000-52206

Quintana Gold Resources Corp.
(Exact name of registrant as specified in its charter)
 
 
 Utah      73-1083773
 (State or other jurisdiction of      (I.R.S. Employer
 incorporation or organization)      Identification No.)
 
7810 Marchwood Place, Vancouver BC, Canada V5S 4A6
(Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code:   (604) 202-3212

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o  No x
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o   No x
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 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    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.
 
 Large accelerated filer  o  Accelerated filer  o
 Non-accelerated filer  o  Smaller reporting company  x
 (Do not check if a smaller reporting company)      
       
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x   No o
The aggregate market value of the voting stock held by non-affiliates of the registrant based on the closing sales price, or the average bid and asked price on such stock, as of September 30, 2010, the last business day of the registrant’s most recently completed third quarter, was $-0-.  Shares of the registrant’s common stock held by each executive officer and director and by each entity or person that, to the registrant’s knowledge, owned 10% or more of registrant’s outstanding common stock as of September 30, 2010 have been excluded in that such persons may be deemed to be affiliates of the registrant.  This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of the registrant’s common stock outstanding as of  March 29, 2011 was 25,990,868

DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Part IV, Item 15.

 
 
 


QUINTANA GOLD RESOURCES CORP.

TABLE OF CONTENTS


Heading
Page
   
PART  I      
 
 Item 1.  
Business
3
     
Item 1A.  Risk Factors  7
     
Item 1B.  Unresolved Staff Comments  8
   
 Item 2.  
Properties
 8
   
 Item 3.  
Legal Proceedings
8
   
 Item 4   
(Removed and Reserved)
8
   
   
PART II
   
 Item 5.   Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
 
  Purchases of Equity Securities  8 
   
 Item 6.   
Selected Financial Data
10
   
 Item 7.   
Management's Discussion and Analysis of Financial Condition
 
  and Results of Operations  10
   
 Item 7A.  
Quantitative and Qualitative Disclosures About Market Risk
12
   
 Item 8.  
Financial Statements and Supplementary Data
12
   
 Item 9.  Changes in and Disagreements with Accountants on Accounting
 
  and Financial Disclosure  12
   
 Item 9A(T). 
Controls and Procedures
12
     
Item 9B.  Other Information 13
     
PART III
     
Item 10.  Directors, Executive Officers and Corporate Governance  13
     
Item 11.  Executive Compensation  15 
     
Item 12.  Security Ownership of Certain Beneficial owners and Management   
  and Related Stockholder matters  15
     
Item 13.  Certain Relationshuips and Related Transactions and Director Independence  16 
     
Item 14.  Principal Accounting Fees and Services  16
     
 PART IV
     
Item 15. Principal Accounting Fees and Statement Schedules  17 
     
  Signatures  34
   
 
 
 
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PART I

Item 1.                 Business.

Business Development

History

Quintana Gold Resources Corp. was organized on August 23, 1978 under the laws of the State of Utah as Price Card & Gift, Inc. On May 19, 1988 the company changed its name to Kellard Marble, Inc. and on March 13, 1989, it changed its name to Who's the Greatest. On May 15, 1994, the company changed its name to SwissAmera Enterprises, Inc. and on July 9, 2001 the company again changed its name to Royal Oil & Gas Corp.  Finally, on June 27, 2008. the company changed its name to the current Quintana Gold Resources Corp.

Our initial authorized capitalization was 50,000 shares of common stock and we originally issued 15,000 shares, which shares were subsequently returned to the Company and cancelled. During 1983 and 1984, the Company issued 15,000 shares for cash and services rendered. In May 1988, the Company amended its Articles of Incorporation to change its name to Kellard Marble, Inc. and increase the authorized capitalization to 10,000,000 shares of common stock. The company developed and operated a `Marble Mine' in the Province of British Columbia Canada. Operations on the mine were ceased in late 1988. On March 2, 1989, the company effected a forward split of its issued shares on a forty (40) shares for one (1) share basis, which increased the issued and outstanding shares of common stock to 600,000 shares. On March 13, 1989, the company changed its name to Who's the Greatest. The company planned to acquire the rights to certain syndicated Television Shows, but was not able to raise the necessary funds.

On March 14, 1994, the company changed its name to SwissAmera Enterprises, Inc. and on May 15, 1994, it effected a reverse split of its issued and outstanding shares on a one (1) share for twenty (20) shares basis, which decreased the outstanding common stock to 30,000 shares.

In July 1994, the company issued an aggregate of 920,666 shares of common stock pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended (the "Securities Act"). The shares were issued as follows:

●           614,000 shares at $ 0.25 per share for cash and a note;

●           230,666 shares at $ 0.375 per share for cash;

●           40,000 shares at $ 0.375 per share for services rendered; and
 
●           36,000 shares at $0.375 per share for a cash advance for the Adams Ranch Oil & Gas Project visibility study.
The company acquired an option to the Adams Ranch situated in the `Medina County, Texas' with the intent to develop and produce the existing oil and gas reserves on the Ranch. The company engaged the services of Tejas Petroleum Engineers, Inc., Dallas Texas' to complete a visibility study on the Adams Ranch Project. Due to the fact that the Oil Reserves were `heavy oils' and could not be recovered through conventional  methods,  and the Gas Reserves were insufficient, the company decided not to continue with the Project.

On July 22, 1994, the company issued 300,000 shares for an option to acquire a telecommunications company. The shares were held in escrow, which increased the outstanding stock, including the escrowed shares, to 1,250,666.

In 1995, the company issued 4,000 shares of common stock in a private transaction for cash at $2.50 per share, which increased the outstanding stock to 1,254,666 shares.

In 1996, the company elected not to exercise the option given in 1994 and the shares issued in July 1994 and held in escrow were returned to the company's treasury and retired, decreasing the outstanding stock to 954,666 shares.

In 1998, the company issued 70,602 shares of common stock valued at $0.50 per share in exchange for debt, which increased the outstanding stock to 1,025,268 shares.


 
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In 1999, the company issued 38,646 shares of common stock for cash at $0.70 per share, and 30,000 shares for services rendered valued at $0.70 per share, increasing the total shares outstanding to 1,093,914.

In 2001, the company negotiated the acquisition of certain interests in producing oil and gas properties located in the United States and Canada. Subsequently on July 9, 2001, the company changed its name from SwissAmera Enterprises, Inc. to Royal Oil & Gas Corp. Upon completion of a viability study on the oil and gas interests proposed to be acquired, the company decided not to continue with the acquisition. No stock was issued.

        From 1995 to 2005 the company researched several opportunities in the oil and gas Industry, but at all occasions the company was unable to raise the necessary funding due to the fact that the company's stock was not trading on any exchange. Therefore the company decided in 2005 to investigate the possibility of filing a registration statement with the SEC and to seek to have its shares quoted on the OTC Bulletin Board.

       On December 31, 2005 the company caused a reverse split of its outstanding common stock on a one share for 10 shares basis, reducing its outstanding stock from 10,939,144 shares to 1,093,952 (adjusted to rounding). All references to common stock have been retroactively restated.

On March 28, 2006 the company issued 16,077,400 shares of common stock at $0.005 per share in payment of a shareholder loan of $80,387 as recorded at December 31, 2005, increasing its issued and outstanding stock to 17,171,352 shares.

On March 31, 2006, the company issued 2,920,156 shares of common stock valued at $0.005 per share in payment of a shareholder loan of $14,601 as recorded on March 31, 2006, increasing its issued and outstanding stock to 20,091,508 shares.
 
On June 30, 2006 the company issued 2,620,000 of common stock valued at $0.005 per share in payment of a shareholder loan of $13,100 as recorded at June 30, 2006, increasing its issued and outstanding stock to 22,711,508 shares.

The company has been inactive with nominal assets and no significant operations since 1995. All shareholders loans have been paid through the issuance of common stock as of June 30, 2006, valued at par value of $0.005.
 
On June 26, 2008 the company issued 3,279,360 of common stock valued at $0.025 per share in payment of a shareholder loan of $81,984 as recorded at June 26, 2008, increasing its issued and outstanding stock to 25,990,868 shares.

The company has been inactive with nominal assets and no significant operations since 1995. All shareholders loans accumulated since June 30, 2006 have been paid through the issuance of common stock as of June 26, 2008, valued at par value of $0.05.

On June 27, 2008 the company caused a forward split of its outstanding common stock on a one share for two shares basis, increasing its outstanding stock to 25,990,868.

The company is attempting to locate and negotiate with a business entity for the merger of that target company into the company. In certain instances, a target company may wish to become a subsidiary of the company or may wish to contribute assets to the company rather than merge. No assurance can be given that the company will be successful in locating or negotiating with any target company.

Management has broad discretion in its search for and negotiations with any potential business or business opportunity.  In certain instances, a target company may desire to become our subsidiary or contribute assets rather than merge.  No assurance can be given that we will be successful in locating or negotiating with any target company.

In the event of a successful acquisition or merger, the acquired entity will become subject to the same reporting requirements with the SEC as we are.  Any acquired business must provide audited financial statements for at least the two most recent fiscal years or, in the event it has been in business for less than two years, from the period of inception.  This could limit potential prospects because many private businesses either do not have audited financial statements, or are unable to produce audited statements without undo time and expense.

We are subleasing executive office space at 7810 Marchwood Place, Vancouver BC, Canada V5S 4A6 and our telephone number is (604) 202-3212.

 
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Current Business Activities

We have a limited operating history and we make no representation, nor is any intended, that we will be able to successfully carry on future business activities.  There can be no assurance that we will have the ability to acquire or merge with a business opportunity that will be of material value.

Management plans to investigate, research and, if justified, potentially acquire or merge with, one or more businesses or business opportunities. We presently have no commitment or arrangement, written or oral, to participate in any business opportunity and we cannot predict the nature of any potential business we may ultimately consider. Management has broad discretion in its search for and negotiations with any prospective business or business opportunity.

Sources of Business Opportunities

Management employs various resources in its search for potential business opportunities including, but not limited to, officers, directors, stockholders, consultants, special advisors, securities broker-dealers, venture capitalists, members of the financial community and others who may present management with unsolicited proposals. Because of a lack of capital, we may not be able to retain, on a fee basis, professional firms specializing in business acquisitions and reorganizations.  Rather, we will most likely rely on outside sources, not otherwise associated with us that will accept their compensation only after we finalize a successful acquisition or merger. To date, we have not engaged or entered into any discussion, agreement or understanding with a particular consultant regarding our search for business opportunities. Presently, no final decision has been made nor is management in a position to identify any future prospective consultants.

In the event we engage an independent consultant, we would prefer that the consultant has experience in working with small companies searching for business opportunities. Also, the consultant must be experienced in locating viable merger and/or acquisition candidates and have a proven track record of finalizing such transactions. Further, we would prefer to engage a consultant that will provide services for only nominal up-front consideration and is willing to be fully compensated at the close of a business consolidation.

We do not limit our search to any specific kind of business or industry. We may investigate and ultimately acquire a venture that is in its preliminary or development stage, is already in operation, or in various stages of its corporate existence and development. Management cannot predict at this time the status or nature of any venture in which we may participate. A potential venture might need additional capital or merely desire to have its shares publicly traded. The most likely scenario for a possible business arrangement would involve the acquisition of or merger with an operating business that does not need additional capital, but which merely desires to establish a public trading market for its shares.  Management believes that we could provide a potential public vehicle for a private entity interested in becoming publicly held without the time and expense typically associated with an initial public offering.

Evaluation

Once we identify a potential acquisition or merger candidate, management will determine whether acquisition or merger is warranted, or whether further investigation is necessary. Such determination will generally be based on management's knowledge and experience, or with the assistance of outside advisors and consultants evaluating the preliminary information available to them. Management may elect to engage outside independent consultants to perform preliminary analysis of potential business opportunities. However, because of our lack of capital, we may not have the necessary funds for a complete and exhaustive investigation of any particular opportunity.

In evaluating potential business opportunities, management considers, to the extent relevant to the specific situation, several factors including:
●      potential benefits to the company and stockholders;
●      working capital;
●      financial requirements and availability of additional financing;
●      history of operation, if any;
●      nature of present and expected competition;
●      quality and experience of management;
●      need for further research, development or exploration;
●      potential for growth and expansion;
●      potential for profits; and
●      other factors deemed relevant to the specific opportunity.

 
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Because we have not yet located or identified a specific business opportunity, there are certain unidentified risks that cannot be adequately expressed.  There can be no assurance following consummation of an acquisition or merger that the business venture will develop into a going concern or, if the business is already operating, that it will continue to operate successfully. Many potential business opportunities available to us may involve a new and untested technology, product, process or market strategy, which may not ultimately prove successful.

Form of Potential Acquisition or Merger

We cannot predict the manner in which we might participate in a particular prospective business opportunity.  Each separate potential opportunity will be reviewed and, upon the basis of that review, a suitable legal structure or method of participation will be chosen. The particular manner in which we participates in a specific opportunity will depend upon the nature of its business, the respective needs and desires of the parties’ management, and the relative negotiating strength of the parties involved. Actual participation in a business venture may take the form of an asset purchase, lease, joint venture, license, partnership, stock purchase, reorganization, merger or other form of consolidation. We may act directly or indirectly through an interest in a partnership, corporation, or other form of organization, however, we presently do not intend to participate in an opportunity through the purchase of a minority stock position.

Because we have only nominal assets and a limited operating history, in the event we successfully acquire or merge with an operating business, current stockholders most likely will experience substantial dilution.  It is also probable that we will experience a change in control.  The owners of a business that we acquire or merge with will most likely gain effectively control of our company following such transaction.  Management has not established any guidelines as to the amount of control it will offer to prospective target.  Instead, management will attempt to negotiate the best possible agreement for the benefit of the stockholders.

Presently, we do not intend to borrow funds to compensate any person, consultant, promoter or affiliate in relation to the consummation of a potential merger or acquisition.  However, if we engage an outside advisor or consultant in our search for business opportunities, we may have to raise additional funds.  As of the date hereof, we have not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital.  In the event we do need to raise capital, most likely the only method available would be the private sale of securities.  These possible private sales would most likely have to be to persons known by the officers, current stockholders, directors or to venture capitalists that would be willing to accept the risks associated with investing in a business with limited operations.

Because we are a development stage company, it is unlikely that we could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender.  Management will attempt to acquire funds on the best available terms.  However, there can be no assurance that we will be able to obtain additional funding when and if needed, or that such funding, if available, can be obtained on reasonable and/or acceptable terms.  Although not presently anticipated, there is a remote possibility that we could sell securities to our management or affiliates to raise funds.

It is possible that the terms of a future acquisition or merger transaction might include the sale of shares held by our officers and/or directors to parties affiliated with or designated by the potential target.  Presently, we have no plans to seek or actively negotiate such terms.  However, if this situation does arise, we are obligated to follow our articles of incorporation and applicable corporate laws in negotiating such an arrangement.  Under this scenario of a possible sale by officers and directors, it is unlikely that similar terms and conditions would be offered to all other stockholders or that stockholders would be given the opportunity to approve such a transaction.

In the event of a successful acquisition or merger, we might pay a finder's fee, in the form of cash or securities, to a person or persons instrumental in facilitating the transaction.  We have not established a policy for the determination of an appropriate finder's fee, although any fee would likely be based upon negotiations by management, the business opportunity and finder.   We cannot at this time estimate the type or amount of a potential finder's fee that might be paid.  It is unlikely that a fee will be paid to an affiliate because of the potential conflict of interest.  However, if such a fee were paid to an affiliate, it would have to be in such a manner so as not to compromise the affiliate’s fiduciary duty or violate the doctrine of corporate opportunity.

We believe that it is highly unlikely that we will acquire or merge with a business in which our management, affiliates or promoters have an ownership interest.  Any possible related party transaction of this type would have to be ratified by a disinterested board and by the stockholders.  Management does not anticipate an acquisition or merger with a related entity.  Further, as of the date hereof, no officer, director, affiliate or associate has had any preliminary contact or discussions with any specific business opportunity, nor are there any present plans, proposals, arrangements or understandings regarding the possibility of an acquisition or merger with any specific business opportunity.
 
 
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Rights of Stockholders

Prior to consummating an acquisition or merger, if required by relevant state laws and regulations, we will seek stockholders approval in the appropriate manner.  Certain types of transactions may be entered into solely by board of directors approval without stockholder ratification.  Under Nevada law, certain actions that would routinely be taken at a meeting of stockholders, may be taken by written consent of stockholders having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting of stockholders. Thus, if stockholders holding a majority of the outstanding shares decide by written consent to consummate an transaction, minority stockholders would not be given the opportunity to vote on the issue. If stockholder approval is required, the board will have discretion to consummate the transaction by written consent.  Regardless of whether an acquisition or merger is ratified by board action alone, by written consent or by holding a stockholders' meeting, we will provide stockholders complete disclosure documentation concerning the potential target including requisite financial statements. This information will be disseminated by proxy statement in the event a stockholders' meeting is held, or by an information statement if the action is taken by written consent.

Under Nevada corporate laws, our stockholders may be entitled to assert dissenters’ rights in the event of a successful merger of acquisition.  Stockholders may be entitled to dissent from and obtain payment of the fair value of their shares in the event we complete a merger if approval by the stockholders is required under Nevada law. Also, stockholders may be entitled to dissenters’ rights if we enter into a share exchange whereby our shares are to be acquired. A stockholder entitled to assert dissenter’s rights and obtain fair value for their shares, may not challenge the corporate action creating this entitlement, unless the action is unlawful or fraudulent with respect to the stockholder or company. A dissenting stockholder must refrain from voting their shares in approval of the corporate action.  If the proposed action is approved by the required vote of stockholders, we must then give notice to all stockholders who delivered their written notice of dissent.

Competition

Because we have not identified a prospective acquisition or merger candidate, we cannot evaluate the type and extent of future competition.  There are several other public companies with only nominal assets that are also searching for operating businesses as potential acquisition or merger candidates.  We will be in direct competition with these other public companies in our search and, due to a lack of funds, it may be difficult to successfully compete with these companies.

Employees

As of the date hereof, we do not have any employees and have no plans for retaining employees until such time as business warrants the expense, or until we successfully acquire or merge with an operating business.  We may find it necessary to periodically hire part-time clerical help on an as-needed basis.

Facilities

We currently use as our principal place of business the business office of our President and director, Delbert G. Blewett, in Vancouver, BC. Although we have no written agreement and currently pay no rent for the use of the facilities, it is contemplated that at such future time as we are able to acquire or merge with an operating business, we will secure commercial office space from which to conduct business. However, until that time, the type of business in which we will be engaged and the type of office and other facilities that will be required is unknown.  We have no current plans to secure such commercial office space.

Industry Segments

No information is presented regarding industry segments. We are presently a development stage company seeking a potential acquisition of or merger with a yet to be identified business opportunity.  Reference is made to the statements of income included in this Form 10-K for a report of our operating history for the past two fiscal years.

Item 1A.                 Risk Factors.

This item is not required for a smaller reporting company.

 
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Item 1B.         Unresolved Staff Comments.

This item is not required for a smaller reporting company.

Item 2.
Description of Property.

We do not presently own any property.

Item 3.
Legal Proceedings.

There are no material pending legal proceedings to which the company or any subsidiary is a party, or to which any property is subject and, to the best of our knowledge, no such action against us is contemplated or threatened.


Item 4.
Removed and Reserved.

PART II

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

There is not currently a public trading market for our common stock, although we have made an application to have our shares quoted on the OTC-QB and Bulletin Board.  The application consists of current corporate information, financial statements and other documents as required by Rule 15c2-11 of the Securities Exchange Act of 1934.  As of the date hereof, there are approximately 123 stockholders of record of our common stock.

Inclusion on the OTC–QB and Bulletin Board will permit price quotations for our shares to be published by that service. Although we intend to request that an application to the OTC-QB and Bulletin Board be submitted, we do not anticipate a public trading market in our shares in the immediate future. Any future secondary trading of our shares may be subject to certain state imposed restrictions.  Except for the application to the OTC-QB and Bulletin Board, there are no plans, proposals, arrangements or understandings with any person concerning the development of a trading market in any of our securities. There can be no assurance that our shares will be accepted for trading on the OTC-QB and Bulletin Board or any other recognized trading market. Also, there can be no assurance that a public trading market will develop following acceptance by the OTC-QB and Bulletin Board or at any other time in the future or, that if such a market does develop, that it can be sustained.

The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.

Penny Stock Rule

It is unlikely that our securities will be listed on any national or regional exchange or The Nasdaq Stock Market in the foreseeable future.  Therefore our shares most likely will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule.  Section 15(g) sets forth certain requirements for broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

The SEC generally defines a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions.  Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is:
 
 
●
registered and traded on a national securities exchange meeting specified criteria set by the SEC;

 
●
authorized for quotation on The Nasdaq Stock Market;

 
●
issued by a registered investment company;

 
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●
excluded from the definition on the basis of price (at least $5.00 per share) or the issuer's net tangible assets; or
 
 
●
exempted from the definition by the SEC.

A broker-dealer who sells penny stocks to a person other than an established customer or accredited investor is subject to additional sales practice requirements.  An accredited investor is generally defined as a person with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.

For transactions covered by these rules, a broker-dealer must make a special suitability determination for the purchase of such securities and must receive the purchaser's written consent to the transaction prior to the purchase.  Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market.  A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.  Finally, a monthly statement must be sent to the client disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks.  Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.

These requirements may be considered cumbersome by broker-dealers and could impact the willingness of a particular broker-dealer to make a market in our shares, or they could affect the value at which our shares trade. Classification of the shares as penny stocks increases the risk of an investment in our shares.

Rule 144

Some of our outstanding common shares are deemed restricted securities.  Rule 144 is the common means for stockholders to resell restricted securities and for affiliates, to sell their securities, either  restricted on non restricted (control) shares.  Rule 144 has been amended by the SEC, effective February 15, 2008.

Under the amended Rule 144, an affiliate of a company filing reports under the Exchange Act who has held their shares for more than six months, may sell in any three-month period an amount of shares that does not exceed the greater of:
 
 
●
the average weekly trading volume in the common stock, as reported through the automated quotation system of a registered securities association, during the four calendar weeks preceding such sale, or
 
 
●
1% of the shares then outstanding.

Sales by affiliates under Rule 144 are also subject to certain requirements as to the manner of sale, filing appropriate notice and the availability of current public information about the issuer.

A non-affiliate stockholder of a reporting company who has held their shares for more than six months, may make unlimited resales under Rule 144, provided only that the issuer has available current public information about itself.  After a one-year holding period, a non-affiliate may make unlimited sales with no other requirements or limitations.

An important exception to the above described availability of the amended Rule 144 is that Rule 144 is not available for either a reporting or non-reporting shell company, unless the company:

 
●
has ceased to be a shell company;

 
●
is subject to the Exchange Act reporting obligations;

 
●
has filed all required Exchange Act reports during the preceding twelve months; and
 
 
●
at least one year has elapsed from the time the company filed with the SEC current Form 10 type information reflecting its status as an entity that is not a shell company.
 
Following a successful acquisition of an operating business, we intend to file with the SEC a report that will include comprehensive information that reflects that we are no longer a shell company.

We cannot predict the effect any future sales under Rule 144 may have on the market price of our common stock, if a market for our shares develops, but such sales may have a substantial depressing effect on such market price.

 
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Dividends Policy

We have never declared cash dividends on our common stock, nor do we anticipate paying any dividends on our common stock in the foreseeable future.

Item 6.
Selected Financial Data.

This item is not required for a smaller reporting company.

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-K.

We are considered a development stage company with no assets and/or capital and no material operations or income.  Ongoing expenses, including the costs associated with the preparation of reports and filing with the SEC, have been paid for by advances from a stockholder, which are evidenced on our financial statements as payable-related party.  It is anticipated that we will require only nominal capital to maintain our corporate viability.  Additional necessary funds will most likely be provided by officers and directors, although there is no agreement related to future funds and there is no assurance such funds will be available.  However, unless we are able to facilitate an acquisition of or merger with an operating business or able to obtain significant outside financing, there is substantial doubt about our ability to continue as a going concern.

Forward Looking and Cautionary Statements

This report contains forward-looking statements relating to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should," “expect," "intend," "plan," anticipate," "believe," "estimate," "predict," "potential," "continue," or similar terms, variations of such terms or the negative of such terms.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors.  Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Results of Operations

We did not realize any revenues for the years ended December 31, 2010 and 2009 and incurred a net loss of $61,356 for 2010 compared to a loss of $50,706 for 2009.  We have also reported a cumulative net loss of $743,016 since inception through December 31, 2010.  The losses for both 2010 and 2009 are attributed primarily to professional expenses for accounting and legal fees related to the preparation and filing of our periodic reports with the SEC and to interest charged on stockholder loans.

Liquidity and Capital Resources

Expenses incurred during 2010 and 2009 have been paid for by a stockholder.  At December 31, 2010, we had current liabilities of $149,044 compared to $92,568 at December 31, 2009.   Because we have no cash reserves or revenue source, we expect to continue to rely on the stockholder to pay expenses until such time as we can successfully complete an acquisition of or merger with an existing, operating company.  There is no assurance that we will complete such an acquisition or merger or that the stockholder will continue indefinitely to pay expenses.

In the opinion of management, inflation has not and will not have a material effect on our operations until such time as we successfully complete an acquisition or merger.  At that time, management will evaluate the possible effects of inflation related to our business and operations following a successful acquisition or merger.






 
- 10 -
 

Plan of Operation

During the next 12 months, we will actively seek out and investigate possible business opportunities with the intent to acquire or merge with one or more business ventures.  We will not restrict our search to any specific business, industry, or geographical location and it may participate in a business venture of virtually any kind or nature.

Because we lack funds, it may be necessary for officers, directors or stockholders to advance funds and we will accrue expenses until such time as a successful business consolidation can be accomplished.  Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible.  Further, directors will defer any compensation until such time as an acquisition or merger can be accomplished and will strive to have the business opportunity provide their remuneration.  However, if we engage outside advisors or consultants in our search for business opportunities, it may be necessary to attempt to raise additional funds.  As of the date hereof, we have not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital.

If we need to raise capital, most likely the only method available would be the private sale of securities.  Because we are a development stage company, it is unlikely that we could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender.  There can be no assurance that we will be able to obtain additional funding when and if needed, or that such funding, if available, can be obtained on acceptable terms.

We do not intend to use any employees, with the possible exception of part-time clerical assistance on an as-needed basis.  Outside advisors or consultants will be used only if they can be obtained for minimal cost or on a deferred payment basis.  Management is confident that it will be able to operate in this manner and to continue its search for business opportunities during the next twelve months.  Also, we do not anticipate making any significant capital expenditures until we can successfully complete an acquisition or merger.

Net Operating Loss

We have accumulated a net operating loss carryforward of approximately $743,016 at of December 31, 2010.  This loss carry forward may be offset against future taxable income through the year 2029.  The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards.  In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used.  No tax benefit has been reported in the financial statements for the year ended December 31, 2010 because it has been fully offset by a valuation reserve.  The use of future tax benefit is undeterminable because we presently has no operations.

Recently Adopted Accounting Standards:

In June 2009, the Financial Accounting Standards Board (FASB) issued a  standard  that  established   the  FASB Accounting Standards Codification ™ (ASC) and amended the hierarchy of generally accepted accounting principles (GAAP) such that the ASC became the single source of authoritative nongovernmental U.S. GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). For the Company, the ASC was effective July 1, 2009. This standard did not have an impact on the Company’s consolidated results of operations or financial condition. However, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

In April 2009, the FASB issued an accounting standard which provides guidance on (1) estimating the fair value of an asset or liability when the volume and level of activity for the asset or liability have significantly declined and (2) identifying transactions that are not orderly. The standard also amended certain disclosure provisions for fair value measurements and disclosures in ASC 820 to require, among other things, disclosures in interim periods of the inputs and valuation techniques used to measure fair value as well as disclosure of the hierarchy of the source of underlying fair value information on a disaggregated basis by specific major category of investment. For the Company, this standard was effective prospectively beginning April 1, 2009. The adoption of this standard did not have a material impact on the Company‘s consolidated results of operations or financial condition.

 
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In May 2009, the FASB issued a new accounting standard regarding subsequent events. This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining essentially unchanged. This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements. Under the new standard, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date. This standard added no additional required disclosure relative to the date through which subsequent events have been evaluated. For the Company, this standard was effective beginning April 1, 2009.

Item 7A.                 Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for a smaller reporting company.

Item 8.
Financial Statements and Supplementary Data.

Financial statements for the fiscal years ended December 31, 2010 and 2009 have been examined to the extent indicated in their reports by HJ & Associates, LLC, independent certified public accountants, and have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to regulations promulgated by the SEC.  The aforementioned financial statements are included herein under Item 15.

Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

This Item is not applicable.

Item 9A(T).
Controls and Procedures.

Evaluation of Disclosures and Procedures

As of the end of the period covered by this annual report, our chief executive officer and principal financial officer, carried out an evaluation of the effectiveness of  “disclosure controls and procedures,” as defined in the Securities Exchange Act of 1934, Rules 13a-15(e) and 15-d-15(e).  Based upon that evaluation, it was concluded that as of December 31, 2009, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is:

(i)  recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms; and
 
(ii) accumulated and communicated to management, including our chief executive officer and principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives.  Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment.





 
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Management’s Annual Report on Internal Control Over Financial Reporting
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting for our company.  Our control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principals.  Our internal control over financial reporting includes those policies and procedures that :

 
●
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;

 
●
provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures are being made only with proper authorizations of management and directors; and

 
●
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.  However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our chief executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2010.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Over Financial Reporting – Guidance for Smaller Public Companies.  Based on our assessment and those criteria, management concluded that during the period covered by this report, our internal control and procedures over financial reporting was effective as of December 31, 2010.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there was no significant change in our internal controls over financial reporting or in other factors that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B.
Other Information.

Not applicable.

PART III

Item 10.
Directors, Executive Officers and Corporate Governance.

Our executive officers and directors are as follows:
 
 
 Name  Age  Position  Served as Director Since
 Delbert G. Blewett  77  President/Director  May 25, 1995
 Fred Hefti  79  Secretary/Director  April 20, 1995
 Glen Buckler  69  Treasurer/Director  August 14, 2000
 
The position of President has been held by Delbert Blewett since January 1, 2005. Previously, he served as Secretary since 1995.
 
All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified.  There are no agreements with respect to the election of directors.  We have not compensated directors for

 
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service on the board of directors or any committee thereof, but directors are entitled to be reimbursed for expenses incurred for attendance at meetings of the board and any committee thereof.  However, directors may defer their expenses and/or take payment in shares of our common stock.  As of the date hereof, no director has accrued any expenses or compensation.  Officers are appointed annually by the board of directors and each executive officer serves at the discretion of the board.  We do not have any standing committees.

No director, officer, affiliate or promoter of our company has, within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, or is any such person the subject or any order, judgment, or decree involving the violation of any state or federal securities laws.

Directors currently devote only such time to company affairs as needed.  The time devoted could amount to as little as 1% of the time they devote to their own business affairs, or if business conditions ultimately warrant, they could possibly elect to devote their full time to our business.  Presently, there are no other persons whose activities are material to our operations.

Currently, there is no arrangement, agreement or understanding between management and non-management stockholders under which non-management stockholders may directly or indirectly participate in or influence the management of our affairs.  Present management openly accepts and appreciates any input or suggestions from stockholders.  However, the board of directors is elected by the stockholders and the stockholders have the ultimate say in who represents them on the board.  There are no agreements or understandings for any officer or director to resign at the request of another person and none of the current offers or directors of are acting on behalf of, or will act at the direction of any other person.

The business experience of each of the persons listed above during the past five years is as follows:

Delbert Blewett B.Sc.Ll.B. Mr. Blewett completed his Bachelor of Science in Agriculture as well as Bachelor of Laws at the University of Saskatchewan in Canada. For 30 years Mr. Blewett managed his own private law practices in the Provinces of Saskatchewan; Alberta and British Columbia specializing in business
law. Upon retiring from active law practice in 1994, Mr. Blewett became active in the funding and development of various business ventures. Mr. Blewett is a past member of the Law Society of British Columbia and a non-practicing member of the Law Societies of Alberta and British Columbia. Mr. Blewett has several years of experience in the practice of business law and the development, funding and consulting of various business ventures.

Fred Hefti. Mr. Hefti was born and educated in Switzerland. During the 1960s and early 1970s, Mr. Hefti owned and managed a restaurant in Vancouver, Canada. Mr. Hefti has experience in the agricultural, food and tourist industries. From 1980 to 1986 he owned and operated a meat processing plant in Kamloops, British Columbia., Canada. From 1987 to 1998, Mr. Hefti was Department Manager of Fleetwood Sausage in Vancouver, Canada, as well as the Manager of a sales agency in the Interior of British Columbia. Mr. Hefti retired from his previous occupations in 1998.

Glen Buckler. Mr. Buckler completed a management program with Alberta Power and worked in management and supervision from 1965 to 1975. In 1975 Mr. Buckler acquired a campground and motel in Kelowna British Columbia, Canada, which he owned and managed until 1985. In 1985 Mr. Buckler bought a moving and hauling company, "Two Small Men With Big Hearts," which he owns and manages to this date. During the past 20 years he expanded the Company from three small offices and ten trucks to over 30 offices with 150 trucks and 7 Tractor Trailers operating across Canada with offices from Vancouver to Toronto.

   No family relationship exists between or among any of the persons named above.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We believe that these reports were not filed during the fiscal year 2009.

Code of Ethics

CODE OF ETHICS FOR CEO AND SENIOR FINANCIAL OFFICERS

The CEO and all senior financial officers, including the CFO and principal accounting officer, are subject to the following procedures relating to ethical conduct, conflicts of interest and compliance with law:

1.The CEO and all senior financial officers are responsible for full, fair, accurate, timely and understandable

 
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disclosure in the periodic reports required to be filed by the Company with the SEC. Accordingly, it is the responsibility of the CEO and each senior financial officer promptly to bring to the attention of the Board of Directors and the Audit Committee any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise assist the Board of Directors and Audit Committee in fulfilling their responsibilities.

2. The CEO and each senior financial officer shall promptly bring to the attention of the Board of Directors and the Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls. 3. The CEO and each senior financial officer shall promptly bring to the attention of the General Counsel or the CEO and to the Audit Committee any information he or she may have
concerning any violation of these procedures, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.

4. The CEO and each senior financial officer shall promptly bring to the attention of the General Counsel or the CEO and to the Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent
thereof, or of violation of these procedures.

5. The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of these procedures by the CEO or the Company's senior financial officers. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to these procedures, and shall include written notices to the individual involved that the Board of Directors has determined that there has been a violation, censure by the Board of Directors, demotion or re-assignment of the individual involved, suspension with or without pay or
benefits (as determined by the Board of Directors) and termination of the individual's employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated
occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.

Item 11.                 Executive Compensation.

We have not had a bonus, profit sharing, or deferred compensation plan for the benefit of employees, officers or directors. We have not paid any salaries or other compensation to officers, directors or employees for the years ended December 31, 2009 and 2008. Further, we have not entered into an employment agreement with any of our officers, directors or any other persons and no such agreements are anticipated in the immediate future. We expect that directors will defer any compensation until such time as an acquisition or merger can be accomplished and will strive to have the business opportunity provide their remuneration. As of the date hereof, no person has accrued any compensation.

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information, to the best of our knowledge, as of March 30, 2010, with respect to each person known by us to own beneficially more than 5% of the outstanding common stock, each director and all directors and officers as a group.
 
 
 
 Name and Address  Amount and Nature  Percent  
 of Beneficial Owner  of Beneficial Ownership  of Class(1)  
   Directors and Officers      
 Delbert G. Blewett  10,000  0.038%  
   7810 Marchwood Place,      
   Vancouver BC, Canada      
       
Emac Handels AG  13,853,186  53.300%  
   (controlled by D. Blewett)      
 
 
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 Name and Address  Amount and Nature  Percent  
 of Beneficial Owner  of Beneficial Ownership  of Class(1)  
   Directors and Officers, cont'd      
 Fred Hefti  1,570,000  6.041%  
   1663 Canford Rd.      
   Meritt BC, Canada      
       
Glen Buckler  1,520,000  5.848%  
   305  15895-84th Ave.      
   Surrey BC, Canada      
       
 All directors and executive officers      
   As a group (3 persons)  16,953,186  65.228%  
       
 5% Stockholders      
 Peter Thaler - Thaler Consultants  1,528,973  5.883%  
 Sommerlistr. 3,  9000-St. Gallen, Switzerland      
       
 Rusheen Handels AG  3,279,360  12.61%  
 Churerstr. 106, 8808 Pfaeffikon, Switzerland      
 
 
Note:
Unless otherwise indicated, we have been advised that each person above has sole voting power over the shares indicated above.

(1)      Based upon 25,990,868 shares of common stock outstanding on March 22, 2011.

Item 13.                 Certain Relationships and Related Transactions, and Director Independence.

There have been no material transactions during the past two fiscal years between our company and any officer, director, nominee for election as director, or any stockholder owning greater than five percent (5%) of our outstanding shares, nor any member of the above referenced individuals' immediate families.

Our officers and directors are subject to the doctrine of corporate opportunities, only insofar as it applies to business opportunities in which we have indicated an interest, either through our proposed business plan or by way of an express statement of interest contained in our corporate minutes. If directors are presented with business opportunities that may conflict with business interests identified by us, such opportunities must be promptly disclosed to the board of directors and made available to us. In the event the board rejects an opportunity so presented and only in that event, any officer or director may avail themselves of such an opportunity. Every effort will be made to resolve any conflicts that may arise in favor of our company. There can be no assurance, however, that these efforts will be successful.

In the event of a successful acquisition or merger, a finder's fee, in the form of cash or securities, may be paid to persons instrumental in facilitating the transaction. We have not established any criteria or limits for the determination of a finder's fee, although it is likely that an appropriate fee will be based upon negotiations by management, the appropriate business opportunity and the finder. Such fees are estimated to be customarily between 1% and 5% of the size of the transaction, based upon a sliding scale of the amount involved. Management cannot at this time make an estimate as to the type or amount of a potential finder's fee that might be paid, but is expected to be comparable to consideration normally paid in like transactions. It is unlikely that a finder's fee will be paid to an affiliate because of the potential conflict of interest that might result. Any such fee would have to be approved by the stockholders or a disinterested board of directors.

None of our directors are deemed to be independent directors. We do not have a compensation, audit or nominating committee, rather those functions are carried out by the board as a whole.

Item 14.
Principal Accounting Fees and Services.

We do not have an audit committee and as a result our entire board of directors performs the duties of an audit committee. Our board of directors will approve in advance the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. As a result, we do not rely on pre-approval policies and procedures.

Audit Fees

The aggregate fees billed by our independent auditors, HJ & Associates, LLC, for professional services rendered for the audit of our annual financial statements included in our annual reports for the years ended December 31, 2010 and 2009 along with reviews of financial statements associated with our quarterly reports for those years and other related services were $17,400 and $18,200, respectively.



 
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Audit Related Fees

For the year ended December 31, 2010 and 2009, there were no fees billed for assurance and related services by HJ & Associates, LLC relating to the performance of the audit of our financial statements which are not reported under the caption "Audit Fees" above.

Tax Fees

For the years ended December 31, 2010 and 2009, fees billed by HJ & Associates, LLC for tax compliance, tax advice and tax planning was $440 and $1,130, respectively.
We do not use HJ & Associates, LLC for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage HJ & Associates, LLC to provide compliance outsourcing services.

The board of directors has considered the nature and amount of fees billed by HJ & Associates, LLC and believes that the provision of services for activities unrelated to the audit is compatible with maintaining HJ & Associates, LLC’s independence.
PART 1V

Item 15.                 Exhibits, Financial Statement Schedules

 
(a)
Exhibits

Exhibit No.
     Exhibit Name
 
 3.1*
  
Articles of Incorporation and Amendments
 
 3.2*
  
By-Laws
 
 4.1*
  
Instrument defining rights of stockholders (See Exhibit No. 3.1, Articles of Incorporation)
 
31.1
  
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
32.1
  
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
________________
 
*
Previously filed as an Exhibit to the Form 10-SB filed August 31, 2006.






 
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QUINTANA GOLD RESOURCES CORP.
(A Development Stage company)


FINANCIAL STATEMENTS


December 31, 2010 and 2009


 
- 18 -
 











C O N T E N T S

 
 Report of Independent Registered Public Accounting Firm      20
       
 Balance Sheets      21
       
 Statements of Operations                                                                                                      22
       
 Statements of Stockholders’ Equity (Deficit)         23
       
 Statements of Cash Flows      28
       
 Notes to the Financial Statements                                                                                                      29
       
 



 
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Report of Independent Registered Public Accounting Firm

To the Stockholders of
Quintana Gold Resources Corp.
(A Development Stage Company)
 
Vancouver, British Columbia
 

 
We have audited the accompanying balance sheets of Quintana Gold Resources Corp. (A Development Stage Company) as of December 31, 2010 and 2009, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and from inception of the development stage August 23, 1978 through December 31, 2010.  These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Quintana Gold Resources Corp. (A Development Stage Company) as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended and from inception of the development stage on August 23, 1978 through December 31, 2010 in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has not established revenues sufficient to cover its operating costs.  In addition, the Company has accumulated losses during the development stage along with a deficit in working capital.  This raises substantial doubt about the Company's ability to continue as a going concern.  Management's plans in regard to this matter are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 

 

 
HJ & Associates, LLC
 
Salt Lake City, Utah
March 29, 2011



 
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QUINTANA GOLD RESOURCES CORP.
(A Development Stage Company)
Balance Sheets
             
ASSETS
            
             
   
December 31,
    
December 31,
  
   
2010
    
2009
  
             
CURRENT ASSETS
            
             
Cash
   $ 401     $ 624  
Prepaid expenses
     730       730  
                 
Total Current Assets
     1,131       1,354  
                 
TOTAL ASSETS
   $ 1,131     $ 1,354  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                
                 
CURRENT LIABILITIES
                
                 
Accounts payable
   $ 73,802     $ 67,568  
Accounts payable - related parties (Note 2)
     75,242       25,000  
                 
Total Current Liabilities
     149,044       92,568  
                 
TOTAL LIABILITIES
     149,044       92,568  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
                
                 
Common stock, $0.001 par value, 50,000,000 shares
                
authorized; 25,990,868 shares issued and outstanding, respectively
     25,991       25,991  
Additional paid-in capital
     569,112       564,455  
Deficit accumulated during the development stage
     (743,016 )     (681,660 )
                 
Total Stockholders' Equity (Deficit)
     (147,913 )     (91,214 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
   $ 1,131     $ 1,354  
                 
                 
                 
                 
                 
                 
The accompanying notes are an integral part of these financial statements

 
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QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statement of Operations
  
                   
               
From
  
               
Inception on
  
               
August 23,
  
   
For the Years Ended
    
1978 Through
  
   
December 31,
          
December 31,
  
   
2010
    
2009
    
2010
  
                   
REVENUE
   $ -     $ -     $ -  
                         
OPERATING EXPENSES
                        
                         
General and administrative
     56,699       49,332       572,965  
Depreciation expense
     -       -       1,095  
                         
Total Operating Expenses
     56,699       49,332       574,060  
                         
LOSS FROM OPERATIONS
     (56,699 )     (49,332 )     (574,060 )
                         
OTHER INCOME (EXPENSES)
                        
                         
Interest expense
     (4,657 )     (1,374 )     (38,815 )
Interest income
     -       -       15,708  
Loss on settlement of debt
     -       -       (59,495 )
Loss on disposal of asset
     -       -       (64,454 )
Loss on investment
     -       -       (21,900 )
                         
Total Other Income (Expenses)
     (4,657 )     (1,374 )     (168,956 )
                         
NET LOSS
   $ (61,356 )   $ (50,706 )   $ (743,016 )
                         
BASIC LOSS PER SHARE
   $ 0.00     $ 0.00          
                         
                         
WEIGHTED AVERAGE SHARES OUTSTANDING
     25,990,868       25,990,868          
                         
                         
                         
                         
                         
                         
                         
                         
The accompanying notes are an integral part of these financial statements

 
- 22 -
 

 
QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statements of Stockholders' Equity (Deficit)
  
From Inception on August 23, 1978 through December 31, 2010
  
                         
                     
Deficit
  
                     
Accumulated
  
               
Additional
    
During the
  
   
Common Stock
          
Paid-in
    
Development
  
   
Shares
    
Amount
    
Capital
    
Stage
  
                         
Balance, August 23, 1978 through
                        
December 31, 1993
     30,000     $ 30     $ 7,470     $ (7,500 )
                                 
Common stock issued for cash and a
                                
 note at $0.25 per share
     614,000       614       148,386          
                                 
Common stock issued for cash
                                
 at $0.375 per share
     230,666       231       86,269          
                                 
Common stock issued for cash
                                
 at $0.375 per share
     40,000       40       14,960          
                                 
Common stock issued for cash
                                
 at $0.375 per share
     36,000       36       13,464          
                                 
Common stock issued and held in
                                
escrow in option to purchase company
     300,000       300       (300 )        
                                 
Net loss for the year ended
                                
December 31, 1994
     -       -       -       (58,609 )
                                 
Balance, December 31, 1994
     1,250,666       1,251       270,249       (66,109 )
                                 
Common stock issued for cash
                                
at $ 0.25 per share
     4,000       4       9,996          
                                 
Net loss for the year ended
                                
December 31, 1995
     -       -       -       (77,715 )
                                 
Balance, December 1995
     1,254,666       1,255       280,245       (143,824 )
                                 
Cancellation of shares held in escrow
                                
 in option to purchase company
     (300,000 )     (300 )     300          
                                 
Net loss for the year ended
                                
December 31, 1996
     -       -       -       (157,370 )
                                 
Balance December 31, 1996
     954,666     $ 955     $ 280,545     $ (301,194 )
                                 
                                 
                                 
The accompanying notes are an integral part of these financial statements.
  
                                 

 
- 23 -
 

QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statements of Stockholders' Equity (Deficit) (Continued)
  
From Inception on August 23, 1978 through Derember 31, 2010
  
                         
                     
Deficit
  
                     
Accumulated
  
               
Additional
    
During the
  
   
Common Stock
          
Paid-in
    
Development
  
   
Shares
    
Amount
    
Capital
    
Stage
  
                         
Balance, December 31, 1996
     954,666     $ 955     $ 280,545     $ (301,194 )
                                 
Net loss for the year ended
                                
December 31, 1997
     -       -       -       (14,040 )
                                 
Balance, December 31, 1997
     954,666       955       280,545       (315,234 )
                                 
Common stock issued for cash and a
                                
 note at $0.50 per share
     70,602       70       35,231       -  
                                 
Contributed capital for expenses
     -       -       1,000       -  
                                 
Net loss for the year ended
                                
December 31, 1998
     -       -       -       (7,415 )
                                 
Balance, December 31, 1998
     1,025,268       1,025       316,776       (322,649 )
                                 
Common stock issued for cash
                                
 at $0.7per share
     38,646       38       27,383       -  
                                 
Common stock issued for cash
                                
 at $0.7per share
     30,000       30       21,256       -  
                                 
Net loss for the year ended
                                
December 31, 1999
     -       -       -       (53,097 )
                                 
Balance, December 31, 1999
     1,093,914       1,093       365,415       (375,746 )
                                 
Net loss for the year ended
                                
December 31, 2000
     -       -       -       (10,081 )
                                 
Balance, December 2000
     1,093,914       1,093       365,415       (385,827 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       2,795       -  
                                 
Net loss for the year ended
                                
December 31, 2001
     -       -       -       (14,879 )
                                 
Balance December 31, 2001
     1,093,914     $ 1,093     $ 368,210     $ (400,706 )
                                 
                                 
The accompanying notes are an integral part of these financial statements.
  

 
- 24 -
 

QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statements of Stockholders' Equity (Deficit) (Continued)
  
From Inception on August 23, 1978 through December 31, 2010
  
                         
                     
Deficit
  
                     
Accumulated
  
               
Additional
    
During the
  
   
Common Stock
          
Paid-in
    
Development
  
   
Shares
    
Amount
    
Capital
    
Stage
  
                         
Balance, December 31, 2001
     1,093,914     $ 1,093     $ 368,210     $ (400,706 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       3,466       -  
                                 
Net loss for the year ended
                                
December 31, 2002
     -       -       -       (15,466 )
                                 
Balance, December 31, 2002
     1,093,914       1,093       371,676       (416,172 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       4,665       -  
                                 
Net loss for the year ended
                                
December 31, 2003
     -       -       -       (16,954 )
                                 
Balance, December 31, 2003
     1,093,914       1,093       376,341       (433,126 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       5,902       -  
                                 
Net loss for the year ended
                                
December 31, 2004
     -       -       -       (18,644 )
                                 
Balance, December 31, 2004
     1,093,914       1,093       382,243       (451,770 )
                                 
Difference due to rounding
     38       2       (2 )     -  
                                 
Interest expense contributed related
                                
to related party payables
     -       -       7,289       -  
                                 
Net loss for the year ended
                                
December 31, 2005
     -       -       -       (22,289 )
                                 
Balance, December 31, 2005
     1,093,952     $ 1,095     $ 389,530     $ (474,059 )
                                 
                                 
                                 
                                 
                                 
                                 
The accompanying notes are an integral part of these financial statements.
                                 

 
- 25 -
 
 
 

QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statements of Stockholders' Equity (Deficit) (Continued)
  
From Inception on August 23, 1978 through December 31, 2010
  
                         
                     
Deficit
  
                     
Accumulated
  
               
Additional
    
During the
  
   
Common Stock
          
Paid-in
    
Development
  
   
Shares
    
Amount
    
Capital
    
Stage
  
                         
Balance, December 31, 2005
     1,093,952     $ 1,095     $ 389,530     $ (474,059 )
                                 
Common stock issued for debt
                                
Conversion at $0.005 per share
     16,077,400       16,077       64,310       -  
                                 
Common stock issued for debt
                                
Conversion at $0.005 per share
     2,920,156       2,920       11,681       -  
                                 
Common stock issued for debt
                                
Conversion at $0.005 per share
     2,620,000       2,620       10,480       -  
                                 
Interest expense contributed related
                                
to related party payables
     -       -       2,662       -  
                                 
Net loss for the year ended
                                
December 31, 2006
     -       -       -       (45,730 )
                                 
Balance, December 31, 2006
     22,711,508       22,712       478,663       (519,789 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       2,800       -  
                                 
Net loss for the year ended
                                
December 31, 2007
     -       -       -       (50,730 )
                                 
Balance, December 31, 2007
     22,711,508       22,712       481,463       (570,519 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       2,913       -  
                                 
Common stock issued for debt
                                
Conversion at $0.025 per share
     3,279,360       3,279       78,705       -  
                                 
Net loss for the period ended
                                
December 31, 2008
     -       -       -       (60,435 )
                                 
Balance, December 31, 2008
     25,990,868     $ 25,991     $ 563,081     $ (630,954 )
                                 
                                 
                                 
                                 
The accompanying notes are an integral part of these financial statements.
  

 
- 26 -
 

 
 
 
QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statements of Stockholders' Equity (Deficit) (Continued)
  
From Inception on August 23, 1978 through December 31, 2010
  
                         
                     
Deficit
  
                     
Accumulated
  
               
Additional
    
During the
  
   
Common Stock
          
Paid-in
    
Development
  
   
Shares
    
Amount
    
Capital
    
Stage
  
                         
Balance, December 31, 2008
     25,990,868     $ 25,991     $ 563,081     $ (630,954 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       1,374       -  
                                 
Net loss for the period ended
                                
December 31, 2009
     -       -       -       (50,706 )
                                 
Balance, December 31, 2009
     25,990,868       25,991     $ 564,455       (681,660 )
                                 
Interest expense contributed related
                                
to related party payables
     -       -       4,657       -  
                                 
Net loss for the period ended
                                
December 31, 2010
     -       -       -       (61,356 )
                                 
Balance, December 31, 2010
     25,990,868     $ 25,991     $ 569,112     $ (743,016 )
                                 
                                 
                                 
                                 
The accompanying notes are an integral part of these financial statements.
  

 
- 27 -
 


QUINTANA GOLD RESOURCES CORP.
  
(A Development Stage Company)
  
Statement of Cash Flows
  
                   
               
From
  
               
Inception on
  
               
August 23,
  
   
For the Years Ended
    
1978 Through
  
   
December 31,
          
December 31,
  
   
2010
    
2009
    
2010
  
                   
CASH FLOWS FROM OPERATING ACTIVITIES
              
                   
Net loss
   $ (61,356 )   $ (50,706 )   $ (743,016 )
Adjustments to reconcile net loss to
                        
net cash used by operating activities
                        
Contributed capital for expenses
     4,657       1,374       39,523  
Stock for services
     -       -       36,286  
Decline in value of assets
     -       -       21,900  
Depreciation
     -       -       2,136  
Loss on disposal of asset
     -       -       64,454  
Loss on settlement of debt
     -       -       60,042  
Change in operating assets and liabilities
                        
(Increase) decrease in prepaid expenses
     -       -       (730 )
(Increase) decrease in loans receivable
     -       -       63,872  
Increase (decrease) in accounts payable
     6,234       22,250       77,088  
Increase (decrease) in accrued liabilities
     -       -       1,700  
                         
Net Cash (Used) by Operating Activities
     (50,465 )     (27,082 )     (376,745 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                        
                         
Advances on notes receivable
     -       -       (123,914 )
Collection of notes receivable
     -       -       73,000  
Purchase of investments
     -       -       (72,854 )
Sale of fixed assets
     -       -       3,340  
                         
Net Cash (Used) by Investing Activities
     -       -       (120,428 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                  
                         
Advances from related parties
     50,242       25,000       285,203  
Proceeds from loans payable
     -       -       4,950  
Net stock offering proceeds
     -       -       207,421  
                         
Net Cash Provided by Financing Activities
     50,242       25,000       497,574  
                         
(DECREASE) INCREASE IN CASH
     (223 )     (2,082 )     401  
                         
CASH AT BEGINNING OF PERIOD
     624       2,706       -  
                         
CASH AT END OF PERIOD
   $ 401     $ 624     $ 401  
                         
                         
                         
                         
                         
The accompanying notes are an integral part of these financial statements.
          

 
- 28 -
 

QUINTANA GOLD RESOURCES CORP.
 (A Development Stage Company)
Notes to Financial Statements
December 31, 2010 and 2009

NOTE 1 -            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  Organization
 
QUINTANA GOLD RESOURCES CORP. (the “Company”) was organized August 23, 1978 under the laws of the State of Utah as Price Card & Gift, Inc.  On May 19, 1988, the Company changed its name to Kellard Marble, Inc., and on March 13, 1989, changed its name to Who’s the Greatest, Inc.  On May 15, 1994, the Company amended its articles of incorporation changing the name to SWISSAMERA ENTERPRISES, INC., and on July 09, 2001, the Company changed its name to ROYAL OIL & GAS CORP., and on June 27, 2008 the company’s Board of Directors, based on the authority given by unanimous consent by the Stockholders Meeting, passed a resolution to change the Company’s name to QUINTANA GOLD RESOURCES CORP., the Company had a forward split of its common stock in 1989, a reverse split in 1993 and a forward split in 2008.  All accompanying stockholders’ equity information is presented as if the stock splits had occurred at inception.  The Company has had no significant operations since inception and is considered a development stage company in accordance with Statement of Financial Accounting Standards No. 7.

b.  Deferred Taxes
 
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by the valuation allowances when, in the opinion of management, it is more likely than not that some portion of 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.

Net deferred tax assets consist of the following components as of December 31, 2010 and 2009:
 
 
 
    For the Years Ended  
    December 31,  
    2010     2009  
             
 Deferred tax asset: NOL Carryover   $ 208,338     $ 194,904  
 Deferred tax liabilities:     -       -  
 Valuation allowance     (208,338  )     (194,904  )
                 
    $ -     $ -  
                 
 
 
 




 
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QUINTANA GOLD RESOURCES CORP.
 (A Development Stage Company)
Notes to Financial Statements
 
December 31, 2010 and 2009

NOTE 1 -            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the years ended December 31, 2010 and 2009 due to the following:
 
 
    For the Years Ended  
    December 31,  
    2010     2009  
             
 Book loss   $ (23,344 )   $ (19,775 )
 Interest     1,816       536  
 Valuation allowance     21,528       19,239  
                 
    $ -     $ -  
                 
 

At December 31, 2010, the Company  had net operating loss carryforwards of approximately
$534,000 that may be offset against future taxable income from the year 2011 through 2030.  No tax benefit has been reported in the December 31, 2010 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations.  Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

The Company adopted the Income Tax topic of the FASB ASC 740, Accounting for Uncertainty in Income Taxes, the Company recognized approximately a $0 increase in the liability for unrecognized tax benefits, which was accounted for as a reduction to the January 1, 2007, balance of retained earnings. Included in the balance at December 31, 2010, are $0 of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.  Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.
 
The Company’s policy is to recognize interest accrued related to unrecognized tax benefits in interest   expense and penalties in operating expenses.

            c. Recently Adopted Accounting Standards:

In June 2009, the Fin ancial Accounting Standards (FASB) issued a standard that established the FASB Accounting Standards Codification™ (ASC) and amended the hierarchy of generally accepted accounting principles(GAAP) such that the ASC became the single source of authoritative non governmental U.S. GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New Accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). For the Company, the ASC was effective July 1, 2009. This standard did not have an impact on the Company’s consolidated results of operations or financial condition. However, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

           
 
  
 
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QUINTANA GOLD RESOURCES CORP.
 (A Development Stage Company)
Notes to Financial Statements
 
December 31, 2010 and 2009

                          

NOTE 1 -            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
        c. Recently Adopted Accounting Standards (continued):

In April 2009, the FASB issued an accounting standard which provides guidance on (1) estimating the fair value of an asset or liability when the volume and level of activity for the asset or liability have significantly declined and (2) identifying transactions that are not orderly. The standard also amended certain disclosure provisions for fair value measurements and disclosures in ASC 820 to require, among other things, disclosures in interim periods of the inputs and valuation techniques used to measure fair value as well as disclosure of the hierarchy of the source of underlying fair value information on a disaggregated basis by specific major category of investment. For the Company, this standard was effective prospectively beginning April 1, 2009. The adoption of this standard did not have a material impact on the Company‘s consolidated results of operations or financial condition.

In May 2009, the FASB issued a new accounting standard regarding subsequent events. This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining essentially unchanged. This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements. Under the new standard, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date. This standard added no additional required disclosure relative to the date through which subsequent events have been evaluated. For the Company, this standard was effective beginning April 1, 2009.

d.  Accounting Method

The financial statements are prepared using the accrual method of accounting.  The Company has elected a calendar year end.

e.  Estimates

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.

                            f.  Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.




 
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QUINTANA GOLD RESOURCES CORP.
 (A Development Stage Company)
Notes to Financial Statements
 
December 31, 2010 and 2009
 
 
NOTE 1 -           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                           g.   Basic Loss Per Share

       The computation of basic loss per share of common stock is based on weighted average number of shares issued and outstanding during the period of the financial statements as follows:  
 
 
 
 
    For the Years Ended  
    December 31,  
    2010     2009  
             
 Numerator Loss   $ (61,356 )   $ (50,706 )
                 
Denominator - weighted average                
   number of shares outstanding     25,990,868       25,990,868  
                 
 Loss per share   $ (0.00 )    $ (0.00 ) 
                 
 
   
NOTE 2 -
RELATED PARTY TRANSACTIONS

The Company makes use of office space and management services controlled by a related party.  These services are non-contractual and are on an as-used basis.  The Company also, from time to time, has some of its expenses paid by related parties with the intent to repay at a rate of 6% simple interest per annum.  In 2010, the Company incurred $50,242 debt for such expenses.  These types of transactions, from time to time, result in related party balances on the Company’s books as a necessary part of funding the Company’s operations. At December 31, 2010, the Company owed related parties $75,242 for expenses which were paid on behalf of the Company.



 
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NOTE 3 -        GOING CONCERN
   
The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established revenues sufficient to cover its operating costs. In addition, the company has accumulated losses during the development stage along with a working capital deficit. This raises substantial doubt about the ability to continue as a going concern. Management intends to seek a merger with an existing, operating company. In the interim, it has committed to meeting the Company's minimal operating expenses.
    
NOTE 4 -        CONTRIBUTED CAPITAL FOR EXPENSES
 
During the 12 months ended December 31, 2010 and 2009, interest on a note payable to a related party was accrued.  As there is no expectation for this interest to ever have to be paid, the amount is being recorded as contributed capital for expenses and recorded as Additional Paid-in Capital.  During the year ended December 31, 2010, the company recorded $4,657 of interest as contributed capital.

NOTE 5 -       CAPITAL STOCK
 
On June 26, 2008, the Company issued 3,279,360 shares of common stock at $0.025 per share to a related party as payment of the related party loan balance of $41,984 at December 31, 2007 and as payment of shareholder loans of $40,000 incurred during the period ended June 26, 2008.
 
On June 27, 2008, the Company decided to effect a forward split of its issued and outstanding stock at a rate of two for one shares (2:1) bringing the total  issued and outstanding stock to 25,990,868 common voting shares. All figures in these financial statements give retroactive effect to the forward split.
 
 
NOTE 6 -       SUBSEQUENT EVENTS
 
The Company has evaluated subsequent events as of the financial Statement date according to the requirements of ASC TOPIC 85S and has concluded there are no additional events to disclose.






















 
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 Quintana Gold Resources Corp.      
       
 By:     /S/  Delbert G. Blewett      
 President and C.E. O.      
 Principal Financial Officer      
 Principal Accounting Officer      
       
 
Dated:  March 29, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
 Signature  Title  Date  
       
 /S/  Delbert G. Blewett     President, C.E.O. and Director  March 29, 2011  
 Delbert G. Blewett    Principal Financial Officer    
     Principal Accounting Officer    
       
 /S/  Fred Hefti           Secretary and Director  March 29, 2011  
 Fred Hefti      
       
       
       
 
 
 
- 34 -
 
 

CLEAN TRANSPORTATION GROUP, INC. Reports