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EX-31.2 - Vitality Biopharma, Inc.ldmi_ex31-2.htm
EX-32.2 - Vitality Biopharma, Inc.ldmi_ex32-2.htm
EX-32.1 - Vitality Biopharma, Inc.ldmi_ex32-1.htm
EX-31.1 - Vitality Biopharma, Inc.ldmi_ex31-1.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the quarterly period ended June 30, 2011
   
or
   
[   ]
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the transition period from ________________ to __________________
   
 
Commission File Number:    000-53832

LEGEND MINING INC.
(Exact name of registrant as specified in its charter)

Nevada
75-3268988
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
2-46 DeZhennan Rd., Suite 403, Yuesiu District, Guangzhou
Guangdong Province, China
N/A
(Address of principal executive offices)
(Postal or Zip Code)
   
Registrant’s telephone number, including
 area code:  86-13268166474

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]  No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [   ] No [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [   ]
Accelerated filer  [   ]
   
Non-accelerated filer  [   ]
Smaller reporting company  [X]
(Do not check if a smaller reporting company)
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [X]  No [   ]
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes  [   ]   No  [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  7,350,000 shares of common stock with a par value of $0.001 as of August 8, 2011.
 

 
 

 

 
 
PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended June 30, 2011, are not necessarily indicative of the results that can be expected for the full year.

 
 
LEGEND MINING INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2011
(Unaudited)
 
 

 





 
 
 
 
 
 

 





 
2

 


LEGEND MINING INC.
 
(A DEVELOPMENT STAGE COMPANY)
 
BALANCE SHEETS
 
AS OF JUNE 30, 2011 AND MARCH 31, 2011
 
(Unaudited)
 
             
Assets
           
             
   
June 30,
   
March 31,
 
   
2011
   
2011
 
             
Current Assets:
           
Cash
  $ 394     $ 10,596  
Prepaid Expense
    612       862  
Total Current Assets
    1,006       11,458  
Total Assets
  $ 1,006     $ 11,458  
                 
                 
Liabilities and Stockholders' Equity (Deficit)
               
                 
                 
Current Liabilities
               
Accounts payable and accrued liabilities
  $ 6,412     $ 8,148  
Accounts Payable - Related Party
    -       1,000  
Notes Payable
    81,800       81,800  
Accrued Interest
    6,996       5,772  
Total Current Liabilities
    95,208       96,720  
                 
                 
Stockholders' Equity (Deficit)
               
Common stock, par value $0.001 per shares;
               
75,000,000 shares authorized; 7,350,000 shares
               
Issued and outstanding
    7,350       7,350  
Additional paid-in-capital
    17,650       17,650  
Deficit accumulated during the exploration stage
    (119,202 )     (110,262 )
Total stockholders' equity (deficit)
    (94,202 )     (85,262 )
Total liabilities and stockholders' equity (deficit)
  $ 1,006     $ 11,458  


 
 
 
The Accompanying Notes are an Integral Part of These Interim Financial Statements


 
3

 




LEGEND MINING INC.
 
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENTS OF OPERATIONS
 
FOR THE THREE MONTHS ENDED JUNE 30, 2011, AND 2010
 
AND THE INCEPTION THROUGH JUNE 30, 2011
 
(Unaudited)
 
                   
               
From July 1,
 
               
2007
 
   
Three Months Ended
   
(Inception) to
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
 
                   
General and Administrative
    4,703       7,270       91,964  
Mineral properties
    -       -       12,228  
Related Party Consulting Fee
    3,000       -       8,000  
Loss from operations
  $ (7,703 )   $ (7,270 )   $ (112,192 )
Interest expense
    (1,237 )     (638 )     (7,010 )
Loss before income taxes
    (8,940 )     (7,908 )     (119,202 )
Provision for income taxes
    -       -       -  
Net loss
  $ (8,940 )   $ (7,908 )   $ (119,202 )
                         
Loss per share - Basic and diluted
  $ (0.00 )   $ (0.00 )        
Weighted Average Number of Common
                       
Shares Outstanding
    7,350,000       7,350,000          

















The Accompanying Notes are an Integral Part of These Interim Financial Statements



 
4

 



LEGEND MINING INC.
 
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
 
FOR THE THREE MONTHS ENDED JUNE 30, 2011, AND FROM
 
INCEPTION THROUGH JUNE 30, 2011
 
(Unaudited)
 
                               
                     
Deficit
       
                     
accumulated
       
               
Additional
   
During the
       
   
Common Stock
   
Paid-in-
   
exploration
       
Description
 
Shares
   
Amount
   
Capital
   
Stage
   
Total
 
Balance- July 1, 2007
    -     $ -     $ -     $ -     $ -  
November 28, 2007
                                       
Subscribed for cash
                                       
at $0.001
    4,500,000       4,500       -       -       4,500  
December 18, 2007
                                       
Subscribed for cash
                                       
at $0.005
    1,600,000       1,600       6,400       -       8,000  
January 18, 2008
                                       
Subscribed for cash
                                       
at $0.01
    1,250,000       1,250       11,250       -       12,500  
Net loss
    -       -       -       (8,583 )     (8,583 )
                                         
Balance- March 31, 2008
    7,350,000     $ 7,350     $ 17,650     $ (8,583 )   $ 16,417  
                                         
Net loss
    -       -       -       (38,112 )     (38,112 )
                                         
Balance- March 31, 2009 (restated)
    7,350,000     $ 7,350     $ 17,650     $ (46,695 )   $ (21,695 )
                                         
Net loss
    -       -       -       (28,292 )     (28,292 )
                                         
Balance- March 31, 2010
    7,350,000     $ 7,350     $ 17,650     $ (74,987 )   $ (49,987 )
                                         
Net loss
    -       -       -       (35,275 )     (35,275 )
                                         
Balance- March 31, 2011
    7,350,000     $ 7,350     $ 17,650     $ (110,262 )   $ (85,262 )
                                         
Net loss
    -       -       -       (8,940 )     (8,940 )
                                         
Balance- June 30, 2011
    7,350,000     $ 7,350     $ 17,650     $ (119,202 )   $ (94,202 )


 
 
 
The Accompanying Notes are an Integral Part of These Interim Financial Statements


 
5

 
 

 
LEGEND MINING INC.
 
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENTS OF CASH FLOWS
 
FOR THE THREE MONTHS ENDED JUNE 30, 2011, AND 2010
 
AND FROM THE INCEPTION THROUGH JUNE 30, 2011
 
(Unaudited)
 
                   
               
From July 1, 2007
 
   
Three Months Ended
   
(Inception) to
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
 
                   
Operating activities
                 
Net loss
  $ (8,940 )   $ (7,908 )   $ (119,202 )
Adjustments to reconcile net loss to net cash
                       
Loan (expenses paid on behalf of the Company by third party)
    -       5,000       5,000  
Prepaid expense
    250       (350 )     (612 )
Accrued interest
    1,224       638       6,996  
Accounts payable - Related Party
    (1,000 )     -       -  
Accounts payable and accrued liabilities
    (1,736 )     1,859       6,412  
Net Cash (Used in ) Operating Activities
    (10,202 )     (761 )     (101,406 )
                         
Financing activities
                       
Loans from shareholders
    -       -       76,800  
Shares subscribed for cash
    -       -       25,000  
Net Cash Provided by Financing Activities
    -       -       101,800  
                         
Net increase (decrease) in cash
    (10,202 )     (761 )     394  
                         
Cash and Cash Equivalent - Beginning of Period
    10,596       1,716       -  
Cash and Cash Equivalent - End of Period
  $ 394     $ 955     $ 394  
                         
Supplemental Disclosure of Cash Flow Information:
                       
Cash paid during the period for:
                       
Interest
  $ -     $ -     $ -  
Income taxes
                       
    $ -     $ -     $ -  
                         
Non-Cash Activities:
                       
Loan (expenses paid on behalf of the Company by third party)
  $ -     $ 5,000     $ 5,000  

 

 

The Accompanying Notes are an Integral Part of These Interim Financial Statements

 
6

 


LEGEND MINING INC.
(A Development Stage Company)
Notes To The Interim Unaudited Financial Statements
June 30, 2011


1.  NATURE AND CONTINUANCE OF OPERATIONS

LEGEND MINING INC. (the “Company”) was incorporated under the laws of State of Nevada, U.S. on July 1, 2007, with an authorized capital of 75,000,000 common shares with a par value of $0.001.  The Company's year end is March 31.  The Company is in the development stage of its resource business.  During the period from July 1, 2007 (inception) to June 30, 2011, the Company commenced operations by issuing shares and acquiring a mineral property located in the Province of Saskatchewan, Canada.

2. GOING CONCERN

These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The Company has incurred losses since inception resulting in an accumulated deficit of $119,202 as at June 30, 2011 and further losses are anticipated in the development of its business raising substantial doubt about the Company's ability to continue as a going concern.  The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans and or private placement of common stock. There is no assurance that the Company will be able to obtain further loans, or that the company will be able to raise money via a private placement.   

3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.  

Development Stage Company
The Company complies with its characterization of the Company as a development stage enterprise.

Mineral Interests

Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified.  The Company has adopted the provisions of ASC 410 “Accounting for Asset Retirement Obligations” which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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 period. Actual results could differ from those estimates.

It is management's opinion that all adjustments necessary for the fair statement of the results for the interim period have been made. All adjustments are of normal recurring nature or a description of the nature and amount of any adjustments other than normal recurring adjustments.
 
 

 
7

 

Foreign Currency Translation

The financial statements are presented in United States dollars.  In accordance with ASC 830, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date.  Non monetary assets and liabilities are translated at the exchange rates prevailing on the transaction date. Revenue and expenses are translated at average rates of exchange during the year.  Gains or losses resulting from foreign currency transactions are included in results of operations.

Fair Value of Financial Instruments

The carrying value of cash and accounts payable and accrued liabilities approximates their fair value because of the short maturity of these instruments.  Unless otherwise noted, it is management's opinion the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Advertising Costs

The Company expenses advertising costs as incurred. No advertising expense was charged to operations for the period from inception on July 1, 2007 through June 30, 2011.

Revenue Recognition

The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated.  Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitments to plan of action based on the then known facts.

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences).  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Basic and Diluted Loss Per Share

The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
 
Stock-based Compensation

ASC718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award.
 

 
8

 

The Company did not record any compensation expense for the period ended June 30, 2011 because there were no stock options outstanding at June 30, 2011.

Recent Accounting Pronouncements

The Management has evaluated the recently issued accounting pronouncements through the date of this report and has determined that their adoption will not have a material impact on the financial position, results of operations, or cash flows of the Company.

4.  COMMON STOCK

The total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of one tenth of one cent ($0.001) per share and no other class of shares is authorized.

During the period from July 1, 2007 (inception) to June 30, 2011, the Company issued 7,350,000 shares of common stock for total cash proceeds of $25,000. No shares were issued in the years ended March 31, 2010 and 2011. As at June 30, 2011, there were no outstanding stock options or warrants.

5.  INCOME TAXES

As of June 30, 2011, the Company had net operating loss carry forwards of approximately $119,202 that may be available to reduce future years' taxable income through 2028. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision (benefit) for income taxes for the three months ended June 30, 2011, and 2010, was as follows (using a 34 percent effective Federal income tax rate in 2011 and 2010):

   
Three months ended June 30,
   
Three months ended June 30,
 
   
2011
   
2010
 
             
Current Tax Provision:
           
Federal-
           
  Taxable income (loss)
 
$
(8,940
)
 
$
(7,908
)
                 
                 
Deferred Tax Provision:
               
Federal-
               
  Loss carryforwards
 
$
3,040
   
$
2,689
 
  Change in valuation allowance
   
(3,040
)
   
(2,689
)
                 
     Total deferred tax provision
 
$
-
   
$
-
 

6.  NOTES PAYABLE

On December 23, 2008, the Company was granted a loan of $25,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $3,777.

On July 31, 2009, the Company was granted a loan of $5,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $575.
 
 

 
9

 


On December 18, 2009, the Company was granted a loan of $6,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $551.

On March 18, 2010, the Company was granted a loan of $5,800. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $447.

On June 14, 2010, the Company was granted a loan of $5,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $313.

On August 06, 2010, the Company was granted a loan of $15,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $809.

On November 16, 2010, the Company was granted a loan of $10,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $373.

On March 30, 2011, the Company was granted a loan of $10,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $151.

7. Subsequent Events

On July 28, 2011, Mr. Tao Chen, the President, CEO, Secretary, Treasurer and director of the Company, agreed to sell all of his 4,500,000 shares of the issued and outstanding common stock of the Company to Mr. Avtar Dhillon for an aggregate price of US$67,500.00 to be paid on or before August 11, 2011, pursuant to a stock purchase agreement, which would result in the change of beneficial ownership of such securities and change in control of the Company.  In addition and in connection with the closing of the stock purchase agreement, Mr. Avtar Dhillon is to be appointed as a director and the President, CEO, CFO, Secretary and Treasurer of our company and concurrently therewith Mr. Tao Chen will resign as a director and from all officer positions, which will result in a change in management of the Company.

Management has evaluated subsequent events through the date on which the financial statements were submitted to the Securities and Exchange Commission and has determined it does not have any other material subsequent events to disclose.





 
 

 







 
10

 

Forward-Looking Statements

This Form 10-Q includes "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

All statements other than historical facts included in this Form, including without limitation, statements under "Plan of Operation", regarding our financial position, business strategy, and plans and objectives of management for the future operations, are forward-looking statements.
 
Although we believe that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.  Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, market conditions, competition and the ability to successfully complete financing.

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

This Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited financial statements and related notes. The discussion and analysis of our financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis, we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions. The following discussion should be read in conjunction with our unaudited interim financial statements and the related notes that appear elsewhere in this quarterly report.

Overview

We were incorporated in the State of Nevada on July 1, 2007.  We commenced operations as a development stage exploration company.  On January 28, 2008, we entered into an agreement with Carman Wilcox of Imperial, Saskatchewan, wherein he granted us the sole and exclusive option to acquire a 100% interest in the Carman Wilcox property, which is located in Sections 4 and 9 of Township 52 and Range 15W2M, Saskatchewan. This agreement was subsequently amended on August 20, 2008. We purchased this Option from Mr. Wilcox for a cash payment of $7,500. In order to exercise this option and acquire these claims we needed to pay Mr. Carman Wilcox further cash payments totaling $245,000 as follows:
 
1.  $15,000 on or before March 31, 2009, provided however, Mr. Wilcox may at any time after October 31, 2008, on 48 hours notice, require said payment to be made forthwith;
2.  $25,000 on or before January 28, 2009; and
3.  $205,000 on or before January 28, 2010.

and incur $200,000 in exploration expenditures as follows:

1.  $50,000 on or before June 30, 2009; and
2.  $150,000 on or before September 30, 2009.

We were unable to keep the mineral claim in good standing due to lack of funding, and accordingly our interest in it has expired.
 


 
11

 

Plan of Operations

We have not yet generated or realized any revenues from our business operations.  Our auditors have issued a going concern opinion.  This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.  This is because we have not generated any revenues to date.  There is no assurance we will ever reach this point.  Accordingly, we must raise cash from other sources.  Our only other source for cash at this time is investments by others in us.

Our plan of operation for the twelve months following the date of this quarterly report is to continue to review other potential acquisitions in the resource and non-resource sectors.  Currently, we are in the process of completing due diligence reviews of several business opportunities.  We expect that these reviews could cost us a total of $30,000 in the next 12 months.

As well, we anticipate spending an additional $30,000 on administrative fees, including fees we will incur in complying with reporting obligations.  Total expenditures over the next 12 months are therefore expected to be $60,000.

We do not currently have enough funds on hand to cover our anticipated expenses for the next 12 months.  We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock or from loans.  However, we do not have any arrangements in place for any future equity financing.

Liquidity and Capital Resources

As of June 30, 2011, we had total current assets of $1,006. Our total current assets as of June 30, 2011 comprise of cash in the amount of $394 and prepaid expenses in the amount of $612. Our total current liabilities as of June 30, 2011 were $95,208 represented by accounts payable and accrued liabilities of $6,412, notes payable of $81,800 and accrued interest of $6,996. As a result, on June 30, 2011, we had a working capital deficiency of $94,202.

We are a development stage exploration company and have not generated any revenue to date from our activities. Despite our hope for revenues in the foreseeable future, we believe that revenues will be sparse and irregular and, if we receive any at all, will be far less than necessary to carry out our business forward without additional financing.  We have cash in the amount of $394 as of June 30, 2011, which is not anticipated to be sufficient to meet our projected expenditures in the next twelve months.  Thus, in order to meet our capital needs, we will most likely need to raise funds from other sources to remain in business.  We intend to raise additional money through private placements or shareholder loans; however, there can be no assurance that we will be able to raise additional money in the future.  If we need additional capital and cannot raise the necessary amount, we will either be required to suspend activities until we do raise the cash or cease activity entirely.

In addition to the issues set out above regarding our ability to raise capital, global economies are currently undergoing a period of economic uncertainty. This has resulted in numerous adverse effects, including unprecedented volatility in financial markets and stock prices, slower economic activity, decreased consumer confidence and commodity prices and reduced corporate profits and capital spending. We anticipate that the current economic conditions and the credit shortage will adversely impact our ability to raise financing.

Results of Operations

The following discussion of our financial condition and results of operations should be read together with the unaudited interim financial statements and the notes to the unaudited interim financial statements included in this quarterly report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.


Three Month Period Ended June 30, 2011

Revenues:  We did not generate any revenues during the three month period ended June 30, 2011.

G & A expense: G&A expense was $4,703 and 7,270 for the three months ended June 30, 2011 and 2010. G&A expense decreased due to professional fee was decreased during the three month period ended June 30, 2011.
 
 

 
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Related Party Consulting Fee: Related Party Consulting fee was $3,000 and Nil for the three months ended June 30, 2011 and 2010, respectively.  The increase in related party consulting fee is a result of the consulting agreement with Mr. Tao Chen which incurred fees during the three month period ended June 30, 2011 but not in the three month period ended June 30, 2010.

Interest expense:  Interest expenses were $1,237 and $638 for the three months ended June 30, 2011 and 2010, respectively.  The increase in interest expense is a result of the increased amount of outstanding loans during the three month period ended June 30, 2011 as compared to the three month period ended June 30, 2010.

Net Loss:  Net loss was $8,940 and $7,908 for the three months ended June 30, 2011 and 2010, respectively.  This increase in net loss of $1,032 resulted primarily from an increase in bank charges, general and administrative expenses, related party consulting fee and interest expense during the three months ended June 30, 2011.

Cash Flow Used in Operating Activities

Operating activities used $106,406 in cash for the period from inception (July 1, 2007) to June 30, 2011.  Our net loss of $119,202 was the primary component of our negative operating cash flow.

Cash Flow Provided by Financing Activities

Net cash flows provided by financing activities for the period from inception (July 1, 2007) to June 30, 2011 was $106,800 represented as loans from a consultant and another investor totaling $81,800 and proceeds from the sale of our common stock of $25,000.

Loan Obligations

On December 23, 2008, the Company was granted a loan of $25,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $3,777.

On July 31, 2009, the Company was granted a loan of $5,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $575.

On December 18, 2009, the Company was granted a loan of $6,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $551.

On March 18, 2010, the Company was granted a loan of $5,800. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $447.

On June 14, 2010, the Company was granted a loan of $5,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $313.

On August 06, 2010, the Company was granted a loan of $15,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $809.

On November 16, 2010, the Company was granted a loan of $10,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $373.

On March 30, 2011, the Company was granted a loan of $10,000. The loan is interest bearing at 6% per annum and payable upon demand. Interest accrued as of June 30, 2011 is $151.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 

 

 
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Going Concern Statement

We have negative working capital, have not yet received revenues from sales of products or services, and have recurring losses from operations.  The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital.  The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended March 31, 2011, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The continuation of our business is dependent upon us raising additional financial support.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company” (as defined by §229.10(f)(1)), we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls

We evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2011.  This evaluation was conducted by our chief executive officer and principal accounting officer.

Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.

Limitations on the Effective of Controls

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met.  Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs.  These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control.  A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Conclusions

Based upon their evaluation of our controls, the chief executive officer and principal accounting officer has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared.  There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
 
 

 
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PART II- OTHER INFORMATION
 
Item 1. Legal Proceedings
 
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
None.
 
Item 3. Defaults Upon Senior Securities
 
None.

Item 4. [Removed and Reserved]

N/A.



















 
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Item 5. Other Information

None.

Item 6. Exhibits

Exhibits:

 
31.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
31.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted 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
 
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002













 
 
 
 

 





 
 

 
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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 11, 2011

Legend Mining Inc.

/s/ Tao Chen
Tao Chen, President







 
 
 
 
 

 



 
 
 

 







 
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