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EXCEL - IDEA: XBRL DOCUMENT - Pharmagen, Inc.Financial_Report.xls
EX-31.1 - EX 31.1 SECTION 302 CERTIFICATIONS - Pharmagen, Inc.certification_ex31z1.htm
EX-32.1 - EX 32.1 SECTION 906 CERTIFICATIONS - Pharmagen, Inc.certification_ex32z1.htm
EX-31.2 - EX 31.2 SECTION 302 CERTIFICATIONS - Pharmagen, Inc.certification_ex31z2.htm



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

_____________


FORM 10-Q

_____________


   X  . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011


       . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______


Commission File Number 333-161985

 

SUNPEAKS VENTURES, INC.

[quarterlyreport_10q001.jpg]

(Exact name of registrant as specified in its charter)

 

Nevada

 

27-0777112

(State of incorporation)

  

(I.R.S. Employer Identification No.)

 

#106, 505 19 Ave SW

Calgary, Alberta, T2S 0E4, Canada

(Address of principal executive offices)

 

(403) 540-5277

(Registrant’s telephone number)


with a copy to:

Carrillo Huettel, LLP

3033 Fifth Ave. Suite 400

San Diego, CA 92103

Telephone (619) 546-6100

Facsimile (619) 546-6060


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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

(Not required) Yes      . No      .


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


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes   X  . No      .


As of November 8, 2011, there were 8,233,350 shares of the registrant’s $0.001 par value common stock issued and outstanding.



1






SUNPEAKS VENTURES, INC.*


TABLE OF CONTENTS 

 

 

 

  

Page

 

 

PART I.                 FINANCIAL INFORMATION

 

  

 

ITEM 1.

FINANCIAL STATEMENTS

3

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

11

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

14

ITEM 4.

CONTROLS AND PROCEDURES

14

  

 

PART II.               OTHER INFORMATION

 

  

 

ITEM 1.

LEGAL PROCEEDINGS

15

ITEM 1A.

RISK FACTORS

15

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

15

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

15

ITEM 4.

[REMOVED AND RESERVED]

15

ITEM 5.

OTHER INFORMATION

15

ITEM 6.

EXHIBITS

16

  

 


Special Note Regarding Forward-Looking Statements


Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Sunpeaks Ventures, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," “SNPK,” or the "Company," refers to Sunpeaks Ventures, Inc.





2






PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS










SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)


Financial Statements


For the Period Ended September 30, 2011 (unaudited) and June 30, 2011











Balance Sheets (unaudited)

4

Statements of Operations (unaudited)

5

Statements of Cash Flows (unaudited)

6

Notes to the Financial Statements (unaudited)

7








3





SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)

(unaudited)



 

September 30,

2011

$

 June 30,

 2011

 $

 

 

 

ASSETS

 

 


Current assets

 

 

 

 

 

Cash

31,259

37,268

 

 

 

Total Assets

31,259

37,268

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

Accounts payable

53,248

44,025

Accrued liabilities

4,460

1,688

Notes payable

110,000

110,000

Due to related party

45,000

40,000

 

 

 

Total Liabilities

212,708

195,713

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

Preferred Stock

Authorized: 50,000,000 preferred shares with a par value of $0.001 per share

Issued and outstanding: nil preferred shares

 –

 –

 

 

 

Common Stock

Authorized: 550,000,000 common shares with a par value of $0.001 per share

Issued and outstanding: 8,233,350 common shares

8,233

 8,233

 

 

 

Additional Paid-In Capital

31,708

31,708

 

 

 

Deficit accumulated during the exploration stage

(221,390)

(198,386)

 

 

 

Total Stockholders’ Deficit

(181,449)

(158,445)

 

 

 

Total Liabilities and Stockholders’ Deficit

31,259

37,268

 

 

 









(The accompanying notes are an integral part of these financial statements)


4






SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

(unaudited)



 

 

For the Three Months Ended

September 30,



Accumulated from June 25, 2009 (Date of Inception) to

September 30,

2011

$

 

 

 

2011

$

2010

$

 



 

 

 

Revenues

 

 

262

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

Consulting fees

 

 

23,670

General and administrative

 

 

931

771

8,752

Impairment of oil and gas property

 

 

10,000

Management fees

 

 

5,000

5,000

50,000

Professional fees

 

 

14,300

12,650

118,017

 

 

 

 

 

 

Total Operating Expenses

 

 

20,231

18,421

210,439

 

 

 

 

 

 

Loss Before Other Expense

 

 

(20,231)

(18,421)

(210,177)

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,773)

(1,008)

(11,913)

Other income

 

 

700



 

 

 

 

 

Net Loss

 

 

(23,004)

(19,429)

(221,390)


Net Loss per Share – Basic and Diluted

 

 


 


Weighted Average Shares Outstanding – Basic and Diluted

 

 


8,233,350

7,900,000

 

 

 

 

 

 

 












(The accompanying notes are an integral part of these financial statements)


5






SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

(unaudited)



 

For the Three Months Ended  September 30,

2011

$



For the Three

Months Ended

September 30,

2010

$


Accumulated from

June 25, 2009

(Date of Inception) to

September 30,

2011

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss for the period

(23,004)

(19,429)

(221,390)

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Shares issued for services

5,000

Impairment of oil and gas property

10,000

Gain on settlement of debt

(700)

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts payable

9,223

8,851

53,248

Accrued liabilities

2,772

1,008

4,460

Due to related party

5,000

25,000

 

 

 

 

Net Cash Used In Operating Activities

(6,009)

(9,570)

(124,382)

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

Acquisition of oil and gas properties

(10,000)

 

 

 

 

Net Cash Used In Investing Activities

(10,000)

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Repayment of note payable

(1,000)

(79,548)

Proceeds from related party

5,000

20,000

Proceeds from note payable

190,248

   Proceeds from issuance of shares

34,941

 

 

 

 

Net Cash Provided By Financing Activities

4,000

165,641

 

 

 

 

Increase (Decrease) in Cash

(6,009)

(5,570)

31,259

 

 

 

 

Cash – Beginning of Period

37,268

5,636

­–

 

 

 

Cash – End of Period

31,259

66

31,259

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

Interest paid

Income tax paid

 

 

 

 



(The accompanying notes are an integral part of these financial statements)


6



SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

(Expressed in US dollars)

(unaudited)



1.

Organization and Nature of Operations


Sunpeaks Ventures Inc. (the “Company”) was incorporated in the State of Nevada on June 25, 2009 and is a natural resource exploration and production company engaged in the exploration, acquisition, and development of oil and gas properties in the United States. The Company is an exploration stage company as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. In June 2009, the Company acquired a 1.28571% interest in three wells located in Pottawatomie, Oklahoma (the “Pottawatomie Wells”) in exchange for $10,000.  The Company’s plan of operations over the next twelve months is to raise financing to explore and develop the Pottawatomie Wells acquired by the Company.


Going Concern


These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2011, the Company has a working capital deficit of $181,449 and an accumulated deficit of $221,390. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  


2.

Summary of Significant Accounting Policies


a)

Basis of Presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.


b)

Use of Estimates


The preparation of financial statements in conformity with US GAAP 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. The Company regularly evaluates estimates and assumptions related to the recoverability of oil and gas properties, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


c)

Cash and Cash Equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of September 30 and June 30, 2011, there were no cash equivalents.



7



SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

(Expressed in US dollars)

(unaudited)



2.

Summary of Significant Accounting Policies (continued)


d)

Interim Financial Statements


These interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.


e)

Oil and Gas Properties


The Company utilizes the full-cost method of accounting for petroleum and natural gas properties. Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such determination is made the Company assesses annually whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.


The Company applies a ceiling test to the capitalized cost in the full cost pool. The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. Specifically, the Company computes the ceiling test so that capitalized cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: (A) The present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus (B) the cost of property not being amortized; plus (C) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less (D) income tax effects related to differences between the book and tax basis of the property.


For unproven properties, the Company excludes from capitalized costs subject to depletion, all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether or not proved reserves can be assigned to the property. Until such a determination is made, the Company assesses the property at least annually to ascertain whether impairment has occurred. In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.



8



SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

(Expressed in US dollars)

(unaudited)



2.

Summary of Significant Accounting Policies (continued)


f)

Asset Retirement Obligations


The Company follows the provisions of ASC 410, Asset Retirement and Environmental 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.


g)

Basic and Diluted Net Loss per Share


The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.


h)

Foreign Currency Translation


The Company’s functional currency is the Canadian dollar and its reporting currency is the United States dollar. The financial statements of the Company are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars.


i)

Financial Instruments


Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related party. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.





9



SUNPEAKS VENTURES, INC.

(An Exploration Stage Company)

Notes to the Financial Statements

(Expressed in US dollars)

(unaudited)



2.

Summary of Significant Accounting Policies (continued)


j)

Income Taxes


The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.


k)

Comprehensive Loss


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2011, the Company has no items representing comprehensive income or loss.


l)

Stock-based Compensation


The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.


The Company did not grant any stock options or warrants during the period ended September 30, 2011.


m)

Recent Accounting Pronouncements


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


3.

Note Payable


In May 2011, the Company issued a $110,000 promissory note (the “Note”) to a third-party investor. Under the terms of the Note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at September 30, 2011, the Company recorded accrued interest of $4,460 which has been recorded as accrued liabilities.


4.

Related Party Transaction


As at September 30, 2011, the Company owes $45,000 (June 30, 2011 - $40,000) to the Company’s President for management fees incurred on behalf of the Company.  The amount owing is unsecured, non-interest bearing, and due on demand.  


5.

Subsequent Events


On November 3, 2011, the Company and its Board of Directors authorized an amendment to its articles of incorporation.  Under the amendment, the number of authorized preferred shares were increased from 10,000,000 preferred shares to 50,000,000 preferred shares with a par value of $0.001 per share, and the number of authorized common shares were increased from 250,000,000 common shares to 550,000,000 common shares at par value of $0.001 per share.  





10






ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


FORWARD-LOOKING STATEMENTS


This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.


RESULTS OF OPERATIONS


Working Capital


  

September 30,

June 30,

  

2011

$

2011

$

Current Assets

31,259

37,268

Current Liabilities

212,708

195,713

Working Capital (Deficit)

(181,449)

(158,445)


Cash Flows


  

September 30,

2011

$

September 30,

2010

$

Cash Flows from (used in) Operating Activities

(6,009)

(9,570)

Cash Flows from (used in) Financing Activities

 -    

4,000

Net Increase (decrease) in Cash During Period

(6,009)

(5,570)


Operating Revenues


We have not generated any revenues since inception.


Operating Expenses and Net Loss


Operating expenses for the three months ended September 30, 2011 were $20,231 compared with $18,421 for the three months ended September 30, 2010. The increase of $1,810 was due to $1,650 of additional professional fees incurred in the current year relating to legal and accounting costs relating to the Company’s SEC reporting requirements.   


For the three months ended September 30, 2011, the Company incurred a net loss of  $23,004 compared with a net loss of  $19,429 for the nine months ended September 30, 2010.  




11






Liquidity and Capital Resources


As at September 30, 2011, the Company’s cash balance and total assets were $31,259 compared to $37,268 as at June 30, 2011. The decrease in total assets is attributed to the fact that the Company incurred operating expenses that exceeded the amount of new debt financing received during the year.  


As at September 30, 2011, the Company had total liabilities of $212,708 compared with total liabilities of $195,713 as at June 30, 2011. The increase in total liabilities of $16,995 is attributed to increases in accounts payable and accrued liabilities of $9,223 due to outstanding professional fees, $2,772 of accrued interest and $5,000 of amounts owing to related parties that were received during the period.


As at September 30, 2011, the Company has a working capital deficit of $181,449 compared with $158,445 at June 30, 2011 and the increase in the working capital deficit is attributed to the use of existing cash to settle obligations.  


Cashflow from Operating Activities


During the three months ended September 30, 2011, the Company used $6,009 of cash for operating activities compared to the use of $9,570 of cash for operating activities during the three months ended September 30, 2010.  The decrease in cash used for operating activities is due to the fact that the Company only raised $nil in financing for operating expenditures compared to $63,921 in financing in the prior year with $37,268 of the prior year proceeds carried forward to fund the current period operations.

 

Cashflow from Financing Activities


During the three months ended September 30, 2011, the Company received proceeds of $nil from financing activities compared to $4,000 during the three months ended September 30, 2010. The decrease in proceeds from financing activities was due to the fact that the Company received $5,000 in proceeds from a related party and repaid $1,000 of outstanding notes payable in the prior period compared to the current period


Corporate Developments


None.


Subsequent Developments


On November 3, 2011, the Company filed Amended and Restated Articles of Incorporation (the “Amendment”) with the Nevada Secretary of State. As a result of the Amendment, the Company has increased the aggregate number of authorized shares to six hundred million (600,000,000) shares, consisting of five hundred fifty million (550,000,000) shares of Common Stock, par value $0.001 per share and fifty million (50,000,000) shares of preferred stock, par value $0.001 per share, of which twenty five million (25,000,000) shall be designated as Class A Preferred Stock.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Off-Balance Sheet Arrangements


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


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.




12





Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


In March 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-11 (“ASU No. 2010-11”), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of provisions of ASU No. 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-10 (“ASU No. 2010-10”), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In February 2010, the FASB issued ASU 2010-09 (“ASU No. 2010-09”), “Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.”  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Company’s adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued ASU 2010-06 (“ASU No. 2010-06”), “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Company’s adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued an amendment to ASC Topic 505, “Equity”, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The Company’s adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued an amendment to ASC Topic 820, “Fair Value Measurements and Disclosure”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Company’s adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.




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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 4. 

CONTROLS AND PROCEDURES


Management’s Quarterly Evaluation of Disclosure Controls and Procedures


Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2011, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on October 12, 2011, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control over Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.




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PART II - OTHER INFORMATION


ITEM 1. 

LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 1A.

RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


1.            Quarterly Issuances:


During the quarter, we did not issue any unregistered securities other than as previously disclosed.


2.            Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4.  

[REMOVED AND RESERVED]


ITEM 5.

OTHER INFORMATION


None.




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ITEM 6.

EXHIBITS


Exhibit

 

 

Number

Description of Exhibit

Filing

 3.01

Articles of Incorporation

Filed with the SEC on September 18, 2009 as part of our Registration Statement on Form S-1.

 3.01(a)

Amended and restated Articles of Incorporation

Filed with the SEC on November 4, 2011 as part of our Current Report on Form 8-K.

 3.02

Bylaws

Filed with the SEC on September 18, 2009 as part of our Registration Statement on Form S-1.

 10.01

Form of Subscription Agreement

Filed with the SEC on September 18, 2009 as part of our Registration Statement on Form S-1.

 10.02

Form of Convertible Promissory Note between the Company and Blue Lagoon Capital dated June 25, 2009

Filed with the SEC on September 18, 2009 as part of our Registration Statement on Form S-1.

 10.03

Management Agreement between the Company and Scott Beaudette dated June 25, 2009

Filed with the SEC on December 30, 2009 as part of our Amended Registration Statement on Form S-1/A.

 10.04

Lease Agreement between the Company and Nitro Petroleum, Inc. dated November 21, 2008

Filed with the SEC on May 5, 2010 as part of our Amended Registration Statement on Form S-1/A.

 10.05

Settlement Agreement between the Company and Blue Lagoon Capital dated May 5, 2011

Filed with the SEC on May 16, 2011 as part of our Quarterly Report on Form 10-Q.

 10.06

Settlement Agreement between the Company and Habana Investments dated May 5, 2011

Filed with the SEC on May 16, 2011 as part of our Quarterly Report on Form 10-Q.

 10.07

Promissory Note between the Company and Whetu, Inc. dated July 13, 2011

Filed with the SEC on October 12, 2011 as part of our Annual Report on Form 10-K.

 31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

 31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

 32.01

Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.

101.INS*

XBRL Instance Document

  Filed herewith.

 101.SCH*

XBRL Taxonomy Extension Schema Document

Filed herewith.

 101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

 101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

 101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

 101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.


*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections




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SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


SUNPEAKS VENTURES, INC.


Dated:  November 10, 2011

/s/ Scott Beaudette

By: Scott Beaudette

Its: President, Chief Executive Officer, Chief Financial Officer, Treasurer & Secretary


In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Dated:  November 10, 2011

/s/ Scott Beaudette

By: Scott Beaudette

Its:  Director




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