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 October 31, 2011
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period to __________
	Commission File Number: 333-146442

 

Goldspan Resources, Inc.
(Exact name of small business issuer as specified in its charter)

 

Nevada	26-3342907
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

836 Fernbrook Court, Vacaville, CA 95687

(Address of principal executive offices)

 

707.469.8732

(Issuer’s telephone number)

_______________________________________________________________

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

 

[ ] Large accelerated filer	[ ] Accelerated filer
[ ] Non-accelerated filer	[X] Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 65,199,631 as of August 20, 2012

 

	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	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	8
Item 1A:	Risk Factors	8
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3:	Defaults Upon Senior Securities	8
Item 4:	Mine Safety Disclosures	8
Item 5:	Other Information	8
Item 6:	Exhibits	8

 

PART I - FINANCIAL INFORMATION

 

Item 1.      Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Balance Sheets as of October 31, 2011, and July 31, 2011 (unaudited);
F-2	Statements of Operations for the three months ended October 31, 2011 and October 31, 2010 and from Inception on March 2, 2007 through October 31, 2011 (unaudited);
F-3	Statements of Cash Flows for the three months ended October 31, 2011 and October 31, 2010 and from Inception on March 2, 2007 through October 31, 2011 (unaudited);
F-4	Notes to Financial Statements.

 

These 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 and for the financial statements to be not misleading have been included. Operating results for the interim period ended October 31, 2011 are not necessarily indicative of the results that can be expected for the full year.

GOLDSPAN RESOURCES, INC.

(An Exploration Stage Company)

Balance Sheets

(unaudited)

 

ASSETS		October 31,				July 31,
		2011				2011
CURRENT ASSETS
Cash		$	80			$	—
Total Current Assets			80				—
TOTAL ASSETS		$	80			$	—
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable		$	40,440			$	40,084
Loan from Officer			100				—
Loan from shareholder			19,755				19,755
Total Current Liabilities			60,295				59,839
STOCKHOLDERS' DEFICIT
Common stock: $0.001 par value; 400,000,000 shares authorized; 61,449,631 and 61,449,631 shares issued and outstanding, respectively			61,450				61,450
Additional paid-in capital			523,332				523,332
Deficit accumulated during the exploration stage			(644,997	)			(644,621	)
Total Stockholders' Deficit			(60,215	)			(59,839	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	80			$	—

 

The accompanying notes are an integral part of these financial statements.

GOLDSPAN RESOURCES, INC.

(An Exploration Stage Company)

Statements of Operations

(unaudited)

 

										From Inception
		For the Three				For the Three				on March 2,
		Months Ended				Months Ended				2007 Through
		October 31,				October 31,				October 31,
		2011				2010				2011
REVENUES		$	—			$	—			$	—
OPERATING EXPENSES
Management fees							18,000				36,880
Professional fees			356				157,185				595,104
General and administrative			20				161				14,013
Total Operating Expenses			376				175,346				645,997
LOSS FROM OPERATIONS			(376	)			(175,346	)			(645,997	)
OTHER INCOME/EXPENSE
Extinguishment of Debt			—				—				1,000
LOSS BEFORE INCOME TAXES			(376	)			(175,346	)			(644,997	)
PROVISION FOR INCOME TAXES							—				—
NET LOSS		$	(376	)		$	(175,346	)		$	(644,997	)
BASIC AND DILUTED LOSS PER SHARE		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING			61,449,631				47,049,631

 

The accompanying notes are an integral part of these financial statements.

GOLDSPAN RESOURCES, INC.

(An Exploration Stage Company)

Statements of Cash Flows

(unaudited)

 

										From Inception
		For the Three				For the Three				on March 2,
		Months Ended				2007 Months Ended				2007 Through
		October 31,				October 31,				October 31,
		2011				2010				2011
OPERATING ACTIVITIES
Net loss		$	(376	)		$	(175,346	)		$	(644,997	)
Adjustments to reconcile net income to net cash provided by operating activities:
Issuance of common stock for services			—				173,179				478,000
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable			356				2,006				101,709
Net Cash Used in Operating Activities			(20	)			(161	)			(65,288	)
INVESTING ACTIVITIES
			—				—				—
FINANCING ACTIVITIES
Increase in loan from shareholder			0				0				24,055
Increase in loan from officer			100				0				100
Repayment of shareholder loans			0				0				(300	)
Proceeds from common stock issued			—				—				41,513
Net Cash Provided by Financing Activities			100				—				65,368
NET DECREASE IN CASH			80				(161	)			80
CASH AT BEGINNING OF PERIOD			—				161				—
CASH AT END OF PERIOD		$	80			$	—			$	80
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest		$	—			$	—			$	—
Income Taxes		$	—			$	—			$	—
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for prepaid consulting		$	—			$	—			$	460,000
Common stock issued for management fees			$				18,000			$	18,000
Shareholder loan converted to contributed capital		$	—			$	—			$	4,000
Accounts payable converted to contributed capital		$	—			$	—			$	61,269

  

The accompanying notes are an integral part of these financial statements.

GOLDSPAN RESOURCES, INC.

(A Development Stage Company)

Notes to Financial Statements

October 31, 2011 and July 31, 2011

 

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at October 31, 2011 and for all periods presented herein, and for them to be not misleading, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s July 31, 2011 audited financial statements. The results of operations for the periods ended October 31, 2011 are not necessarily indicative of the operating results for the full year.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Use of 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.

 

Recent Accounting Pronouncements

 

No recent accounting standards or interpretations issued or recently adopted are expected to have a material impact on the Company’s financial position, operations or cash flows.

 

 

NOTE 3 – SUBSEQUENT EVENTS

 

On March 26, 2012, the board of directors appointed the following new officers and directors:

 

· David Hedderly-Smith – Chief Executive Officer and Chairman of the Board

· Robert W. George II – Director and President

· James McLaughlin – Director, Chief Financial Officer, and Treasurer

· David Saykally – Director and Secretary

 

Concurrently, Robert W. George II resigned as CEO and as the Chairman of the Board.

 

On April 5, 2012, we entered into a non-binding letter of intent with Alix Resources Corp. (“Alix”) for the potential purchase of an option to acquire a 60% ownership interest in certain mineral properties known as the “Golden Zone Property” located in the State of Alaska (the “Property”). The Property is located along the south flank of the Alaska Range 15 miles west of the Parks Highway, approximately halfway between the cities of Anchorage and Fairbanks. Alix has the existing option on the Property (the “Underlying Option”) which was entered into in September of 2010 with Hidefield Gold Inc. and Mines Trust Company (collectively the “Owners”) wherebyAlix can earn up to a 70% interest in the Property.

The letter of intent contemplates the sale of an option to us which, when exercised in conjunction with the Underlying Option held by Alix, will result in our ownership of 60% of the Property, with Alix retaining 10% ownership.

 

The letter of intent was to expire on May 15, 2012 provided no definitive agreement was reached between the Parties. On June 22, 2012 Alix and Goldspan agreed to extend the May 15, 2012 deadline to July 15, 2012.

 

On August 7, 2012 Alix and Goldspan agreed to an additional extension to August 31, 2012 in order to obtain a definitive agreement that would include not only Alix and Goldspan, but the underlying land owners acknowledgment of the Agreement between Alix and Goldspan.

Item 2.     Management’s Discussion and Analysis or Plan of Operation

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which June cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Company Overview and Plan of Operations

 

We were incorporated on March 2, 2007, under the laws of the state of Nevada.

 

On April 5, 2012, we entered into a non-binding letter of intent with Alix Resources Corp. (“Alix”) for the potential purchase of an option to acquire a 60% ownership interest in certain mineral properties known as the “Golden Zone Property” located in the State of Alaska (the “Property”). The Property is located along the south flank of the Alaska Range 15 miles west of the Parks Highway, approximately halfway between the cities of Anchorage and Fairbanks. Alix has the existing option on the Property (the “Underlying Option”) which was entered into in September of 2010 with Hidefield Gold Inc. and Mines Trust Company (collectively the "Owners") whereby Alix can earn up to a 70% interest in the Property.

 

The letter of intent contemplates the sale of an option to us which, when exercised in conjunction with the Underlying Option held by Alix, will result in our ownership of 60% of the Property, with Alix retaining 10% ownership.

 

The letter of intent contemplates the sale of an option to us which, when exercised in conjunction with the Underlying Option held by Alix, will result in our ownership of 60% of the Property, with Alix retaining 10% ownership. In order to maintain our rights under the contemplated option agreement and ultimately exercise the option, the letter of intent contemplates that we will make the following payments:

 

a)

pay Alix Resources an amount of CDN $1,000,000 as follows:

 

i)

an initial amount of CDN $200,000 upon execution of the Definitive Agreement;

ii)

an additional amount of CDN $300,000 on or before that date which is 12 months from the date of the Definitive Agreement; and

iii)

the remaining amount of CDN $500,000 on or before that date which is 24 months from the date of the Definitive Agreement;

 

b)

fund CDN $3,500,000 in exploration expenditures as follows:

 

i)

an initial amount of CDN $1,500,000 on or before that date which is 12 months from the date of the Definitive Agreement; and

ii)

the remaining CDN $2,000,000 on or before that date which is 24 months from the date of the Definitive Agreement; and

 

c)

assume all payment obligations of the Alix Group under the Underlying Agreement, including but not limited to:

 

i)

all outstanding and ongoing cash payments required under Section 2.3 of the Underlying Agreement;

ii)

all outstanding and ongoing share issuance obligations under Section 2.3 of the Underlying Agreement, such that Goldspan shall issue securities in its capital in lieu and in replacement of Alix Resources issuing securities in its respective capital;

iii)

all cash payment and share issuance obligations under Section 2.8 of the Underlying Agreement, such that Goldspan shall issue securities in its capital in lieu and in replacement of Alix Resources issuing securities in its respective capital; and

iv)

all lease payments, taxes or other amounts payable to the State of Alaska or other governmental authorities with respect to the Property.

 

Alix is required to notify the Owners of the Property of the letter of intent. Upon exercise of our option, the Owners will have the option to form a joint venture with us and Alix or sell their remaining 30% interest in the Property in exchange for an overriding perpetual royalty equal to 2.5% of the net smelter returns.

 

The letter of intent is non-binding and conditional upon the parties’ entry into a definitive agreement, the completion of our due diligence on the Property, and the approval of the Owners and any necessary regulatory approvals.

 

The letter of intent was to expire on May 15, 2012 provided no definitive agreement was reached between the Parties. On June 22, 2012 Alix and Goldspan agreed to extend the May 15, 2012 deadline to July 15, 2012.

 

On August 7, 2012 Alix and Goldspan agreed to an additional extension to August 31, 2012 in order to obtain a definitive agreement that would include not only Alix and Goldspan, but the underlying land owners acknowledgment of the Agreement between Alix and Goldspan.

 

Expected Changes In Number of Employees, Plant, and Equipment

 

We do not have plans to purchase any physical plant or any significant equipment or to change the number of our employees during the next twelve months.

 

Results of Operations for the three months ended October 31, 2011

 

We did not earn any revenues from inception on March 2, 2007 through the period ending October 31, 2011. We can provide no assurance that we will produce significant revenues in the future, or, if revenues are earned, that we will be profitable.

 

We incurred operating expenses of $645,997 and net losses in the amount of $644,997 from our inception on March 2, 2007 through the period ending October 31, 2011.  We incurred operating expenses and net losses in the amount of $376 during the three months ended October 31, 2011, compared to operating expenses and net losses in the amount of $175,346 during the three months ended October 31, 2010. Our operating expenses for the three months ended October 31, 2011 included $356 for legal fees and $20 for bank charges. By way of comparison our operating expenses for the three months ended October 31, 2010 included $155,179 for investor relations, legal fees of $2,006, management fees of $18,000 and office expenses of $161.  Our losses are attributable to our operating expenses combined with a lack of any revenues during our current stage of development.

Liquidity and Capital Resources

 

As of October 31, 2011, there was $80 in cash and a working capital deficit of $60,215. We will require significant financing in order to perform the terms of the purchase transaction for the Golden Zone Property as contemplated by the Letter of Intent. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

We have not attained profitable operations and may be dependent upon obtaining financing to pursue a long-term business plan.

 

Off Balance Sheet Arrangements

 

As of October 31, 2011, there were no off balance sheet arrangements.

 

Going Concern

 

Our financial statements have been prepared on a going concern basis. As of October 31, 2011, we have a working capital deficit of $60,215 and an accumulated deficit of $644,997 since inception. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that we will be able to continue as a going concern. Management plans to continue to provide for our capital needs by the issuance of common stock and related party advances.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies fit this definition for our company.

 

Recently Issued Accounting Pronouncements

 

No recent accounting standards or interpretations issued or recently adopted are expected to have a material impact on the Company’s financial position, operations or cash flows.

 

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4.     Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2011. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of October 31, 2011, our disclosure controls and procedures were not effective. There have been no changes in our internal controls over financial reporting during the quarter ended October 31, 2011.

Management determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation and control procedures not regularly performed due to the lack of staff and resources.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are 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 in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Limitations on the Effectiveness of Internal Controls

 

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.   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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations 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 the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

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

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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.

 

Goldspan Resources, Inc.

 

By:	/s/ David Hedderly-Smith
	David Hedderly-Smith Chief Executive Officer, and Director
	August 27,  2012

 

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

 

By:	/s/ David Hedderly-Smith
	David Hedderly-Smith Chief Executive Officer and Director
	August 27,  2012

 

By:	/s/ James McLaughlin
	James McLaughlin Chief Financial Officer, Treasurer, and Director
	August 27,  2012

 

By:	/s/ Robert W. George II
	Robert W. George II President and Director
	August 27,  2012

 

By:	/s/ David Saykally
	David Saykally, Secretary and and Director
	August 27,  2012