Attached files
file | filename |
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EXCEL - IDEA: XBRL DOCUMENT - BEESTON ENTERPRISES LTD | Financial_Report.xls |
EX-31 - CERTIFICATION - BEESTON ENTERPRISES LTD | exhibit31.htm |
EX-32 - CERTIFICATION - BEESTON ENTERPRISES LTD | exhibit32.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________________ to ________________________
Commission File Number 333-103621
BEESTON ENTERPRISES LTD.
NEVADA | 88-04360717 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1685 H Street, #219
Blaine, WA 98230-5110
(Address of principal executive offices)
(877) 208-6141
(Registrants 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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the 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 during the preceding 12 months (or for such shorter period that the registrant is required to submit and post such file). 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. See the definitions of large accelerated filer, an accelerated filer, a non-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 [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of September 30, 2012, the Company had 200,851,241 shares of its common stock issued and outstanding.
Table of Contents
PART I FINANCIAL INFORMATION
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative Disclosures about Market Risks
Item 4. Controls and Procedures.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS | |||
| September 30, |
| December 31, |
| 2012 |
| 2011 |
Current Assets |
|
|
|
Cash | $ 20,139 |
| $ 241 |
Prepaid expenses and deposits | 189 |
| 125 |
Marketable securities | 57,400 |
| 108,000 |
TOTAL ASSETS | $ 77,728 |
| $ 108,366 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Accounts payable and accrued expenses | $ 24,613 |
| $ 18,053 |
Promissory notes, related party | 10,350 |
| 26,200 |
Total Current Liabilities | 34,963 |
| 44,253 |
|
|
|
|
Total Liabilities | 34,963 |
| 44,253 |
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock, par value $.001, 500,000,000 shares authorized and |
|
|
|
200,851,241 and 160,851,241 issued and outstanding at September 30, 2012 |
|
|
|
and December 31, 2011, respectively | 200,851 |
| 160,851 |
Additional paid-in capital | 1,889,721 |
| 1,664,496 |
Deficit accumulated during the development and exploration stages | (2,047,807) |
| (1,761,234) |
|
|
|
|
Total Stockholders' Equity | 42,765 |
| 64,113 |
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 77,728 |
| $ 108,366 |
The accompanying notes are an integral part of the condensed financial statements.
3
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)
(WITH TOTALS SINCE INCEPTION)
|
| Three Months Ended |
| Nine Months Ended |
| Cumulative Totals | ||||
|
| September 30, |
| September 30, |
| from Inception, | ||||
|
|
|
|
|
|
|
|
|
| July 12, 1999, to |
|
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| September 30, 2012 |
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
| |
| Sale of mining claims | $ - |
| $ - |
| $ - |
| $ - |
| $ 131,889 |
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
| |
| Speculative mining expenses | - |
| - |
| - |
| - |
| 387,357 |
| Consulting | 0 |
| 12,650 |
| 15,000 |
| 58,510 |
| 147,882 |
| Promotional expenses | 19,001 |
| - |
| 28,021 |
| - |
| 28,021 |
| Professional fees | 9,289 |
| 11,110 |
| 26,935 |
| 38,710 |
| 300,397 |
| Administrative expenses | 84,377 |
| 24,873 |
| 164,299 |
| 30,640 |
| 310,570 |
| Depreciation | - |
| - |
| - |
| - |
| 3,806 |
| Total Operating Expenses | 112,667 |
| 48,633 |
| 234,255 |
| 127,860 |
| 1,178,033 |
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE OTHER INCOME (EXPENSE) | (112,667) |
| (48,633) |
| (234,255) |
| (127,860) |
| (1,046,144) | |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
| |
| Interest expense, net | (645) |
| 190 |
| (1,578) |
| (6,023) |
| (62,260) |
| Foreign currency transaction gain (loss) | 6 |
| - |
| (140) |
| (179) |
| (16,768) |
| Claim settlement gain | - |
| - |
| - |
| 1,048,297 |
| 1,048,297 |
| Loss from debt extinguishment | - |
| - |
| - |
| - |
| (839,326) |
| Loss on modification of warrants | - |
| - |
| - |
| - |
| (207,651) |
| Gain (loss) on marketable securities | (26,600) |
| (156,000) |
| (50,600) |
| (828,000) |
| (1,060,200) |
| Release of exploration cost liability | - |
| - |
| - |
| - |
| 136,245 |
| Total Other Income (Expense) | (27,239) |
| (155,810) |
| (52,318) |
| 214,095 |
| (1,001,663) |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) APPLICABLE TO |
|
|
|
|
|
|
|
|
| |
COMMON SHARES | $ (139,906) |
| $ (204,443) |
| $ (286,573) |
| $ 86,235 |
| $ (2,047,807) | |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) - BASIC | $ (0.00) |
| $ (0.00) |
| $ (0.00) |
| $ 0.00 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON |
|
|
|
|
|
|
|
|
| |
SHARES OUTSTANDING - BASIC | 180,174,000 |
| 160,851,000 |
| 173,466,000 |
| 130,767,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON |
|
|
|
|
|
|
|
|
| |
SHARES OUTSTANDING - DILUTED | 180,174,000 |
| 160,851,000 |
| 173,466,000 |
| 199,801,000 |
|
|
The accompanying notes are an integral part of the condensed financial statements.
4
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FROM JULY 12, 1999 (INCEPTION) TO SEPTEMBER 30, 2012
| Common Stock |
| Additional |
| Accumulated |
| Deficit accumul- |
| Stockholders' | ||
| Shares |
| Amount |
| Paid-in Capital |
| Other Compre- |
| ated during the ex- |
| Equity (Deficit) |
|
|
|
|
|
|
| hensive Income |
| ploration stages |
|
|
|
|
|
|
|
|
| (Loss) |
|
|
|
|
July 12, 1999 (Inception) | - |
| - |
| - |
|
|
| - |
| - |
Issuance of common stock for cash, |
|
|
|
|
|
|
|
|
|
|
|
September 9, 1999 | 1,700,000 |
| $ 1,700 |
| $ - |
| $ - |
| $ - |
| $ 1,700 |
Net loss | - |
| - |
| - |
|
|
| (1,700) |
| (1,700) |
Balance, December 31, 1999 | 1,700,000 |
| 1,700 |
| - |
|
|
| (1,700) |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
|
|
| - |
| - |
Balance, December 31, 2000 | 1,700,000 |
| 1,700 |
| - |
|
|
| (1,700) |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
|
|
| - |
| - |
Balance, December 31, 2001 | 1,700,000 |
| 1,700 |
| - |
|
|
| (1,700) |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, |
|
|
|
|
|
|
|
|
|
|
|
December 30, 2002 | 3,375,000 |
| 3,375 |
| 30,375 |
|
|
| - |
| 33,750 |
Net loss | - |
| - |
| - |
|
|
| (9,242) |
| (9,242) |
Balance, December 31, 2002 | 5,075,000 |
| 5,075 |
| 30,375 |
|
|
| (10,942) |
| 24,508 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
|
|
| (29,673) |
| (29,673) |
Balance, December 31, 2003 | 5,075,000 |
| 5,075 |
| 30,375 |
|
|
| (40,615) |
| (5,165) |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, |
|
|
|
|
|
|
|
|
|
|
|
December 20, 2004 | 750,000 |
| 750 |
| 74,250 |
|
|
| - |
| 75,000 |
Net loss | - |
| - |
| - |
|
|
| (30,738) |
| (30,738) |
Balance, December 31, 2004 | 5,825,000 |
| 5,825 |
| 104,625 |
|
|
| (71,353) |
| 39,097 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
|
|
| (25,912) |
| (25,912) |
Balance, December 31, 2005 | 5,825,000 |
| 5,825 |
| 104,625 |
| - |
| (97,265) |
| 13,185 |
|
|
|
|
|
|
|
|
|
|
|
|
10 for 1 forward split, July 17, 2006 | 52,425,000 |
| 52,425 |
| (52,425) |
|
|
| - |
| - |
Net loss | - |
| - |
| - |
|
|
| (92,174) |
| (92,174) |
Forgiveness of interest on notes payable | - |
| - |
| 2,299 |
| - |
| - |
| 2,299 |
Other accumulated comprehensive loss |
|
|
|
|
|
| 2,072 |
|
|
| 2,072 |
Balance, December 31, 2006 | 58,250,000 |
| 58,250 |
| 54,499 |
| 2,072 |
| (189,439) |
| (74,618) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| - |
| (157,810) |
| (157,810) |
Forgiveness of interest on notes payable | - |
| - |
| 7,124 |
| - |
| - |
| 7,124 |
Other accumulated comprehensive loss | - |
| - |
| - |
| (10,223) |
| - |
| (10,223) |
Balance, December 31, 2007 | 58,250,000 |
| 58,250 |
| 61,623 |
| (8,151) |
| (347,249) |
| (235,527) |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash, |
|
|
|
|
|
|
|
|
|
|
|
July 9, 2008 | 92,000 |
| 92 |
| 62,468 |
| - |
| - |
| 62,560 |
Net loss | - |
| - |
| - |
| - |
| (69,375) |
| (69,374) |
Forgiveness of interest on notes payable | - |
| - |
| 11,188 |
| - |
| - |
| 11,188 |
Other accumulated comprehensive loss | - |
| - |
| - |
| 20,690 |
| - |
| 20,689 |
Balance, December 31, 2008 | 58,342,000 |
| 58,342 |
| 135,279 |
| 12,539 |
| (416,624) |
| (210,464) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| - |
| (380,677) |
| (380,677) |
Forgiveness of interest on notes payable | - |
| - |
| 4,434 |
| - |
| - |
| 4,434 |
Amortization of consulting options | - |
| - |
| 24,720 |
| - |
| - |
| 24,720 |
Fair value of warrants issued | - |
| - |
| 383,828 |
| - |
| - |
| 383,828 |
Other accumulated comprehensive |
|
|
|
|
|
|
|
|
|
|
|
income (loss) | - |
| - |
| - |
| 189,803 |
| - |
| 189,803 |
Balance, December 31, 2009 | 58,342,000 |
| 58,342 |
| 548,261 |
| 202,342 |
| (797,301) |
| 11,644 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| - |
| (953,274) |
| (953,274) |
Forgiveness of interest on notes payable | - |
| - |
| 1,659 |
| - |
| - |
| 1,659 |
Amortization of consulting options | - |
| - |
| 37,207 |
| - |
| - |
| 37,207 |
Conversion of notes and interest liability | 36,431,093 |
| 36,431 |
| 204,758 |
| - |
| - |
| 241,189 |
Exchange of debt for notes and warrants | - |
| - |
| 495,300 |
| - |
| - |
| 495,300 |
Modification of warrant terms | - |
| - |
| 207,651 |
| - |
| - |
| 207,651 |
Exchange of non-trading shares for debt | - |
| - |
| 23,623 |
| - |
| - |
| 23,623 |
Other accumulated comprehensive |
|
|
|
|
|
|
|
|
|
|
|
income (loss) | - |
| - |
| - |
| (202,342) |
| - |
| (202,342) |
Balance, December 31, 2010 | 94,773,093 |
| 94,773 |
| 1,518,459 |
| - |
| (1,750,575) |
| (137,343) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - |
| - |
| - |
| - |
| (10,659) |
| (10,659) |
Forgiveness of interest on notes payable | - |
| - |
| 365 |
| - |
| - |
| 365 |
Exercise of warrants - proceeds used to repay debt | 4,657,243 |
| 4,657 |
| 9,360 |
| - |
| - |
| 14,017 |
Exercise of warrants - proceeds used to repay debt | 566,667 |
| 567 |
| 1,133 |
| - |
| - |
| 1,700 |
Conversion of debentures and interest | 42,672,000 |
| 42,672 |
| 86,581 |
| - |
| - |
| 129,253 |
Exercise of warrants | 18,182,238 |
| 18,182 |
| 36,365 |
| - |
| - |
| 54,547 |
Amortization of consulting options | - |
| - |
| 12,233 |
| - |
| - |
| 12,233 |
Balance, December 31, 2011 | 160,851,241 |
| $ 160,851 |
| $ 1,664,496 |
| $ - |
| $ (1,761,234) |
| $ 64,113 |
Issuance of shares for cash | 12,870,000 |
| 12,870 |
| 25,740 |
| - |
| - |
| 38,610 |
Issuance of shares in set-off of debt | 27,130,000 |
| 27,130 |
| 54,260 |
| - |
| - |
| 81,390 |
Forgiveness of interest on notes payable | - |
| - |
| 997 |
| - |
| - |
| 997 |
Shares issued below market value | - |
| - |
| 144,228 |
| - |
| - |
| 144,228 |
Net loss | - |
| - |
| - |
| - |
| (286,573) |
| (286,573) |
Balance, September 30, 2012 | 200,851,241 |
| $ 200,851 |
| $ 1,889,721 |
| $ - |
| $ (2,047,807) |
| $ 42,765 |
The accompanying notes are an integral part of the condensed financial statements.
5
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)
(WITH TOTALS SINCE INCEPTION)
|
| Nine Months Ended |
| Cumulative Totals | ||
|
| September 30, |
| from Inception, | ||
|
|
|
|
|
| July 12, 1999, to |
|
| 2012 |
| 2011 |
| September 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income (loss) |
| $ (286,573) |
| $ 86,235 |
| $ (2,047,807) |
Adjustments to reconcile net income (loss) to net cash |
|
|
|
|
|
|
(used in) operating activities |
|
|
|
|
|
|
Depreciation |
| - |
| - |
| 3,806 |
Amortization of prepaid consulting |
| - |
| 12,233 |
| 74,160 |
Gain on foreign currency translation |
| - |
| 1,097 |
| 1,097 |
Interest forgiven by shareholder |
| 997 |
| 24 |
| 28,066 |
Accrued interest |
| - |
| 5,884 |
| 43,615 |
Claim settlement gain |
| - |
| (1,014,000) |
| (1,014,000) |
Mark to market on marketable securities |
| 50,600 |
| 828,000 |
| 956,600 |
Share based expense |
| 144,228 |
| - |
| 144,228 |
Other |
| - |
| - |
| 1,048,043 |
Changes in assets and liabilities |
|
|
|
|
|
|
Prepaid expenses and deposits |
| (65) |
| (125) |
| (189) |
Accounts receivable |
| - |
| 22,874 |
| (1,089) |
Accounts payable and accrued expenses |
| 6,561 |
| (18,243) |
| 24,613 |
Net cash used in operating activities |
| (84,252) |
| (76,021) |
| (738,857) |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITES |
|
|
|
|
|
|
Acquisition of equipment |
| - |
| - |
| (3,806) |
Net cash (used in) investing activities |
| - |
| - |
| (3,806) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITES |
|
|
|
|
|
|
Proceeds from sale of common stock |
| 38,610 |
| - |
| 211,620 |
Proceeds from exercise of warrants |
| - |
| 60,847 |
| 70,264 |
Principal payments on promissory notes |
| - |
| - |
| 389,178 |
Note repayments |
| (112) |
| - |
| (112) |
Proceeds from issuance of promissory notes, related party |
| 65,652 |
| 16,370 |
| 91,852 |
Net cash provided by financing activities |
| 104,150 |
| 77,217 |
| 762,802 |
|
|
|
|
|
|
|
NET INCREASE IN CASH |
| 19,898 |
| 1,196 |
| 20,139 |
|
|
|
|
|
|
|
CASH - BEGINNING OF PERIOD |
| 241 |
| 108 |
| - |
|
|
|
|
|
|
|
CASH - END OF PERIOD |
| $ 20,139 |
| $ 1,304 |
| $ 20,139 |
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
Payments to promissory note holders from proceeds |
|
|
|
|
|
|
of issuance of common stock |
| 81,390 |
| - |
| 81,390 |
The accompanying notes are an integral part of the condensed financial statements.
6
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1-
ORGANIZATION AND BASIS OF PRESENTATION
Organization and Business
Beeston Enterprises Ltd. (the Company) was incorporated on July 12, 1999 under the laws of the State of Nevada. At present, the Company is an exploration stage company engaged in the search of mineral deposits that can be developed to a state of a commercially viable producing mine. The Company owns a 100% interest in ten mineral claims comprising 4,826.46 hectares, known as the Ruth Lake Property located approximately 25 kilometers from Lac La Hache, British Columbia, Canada. The claims are in good standing until November 4, 2012.
Basis of Presentation
The condensed unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The condensed financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Companys annual statements and notes. 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 pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2011 audited financial statements and the accompanying notes thereto included in our Form 10-K filed on April 15, 2012. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.
These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.
Significant Accounting Policies
There have been no material changes during 2012 in the Companys significant accounting policies to those previously disclosed in the 2011 Form 10-K.
7
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1-
ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
Going Concern
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has had recurring losses, large accumulated deficits, is dependent on the shareholder to provide additional funding for operating expenses, is in the exploration stage, and has no recurring revenues. These items raise substantial doubt about the Companys ability to continue as a going concern.
In view of these matters, realization of the assets of the Company is dependent upon the Companys ability to meet its financial requirements and the success of future operations.
The management of the Company plans to raise additional funds through loans from its shareholders or the issuance of stock.
These financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue its existence.
NOTE 2-
NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic earnings per share is computed by dividing income or loss available to common shareholders by the weighted average shares outstanding for the period. Diluted earnings per share reflects the potential dilution to earnings per share due to securities outstanding which, upon exercise, would increase the number of common shares outstanding. The following table reflects potentially dilutive securities which were not included in diluted earnings per share as their effect was anti-dilutive.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2012 2011 2012 2011
Convertible debentures -
- - -
Options
- - - -
Warrants
98,620,000 98,620,000 98,620,000 98,620,000
________ _________ _________ _________
Total
98,620,000 98,620,000 98,620,000 98,620,000
8
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2-
NET INCOME (LOSS) PER SHARE OF COMMON STOCK
(CONTINUED)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Net Income (Loss) $ (139,906) $ (204,443) $ (286,573) $ 86,235
Weighted Average
common shares
outstanding (basic) 180,174,000 160,851,000 173,466,000 130,767,000
Convertible debentures -
-
- -
Options
- - - -
Warrants
- - - 69,034,000
_________ __________ __________ __________
Weighted Average
common shares
outstanding (diluted) 180,174,000 160,851,000 173,466,000 199,801,000
========= ========= ========= =========
Diluted shares for 2011 are shown because the period showed positive results. For 2012, basic and diluted shares are the same because the calculation of earnings per share would be anti-dilutive.
NOTE 3 -
MARKETABLE SECURITIES
On September 28, 2012, Lithium shares closed at $0.287, resulting in a three and nine month loss of $26,600 and $50,600, respectively. The remaining market value at September 30, 2012, was $57,400. These shares became free-trading on July 17, 2012.
NOTE 4 -
PROMISSORY NOTES, RELATED PARTY
During 2012 the Company issued approximately $66,000 to related parties in the form of Promissory Notes. The notes are due on demand and are non-interest bearing.
In addition, during the year the Company settled obligations of $81,000 to their Promissory Note Holders by offsetting amounts owed to the Company from private investors from the sale of common stock with the aforementioned amounts due to Promissory Note Holders. Settlement between the parties occurred outside of the Company and has been reflected as a non-cash financing activity.
9
BEESTON ENTERPRISES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 -
COMMON STOCK OFFERING
The Companys directors authorized a Private Placement Memorandum offering a maximum of 40,000,000 shares of its common stock at a price of $0.003 per share to raise a maximum of $120,000. The offering was terminated on September 30, 2012.
A total of 40,000,000 shares were sold under the offering for proceeds of $120,000, which was used for repayment of Promissory Note Holder and for working capital purposes.
NOTE 6 -
SUBSEQUENT EVENTS
On October 1, 2012, the Companys directors authorized a private placement units offering of a maximum of 50,000,000 units at a price of $0.006 per unit for total proceeds of $300,000. Each unit is comprised of one share of the Companys common stock and one warrant, with the warrant being exercisable into one share of the Companys common stock for a period of one year from the closing date of the private placement or December 31, 2012, whichever date is the latest, at a price of $0.01.
On November 4, 2012, the Company allowed nine of the mineral claims that make up the Ruth Lake Property to lapse due to the high associated maintenance costs. The Company then reclaimed four of the nine claims comprising 1,973.29 hectares, which four mineral claims are in good standing until November 5, 2013.
10
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's 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 these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common stock" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", Beeston and "our company" mean Beeston Enterprises Ltd., unless otherwise indicated.
General Overview
We are an exploration stage company engaged in the search of mineral deposits that can be developed to a state of commercially viable producing mine. We owned a 100% interest in ten mineral claims comprising 4,826.46 hectares known as the Ruth Lake Property located 25 kilometers from Lac La Hache, British Columbia, Canada. However, on November 4, 2012, we allowed nine of the mineral claims to lapse due to the high associated maintenance costs. We then reclaimed four of the nine claims, which four mineral claims are in good standing until November 5, 2013. There is no guarantee of locating a deposit of some mineral product that could result in a producing mine. However, we are of the opinion that the location of the mining property is such as to warrant retention of a portion of the claims that originally comprised the Ruth Lake Property for further exploration.
The property is situated within the Quesnel Trough, a renowned geologic belt that hosts numerous base and precious metal deposits along with current and formerly producing mines. It is located 10 kilometres northeast of GWR Resources Incs Lac La Hache property where ongoing exploration continues to delineate porphyry copper-gold-silver/skarn, copper-magnetite-gold-silver deposits and is situated between producing mines at Imperial Metals Corporations Mt. Polley copper-gold mine and New Gold Inc.'s New Afton copper-gold project (Teck-Cominco Ltds legendary Afton mine).
The terrain in the area in which our mineral properties are located is well forested with rolling hills, and elevations ranging from 915-1525 meters. The climate is generally dry with a warm summer and a cold winter. Precipitation ranges from 42-62 centimeters per year with up to 30 centimeters occurring as snow. While some exploration work such as trenching and drilling could be carried out all year long, generally, exploration in the area is limited to an eight month period running from April to October. Any exploration programs would be carried out during this eight month period. The area has an excellent infrastructure in place with a skilled workforce, rail, roads and power capacity.
As our directors and officers have no professional training or technical credentials in the field of geology, and specifically in the areas of exploring, developing and operating mining properties, we will have to retain the services of various professionals and technicians in the mining industry to provide such expertise. Accordingly, we have, and will continue to retain the services of geologists and engineers to advise and assist us in the exploration of our acquired interest in mineral claims.
The Ruth Lake Property has not received as much exploration as some of the surrounding properties, such as GWR Resources Inc.s Lac La Hache Property. What prior exploration has taken place on or near this property has provided indications that the area has the potential to host a copper-gold deposit or a molybdenite deposit. We utilized the services of geologists to interpret a recent airborne geophysical survey of the area and the existing geological information in relation to the Ruth Lake Property to identify target areas and make recommendations for the further exploration of the property. Based on our geologists recommendation, an initial exploration program of approximately $50,000 CAD was carried on the Ruth Lake Property, which involved the taking of soil geochemical samples on a regional grid with fill in samples where indicated by anomalous values. Each target area was then explored
by geochemical soil sampling and prospecting. Anomalous cooper-in-soil was detected near the edge of one target area and cooper mineralization was sighted along a newly constructed logging road near this area. In addition to the results of the exploration program, historic assessment reports relating to the southern part of the property reported sporadic molybdenite-in-soil geochemical anomalies over a north-south length of 750 metres. Molybdenite and small amounts of chalcopyrite were described as disseminations and fracture fillings in altered, silicified and locally quartz veined granite float and bedrock. While some drilling was performed, there are no records of results. Based on the results of our initial exploration program and the historic data on the property, we believe that further exploration is warranted for the Ruth Lake Property. A work program was to have been carried out in late fall of 2008, then the summer of 2009; however, such exploration was subsequently delayed pending the results of the exploration work that was to have been carried out on various large parcels of the Ruth Lake Property under option agreements entered into by the Company with other junior mining companies.
In our efforts to further the exploration and development of this large tract of acquired mineral claims, we have continuously reviewed the possibility of participating in some form of joint venture or option arrangement with other entities on a portion of these mineral claim holdings. Accordingly, since acquiring this property, we have entered into various arrangements with other companies to carry out exploration work on various mineral claims that comprise the Ruth Lake Property. At present, we have no option agreements or other arrangements with any party for the exploration of this property. We have no exploration planned for the Ruth Lake Property in 2012.
We have been able to maintain our remaining interest in the Ruth Lake Property through the conduct of exploration and development work programs, by ourselves and others, and then filing assessment reports of the exploration work for credit towards the maintenance costs plus paying cash in lieu of exploration work as required. All of the mining claims currently comprising the Ruth Lake Property are in good standing.
On August 26, 2011, we entered into an agreement with MSM Resource, L.L.C. ("MSM"), a Nevada limited liability company, under which the Company was granted an option to acquire a 100% interest in eighteen mineral claims located in the Silver Star Mining District, Mineral County, Nevada (the "Chucker Property"). We can earn a 100% interest in the claims, upon exercise of the option, by issuing a total of 3,000,000 shares of its common stock to MSM over a period of three years, and by paying a total of $250,000 plus carrying out a $2,000,000 exploration and development program on the claims over a six year period. Upon Beeston acquiring the Chucker Property, the claims will be subject to a royalty of 2% of net smelter returns payable to MSM up to a maximum royalty payment of $5,000,000. The Company can also reduce the royalty to 1% with a maximum royalty payment to $2,500,000 by payment of $1,000,000 to MSM within a limited time period of seventy-five months. In addition, in the event the Company exercises its option and acquires the Chucker Property, we will be required to pay an annuity of $50,000 to MSM commencing at the end of the seventh year and on the anniversary thereof in every year for a total of seventeen years. The option under the option agreement with MSM can be terminated by us at any time upon thirty (30) days notice.
We have undertaken the preparation of a geology report as required under the aforesaid agreement. It is anticipated that this report will not be ready until sometime in late fall, 2012. If it is acceptable to Beeston, ten (10) days after acceptance of the geology report, we will be required to pay the sum of $20,000 and issue 1,000,000 shares of its common stock to MSM, which will form part of the option exercise price under the option agreement with MSM in the event the option is exercised by us.
The Chucker Property is located in an area known for gold/silver mining. We are currently considering the acquisition of additional mineral properties having similar potential.
Results of Operations
You should read the following discussion of our financial condition and results of operations together with our unaudited financial statements and the notes thereto included elsewhere in this filing. Our unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.
The following provides selected financial data about our company for the three and nine month periods ended September 30, 2012 and 2011.
Three months ended September 30, 2012 and 2011.
|
| Three months |
|
| Three months |
|
| Ended |
|
| Ended |
|
| September 30, 2012 |
|
| September 30, 2011 |
Revenue | $ | Nil |
| $ | Nil |
Operating Expenses | $ | (112,667) |
| $ | (48,633) |
Net Income (Loss) | $ | (139,906) |
| $ | (204,443) |
Revenue
There were no revenues from operations for the three months periods ended September 30, 2012 and 2011. The reason for the large differences reported in the net income (loss) positions is due to the shares in the common stock of a junior mining company we received as part of a settlement of certain claims under an option agreement with the junior mining company. These shares became tradable July 17, 2012. We have elected to account for receipt of the shares under the fair value option method of accounting which requires the securities to be marked to market every reporting period through the Statement of Operations.
Expenses
Our total expenses for the three month periods ended September 30, 2012 and 2011 are outlined in the table below:
|
| Three Months Ended |
| |||
|
| September 30, |
| |||
|
| 2012 |
|
| 2011 |
|
|
|
|
|
|
|
|
Consulting fees | $ | Nil |
| $ | 12,650 |
|
Promotional expenses | $ | 19,001 |
| $ | Nil |
|
Professional fees | $ | 9,289 |
| $ | 11,110 |
|
Administrative expenses | $ | 84,377 |
| $ | 24,873 |
|
Expenses for the three months period ended September 30, 2012, increased from the comparative period in 2011 primarily as a result of the increase in administrative expenses and the incurring of promotional expenses.
Nine months ended September 30, 2012 and 2011.
|
|
| Nine months |
|
| Nine months |
|
|
|
| ended |
|
| ended |
|
|
|
| September 30, |
|
| September 30, |
|
|
|
| 2012 |
|
| 2011 |
|
| Revenue | $ | Nil
|
| $ | Nil
|
|
| Operating Expenses | $ | (234,255)
|
| $ | (127,860) |
|
| Net Income (Loss) | $ | (286,573)
|
| $ | 86,235
|
|
Revenue
There were no revenues from operations for the nine months periods ended September 30, 2012 and 2011. The reason for the large differences reported in the net income (loss) positions is due to the shares in the common stock of a junior mining company we received as part of a settlement of certain claims under an option agreement with the junior mining company. These shares became tradable on July 17, 2012. We have elected to account for receipt of the shares under the fair value option method of accounting which requires the securities to be marked to market every reporting period through the Statement of Operations.
Expenses
Our total expenses for the nine month periods ended September 30, 2012 and 2011 are outlined in the table below:
|
| Nine Months Ended |
| |||
|
| September 30, |
| |||
|
| 2012 |
|
| 2011 |
|
|
|
|
|
|
|
|
Consulting fees | $ | 15,000 |
| $ | 58,510 |
|
Promotional expenses | $ | 28,021 |
| $ | Nil |
|
Professional fees | $ | 26,935 |
| $ | 38,710 |
|
Administrative expenses | $ | 164,299 |
| $ | 30,640 |
|
Expenses for the nine months ended September 30, 2012 increased significantly from the comparative period in 2011 primarily as a result of the increase in the administrative expenses and the incurring of promotional expenses.
Equity Compensation
We currently do not have any stock option or equity compensation plans or arrangements.
Liquidity and Financial Condition
Working Capital
|
| As of |
|
| As of |
|
|
| September 30, 2012 |
|
| December 31, 2011 |
|
Current assets |
| 77,728
|
|
| 108,366 |
|
Current liabilities |
| (34,963)
|
|
| (44,253) |
|
Working capital |
| 42,765
|
|
| 64,113 |
|
Cash Flows
|
| Nine Months |
|
| Nine Months |
|
|
| ended |
|
| ended |
|
|
| September 30, 2012 |
|
| September 30, 2011 |
|
Net cash provided by (used in) operating activities |
| (84,252)
|
|
| (76,021) |
|
Net cash provided by (used in)investing activities |
| Nil
|
|
| Nil |
|
Net cash provided by (used in)financing activities |
| 104,150
|
|
| 77,217
|
|
Increase (Decrease) in cash |
| 19,898
|
|
|
1,196 |
|
We had cash of $20,139 as of September 30, 2012 as compared to cash of $241 as of December 31, 2011. We had a working capital of $42,765 as of September 30, 2012 as compared to a working capital of $64,113 as of December 31, 2011.
We will need to raise funds in order to cover our ongoing general operating costs as well as to facilitate the acquisition of additional mining properties, such as the Chucker Property, or an interest in such other mining properties and the exploration and development of such acquisitions or interest in mining properties in the near future.
In the past, we have raised funds by means of various equity financings. Recently, on March 31, 2012, our Board of Directors approved a private placement offering of 40,000,000 common shares of the Company at a price of $0.003 per share, for total proceeds of $120,000. As of the date of this report, the offering has been fully subscribed for and we have raised the full proceeds of this offering. Proceeds under this private placement offering will be used to pay off debt due and owing by the Company to shareholders and to provide the company with working capital. Subsequently thereto, on October 1, 2012, our Board of Directors approved another private placement offering of 50,000,000 units at a price of $0.006 per unit, for total proceeds of $300,000. Each unit is comprised of one share of the Companys common stock and one warrant, with the warrant being exercisable into one share of the Companys common stock for a period of one year from the closing date of the private placement offering or December 31, 2012, which ever date is the latest, at a price of $0.01.
We have also had to borrow funds from time to time in order to fund part of our ongoing operations. For some of this borrowing, we issued convertible debentures as security. All of the debt under these convertible debentures has since been converted into common shares of the Company. We have also raised funds and set off debt through the exercise of the share purchase warrants that were attached to these convertible debentures. A number of these share purchase warrants are still outstanding and remain another source of funds for the Company in the event they are exercised. On occasion, we have also borrowed funds for working capital purposes from stockholders of the Company. As of September 30, 2012, there was $10,350 in loans outstanding to stockholders. These loans are evidenced by promissory notes and are payable on demand and non-interest bearing. We currently have no agreement with any of our officers and directors or any of our shareholders for the provision of additional funding.
We have also received shares in the common stock of a junior mining company as part of a settlement of certain claims under an option agreement with the junior mining company. As of July 17, 2012, these shares were tradable. We hope to be able to sell them into the market.
We anticipate being able to raise the funds that are required for our ongoing operating, acquisitions and exploration costs by means of the sale of securities currently held by the Company, which securities have recently become tradable, as well as by both further debt and equity funding. The equity funding would be in the form of a private placement and/or the exercise of our outstanding warrants by the warrant holders. To the extent we are unable to raise additional funds, our participation in the exploration of our acquired mining properties as well as the acquisition of additional mining property interests will be delayed and/or we could be unable to continue to operate.
Cash Requirements
We estimate that our expenses over the next 12 months will be approximately $125,000 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.
We intend to commence exploration activities on our newly optioned properties over the next twelve months. We estimate our operating expenses and working capital requirements for the next twelve month period to be as follows:
Description |
| Operating |
|
| Estimated |
|
|
| Period |
|
| Expenses |
|
|
|
|
|
| ($) |
|
General and administrative |
| 12 months |
|
| 35,000 |
|
Mining expenses |
| 12 months |
|
| 55,000 |
|
Professional fees |
| 12 months |
|
| 35,000 |
|
Total |
|
|
|
| $125,000 |
|
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
These cash requirements are in excess of our current cash and working capital resources. As a result, we will require additional financing in order to pay for our anticipated ongoing expenditures as outlined above. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities. We hope to meet our cash requirements for the next 12 months through equity financing by way of a private placement and/or through the exercise of the existing outstanding warrants held by our investors. We currently do not have any arrangements in place to complete any private placement financing and there is no assurance that we will be successful in completing any such financing on terms that will be acceptable to us or that the holders of our outstanding warrants will exercise the warrants. We also own securities of a company that is publicly trading. These shares could be a source of funds for our operations.
Contractual Obligations
As a smaller reporting company, we are not required to provide tabular disclosure obligations.
Going Concern
Due to our limited amount of capital, recurring losses, negative cash flows from operations and our ability to pay outstanding liabilities, our independent auditors stated in their report for the fiscal year ended December 31, 2011, that there is substantial doubt about our ability to continue as a going concern. Since inception on July 12, 1999, we have incurred operating losses and negative cash flows from operations. As of September 30, 2012, we had an accumulated deficit of $2,047,807, with total stockholders equity of $42,765. We had a working capital of $42,765 at September 30, 2012.
Our company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months. The ability of our company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. These factors, among others, raise substantial doubt about our companys ability to continue as a going concern.
The financial statements included elsewhere in this report have been prepared in accordance with United States generally accepted accounting principles, assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We have 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 is material to stockholders.
Critical Accounting Policies
We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Please refer to our Form 10-K for the year ended December 31, 2011, filed with the SEC for our critical accounting policies, from which there has been no change as of the date of this file.
Item 3. Quantitative Disclosures about Market Risks
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Managements Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our chief executive officer and chief financial officer) of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our chief executive officer and chief financial officer) concluded that, as of September 30, 2012, a material weakness exists in the Companys internal control procedures, in that one individual who, as an officer and director of the Company, has sole access and authority to receive cash and make cash disbursements. As such, our disclosure controls and procedures as of September 30, 2012 were not effective.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during our quarter ended June 30, 2012, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
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 any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk Factors
As a smaller reporting company, we are 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
The Company is not subject to the mine safety disclosure requirements and other regulatory matters required by Section 1503(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibits:
Exhibit No. | Document | Location |
3.1 | Articles of Incorporation | Previously Filed |
3.2 | Amendment to Articles | Previously Filed |
3.3 | Bylaws | Previously Filed |
3.4 | Certificate of Change | Previously Filed |
14.1 | Code of Ethics | Previously Filed |
31 | Rule 13a-41(a)/15d-14(a) Certificates | Included |
32 | Section 1350 Certifications | Included |
101.INS* | XBRL Instance | Included |
101.SCH* | XBRL Taxonomy Extension Schema | Included |
101.CAL* | XBRL Taxonomy Calculation | Included |
101.DEF* | XBRL Taxonomy Definition | Included |
101.LAB* | XBRL Taxonomy Extension Labels | Included |
101.PRE* | XBRL Taxonomy Extension Presentation | Included |
* XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BEESTON ENTERPRISES LTD.
Date: November 13, 2012________________ /s/ Michael Upham
MICHAEL UPHAM, PRESIDENT