Banny Cosmic International Holdings, Inc - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Banny Cosmic International Holdings, Inc	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - Banny Cosmic International Holdings, Inc	ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - Banny Cosmic International Holdings, Inc	ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - Banny Cosmic International Holdings, Inc	ex32-1.htm
EX-32.2 - EXHIBIT 32.2 - Banny Cosmic International Holdings, Inc	ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 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 December 31, 2012

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 0-27791

Apolo Gold & Energy, Inc.

(Excact name of registrant as specified in its Charter)

Nevada	98-0412805
(State of Other Jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

#210 – 905 West Pender Street

Vancouver, BC V6C 1L6

Canada

(Address of principal executive offices) (Zip Code)

604 970 0901

(Registrant's telephone number including area code)

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 o

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 o

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


Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if a smaller reporting company)

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

As of February 14, 2013, the Registrant had 6,503,295 Shares of Common Stock outstanding. This is after giving effect to a share consolidation of 20:1 approved by shareholders on October 29, 2010

Transitional Small Business Disclosure Format (check one): Yes o No x

APOLO GOLD & ENERGY INC.

(An Exploration Stage Company)

BALANCE SHEETS

(Unaudited)

	December 31,			June 30,
ASSETS	2012			2012
CURRENT ASSETS
Cash and cash equivalents	$	546		$	314
Prepaid expenses		1,459			-

TOTAL ASSETS	$	2,005		$	314

LIABILITIES & STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	23,006		$	20,969
Loans payable, related parties (Note 6)		80,252			59,629
TOTAL LIABILITIES		103,258			80,598

COMMITMENTS AND CONTINGENCIES (Note 6)		-			-

STOCKHOLDERS' DEFICIT
Common stock, 300,000,000 shares authorized, $0.001
par value; 6,503,295 and 6,503,295 shares
issued and outstanding, respectively (Note 4)		6,503			6,503
Additional paid-in capital		7,558,884			7,558,884
Accumulated deficit prior to exploration stage		(1,862,852	)		(1,862,852	)
Deficit accumulated during exploration stage		(5,803,788	)		(5,782,819	)

TOTAL STOCKHOLDERS' DEFICIT		(101,253	)		(80,284	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,005		$	314

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

APOLO GOLD & ENERGY, INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended December 31,			Three Months Ended December 31,			Six Months Ended December 31			Six Months Ended December 31			Period from April 16, 2002 (Inception of Exploration Stage) Through December 31,
	2012			2011			2012			2011			2012

REVENUES	$	-		$	-		$	-		$	-		$	-


EXPENSES
Consulting and professional fees		2,902			9,199			12,685			17,032			1,906,728
Exploration costs		-			-			-			-			2,449,248
Stock compensation expense		-			-			-			-			381,340
General and administrative expenses		2,171			4,117			8,284			5,495			1,032,907
TOTAL EXPENSES		5,073			13,316			20,969			22,527			5,770,223

LOSS FROM OPERATIONS		(5,073	)		(13,316	)		(20,969	)		(22,527	)		(5,770,223	)

OTHER INCOME (EXPENSE)
Loss on sale of mining equipment		-			-			-			-			(177,193	)
Gain on settlement of debt		-			-			-			-			142,442
Other income		-			-			-			-			1,186
		-			-			-			-			(33,565	)


LOSS BEFORE INCOME TAXES		(5,073	)		(13,316	)		(20,969	)		(22,527	)		(5,803,788	)

INCOME TAXES		-			-			-			-			-

NET LOSS AND COMPREHENSIVE LOSS	$	(5,073	)	$	(13,316	)	$	(20,969	)	$	(22,527	)	$	(5,803,788	)


NET LOSS PER SHARE, BASIC AND DILUTED:	$	(0.00	)	$	(0.00	)		(0.00	)	$	(0.00	)


WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING, BASIC AND DILUTED:		6,503,295			6,503,295			6,503,295			6,503,295

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

APOLO GOLD & ENERGY INC.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended December 31			Six Months Ended December 31			Period from April 16, 2002 (Inception of Exploration Stage) Through December 31,
	2012			2011			2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(20,969	)	$	(22,527	)	$	(5,803,788	)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation		-			-			95,176
Loss on sale of mining equipment		-			-			177,193
Options exercised for services		-			-			276,691
Gain on settlement of debt		-			-			(142,442	)
Stock issued for current debt		-			-			470,041
Stock issued for officer's wages and services		-			-			252,700
Stock issued for professional services		-			-			272,060
Stock issued for exploration costs		-			-			711,000
Stock options granted		-			-			381,340
Expenses paid on behalf of Company		-			-			42,610
(Decrease) increase in:
Prepaid expenses		(1,458	)		-			(1,458	)
Accounts payable		2,037			(1,975	)		265,488
Accrued expenses		-			-			(5,807	)
Accrued payables, related parties		-			-			387,663
Net cash (used) by operating activities		(20,390	)		(24,502	)		(2,621,533	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		-			-			(95,174	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from related party loans		20,622			24,408			207,985
Proceeds from borrowings		-			-			84,937
Proceed from subscription receivable		-			-			25,000
Proceeds from sale of common stock		-			-			2,397,835
Net cash provided by financing activities		20,622			24,408			2,715,757


NET INCREASE (DECREASE) IN CASH		232			(94	)		(950	)

Cash, beginning of period		314			425			1,496

Cash, end of period	$	546		$	331		$	546


SUPPLEMENTAL CASH FLOWS INFORMATION
Income taxes paid	$	-		$	-		$	-
Interest paid	$	-		$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Note receivable from sale of mining equipment	$	-		$	-		$	45,000
Common stock issued on settlement of debt	$	-		$	-		$	529,559

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

APOLO GOLD & ENERGY INC.

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

(An Exploration Stage Company)

December 31, 2012

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

These financial statements have been prepared in accordance with generally accepted accounting principles for the interim financial information with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal, recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2012 are not necessarily indicative of the results that may be expected for the year ending June 30, 2013.

For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2012.

The Company’s fiscal year-end is June 30.

NOTE 2 – ACCOUNTING POLICIES

This summary of significant accounting policies of Apolo Gold & Energy Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. There have been no changes in accounting policies from those disclosed in the notes to the audited financial statements June 30, 2012.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Fair Value of Financial Instruments and Concentration of Risk

A fair value hierarchy was established that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1: classification is applied to any asset or liability that has a readily available quoted market price from an active market where there is significant transparency in the executed/quoted price.

Level 2: classification is applied to assets and liabilities that have evaluated prices where the data inputs to these valuations are observable either directly or indirectly, but do not represent quoted market prices from an active market.

Level 3: classification is applied to assets and liabilities when prices are not derived from existing market data and requires us to develop our own assumptions about how market participants would price the asset or liability.

The fair values of financial instruments, which include cash, accounts payable and accrued liabilities and loans payable to related parties, were estimated to approximate their carrying values due to the immediate or relatively short maturity of these instruments. Management does not believe that the Company is subject to significant interest, currency or credit risks arising from these financial instruments.

Going Concern

As shown in the financial statements, the Company incurred a net loss of $20,969 for the period ended December 31, 2012 and has an accumulated deficit of $7,666,640, no revenues, and limited cash resources as at December 31, 2012.

These factors indicate that the Company may be unable to continue in existence. The financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue existence. The Company’s management is actively seeking additional capital and management believes that new properties can ultimately be developed to enable the Company to continue its operations. However, there are inherent uncertainties in mining operations and management cannot provide assurances that it will be successful in its endeavors. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company’s management believes that it will be able to generate sufficient cash from public or private debt or equity financing for the Company to continue to operate based on current expense projections.

Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on our present or future financial statements.

NOTE 3 – PREFERRED STOCK

The Company’s directors authorized 25,000,000 preferred shares with a par value of $0.001. The preferred shares will have rights and preferences set from time to time by the Board of Directors. As of December 31, 2012 and June 30, 2012, the Company has no preferred shares issued and outstanding.

NOTE 4 – COMMON STOCK

At a shareholder meeting held October 29, 2010, shareholders authorized an increase in authorized capital from 200,000,000 to 300,000,000 common shares with a par value of $0.001. In addition, shareholders also authorized a share consolidation of 20:1. These financial statements have been restated retroactively to reflect this share consolidation.

There were no stock options, warrants or other potentially dilutive securities outstanding as at December 31, 2012, June 30, 2012 and December 31, 2011.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Foreign Operations

The accompanying balance sheet at December 31, 2012 includes $546 of cash in Canada. Although Canada is considered economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company's operations.

Compliance with Environmental Regulations

The Company's mining activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties, but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays affect the economics of a project, and cause changes or delays in the Company's activities.

NOTE 6– RELATED PARTY TRANSACTIONS

The Company incurred administrative fees and reimbursement of expenses to its Chief Executive Officer in the amount of $6,000 during the 6 months ended December 31, 2012 (6 months ended December 31, 2011 - $9,000).

During the three month period ending December 31, 2012, an officer advanced loans in the amount of $10,380 (3 months ended December 31, 2011 - $12,590) to retire current and outstanding debts incurred and for the six months ended December 31, 2012 said loans amounted to $20,623 (6 months ended December 31, 2011 - $24,407).

The Company’s loans payable to one of its Directors as at December 31, 2012 amounted to $80,252 ($59,629 at June 30, 2012 and $38,494 at December 30, 2011). These loans are unsecured, have no stated terms of repayment and are non-interest bearing.

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

General Overview

Apolo Gold & Energy Inc. ("Company") was incorporated in March 1997 under the laws of the State of Nevada. Its objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary - Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Project was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001 and will not be reactivated.

On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, ("NUP"). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consists of 733.9 hectares and possesses a Production Permit (a KP) # KW. 098PP325.

The terms of the Napal Gold Property called for a total payment of $375,000 US over a six-year period of which a total of $250,000 had been made. Subsequent to the year ending June 30, 2008 the Company terminated its agreement on the NUP property and returned all exploration rights to the owner.

On October 29, 2010, shareholders approved an increase in the authorized capital of the Company to 300,000,000 shares of common stock from 200,000,000. In addition to this, shareholders also authorized a share consolidation of 20:1 effective immediately.

The Company continues to pursue opportunities in the natural resource industry and will consider an investment in any other energy related business in order to create value.

At December 31, 2012, the Company had funds on hand of $546.

The Company recognizes that it does not have sufficient funds on hand to finance its operations on an ongoing basis. The Company further recognizes that it is dependent on the ability of its management team to obtain the necessary working capital in order to complete projects started and operate successfully. There is no assurance that the Company will be able to obtain additional capital as required, or if the capital is available, to obtain it on terms favorable to the Company. The Company may suffer from a lack of liquidity in the future that could impair its exploration efforts and adversely affect its results of operations.

Results of Operations

In the six months ended December 31, 2012, the Company incurred a loss of $20,969 vs. a loss of $22,527 for the six months ended December 31, 2011. Consulting and professional fees for the six months ended December 31, 2012 were $12,685 vs. $17,032 for the six months ended December 31, 2011.

General and administrative costs increased to $8,284 in the six month period ending December 31, 2012 vs. $5,495 in the six month period ending December 31, 2011 as a result of additional costs incurred in the current year related to implementation of XBRL procedures.

Company operations are limited at the present time to seeking out and acquiring a desirable resource project that will be beneficial to shareholders. Expenses during the six months ending December 31, 2012 amounted in total to $20,969 vs. $22,527 in the six month period ending December 31, 2011 as the Company continued its pursuit of a new project.

The Company recognizes that it will require additional capital in order to continue its search for a mineral property or other projects that will be beneficial to the shareholders of the company. There is no assurance at this time that said capital can be raised on terms and conditions acceptable to management.

At December 31, 2012 there were 6,503,295 shares outstanding. There were no shares issued in the six month period ending December 31, 2012.The Company at December 31, 2012 had current trade accounts payable of $23,006 compared to $20,970 at June 30, 2012 and $28,736 at December 30, 2011. Loans owing to a related party at December 31, 2012 amounted to $80,252 vs. $59,629 at June 30, 2012 and $38,494 at December 31, 2011. There are no terms of repayment, no interest rate and are unsecured.

Cash on hand at December 31, 2012 amounted to $546. The Company is aware that additional financing will be required in order to continue its pursuit of a mineral property opportunity or a comparable opportunity in a related field. There is no assurance that additional funding will be successfully completed.

The Company has no employees other than officers and uses consultants as and when necessary.

LIQUIDITY AND CAPITAL RESOURCES

The Company has limited financial resources at December 31, 2012 with funds on hand of $546 vs. $314 at June 30, 2012 and $331 at December 31, 2011.

During the six months ending December 31, 2012, the Company has pursued opportunities in the energy sector but to date negotiations have not advanced to the point of a Definitive Agreement. The Company continues to pursue opportunities and is in active negotiations at the present time.

The Company has current accounts payable at December 31, 2012 of $23,006 compared to $28,736 at December 31, 2011 and $20,970 at June 30, 2012.

Amounts due to related parties at December 31, 2012 amounted to $80,252 compared to $38,494 at December 31, 2011, and $59,629 at June 30, 2012. These current loans are due to a director of the Company for cash advances to the company to retire current debt and sustain its operations. While the Company continues to seek out additional capital, there is no assurance that they will be successful in completing this necessary financing. The Company recognizes that it is dependent on the ability of its management team to obtain the necessary working capital required.

While in the pursuit of additional working capital, the Company is also very active in reviewing other resource development opportunities and will continue with these endeavors.

Inflation has not been a factor during the six months ending December 31, 2012.

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

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer / Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(f). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organiations of the Treadway Commission.

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2012. The material weakness identified is the lack of segregation of duties due to limited staff.

This change in financial reporting was the result of the former Chairman and CEO, who resigned because of illness. The duties of Chairman and CEO were assumed by the CFO who continued with his duties as CFO in addition to new duties as Chairman and CEO. This change created a lack of segregation of duties.

This weakness may result in a more than remote likelihood that a material misstatement would not be prevented or detected. The Company currently has no active business being conducted.

Part II - Other Information

Item 1. Legal Proceedings: There are no proceedings to report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None

Item 3. Default Upon Senior Securities: There are no defaults to report.

Item 4. Mine Safety Disclosures: N/A

Item 5. Other Information: None

Item 6. Exhibits

31.1 Sarbanes Oxley Section 302 Certification from C.E.O.

31.2 Sarbanes Oxley Section 302 Certification from C.F.O.

32.1 Sarbanes Oxley Section 906 Certification from C.E.O.

32.2 Sarbanes Oxley Section 906 Certification from C.F.O.

101 Interactive Data Files

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.

APOLO GOLD & ENERGY, INC.

Dated: February 14, 2013

/s/ Robert G. Dinning

Robert G. Dinning, CEO, CFO and Secretary

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