Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2013
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
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Commission File No. 0-27791
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Apolo Gold & Energy, Inc.
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(Excact name of registrant as specified in its Charter)
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Nevada
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98-0412805
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(State of Other Jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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#210 – 905 West Pender Street
Vancouver, BC V6C 1L6
Canada
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(Address of principal executive offices) (Zip Code)
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604 970 0901
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(Registrant's telephone number including area code)
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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):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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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 Sept 30, 2013, the Registrant had 8,378,295 Shares of Common Stock outstanding. This is after giving effect to a share consolidation of 20:1 approved by shareholders on October 29, 2010, and the issuance of 1,875,000 common shares in the period ending September 30, 2013.
Transitional Small Business Disclosure Format (check one): Yes o No x
APOLO GOLD & ENERGY INC.
(An Exploration Stage Company)
BALANCE SHEETS
(Unaudited)
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Sept 30,
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June 30,
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ASSETS
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2013
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2013
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CURRENT ASSETS
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Cash
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$ | 33,715 | $ | 417 | ||||
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TOTAL ASSETS
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$ | 33,715 | $ | 417 | ||||
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LIABILITIES AND STOCKHOLDER’ EQUITY (DEFICIT)
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CURRENT LIABILITIES
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Accounts payableand accrued expenses
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$ | 6,957 | $ | 24,922 | ||||
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Loans payable, related parties (note 6)
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- | 86,399 | ||||||
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Total Current Liabilities
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6,957 | 111,321 | ||||||
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COMMITMENTS AND CONTINGENCIES (note 5)
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- | - | ||||||
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STOCKHOLDERS’ EQUITY (DEFICIT)
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Common stock, 300,000,000 shares authorized, $0.001
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par value; 8,378,295 and 6,503,295 shares
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issued and outstanding, respectively (note 4)
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8,378 | 6,503 | ||||||
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Additional paid-in capital
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7,707,009 | 7,558,884 | ||||||
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Accumulated deficit prior to exploration
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(1,862,852 | ) | (1,862,852 | ) | ||||
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Deficit accumulated during exploration stage
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(5,825,777 | ) | (5,813,439 | ) | ||||
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TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
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26,758 | (110,904 | ) | |||||
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TOTAL LIABILITES AND STOCKHOLDERS EQUITY (DEFICIT)
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$ | 33,715 | $ | 417 | ||||
The accompanying notes are an integral part of these interim financial statements.
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APOLO GOLD & ENERGY, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
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Three Months Ended
September 30,
2013
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Three Months Ended
September 30,
2012
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Period from
April 16, 2002 (Inception of Exploration Stage Through
September 30,
2013)
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REVENUES
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$ | - | $ | - | $ | - | ||||||
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EXPENSES
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Consulting and professional fees
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6,500 | 9,783 | 1,916,564 | |||||||||
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Exploration costs
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- | - | 2,449,248 | |||||||||
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Stock compensation expense
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- | - | 381,340 | |||||||||
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General and administrative expenses
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5,838 | 6,113 | 1,045,060 | |||||||||
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TOTAL EXPENSES
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12,338 | 15,896 | 5,792,212 | |||||||||
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LOSS FROM OPERATIONS
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(12,338 | ) | (15,896 | ) | (5,792,212 | ) | ||||||
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OTHER INCOME (EXPENSE)
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Loss on sale of mining equipment
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- | - | (177,193 | ) | ||||||||
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Gain on settlement of debt
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- | - | 142,442 | |||||||||
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Other income
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- | - | 1,186 | |||||||||
| - | - | (33,565 | ) | |||||||||
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LOSS BEFORE INCOME TAXES
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(12,338 | ) | (15,896 | ) | (5,825,777 | ) | ||||||
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INCOME TAXES
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- | - | - | |||||||||
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NET LOSS
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$ | (12,338 | ) | $ | (15,896 | ) | $ | (5,825,777 | ) | |||
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NET LOSS PER SHARE, BASIC AND DILUTED
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
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WEIGHTED AVERAGE NUMBER OF
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COMMON STOCK SHARES OUTSTANDING, BASIC AND DILUTED
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6,605,197 | 6,503,265 | ||||||||||
The accompanying notes are an integral part of these interim financial statements.
3
APOLO GOLD & ENERGY INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
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Three Months Ended
September 30,
2013
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Three Months Ended
September 30,
2012
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Period from April 16,2002 (Inception of Exploration Stage Through
September 30,
2013)
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CASH FLOWS USED FOR OPERATING ACTIVITES:
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Net Loss
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$ | (12,338 | ) | $ | (15,896 | ) | $ | (5,825,777 | ) | |||
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Adjustments to reconcile net loss
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to net cash used by operating activities:
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Depreciation
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- | - | 95,176 | |||||||||
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Loss on sale of mining equipments
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- | - | 177,193 | |||||||||
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Options exercised for services
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- | - | 276,691 | |||||||||
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Gain on settlements of debt
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- | - | (142,442 | ) | ||||||||
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Stock issued for current debt
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- | - | 470,041 | |||||||||
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Stock issued for officer’s wages and services
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- | - | 252,700 | |||||||||
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Stock issued for professional services
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- | - | 272,060 | |||||||||
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Stock issued for exploration costs
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- | - | 711,000 | |||||||||
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Stock options granted
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- | - | 381,340 | |||||||||
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Expenses paid on behalf of Company
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- | - | 42,610 | |||||||||
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(Decrease) increase in:
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Prepaid expenses
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- | (2,212 | ) | - | ||||||||
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Accounts payable
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(17,965 | ) | 7,831 | 249,439 | ||||||||
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Accrued expenses
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- | - | (5,807 | ) | ||||||||
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Accrued payables, related parties
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- | - | 387,663 | |||||||||
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Net cash (used) by operating activities
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(30,303 | ) | (10,277 | ) | (2,658,113 | ) | ||||||
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CASH FLOWS USED FOR INVESTING ACTIVITIES:
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Purchase of fixed assets
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- | - | (95,174 | ) | ||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Net proceeds from (repayments of) related party loans
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(86,399 | ) | 10,243 | 127,734 | ||||||||
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Proceeds from borrowings
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- | - | 84,937 | |||||||||
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Proceeds from subscription receivable
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- | - | 25,000 | |||||||||
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Proceeds from sale of common stock
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150,000 | - | 2,547,835 | |||||||||
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Net cash provided by financing activities
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63,601 | 10,243 | 2,785,506 | |||||||||
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NET INCREASE (DECREASE) IN CASH
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33,298 | (34 | ) | 33,219 | ||||||||
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Cash, beginning of period
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417 | 314 | 1,496 | |||||||||
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Cash, end of period
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$ | 33,715 | $ | 280 | $ | 33,715 | ||||||
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SUPPLEMENTAL CASH FLOWS INFORMATION:
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Income taxes paid
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$ | - | $ | - | $ | - | ||||||
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Interest paid
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$ | - | $ | - | $ | - | ||||||
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NON-CASH INVESTING AND FINANCING ACTIVITIES:
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Note receivable from sale of mining equipment
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$ | - | $ | - | $ | 45,000 | ||||||
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Common stock issued on settlement of debt
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$ | - | $ | - | $ | 529,559 | ||||||
The accompanying notes are an integral part of these interim financial statements.
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APOLO GOLD & ENERGY INC.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
(An Exploration Stage Company)
September 30, 2013
(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 three months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending June 30, 2014.
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, 2013.
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 for the year ended June 30, 2013.
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.
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Going Concern
As shown in the financial statements, the Company incurred a net loss of $12,338 for the three month period ended September 30, 2013 and has an accumulated deficit of $7,688,629, no revenues, and limited cash resources as at September 30, 2013.
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.
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 September 30, 2013 and June 30, 2013, 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 1,875,000 shares of common stock issued for a cash consideration of $0.08 per share for total proceeds of $150,000 during the three month period ending September 30, 2013. The shares were issued to a director of the Company.
There were no stock options, warrants or other potentially dilutive securities outstanding as at September 30, 2013, June 30, 2013.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
Foreign Operations
The accompanying balance sheet at September 30, 2013 includes $33,715 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 various expenses during the period and reimbursement of these expenses to its Chief Executive Officer amounted to $3,601 during the three months ended September 30, 2013 (three months ended September 30, 2012 - $10,243).
Loans outstanding in the amount of $90,000 to its Chief Executive Officer were retired during the three months ended September 30, 2013 (three months ended September 30, 2012 - $nil).
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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.
During the period ending September 30, 2013, the Company completed the sale of 1,875,000 common shares to a director of the Company for cash in the amount of $0.08 per share for a total consideration of $150,000.
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 September 30, 2013, the Company had funds on hand of $33,715.
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 three months ended September 30, 2013, the Company incurred a loss of $12,338 vs. a loss of $15,896 for the three months ended September 30, 2012. Consulting and professional fees for the three months ended September 30, 2013 were $6,500 vs. $9,783 for the three months ended September 30, 2012.
General and administrative costs decreased to $5,838 in the three month period ending September 30, 2013 vs. $6,113 in the three month period ending September 30, 2012 as a result of a reduction in costs incurred related to implementation of XBRL procedures as well as additional filing fee related to filing of the 10Q’s and 10K.
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 three month ending September 30, 2013 amounted in total to $12,338 vs. $15,896 in the three month period ending September 30, 2012 as the Company continued its pursuit of a new project.
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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 September 30, 2013 there were 8,378,295 shares outstanding. This includes the issuance of 1,875,000 common shares at $0.08 per share for total proceeds of $150,000 in the period ending September 30, 2013.The Company at September 30, 2013 had current trade accounts payable of $6,957 compared to $24,922 at June 30, 2013 and $28,800 at September 30, 2012. There are no loans owing to a related party at September 30, 2013, compared to $86,399 owing at June 30, 2013 and $69,872 at September 30, 2012.
Cash on hand at September 30, 2013 amounted to $33,715. 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 September 30, 2013 with funds on hand of $33,715 vs. $417 at June 30, 2013 and $280 at September 30, 2012.
During the three months ending September 30, 2013, the Company continues to pursue opportunities in the energy sector but the Capital markets make it difficult. The Company continues to pursue opportunities and is in active negotiations at the present time.
The Company has current accounts payable at September 30, 2013 of $6,957 compared to $24,922 at June 30, 2013 and $28,800 at September 30, 2012.
Amounts due to related parties at September 30, 2013 were nil compared to $69,872 at September 30, 2012, and $86,399 at June 30, 2013. 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 three months ending September 30, 2013.
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.
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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 September 30, 2013. 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.
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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
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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: November 13, 2013
/s/ Robert G. Dinning
Robert G. Dinning, CEO, CFO and Secretary
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