minercoform10-q.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 April 30,
2009
or
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
number: 333-156059
Minerco
Resources, Inc.
(Exact name of
registrant as specified in its charter)
|
Nevada
|
None
|
|
(State or
other jurisdiction of incorporation or
|
(I.R.S.
Employer Identification No.)
|
|
organization)
|
|
7999 Rue
Chouinard
Lasalle, Quebec, Canada H8N
2E5
(Address of
principal executive offices)
(514)
461-1375
(Registrant’s
telephone number, including area code)
_____________________________________________________
(Former name,
former address and former fiscal year, if changed since last
report)
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes x No
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 the definitions of
“large accelerated filer”, “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
Large accelerated
filer o Accelerated
filer o Non-accelerated
filer o Smaller reporting company x
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes x No
o
APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check
mark whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes o No
o
APPLICABLE ONLY TO
CORPORATE ISSUERS
As
of June 11, 2009 the registrant had 55,257,500 outstanding shares of its common
stock.
Table
of Contents
The unaudited
interim financial statements of Minerco Resources, Inc. follow. All currency
references in this report are to U.S. dollars unless otherwise
noted.
Minerco Resources,
Inc.
(An Exploration
Stage Company)
April 30,
2009
(unaudited)
Minerco Resources,
Inc.
(An Exploration
Stage Company)
(unaudited)
|
|
|
April
30,
2009
|
|
|
July
31,
2008
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
24,206 |
|
|
$ |
78,210 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Current
Assets
|
|
|
24,206 |
|
|
|
78,210 |
|
|
|
|
|
|
|
|
|
|
|
|
Loan
receivable
|
|
|
10,000 |
|
|
|
– |
|
|
Note
receivable
|
|
|
20,000 |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
54,206 |
|
|
$ |
78,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$ |
13,013 |
|
|
$ |
26,144 |
|
|
Due to
related parties
|
|
|
541 |
|
|
|
541 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
|
|
13,554 |
|
|
|
26,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value,
75,000,000 shares authorized, 55,257,500 and 42,757,500 shares issued and
outstanding
|
|
|
55,257 |
|
|
|
42,757 |
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid-in capital
|
|
|
55,257 |
|
|
|
42,757 |
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
accumulated during the exploration stage
|
|
|
(69,862 |
) |
|
|
(33,989 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders’ Equity
|
|
|
40,652 |
|
|
|
51,525 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$ |
54,206 |
|
|
$ |
78,210 |
|
The accompanying
notes are an integral part of these financial statements.
Minerco Resources,
Inc.
(An Exploration
Stage Company)
(unaudited)
|
|
|
Three
Months Ended
April
30, 2009
|
|
|
Three
Months Ended
April
30, 2008
|
|
|
Nine
Months Ended
April
30, 2009
|
|
|
Nine
Months Ended
April
30, 2008
|
|
|
Period
from June
21, 2007
(Date
of Inception)
to
April 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
$ |
7,942 |
|
|
$ |
– |
|
|
$ |
35,873 |
|
|
$ |
2,846 |
|
|
$ |
69,862 |
|
|
|
|
|
, |
|
|
|
, |
|
|
|
|
|
|
|
|
|
|
|
, |
|
|
Net
Loss
|
|
$
|
(7,942 |
) |
|
$
|
– |
|
|
$
|
(35,873 |
) |
|
$
|
(2,846 |
) |
|
$
|
(69,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per
Share – Basic and Diluted
|
|
$
|
(0.00 |
) |
|
$
|
(0.00 |
) |
|
$
|
(0.00 |
) |
|
$
|
(0.00 |
) |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
|
|
55,257,500 |
|
|
|
37,808,689 |
|
|
|
54,708,049 |
|
|
|
37,808,689 |
|
|
|
N/A |
|
The accompanying notes are an
integral part of these financial statements.
Minerco Resources,
Inc.
(An Exploration
Stage Company)
For the nine months
ended April 30, 2009
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Capital
Paid-in
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance –
July 31, 2008
|
|
42,757,500 |
|
$ |
42,757 |
|
$ |
42,757 |
|
$ |
(33,989 |
) |
$
|
51,525 |
|
|
Common stock
issued to related party at $0.002 per share for cash and assets on August
12, 2008
|
|
12,500,000 |
|
|
12,500 |
|
|
12,500 |
|
|
– |
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
– |
|
|
– |
|
|
– |
|
|
(35,873 |
) |
|
(35,873 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance –
April 30, 2009
|
|
55,257,500 |
|
$ |
55,257 |
|
$ |
55,257 |
|
$ |
(69,862 |
) |
$
|
40,652 |
|
The accompanying
notes are an integral part of these financial statements.
Minerco Resources,
Inc.
(An Exploration
Stage Company)
(unaudited)
|
|
|
Nine
Months Ended
April
30, 2009
|
|
|
Nine
Months Ended
April
30, 2008
|
|
|
Period
from
June
21, 2007
(Date
of Inception)
to
April 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for
the period
|
|
$
|
(35,873 |
) |
|
$
|
(2,846 |
) |
|
$
|
(69,862 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
(13,131 |
) |
|
|
– |
|
|
|
13,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used
in Operating Activities
|
|
|
(49,004 |
) |
|
|
(2,846 |
) |
|
|
(56,849 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
to third party
|
|
|
(10,000 |
) |
|
|
– |
|
|
|
(10,000 |
) |
|
Net Cash Used
in Investing Activities
|
|
|
(10,000 |
) |
|
|
– |
|
|
|
(10,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
|
|
5,000 |
|
|
|
85,514 |
|
|
|
90,514 |
|
|
Proceeds from
related party debt
|
|
|
– |
|
|
|
541 |
|
|
|
541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash
Provided by Financing Activities
|
|
|
5,000 |
|
|
|
86,055 |
|
|
|
91,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in
cash
|
|
|
(54,004 |
) |
|
|
83,209 |
|
|
|
24,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of Period
|
|
|
78,210 |
|
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, End of
Period
|
|
$ |
24,206 |
|
|
$ |
83,209 |
|
|
$ |
24,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
|
Cash paid for
income taxes
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non cash
investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for note receivable
|
|
$ |
20,000 |
|
|
$ |
– |
|
|
$ |
20,000 |
|
The accompanying notes are an
integral part of these financial statements.
Minerco Resources,
Inc.
(An Exploration
Stage Company)
(unaudited)
The accompanying
unaudited interim financial statements of Minerco Resources, Inc., have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with the audited financial
statements and notes thereto contained in Minerco’s Registration Statement filed
with the SEC on Form S-1/A. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the results to
be expected for the full year. Notes to the financial statements
which substantially duplicate the disclosure contained in the audited financial
statements for fiscal 2008 as reported in the Form S-1/A have been
omitted.
These financial
statements have been prepared on a going concern basis, which implies Minerco
will continue to realize its assets and discharge its liabilities in the normal
course of business. As of April 30, 2009, Minerco has an accumulated
deficit of $69,862. Minerco is in the business of exploiting and
developing natural resource properties. Minerco participates in and
invests in development projects with other companies across a wide range of
natural resources. The continuation of Minerco as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of Minerco to obtain necessary equity financing to continue operations,
and the attainment of profitable operations. These factors raise
substantial doubt regarding Minerco’s ability to continue as a going
concern. These financial statements do not include any adjustments to
the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should Minerco be unable
to continue as a going concern.
Minerco intends to
fund operations through equity financing arrangements, which may be insufficient
to fund its capital expenditures, working capital and other cash requirements
through April 30, 2010.
|
3.
|
Gas Pipeline
Property – Related Party
Transaction
|
On August 12, 2008,
Minerco signed an agreement with Wisdom Resources, Inc. to issue 12,500,000
shares at $0.002 per share and received $5,000 cash from Wisdom in exchange for
a $20,000 promissory note and an interest in a gas pipeline. The
promissory note is dated May 15, 2008 and was payable from Plateau Mineral
Development, LLC, the owner and the operator of a certain natural gas pipeline
known as the PMD-Duke Pipeline, while the interest consists of a continuous
right to receive a royalty of as much as $0.02 and as little as approximately 9%
of $0.02 per 1000 cubic feet of gas transported through the PMD-Duke Pipeline
for as long as Plateau or its successors operates the
Pipeline. Plateau is obligated to pay to Minerco $20,000 plus
interest calculated annually at the rate of 10% on any unpaid and outstanding
principal pursuant to a 36-month payment schedule. With regard to the
royalty interest, the investment unit constitutes two units of a maximum
possible twenty-two investment units in the PMD-Duke Pipeline. Each
investment unit is valued at $10,000 (payable in cash only), and each unit
holder is entitled to receive a share of the royalty on a pro-rated basis
according to the number of units held by them. The promissory note is
to be paid $6,000 on December 31, 2008, $10,000 on December 31, 2009 and the
balance at maturity. The note is secured by assignment of the
pipeline. To date, none of the promissory note has been
repaid.
On January 19,
2009, Minerco and Wisdom amended the agreement to shift the $5,000 payment
obligation to Wisdom instead of Minerco. Michael Too, the President
and CEO of Minerco Resources, Inc. is also the President of Wisdom Resources,
Inc. Because Michael Too controls both companies, the promissory note and the
royalty interest in the gas pipeline were transferred to Minerco at Wisdom’s
basis of $20,000 and $0, respectively.
On March 25, 2009,
Minerco issued a loan of $10,000 to Here Enterprises Inc. This loan
is unsecured, non-interest bearing, due on demand and has no specific terms of
repayment.
Forward Looking
Statements
This quarterly
report on Form 10-Q contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including "could", "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" and the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially.
While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested in this report.
Business
Overview
Minerco Resources,
Inc. (“Minerco”, “we”, “our” or “us”) was incorporated as a Nevada company on
June 21, 2007. We have been engaged in the acquisition of interests and leases
in oil and natural gas properties since our inception. We have no subsidiaries.
Our common stock is quoted on the OTC Bulletin Board under the symbol
“MINE”.
We
intend to build our business by acquiring royalties or other non-operated
interests in productive or soon-to-be productive oil and natural gas projects,
and acquiring operated interests (in which we participate in the development and
operation) in development stage oil and gas properties to generate additional
revenues. Currently, we only own a royalty interest of as much as $0.02 or as
little as approximately 9% of $0.02 per 1000 cubic feet of natural gas
transported through the PMD-Duke Pipeline operated by Plateau Mineral
Development, LLC, for as long as Plateau or its successors operates the
Pipeline. To date, the construction of the PMD-Duke Pipeline is not complete,
and we have not received any revenues from our royalty interest. There is no
assurance that the PMD-Duke Pipeline will be completed in a timely manner, if at
all. Additionally, if the PMD-Duke Pipeline is completed, there is no guarantee
that it will be successfully used to transport natural gas or that it will
generate a consistent revenue stream for us.
Our registration
statement on Form S-1 registering an aggregate of 23,757,500 shares of our
common stock became effective on February 6, 2009. The 23,757,500 shares offered
for resale by the 35 selling security holders include 2,000,000 shares owned by
Wisdom Resources, Inc., a company controlled by Michael Too, our President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Secretary, Treasurer and sole director. We will not receive any proceeds from
the resale of these shares by the selling security holders. We incurred all
costs associated with the registration statement.
Uncertainties
We
are a development stage company that has only recently begun operations. We have
not generated any revenues from our business activities, and we do not expect to
generate revenues for the foreseeable future. Since our inception, we have
incurred operational losses, and we have been issued a going concern opinion by
our auditors. To finance our operations, we have completed several rounds of
financing and raised $90,514 through private placements of our common
stock.
Our most advanced
projects are at the exploration stage and there is no guarantee that any of the
projects or properties in which we may acquire an interest will be successful.
There is also no guarantee that any development stage oil and gas properties we
acquire will contain commercially viable quantities of oil and gas. We plan to
undertake exploration activities on any properties in which we acquire an
interest, but further exploration beyond the scope of our planned activities
will be required before we make a final evaluation regarding the economic
feasibility of drilling on any of them. There is no assurance that further
exploration will result in a final evaluation that commercially viable
quantities of oil and gas exist on any of these properties.
We
anticipate that we will require additional financing in order to complete our
acquisition and exploration activities. We currently do not have sufficient
financing to fully execute our business plan and there is no assurance that we
will be able to obtain the necessary financing to so. Accordingly, there is
uncertainty about our ability to continue to operate.
Results of
Operations
Our results of
operations are presented below:
|
|
Three
Months Ended
April
30, 2009
($)
|
Three
Months Ended
April
30, 2008
($)
|
Nine
Months Ended
April
30, 2009
($)
|
Nine
Months Ended
April
30, 2008
($)
|
Period
from June
21, 2007
(Date
of Inception) to
April
30, 2009
($)
|
| |
|
|
|
|
|
|
General
and Administrative Expenses
|
7,942
|
-
|
35,873
|
2,846
|
69,862
|
|
Net
Loss
|
(7,942)
|
-
|
(35,873)
|
(2,846)
|
(69,862)
|
|
Net
Loss per Share –Basic and Diluted
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
N/A
|
|
Weighted
Average Shares Outstanding
|
55,257,500
|
37,808,689
|
54,708,049
|
37,808,689
|
N/A
|
Results of Operations for
the Three Months Ended April 30, 2009
For the three
months ended April 30, 2009 we incurred a net loss of $7,942. During the same
period in fiscal 2008 we did not incur any net loss. Our net loss per share did
not change during these periods.
Our total operating
expenses for the three months ended April 30, 2009 were $7,942. During the same
period in fiscal 2008 we did not incur any operating expenses. Our total
operating expenses consisted entirely of general and administrative expenses,
and we did not incur any foreign exchange losses, management fees, rent expenses
or other operating expenses.
Our general and
administrative expenses consist of professional fees, transfer agent fees,
investor relations expenses and general office expenses. Our professional fees
include legal, accounting and auditing fees.
The increase in
operating expenses for the three months ended April 30, 2009 was primarily due
to an increase in our professional fees.
Results of Operations for
the Period from June 21, 2007 (Date of Inception) to April 30, 2009 and for the
Nine Months Ended April 30, 2009
From our inception
on June 21, 2007 to April 30, 2009 we did not generate any revenues and we
incurred an accumulated deficit of $69,862. We may not generate significant
revenues from our royalty interest in the PMD-Duke Pipeline or any other
properties in which we acquire an interest, and we anticipate that we will incur
substantial losses for the foreseeable future.
For the nine months
ended April 30, 2009 we incurred a net loss of $35,873, compared to a net loss
of $2,846 during the same period in fiscal 2008. Our net loss per share did not
change during these periods.
Our total operating
expenses for the nine months ended April 30, 2009 were $35,873 compared to total
operating expenses of $2,846 for the same period in fiscal 2008. Our total
operating expenses for these periods consisted entirely of general and
administrative expenses, and we did not incur any foreign exchange losses,
management fees, rent expenses or other operating expenses.
Our general and
administrative expenses consist of professional fees, transfer agent fees,
investor relations expenses and general office expenses. Our professional fees
include legal, accounting and auditing fees.
The increase in
operating expenses for the nine months ended April 30, 2009 was primarily due to
an increase in our professional fees.
Liquidity and Capital
Resources
As
of April 30, 2009 we had cash of $24,206 in our bank accounts. Our entire
current assets consist of this cash. As of April 30, 2009 we also had a loan
receivable in the amount of $10,000 and a note receivable in the amount of
$20,000, for total assets of $54,206.
As
of April 30, 2009 we had a working capital surplus of $10,652. Our accumulated
deficit from our inception on June 21, 2007 to April 30, 2009 was $69,862 and
was funded primarily through equity financing.
We
are dependent on funds raised through our equity financing. Our net loss of
$69,862 from our inception on June 21, 2007 to April 30, 2009 was funded
primarily through equity financing. Since our inception on June 21, 2007 we have
raised gross proceeds of $90,514 in cash from the sale of our common stock.
During the nine months ended April 30, 2009 we raised $5,000 from the sale of
our common stock.
From our inception
on June 21, 2007 to April 30, 2009 we spent net cash of $56,849 on operating
activities. During the nine months ended April 30, 2009 we spent net cash of
$49,004 on operating activities, compared to $2,846 for the same period in
fiscal 2008. The increase in expenditures on operating activities for the nine
months ended April 30, 2009 was primarily due to an increase in our professional
fees.
From our inception
on June 21, 2007 to April 30, 2009 we spent net cash of $10,000 on investing
activities. During the nine months ended April 30, 2009 we spent net cash of
$10,000 on investing activities. During the same period in fiscal 2008 we did
not use any cash on investing activities. The increase in expenditures on
investing activities for the nine months ended April 30, 2009 was solely due to
a loan we issued to a third party.
From our inception
on June 21, 2007 to April 30, 2009 we received net cash of $91,055 from
financing activities. During the nine months ended April 30, 2009 we received
net cash of $5,000 from financing activities, compared to $86,055 for the same
period in fiscal 2008. The decrease in receipts from financing activities for
the nine months ended April 30, 2009 was primarily due to a decrease in the sale
of our common stock.
During the nine
months ended April 30, 2009 our monthly cash requirements to fund our operating
activities was approximately $5,445. Our cash of $24,206 as of April 30, 2009 is
sufficient to cover our current monthly burn rate for a little over four
months.
We
estimate our planned expenses for the next 12 months (beginning June 2009) to be
approximately $1,735,000, as summarized in the table below.
|
Description
|
Potential
completion date
|
Estimated
Expenses
($)
|
|
Purchase
other non-operated interests in oil and gas projects
|
July
2009
|
100,000
|
|
Acquire
development stage oil and gas properties
|
September
2009
|
420,000
|
|
Develop and
carry out preliminary exploration programs on any acquired
properties
|
November
2009
|
900,000
|
|
Select and
retain two business development consultants
|
July
2009
|
60,000
|
|
Attendance at
forums
|
July
2009
|
20,000
|
|
Develop a
website
|
June
2009
|
5,000
|
|
Professional
fees (legal, accounting and auditing fees)
|
12
months
|
100,000
|
|
Management
and consulting fees
|
12
months
|
60,000
|
|
Marketing
expenses
|
12
months
|
30,000
|
|
Transfer
agent’s fees
|
12
months
|
30,000
|
|
General and
administrative expenses
|
12
months
|
10,000
|
|
Total
|
|
1,735,000
|
Our general and
administrative expenses for the year will consist primarily of transfer agent
fees, investor relations expenses and general office expenses. The professional
fees are related to our regulatory filings throughout the year.
Based on our
planned expenditures, we require additional funds of approximately $1,710,800 (a
total of $1,735,000 less our approximately $24,200 in cash as of April 30,
2009)
to proceed with our business plan over the next 12 months. If we secure
less than the full amount of financing that we require, we will not be able to
carry out our complete business plan and we will be forced to proceed with a
scaled back business plan based on our available financial
resources.
We
anticipate that we will incur substantial losses for the foreseeable future.
Although we acquired a royalty interest in the PMD-Duke Pipeline, there is no
assurance that we will receive any revenues from this interest. Meanwhile, even
if we purchase other non-operated interests in oil and gas projects or carry out
exploration activities on any properties we may acquire, this does not guarantee
that these projects or properties will contain commercially exploitable
quantities of oil and gas.
Our exploration
activities will be directed by Michael Too, our President, Chief Executive
Officer, Chief Financial Officer, Principal Accounting Officer, Secretary,
Treasurer and sole director, who will also manage our operations and supervise
our other planned acquisition activities.
Future
Financings
Our financial
statements for the nine months ended April 30, 2009 have been prepared on a
going concern basis and contain an additional explanatory paragraph in Note 2
which identifies issues that raise substantial doubt about our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
We
have not generated any revenues, have achieved losses since our inception, and
rely upon the sale of our securities to fund our operations. We may not generate
any revenues from our royalty interest in the PMD-Duke Pipeline, or from any of
the oil and gas projects or properties in which we acquire an interest.
Accordingly, we are dependent upon obtaining outside financing to carry out our
operations and pursue any acquisition and exploration activities.
Of
the $1,735,000 we require for the next 12 months, we had approximately $24,200
in cash as of April 30, 2009. We intend to raise the balance of our cash
requirements for the next 12 months (approximately $1,710,800) from private
placements, shareholder loans or possibly a registered public offering (either
self-underwritten or through a broker-dealer). If we are unsuccessful in raising
enough money through such efforts, we may review other financing possibilities
such as bank loans. At this time we do not have a commitment from any
broker-dealer to provide us with financing, and there is no guarantee that any
financing will be available to us or if available, on terms that will be
acceptable to us. We intend to negotiate with our management and any consultants
we may hire to pay parts of their salaries and fees with stock and stock options
instead of cash.
If
we are unable to obtain the necessary additional financing, then we plan to
reduce the amounts that we spend on our acquisition and exploration activities
and our administrative expenses so as not to exceed the amount of capital
resources that are available to us. Specifically, we anticipate that we will
defer drilling programs and certain acquisitions pending the receipt of
additional financing. Still, if we do not secure additional financing our
current cash reserves and working capital will be not be sufficient to enable us
to sustain our operations and for the next 12 months, even if we do decide to
scale back our operations.
Product Research and
Development
We
do not anticipate spending any material amounts in connection with product
research and development activities during the next 12 months.
Acquisition of Plants and
Equipment and Other Assets
Apart from our
royalty interest in the PMD-Duke Pipeline, we do not anticipate selling or
acquiring any material properties, plants or equipment during the next 12
months. Any acquisitions we may be able to make are subject to us obtaining
additional financing.
Off-Balance Sheet
Arrangements
We
have no significant off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to stockholders.
Inflation
The amounts
presented in the financial statements do not provide for the effect of inflation
on our operations or financial position. The net operating losses shown would be
greater than reported if the effects of inflation were reflected either by
charging operations with amounts that represent replacement costs or by using
other inflation adjustments.
Audit
Committee
The functions of
the audit committee are currently carried out by our Board of Directors, who has
determined that we do not have an audit committee financial expert on our Board
of Directors to carry out the duties of the audit committee. The Board of
Directors has determined that the cost of hiring a financial expert to act as a
director and to be a member of the audit committee or otherwise perform audit
committee functions outweighs the benefits of having a financial expert on the
audit committee.
Not
applicable.
Disclosure
Controls
We
maintain disclosure controls and procedures (as defined in Rule 13a-15(e)
and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable
assurance the information required to be reported in our Exchange Act filings is
recorded, processed, summarized and reported within the time periods specified
and pursuant to Securities and Exchange Commission rules and forms, including
controls and procedures designed to ensure that this information is accumulated
and communicated to our management, including our Principal Executive Officer
and Principal Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
As
of the end of the period covered by this report, our management, with the
participation of our Principal Executive Officer and Principal Financial
Officer, carried out an evaluation of the effectiveness of our disclosure
controls and procedures. Based upon this evaluation, our Principal Executive
Officer and our Principal Financial Officer concluded that our disclosure
controls and procedures were (1) designed to ensure that material
information relating to our Company is accumulated and communicated to our
management, including our Principal Executive Officer and Principal Financial
Officer, in a timely manner, particularly during the period in which this report
was being prepared, and (2) effective, in that they provide reasonable
assurance that information we are required to disclose in the reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s
rules and forms.
Changes in Internal
Control
There were no
changes in our internal control over financial reporting (as defined in Rule
13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the quarterly period
ended April 30, 2009 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Not
applicable.
We
are not aware of any legal proceedings to which we are a party or of which our
property is the subject. None of our directors, officers, affiliates, any owner
of record or beneficially of more than 5% of our voting securities, or any
associate of any such director, officer, affiliate or security holder are (i) a
party adverse to us in any legal proceedings, or (ii) have a material interest
adverse to us in any legal proceedings. We are not aware of any other legal
proceedings that have been threatened against us.
None.
None.
None.
None.
|
Exhibit
Number
|
Exhibit
Description
|
|
31.1
|
|
|
32.1
|
|
Pursuant to the
requirements of the Exchange Act, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
Minerco Resources,
Inc.
|
|
|
(Registrant)
|
|
|
|
|
Date:
June , 2009
|
/s/
Michael Too
|
|
|
Michael
Too
|
|
|
President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting
Officer, Secretary, Treasurer,
Director
|
8