The accompanying condensed notes are an integral part of these interim financial statements
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
(An Exploration Stage Company)
March 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 accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending June 30, 2012.
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, 2011.
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, 2011.
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
The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts for cash, accounts payable and accrued liabilities and loans payable to a related party approximate their fair value due to their short term nature.
Going Concern
As shown in the financial statements, the Company incurred a net loss of $30,956 for the period ended March 31, 2012 and has an accumulated deficit of $7,640,715, no revenues, and limited cash resources as at March 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.
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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 March 31, 2012 and June 30, 2011, 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 March 31, 2012, June 30, 2011 and March 31, 2011.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
Foreign Operations
The accompanying balance sheet at March 31, 2012 includes $367 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 to its Chief Executive Officer in the amount of $12,000 during the 9 months ended March 31, 2012 (9 months ended March 31, 2011 - $17,000). During the quarter ended March 31, 2012, administrative fees amounted to $4,500 (2010 - $4,500).
During the nine month period ending March 31, 2011, an officer advanced loans in the amount of $33,164 to retire current and outstanding debts (9 months ended March 31, 2011 - $41,301). The Company’s loans payable to a related party as at March 31, 2012 and June 30, 2011 are due to one of its Directors, and are unsecured, non-interest bearing and have no stated terms of repayment.
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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.
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 March 31, 2012, the Company had funds on hand of $367.
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 nine months ended March 31, 2012, the Company incurred a loss of $30,956 vs. a loss of $48,704 for the nine months ended March 31, 2011. Consulting and professional fees for the nine months ended March 31, 2012 were $22,214 vs. $32,403 at March 31, 2011, mainly as a result of reduced legal and filing fees in the current period compared to additional costs incurred in preparation of special shareholder meeting which was held October 29, 2010 and reflected in the nine month period ending March 31, 2011.
General and administrative costs are reduced – being $8,742 in the nine month period ending March 31, 2012 vs. $16,301 in the nine month period ending March 31, 2011 again as a result of additional costs incurred in the previous year pertaining to shareholder meeting and adjustments to the share capital share rollback that was approved October 29, 2010.
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 nine months ending March 31, 2012 amounted in total to $30,956 vs. $48,704 in the nine month period ending March 31, 2011.
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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 March 31, 2012 there were 6,503,295 shares outstanding. There were no shares issued in the nine month period ending March 31, 2012
.
The Company at March 31, 2012 had current trade accounts payable of $28,444 compared to $30,711 at June 30, 2011 and $30,603 at March 31, 2011. Loans owing to a related party at March 31, 2012 amounted to $47,253 vs. $14,087 at June 30, 2011 and $10,301 at March 31, 2011.
Cash on hand at March 31, 2012 amounted to $367. 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 March 31, 2012 with funds on hand of $367 vs. $425 at June 30, 2011 and $597 at March 31, 2011.
During the nine months ending March 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 March 31, 2012 of $28,444 compared to $30,603 at March 31, 2011 and $30,711 at June 30, 2011.
Amounts due to related parties at March 31, 2012 amounted to $47,251 compared to $10,301 at March 31, 2011, and $14,087 at June 30, 2011. These loans are due to a director of the Company for cash advances to the company to retire current debt. 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 nine months ending March 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 and 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(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. 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 certifying officer has concluded that the Company's disclosure controls and procedures are effective in reaching that level of assurance.
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As of the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were as effective as it could be given the limited personnel involved in the operations as at March 31, 2012.
There have been no changes in the Company's internal controls or in other factors that have affected or are reasonably likely to affect the internal controls subsequent to the date the Company completed its evaluation.
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: May 21, 2012
/s/ Robert G. Dinning
Robert G. Dinning, CEO, CFO and Secretary