UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2014
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 000-53767
WOLVERINE EXPLORATION INC.
(Exact name of registrant as specified in its charter)
Nevada |
98-0569013 |
(State or other jurisdiction of incorporation or
organization) |
(IRS Employer Identification No.) |
|
|
4055 McLean Road, Quesnel, British Columbia, Canada
|
V2J 6V5 |
(Address of principal executive offices) |
(Zip Code) |
250.992.6972
(Registrants telephone number,
including area code)
N/A
(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.
[X]
YES [ ] NO
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
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 [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ] (Do not check if a smaller
reporting company) |
Smaller reporting company [X]
|
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act
[ ]
YES [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
[ ]
YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
200,563,333 common shares issued and outstanding as December 30,
2014
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statements.
Our unaudited interim financial statements for the nine month
period ended August 31, 2014 form part of this quarterly report. They are stated
in United States Dollars (US$) and are prepared in accordance with United States
generally accepted accounting principles.
2
WOLVERINE EXPLORATION INC.
August 31, 2014
(Expressed in U.S. dollars)
(unaudited)
WOLVERINE EXPLORATION INC.
Balance Sheets
(Expressed in U.S. dollars)
|
|
August 31, |
|
|
May 31, |
|
|
|
2014 |
|
|
2014 |
|
|
|
$ |
|
|
$ |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash |
|
100 |
|
|
135 |
|
Amounts receivable |
|
3,984
|
|
|
2,053
|
|
Total Current Assets |
|
4,084 |
|
|
2,188 |
|
Mineral property
costs |
|
201,250 |
|
|
201,250 |
|
Total Assets |
|
205,334 |
|
|
203,438 |
|
LIABILITIES AND STOCKHOLDERS DEFICIT |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
256,457 |
|
|
215,966 |
|
Due to related party (Note 3) |
|
62,039 |
|
|
53,914 |
|
Total Liabilities
|
|
318,496 |
|
|
269,880 |
|
|
|
|
|
|
|
|
Stockholders Deficit |
|
|
|
|
|
|
Common stock, 200,000,000
shares authorized, $0.001 par value 194,063,333 shares issued and
outstanding |
|
194,063 |
|
|
194,063 |
|
Additional paid-in capital |
|
3,990,672 |
|
|
3,990,672 |
|
Accumulated Deficit |
|
(4,297,897 |
) |
|
(4,251,177 |
) |
Total
Stockholders Deficit |
|
(113,162 |
) |
|
(66,442 |
)
|
Total Liabilities and Stockholders Deficit |
|
205,334 |
|
|
203,438 |
|
(The accompanying notes are an integral part of these unaudited
financial statements)
F-1
WOLVERINE EXPLORATION INC.
Statements of Operations
(Expressed in U.S. dollars)
(unaudited)
|
|
Three Months |
|
|
Three Months |
|
|
|
Ended |
|
|
Ended |
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
$ |
|
|
$ |
|
Expenses |
|
|
|
|
|
|
Depreciation |
|
|
|
|
206 |
|
Foreign exchange gain |
|
(765 |
) |
|
(3,126 |
) |
General and administrative |
|
47,485 |
|
|
64,143 |
|
Total Expenses |
|
46,720 |
|
|
61,223 |
|
Net Loss |
|
(46,720 |
) |
|
(61,223 |
) |
Net Loss Per
Share, Basic and Diluted |
|
(0.00 |
) |
|
(0.00 |
) |
Weighted Average Shares Outstanding |
|
194,063,333 |
|
|
182,378,550 |
|
(The accompanying notes are an integral part of these unaudited
financial statements)
F-2
WOLVERINE EXPLORATION INC.
Statements of Cash Flows
(Expressed in U.S. dollars)
(unaudited)
|
|
Three Months |
|
|
Three Months |
|
|
|
Ended |
|
|
Ended |
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
$ |
|
|
$ |
|
Operating Activities |
|
|
|
|
|
|
Net loss |
|
(46,720 |
) |
|
(61,223 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
|
|
206 |
|
Changes in operating assets
and liabilities |
|
|
|
|
|
|
Amounts receivable |
|
(1,931 |
) |
|
394 |
|
Accounts payable
|
|
37,111 |
|
|
42,978 |
|
Accrued liabilities |
|
3,380 |
|
|
11,468 |
|
Due to related party |
|
8,125 |
|
|
6,157 |
|
Net Cash Used In
Operating Activities |
|
(35 |
) |
|
(20 |
) |
Decrease in Cash |
|
(35 |
) |
|
(20 |
) |
Cash, Beginning of
Period |
|
135
|
|
|
63
|
|
Cash, End of Period |
|
100 |
|
|
43 |
|
Non-cash Investing and Financing Activities: |
|
|
|
|
|
|
Shares issued pursuant to the acquisition of
mineral properties |
|
|
|
|
201,250 |
|
Supplemental Disclosures: |
|
|
|
|
|
|
Interest paid |
|
|
|
|
|
|
Income taxes paid |
|
|
|
|
|
|
(The accompanying notes are an integral part of these unaudited
financial statements)
F-3
WOLVERINE EXPLORATION INC.
(An Exploration Stage
Company)
Notes to the Financial Statements
August 31, 2014
(Expressed in U.S. dollars)
(unaudited)
1. |
Basis of Presentation |
|
|
|
|
Wolverine Exploration Inc. (the Company) was
incorporated in the State of Nevada on February 23, 2006. The Companys
principal business is the acquisition and exploration of mineral
resources. The Company has not presently determined whether its properties
contain mineral reserves that are economically recoverable. |
|
|
|
|
The accompanying financial statements of Wolverine
Exploration Inc.(the Company) should be read in conjunction with the
financial statements and accompanying notes filed with the U.S. Securities
and Exchange Commission in the Companys Annual Report on Form 10-K for
the fiscal year ended May 31, 2014. In the opinion of management, the
accompanying financial statements reflect all adjustments of a recurring
nature considered necessary to present fairly the Companys financial
position and the results of its operations and its cash flows for the
periods shown. |
|
|
|
|
The preparation of financial statements in accordance
with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the
amounts reported. Actual results could differ materially from those
estimates. The results of operations and cash flows for the periods shown
are not necessarily indicative of the results to be expected for the full
year. |
|
|
|
|
Going Concern |
|
|
|
These financial statements have been prepared on a going
concern basis, which implies the Company will continue to realize its
assets and discharge its liabilities in the normal course of business. The
Company has never generated revenues since inception and is unlikely
generate earnings in the immediate or foreseeable future. The continuation
of the Company as a going concern is dependent upon the continued
financial support from its shareholders, the ability of the Company to
obtain necessary equity financing to continue operations, and the
attainment of profitable operations. As August 31, 2014, the Company has a
working capital deficiency of $314,412 and has accumulated losses of
$4,297,897 since inception. These factors raise substantial doubt
regarding the Companys 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 the Company be unable to
continue as a going concern. |
|
|
|
2. |
Recent Accounting Pronouncements |
|
|
|
|
The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial
statements and does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on
its financial position or results of operations. |
|
|
|
3. |
Related Party Transactions |
|
|
|
|
(a) |
During the three months ended August 31, 2014, the
Company incurred consulting fees of $8,311 (2013 - $8,662) to the
President of the Company. |
|
|
|
|
(b) |
During the three months ended August 31, 2014, the
Company incurred consulting fees of $29,088 (2013 - $28,874) and rent of
$2,909 (2013 - $2,887) to a company controlled by the brother of the
President of the Company which is included in general and administrative
expenses. |
|
|
|
|
(c) |
As at August 31, 2014, the Company owed $43,645
(Cdn$47,456) (May 31, 2014 - $35,468 (Cdn$38,456)) to the President of the
Company which is non-interest bearing, unsecured, and due on
demand. |
|
|
|
|
(d) |
As at August 31, 2014, the Company owes $18,394
(Cdn$20,000) (May 31, 2014 - $18,446 (Cdn$20,000)) for cash advances
received from a company controlled by the brother of the President of the
Company, which is non-interest bearing, unsecured, and due on demand. As
at August 31, 2014, included in accounts payable are the amounts of
$91,518 (Cdn$99,508) (May 31, 2014 - $59,819 (Cdn$64,858)) owing to this
company. |
|
|
|
|
(e) |
As at August 31, 2014, included in accounts payable is
the amount of $24 (Cdn$26) (May 31, 2014 - $24 (Cdn$26)) owing to the
brother of the President of the Company, which is non-interest bearing,
unsecured and due on demand. |
F-4
WOLVERINE EXPLORATION INC.
(An Exploration Stage
Company)
Notes to the Financial Statements
August 31, 2014
(Expressed in U.S. dollars)
(unaudited)
4. |
Stock-based Compensation |
|
|
|
On May 28, 2010, the Board of Directors of the Company
adopted the 2010 Stock Plan (the Plan). The maximum number of shares of
the Companys common stock available for issuance under the Plan is
10,294,500 shares. An aggregate of 5,147,250 shares may be issued under
stock options and an aggregate of 5,147,250 shares may be issued in the
form of restricted shares. |
|
|
|
A summary of the Companys stock option activity is as
follows: |
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Remaining |
|
|
Aggregate |
|
|
|
|
Number of |
|
|
Exercise |
|
|
Contractual |
|
|
Intrinsic |
|
|
|
|
Options |
|
|
Price |
|
|
Life
(years) |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding and exercisable, August 31, 2014 and May 31,
2014 |
|
5,100,000 |
|
$ |
0.05 |
|
|
0.79 |
|
$ |
|
|
|
There were no options issued during the three months ended August 31,
2014. |
|
|
5. |
Commitments |
|
|
|
|
(a) |
On January 31, 2007, the Company entered into a
consulting agreement with a company whereby it has agreed to pay $10,000
per month. The Company is obligated to issue a bonus of 5% of the
Companys issued and outstanding common shares as of the date of the
payment of the bonus upon and only in the event of the discovery of a
major commercially viable mineral resource deposit. As at August 31, 2014,
the Company has not issued a bonus. During the three months ended August
31, 2014, the Company recorded consulting fees of $30,000. |
|
|
|
|
(b) |
On December 1, 2013, the Company agreed to issue
1,000,000 shares of common stock with a fair value of $5,000 to settle
accounts payable of $10,000. Subsequent to August 31, 2014, the
Company issued 1,000,000 shares to settle the accounts payable (Note 6
(a)).
|
|
|
|
6. |
Subsequent Events |
|
|
|
|
(a) |
On September 8, 2014, the Company issued 5,000,000 shares
of common stock pursuant to the settlement of $50,000 of debt owed to two
individuals. |
|
|
|
|
(b) |
On September 29, 2014, the Company issued 1,500,000
shares of common stock pursuant to a private placement at $0.01 per share
for proceeds of $15,000. |
F-5
Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States generally
accepted accounting principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report, particularly in the section entitled "Risk Factors".
In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "CDN$"
refer to Canadian dollars and all references to "common shares" refer to the
common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our",
the Company and "Wolverine" mean Wolverine Exploration Inc., unless otherwise
indicated.
Corporate History
Our company was incorporated in the State of Nevada on February
23, 2006 and is quoted on the OTCQB under the symbol WOLV.
On February 28, 2007, we entered into a vend-in agreement with
Shenin Resources Inc. (Shenin), a private Canadian corporation, for the
purchase of a 90% interest certain mineral claims located in Labrador Canada.
The purchase price paid to Shenin was $374,000 satisfied by the issuance of
34,000,000 shares of our common stock at a fair value of $0.01 per share and a
note payable of $34,000. Under the terms of the vend-in agreement we were
required to incur the following expenditures on the claims: (i) CDN $150,000 on
or before March 1, 2008; (ii) CDN $200,000 on or before March 1, 2009, and (iii)
CDN $250,000 on or before March 1, 2010; provided that (iv) any excess amount
spent in one year may be carried forward and applied towards fulfillment of the
expenditure required in the later year. Shenin has also granted our company a
first right of refusal to purchase a 90% interest in all further property in
Labrador Canada that Shenin may obtain an interest in from time to time.
On August 15, 2007, we registered our company as an
extra-provincially registered company in the Province of Newfoundland and
Labrador for the purpose of being able to register the Claims in the name of our
company and for the purpose of being able to conduct our business in the
Province of Newfoundland and Labrador.
On August 27, 2009 we signed an amending agreement with Shenin.
Which waives all of the remaining work commitments required under the vend-in
agreement subject to us incurring sufficient exploration expenditures on the
claims to keep them in good standing with the Province of Newfoundland and
Labrador.
Wolverine now holds a 90% interest and Shenin holds a 10%
interest in a total of 6 claims. Due to the current lack of financing available
for exploration companies, exploration on the Labrador Claims has been
suspended. Wolverine will continue exploration on these claims when financing is
available.
On June 11, 2013, Wolverine entered into an Agreement (the
Agreement) with 0969015 B.C. Ltd (0969015) to acquire the Eureka Project
Claims located in the Cariboo Mining District of British Columbia. Under the
terms of the Agreement Wolverine issued 35,000,000 shares of common stock to
0969015 at a fair value of $0.01 per share as full consideration for the
acquisition of the Eureka Project Claims.
On August 9, 2014 a total of 17,500,000 common shares issued
pursuant to the acquisition of the Eureka Project Claims were cancelled.
On September 5, 2013 Wolverine entered into a Letter of Intent
(LOI) with the cyber security corporation ENIGMAMobil Inc. (Enigma) to
acquire a 25% interest in Enigma for a cash payment of $10,000,000.
Enigma is building a fully secure mobile wireless software
application for Apple iOS, Android and Blackberry developed through a full
patented language technology with the capability to protect against unauthorized
computer intrusion and fraud.
On January 22, 2014 Wolverine entered into an Amended Letter of
Intent (Amended LOI) with Enigma. Under the terms of the Amended LOI Wolverine
will acquire a 25% interest in Enigma for the purchase price of USD $5,000,000
of which USD $3,000,000 is to be paid in shares of common stock of Wolverine at
a deemed price of USD$0.01 per share and USD$2,000,000 in cash.
The LOI with Enigma has expired, however Wolverine and Enigma
are still working on raising the financing required to build Enigmas app.
Our Current Business
We are an exploration stage company engaged in the business of
acquisition and exploration of base and precious metal mineral properties. Our
current exploration is focused on mineral properties located in British Columbia
and Labrador, Canada. We have not yet determined whether the Labrador Claims or
the Eureka Project Claims contain mineral reserves that are economically
recoverable.
There has been no exploration on the Labrador Claims since
2012. Due to the current lack of financing available for exploration companies,
exploration on these claims has been suspended. Wolverine will continue
exploration on these claims when financing is available.
There has been no exploration on the Eureka Project Claims
since 2013. Due to the current lack of financing available for exploration
companies, exploration on these claims has been suspended. Wolverine will
continue exploration on these claims when financing is available.
Cash Requirements
There is limited historical financial information about us upon
which to base an evaluation of our performance. We are an exploration stage
company and have not generated any revenues from activities. We cannot guarantee
we will be successful in our business activities. Our business is subject to
risks inherent in the establishment of a new business enterprise, including
limited capital resources, possible delays in the exploration of our properties,
and possible cost overruns due to price and cost increases in services.
Over the next twelve months we intend to use any funds that we
may have available to fund our Plan of Operation and conduct exploration on our
Labrador and Eureka Project Claims. We expect to review other potential
exploration projects from time to time as they are presented to us.
Not accounting for our working capital deficit of $314,412
as of August 31, 2014, we require additional funds of approximately
$2,000,000 at a minimum to proceed with our plan of operation over the next
twelve months. As we do not have the funds necessary to cover our projected
operating expenses for the next twelve month period, we will be required to
raise additional funds through the issuance of equity securities, through loans
or through debt financing. There can be no assurance that we will be successful
in raising the required capital or that actual cash requirements will not exceed
our estimates. We intend to fulfill any additional cash requirement through the
sale of our equity securities.
Our auditors have issued a going concern opinion for our year
ended May 31, 2014. This means that there is substantial doubt that we can
continue as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not generated any
revenues and no revenues are anticipated until we begin removing and selling
minerals. As at August 31, 2014 we had cash in the amount of $100 and a working
capital deficiency in the amount of $314,412. As of August, 2013, we do not have
sufficient working capital to enable us to carry out our stated plan of
operation for the next twelve months.
Plan of Operation
The Plan of Operation for the next 12 months is to raise
$2,000,000 for the building of Enigmas mobile security application.
As at August 31, 2014, we had a cash balance of $100. We will
need to raise additional financing to fund any exploration program over the next
12 months.
The continuation of our business is dependent upon obtaining
further financing, a successful program of exploration and/or development, and,
finally, achieving a profitable level of operations. The issuance of additional
equity securities by us could result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.
There are no assurances that we will be able to obtain further
funds required for our continued operations. As noted herein, we are pursuing
various financing alternatives to meet our immediate and long-term financial
requirements. There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will be unable to conduct our operations as
planned, and we will not be able to meet our other obligations as they become
due. In such event, we will be forced to scale down or perhaps even cease our
operations.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the
twelve months ending August 31, 2015.
Corporate Offices
We do not own any real property. Our principal business office
is located at 4055 McLean Road, Quesnel, British Columbia, Canada, V2J 6V5. The
Company also maintains an office in Richmond, British Columbia at a cost of
CDN$1,000 per month. We believe that our current lease arrangements provide
adequate space for our foreseeable future needs.
Employees
Currently we do not have any employees. The Company utilizes
consultants for the management, regulatory, administration, investor relations
and geological functions of the Company. We do not expect any material changes
in the number of employees over the next 12 month period. We will continue to
retain consultants as required.
Critical Accounting Policies
Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles used in the United
States. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our financial statements is critical to an understanding of our financial
statements.
Mineral Property Costs
Our company has been in the exploration stage since inception
and have not yet realized any revenues from its operations. We are primarily
engaged in the acquisition and exploration of mineral exploration properties. We
expense mineral property exploration costs as they are incurred. Mineral
property acquisition costs are initially capitalized, when incurred. Our company
assesses the carrying costs for impairment under ASC 360, Property, Plant and
Equipment at each fiscal quarter end. An impairment is recognized when
the sum of the expected undiscounted future cash flows is less than the carrying
amount of the mineral property. Impairment losses, if any, are measured as the
excess of the carrying amount of the mineral property over its estimated fair
value. When it has been determined that a mineral property can be economically
developed as a result of establishing proven and probable reserves, the costs
then incurred to develop such property, are capitalized. Such costs will be
amortized using the units-of-production method over the estimated life of the
proven and probable reserves. If mineral properties are subsequently abandoned
or impaired, any capitalized costs will be charged to operations.
Long-Lived Assets
In accordance with ASC 360, Property, Plant and Equipment,
the Company tests long-lived assets or asset groups for recoverability when
events or changes in circumstances indicate that their carrying amount may not
be recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life. Recoverability is assessed based on the carrying amount of the asset and
its fair value which is generally determined based on the sum of the
undiscounted cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain instances. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.
Stock-based Compensation
The Company records stock-based compensation in accordance with
ASC 718, Compensation - Stock Compensation, using the fair value method. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.
Results of Operations
Three Months Ended August 31, 2014 and August 31, 2013
The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended August
31, 2014 which are included herein.
Three month summary ending August 31, 2014 and August 31,
2013
|
|
Three Months Ended |
|
|
|
August 31, 2014 |
|
|
August 31, 2013 |
|
Revenue |
$ |
Nil |
|
$ |
Nil |
|
Operating Expenses |
$ |
46,720 |
|
$ |
61,223 |
|
Net Loss |
$ |
(46,720 |
) |
$ |
(61,223 |
) |
Expenses
Our operating expenses for the three month periods ended August
31, 2014 and August 31, 2014 are outlined in the table below:
|
|
Three Months Ended |
|
|
|
August 31, 2014 |
|
|
August 31, 2013 |
|
Depreciation |
$ |
- |
|
$ |
206 |
|
Foreign exchange loss (gain) |
$ |
(765 |
) |
$ |
(3,126 |
) |
General and administrative |
$ |
47,785 |
|
$ |
64,143 |
|
Revenue
We have not earned any revenues since our inception and we do
not anticipate earning revenues in the upcoming quarter.
Liquidity and Financial Condition
Working Capital
|
|
As At |
|
|
As At |
|
|
|
August 31, |
|
|
May 31, |
|
|
|
2014 |
|
|
2014 |
|
Current assets |
$ |
4,084 |
|
$ |
2,188 |
|
Current liabilities |
|
318,496 |
|
|
269,880 |
|
Working capital (deficit) |
$ |
(314,412 |
) |
$ |
(267,692 |
) |
Cash Flows
|
|
Three Months Ended |
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
Net Cash Used in Operating Activities |
$ |
(35 |
) |
$ |
(20 |
) |
Net Cash Used in Investing Activities |
|
- |
|
|
- |
|
Net Cash Provided by Financing Activities
|
|
- |
|
|
- |
|
Net increase (decrease) in cash during period |
$ |
(35 |
) |
$ |
(20 |
) |
Operating Activities
Net cash used in operating activities during the three months
ended August 31, 2014, was $35 compared to $20 during the three months ended
August 31, 2014.
Financing Activities
During the three months ended August 31, 2014, we received $Nil
through the issuance of shares/shares subscribed in private placements. In the
comparable period, the Company received $Nil through the issuance of
shares/shares subscribed in private placements.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
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, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.
Recent Accounting Standards
The Company has implemented all new accounting pronouncements
that are in effect and that may impact its financial statements and does not
believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on its financial position or results of
operations.
Item 4. Controls and Procedures
Managements Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer, principal financial officer and principal
accounting officer) to allow for timely decisions regarding required
disclosure.
As of August 31, 2014, the end of the quarter covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our president (also our principal executive officer, principal
financial and accounting officer), of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on the foregoing, and
in light of weakness identified in our internal controls over financial
reporting which were disclosed in our Annual Report on Form 10-K for the year
ended May 31, 2013, our president (also our principal executive officer,
principal financial and accounting officer) concluded that our disclosure
controls and procedures were not effective .
Changes in Internal Control over Financial
Reporting
There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended August 31, 2014 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceedings and, to the
best of our knowledge, none of our property or assets are the subject of any
pending legal proceedings
Item 1A. Risk Factors
Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections and estimates made by us
and our management in connection with our business operations. 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 herein.
Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.
If we do not obtain additional financing, the business plan
will fail.
Our current operating funds are insufficient to complete the
next phases of our proposed exploration program on our Labrador mineral claims.
We will need to obtain additional financing in order to complete our business
plan and our proposed exploration program. Our business plan calls for
significant expenses in connection with the exploration of the Labrador Claims.
We have not made arrangements to secure any additional financing.
Because we have only recently commenced business operations,
we face a high risk of business failure and this could result in a total loss of
your investment.
We recently begun the initial stages of exploration of the
Labrador Claims, and thus has no way to evaluate the likelihood whether our
company will be able to operate our business successfully. Our Company was
incorporated on February 23, 2006 and to date we have been involved primarily in
organizational activities, obtaining financing and preliminary exploration of
the Labrador Claims. We have not earned any revenues and we have never achieved
profitability as of the date of this annual report. Potential investors should
be aware of the difficulties normally encountered by new mineral exploration
companies and the high rate of failure of such enterprises. The likelihood of
success must be considered in the light of problems, expenses, difficulties,
complications and delays encountered in connection with the exploration of the
mineral properties that our company plans to undertake. These potential problems
include, but are not limited to, unanticipated problems relating to exploration
and additional costs and expenses that may exceed current estimates. We have no
history upon which to base any assumption as to the likelihood that its business
will prove successful, and we can provide no assurance to investors that our
company will generate any operating revenues or ever achieve profitable
operations. If our company is unsuccessful in addressing these risks its
business will likely fail and you will lose your entire investment in this
offering.
Because our company has only recently commenced business
operations, we expect to incur operating losses for the foreseeable future.
Our company has never earned any revenue and our company has
never been profitable. Prior to completing exploration on the Labrador Claims,
we may incur increased operating expenses without realizing any revenues from
the Labrador Claims, this could cause our company to fail and you will lose your
entire investment in this offering.
If we do not find a joint venture partner for the continued
development of our mineral claims, we may not be able to advance exploration
work.
If the results of the exploration program are successful, we
may try to enter into a joint venture agreement with a partner for the further
exploration and possible production of the Labrador Claims. Our company would
face competition from other junior mineral resource exploration companies who
have properties that they deem to be attractive in terms of potential return and
investment cost. In addition, if our company entered into a joint venture
agreement, our company would likely assign a percentage of our interest in the
Labrador Claims to the joint venture partner. If our company is unable to enter into a joint venture
agreement with a partner, our company may fail and you may lose your entire
investment in this offering.
Because of the speculative nature of mineral property
exploration, there is substantial risk that no commercially viable deposits will
be found and our business will fail.
Exploration for base and precious metals is a speculative
venture involving substantial risk. We can provide investors with no assurance
that the Labrador Claims contain commercially viable mineral deposits. The
exploration program that our company will conduct on the Labrador Claims may not
result in the discovery of commercial viable mineral deposits. Problems such as
unusual and unexpected rock formations and other conditions are involved in base
and precious metal exploration and often result in unsuccessful exploration
efforts. In such a case, we may be unable to complete our business plan and you
could lose your entire investment.
Because of the inherent dangers involved in base and
precious metal exploration, there is a risk that our company may incur liability
or damages as we conducts our business.
The search for base and precious metals involves numerous
hazards. As a result, our company may become subject to liability for such
hazards, including pollution, cave-ins and other hazards against which we cannot
insure or against which we may elect not to insure. Our company currently has no
such insurance nor do we expect to get such insurance in the foreseeable future.
If a hazard were to occur, the costs of rectifying the hazard may exceed our
asset value and cause our company to liquidate all of our assets resulting in
the loss of your entire investment.
As our company undertakes exploration of the Labrador
Claims, we will be subject to compliance with government regulation that may
increase the anticipated time and cost of its exploration program.
There are several governmental regulations that materially
restrict the exploration of minerals. Our company will be subject to the mining
laws and regulations as contained in the Mineral Act of the Province of
Newfoundland and Labrador as we carry out our exploration program. We may be
required to obtain work permits, post bonds and perform remediation work for any
physical disturbance to the land in order to comply with these regulations.
While our companys planned exploration program budgets for regulatory
compliance, there is a risk that new regulations could increase our time and
costs of doing business and prevent our company from carrying out our
exploration program.
Because market factors in the mining business are out of our
control, our company may not be able to market any minerals that may be found.
The mining industry, in general, is intensely competitive and
we can provide no assurance to investors even if minerals are discovered that a
ready market will exist from the sale of any base or precious metals found.
Numerous factors beyond our control may affect the marketability of base or
precious metals. These factors include market fluctuations, the proximity and
capacity of natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting of minerals and environmental
protection. The exact effect of these factors cannot be accurately predicted,
but the combination of these factors may result in our company not receiving an
adequate return on invested capital and you may lose your entire investment.
Because our company holds a significant portion of our cash
reserves in United States dollars, we may experience weakened purchasing power
in Canadian dollar terms.
Our company holds a significant portion of our cash reserves in
United States dollars. Due to foreign exchange rate fluctuations, the value of
these United States dollar reserves can result in translation gains or losses in
Canadian dollar terms. If there was to be a significant decline in the United
States dollar versus the Canadian Dollar, our US dollar purchasing power in
Canadian dollars would also significantly decline. Our company has not entered
into derivative instruments to offset the impact of foreign exchange
fluctuations.
Our auditors have expressed substantial doubt about our
companys ability to continue as a going concern.
The accompanying financial statements have been prepared
assuming that our company will continue as a going concern. As discussed in Note
1 to the May 31, 2014 financial statements, our company was incorporated on
February 23, 2006, and does not have a history of earnings, and as a result, our
companys auditor has expressed substantial doubt about the ability of our
company to continue as a going concern. Continued operations are dependent on
our ability to complete equity or debt financings or generate profitable
operations. Such financings may not be available or may not be available on
reasonable terms. Our financial statements do not include any adjustments that
may result from the outcome of this uncertainty.
Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations which may limit a stockholders
ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety disclosures
N/A.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibit |
|
Number |
Description |
(3) |
(i) Articles of
Incorporation; and (ii) Bylaws |
3.1 |
Articles of Incorporation of Wolverine
Exploration Inc. filed as an Exhibit to our Form S-1 (Registration
Statement) on July 15, 2008, and incorporated herein by reference. |
3.2 |
Bylaws of Wolverine Exploration
Inc., filed as an Exhibit to our Form S-1 (Registration Statement) on July
15, 2008, and incorporated herein by reference. |
3.3 |
Certificate of Amendment of Wolverine
Exploration Inc., filed as an Exhibit to our Form S-1 (Registration
Statement) filed on July 15, 2008 and incorporated herein by reference.
|
3.4 |
Certificate of Registration of
Extra-Provincial Corporation, filed as an Exhibit to our Form S-1
(Registration Statement) filed on July 15, 2008 and incorporated herein by
reference. |
(10) |
Material Contracts |
10.1 |
Vend-In Agreement dated
February 28, 2007 between Wolverine and Shenin Resources Inc., filed as an
Exhibit to our Form S-1 (Registration Statement) filed on July 15, 2008
and incorporated herein by reference. |
10.2 |
Consulting Agreement dated January 31, 2007
between Wolverine and Texada Consulting Inc., filed as an Exhibit to our
Form S-1 (Registration Statement) filed on July 15, 2008 and incorporated
herein by reference. |
10.3 |
Purchase Agreement dated June
11, 2013 between Wolverine and 0969015 B.C. Ltd. filed as an Exhibit to
our 8-K filed on June 13, 2013 and incorporated herein by reference.
|
(14) |
Code of Ethics |
14.1 |
Code of Ethics, filed as an
Exhibit to our Form S-1 (Registration Statement) filed on July 15, 2008
and incorporated herein by reference. |
(31) |
Rule 13a-14(a)/15d-14(a) Certifications
|
31.1* |
Section 302 Certifications under Sarbanes-Oxley Act of 2002 |
(32) |
Section 1350 Certifications |
32.1* |
Section 906 Certifications under Sarbanes-Oxley Act of 2002 |
* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
|
WOLVERINE EXPLORATION INC. |
|
(Registrant) |
|
|
|
|
Dated: January 6, 2015 |
/s/
Lee Costerd |
|
Lee Costerd |
|
Chief Executive Officer, Chief Financial
Officer |
|
and Director |
|
(Principal Executive Officer, Principal
Financial |
|
Officer and Principal Accounting Officer)
|
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lee Costerd, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Wolverine Exploration Inc.;
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
|
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
Date: January 6, 2015 |
|
|
|
/s/ Lee Costerd
|
|
Lee Costerd |
|
Chief Executive Officer, Chief Financial Officer and
Director |
|
(Principal Financial Officer and Principal Accounting
Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Lee Costerd, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) |
the Quarterly Report on Form 10-Q of Wolverine
Exploration Inc. for the period ended August 31, 2014 (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and |
|
|
(2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Wolverine Exploration Inc. |
Dated: January 6, 2015
|
/s/
Lee Costerd |
|
Lee Costerd |
|
Chief Executive Officer, Chief Financial
Officer and Director |
|
(Principal Financial Officer and Principal
Accounting Officer) |
|
Wolverine Exploration Inc. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Wolverine
Exploration Inc. and will be retained by Wolverine Exploration Inc. and
furnished to the Securities and Exchange Commission or its staff upon
request.
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