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 January 31, 2019

 

or

 

[  ] 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: 000-55588

 

BLUE EAGLE LITHIUM INC.

 

(Exact name of registrant as specified in its charter)

 

Nevada   35-2636271

State or other jurisdiction of

incorporation or organization

  (I.R.S. Employer
Identification No.)

 

2831 St. Rose Parkway, Suite 200, Henderson, NV

(Address of principal executive offices) (Zip Code)

 

( 702) 889 – 3369

Registrant’s telephone number, including area code

 

Wishbone Pet Products Inc.

( Former name of registrant)

 

2857 Sherwood Heights Drive, Oakville, Ontario L6J 7J9

(Former address of registrant)

 

 

(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 [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

 

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 [  ]   Accelerated filer [  ]
         
Non-accelerated filer [X]   Smaller reporting company [X]
         
Emerging growth company [  ]      

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

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 CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

76,183,855 shares of common stock are issued and outstanding as of March 15, 2019.

 

 

 

     
 

 

INDEX

 

    Page
PART I FINANCIAL INFORMATION  
     
  CONDENSED INTERIM BALANCE SHEETS as of January 31, 2019 and April 30, 2018 4
     
  CONDENSED INTERIM STATEMENTS OF OPERATIONS for the three and nine months ended January 31, 2019 and 2018 5
     
  CONDENSED INTERIM STATEMENTS OF SHAREHOLDERS’ EQUITY to January 31, 2019 6
     
  CONDENSED INTERIM STATEMENTS OF CASH FLOWS for the nine months ended January 31, 2019 and 2018 8
     
  NOTES TO THE CONDENSED UNAUDITED INTERIM FINANCIAL STATEMENTS 9
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
     
Item 3 Quantitative and Qualitative Disclosures About Market Risk 21
     
Item 4. Controls and Procedures 21
     
PART II OTHER INFORMATION  
     
Item 1. Legal Proceedings 22
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
     
Item 3. Defaults Upon Senior Securities. 22
     
Item 4. Mine Safety Disclosures 22
     
Item 5. Other Information. 22
     
Item 6. Exhibits 22
     
SIGNATURES 23

 

  2  
 

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (and the “Liquidity and Capital Resources” section thereof) and elsewhere may address or relate to future events and expectations of our management and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to our plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects”, “may”, “could”, “would”, “should”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans” or similar expressions. These statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties, including those detailed in our filings with the SEC.

 

Readers are cautioned that actual results, including, without limitation: the results of our mineral exploration activities and the overall establishment of our business as well as the results of our financing initiatives, may differ significantly from those set forth in the forward-looking statements. Such forward-looking statements also involve other factors which may cause our actual results, performance or achievements to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Such factors include, among others, those described in the risk factors detailed from time to time in our other filings with the SEC. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this Report. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

  3  
 

 

PART I. FINANCIAL INFORMATION

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

CONDENSED INTERIM BALANCE SHEETS

 

    January 31, 2019     April 30, 2018  
  (Unaudited)     (Audited)  
ASSETS            
Current Assets                
Cash   $ 165     $ 9,785  
Prepaids     10,333       5,833  
Total Current Assets     10,498       15,618  
                 
Equipment, net (Note 4)     2,150       -  
Intangible Assets, net (Note 5)     6,121       -  
Mineral Properties (Note 9)     553,000       -  
                 
TOTAL ASSETS   $ 571,769     $ 15,618  
                 
LIABILITIES & STOCKHOLDER’S EQUITY                
                 
LIABILITIES                
Current Liabilities                
Accounts payable & Accrued interest (Note 6)   $ 124,017     $ 59,610  
Convertible loan payable (Note 7)     50,000       50,000  
Loans payable (Note 7)     152,800       101,300  
TOTAL CURRENT LIABILITIES     326,817       210,910  
                 
Commitments and Contingencies   $ -     $ -  
                 
STOCKHOLDER’S EQUITY                
Capital stock authorized: 200,000,000 common shares with a par value $0.0001 Issued and outstanding: 76,183,855 common shares (Note 8) (75,000,000 common shares at April 30, 2018)   $ 7,618     $ 7,500  
Additional paid-in capital     952,107       14,500  
Accumulated deficit     (714,773 )     (217,292 )
TOTAL STOCKHOLDER’S EQUITY     244,952       (195,292 )
                 
TOTAL LIABILITIES & STOCKHOLDER’S EQUITY   $ 571,769     $ 15,618  

 

See accompanying notes to the condensed unaudited interim financial statements

 

  4  
 

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

CONDENSED INTERIM INCOME STATEMENTS

For the three and nine months ended January 31, 2019 and 2018

(Unaudited)

 

    For the three months     For the nine months  
    ended January 31,     ended January 31,  
    2019     2018     2019     2018  
OPERATING EXPENSES                                
                                 
Amortization   $ 592     $ -     $ 987     $ -  
Consulting fees     -       -       76,250       -  
Management fees     33,600       -       182,550       -  
Rent     516       -       1,047       -  
General & administrative expenses     12,436       4,500       36,957       8,564  
Marketing and promotional expenses     2,654       -       81,527       -  
Mineral exploration expenses     34,742       -       67,242       -  
Professional fees     16,450       2,175       36,762       8,225  
                                 
TOTAL EXPENSES     100,990       6,675       483,332       16,789  
                                 
OPERATING LOSS   $ (100,990 )   $ (6,675 )   $ (483,332 )   $ (16,789 )
                                 
OTHER EXPENSES                                
Interest on loans     5,081       4,064       14,159       10,122  
                                 
NET INCOME/(LOSS)   $ (106,071 )   $ (10,739 )   $ (497,481 )   $ (26,911 )
                                 
Net loss per share, basic and diluted   $ (0.0014 )   $ (0.0001 )   $ (0.007 )   $ (0.0004 )
                                 
Weighted average common shares outstanding basic and diluted     75,166,537       75,000,000       75,673,607       75,000,000  

 

See accompanying notes to the condensed unaudited interim financial statements

 

  5  
 

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

CONDENSED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

For the nine months ended January 31, 2019

(Unaudited)

 

    Common Stock                    
    200,000,000 shares authorized     Additional           Total  
    Shares     Par Value     Paid in     Accumulated     Stockholder’s  
    Issued     $.0001 per share     Capital     Deficit     Equity  
                               
Balance, April 30, 2018     75,000,000     $ 7,500     $ 14,500     $ (217,292 )   $ (195,292 )
Net income/loss                             (14,189 )     (14,189 )
Balance, July 31, 2018     75,000,000       7,500       14,500       (231,481 )     (209,481 )
                                         
Shares issued at $0.75 per share for assets     500,000       50       374,950       -       375,000  
Shares issued at $0.75 per share for assets     100,000       10       74,990       -       75,000  
Shares issued at $0.95 per share for services     30,000       3       28,497       -       28,500  
Shares issued at $0.60 per share     83,333       8       49,992       -       50,000  
Shares issued at $0.6375 per share     156,862       16       99,984       -       100,000  
Shares issued at $0.95 per share for services     125,000       13       118,737       -       118,750  
Shares issued at $0.95 per share for services     50,000       5       47,495       -       47,500  
Net income/loss     -       -       -       (377,221 )     (377,221 )
Balance, October 31, 2018     76,045,195       7,605       809,145       (608,702 )     208,048  
                                         
Shares issued at $1.034 per share     38,660       3       39,972       -       39,975  
Shares issued at $1.03 per share for assets     100,000       10       102,990       -       103,000  
Net income/loss     -       -       -       (106,071 )     (106,071 )
Balance, January 31, 2019     76,183,855     $ 7,618     $ 952,107     $ (714,773 )   $ 244,952  

 

See accompanying notes to the condensed unaudited interim financial statements

 

  6  
 

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

CONDENSED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

For the nine months ended January 31, 2018

(Unaudited)

 

    Common Stock                    
    200,000,000 shares authorized     Additional           Total  
    Shares     Par Value     Paid in     Accumulated     Stockholder’s  
    Issued     $.0001 per share     Capital     Deficit     Equity  
                               
Balance, April 30, 2017     75,000,000     $ 7,500     $ 14,500     $ (170,502 )   $ (148,502 )
Net income/loss                             (7,914 )     (7,914 )
Balance, July 31, 2017     75,000,000       7,500       14,500       (178,416 )     (156,416 )
                                         
Net income/loss     -       -       -       (8,258 )     (8,258 )
Balance, October 31, 2017     75,000,000       7,500       14,500       (186,674 )     (164,674 )
                                         
Net income/loss     -       -       -       (10,739 )     (10,739 )
Balance, January 31, 2018     75,000,000     $ 7,500     $ 14,500     $ (197,413 )   $ (175,413 )

 

See accompanying notes to the condensed unaudited interim financial statements

 

  7  
 

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

For the nine months ended January 31, 2019 and 2018

(Unaudited)

 

    For the nine months  
    ended January 31,  
    2019     2018  
Cash Flows from Operating Activities                
Net income/(loss)   $ (491,481 )   $ (26,911 )
Amortization     987       139  
Shares issued for services     194,750       -  
                 
Changes in current assets and liabilities:                
Prepaids     (4,500 )     (8,733 )
Accounts payable & accrued interest     64,407       (4,519 )
                 
Net cash used in operating activities   $ (241,837 )   $ (40,024 )
                 
Cash Flows from Investing Activities                
Intangible Assets   $ (9,258 )   $ (5,000 )
                 
Net cash provided by investing activities   $ (9,258 )   $ (5,000 )
                 
Cash Flows from Financing Activities                
Proceeds from loans payable   $ 51,500     $ 6,961  
Proceeds from convertible loans payable     -       50,000  
Proceeds from issuance of common stock     189,975       -  
                 
Net cash provided by financing activities   $ 241,475     $ 56,961  
                 
Net increase(decrease) in cash   $ (9,620 )   $ 11,937  
                 
Cash and cash equivalents, beginning of period   $ 9,785     $ 583  
                 
Cash and cash equivalents, end of period   $ 165     $ 12,520  
                 
Supplemental Disclosure                
Interest paid   $ -     $ -  
Taxes paid   $ -     $ -  
                 
Non-cash Financing and Investing Activities                
Common stock issued for assets   $ 553,000     $ -  

 

See accompanying notes to the condensed unaudited interim financial statements.

 

  8  
 

 

BLUE EAGLE LITHIUM INC.

(Formerly WISHBONE PET PRODUCTS INC.)

Notes to the Condensed Interim Financial Statements

January 31, 2019

(Unaudited)

 

Note 1 Nature and Continuance of Operations

 

Blue Eagle Lithium Inc. (the “Company”) was incorporated in the State of Nevada on July 30, 2009. The Company is engaged in identifying, evaluating and developing early-stage lithium exploration opportunities and has not realized any revenues from its planned operations. Previously, the Company was engaged in the business of developing, manufacturing, marketing and selling dog waste removal devices.

 

On May 10, 2018, a majority of the Company’s stockholders approved a share split of the issued and outstanding shares of common stock, on a 20-for-1 basis, thereby increasing the issued and outstanding share capital from 3,750,000 to 75,000,000. On July 12, 2018 the Company effectively changed its name from Wishbone Pet Products Inc. to Blue Eagle Lithium Inc. These financial statements give retroactive effect to both these changes.

 

The Company’s fiscal year ends on April 30.

 

Note 2 Basis of Presentation – Going Concern Uncertainties

 

These financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern. The Company is at its early stages of development and has limited operations and has sustained operating losses resulting in a deficit.

 

The Company has accumulated a deficit of $714,773 since inception, has yet to achieve revenue producing or profitable operations, and further significant losses are anticipated in the development of its business. The Company’s ability to continue as a going concern is in substantial doubt and is dependent upon obtaining financing and/or generating revenue and achieving a sustainable profitable level of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company will need seek additional equity financing from time to time in order to fund its business plan, and it plans to raise funds through private or public equity financings or loans from directors of the Company in order to support existing operations. There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all.

 

Note 3 Interim Reporting and Significant Accounting Policies

 

The condensed interim financial statements are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the interim information. Accordingly, the financial statements do not include all of the information and notes required by GAAP for the complete financial statements. While the information presented is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, result of operation and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature. It is suggested that the interim financial statements be read in conjunction with the Company’s April 30, 2018 annual financial statements. Operating results for the nine months period ended January 31, 2019 are not necessarily indicative of the results that can be expected for the year ended April 30, 2019.

 

There have been no changes in the accounting policies from those disclosed in the notes to the audited financial statements for the year ended April 30, 2018.

 

Convertible debt

 

The Company accounts for convertible debt according to ASC 470, “Debt with Conversion and Other Options”. No portion of the proceeds is attributable to the conversion feature when there is no beneficial conversion feature (“BCF”), there is no BCF when the debt instrument is convertible into common stock at a specified price at the option of the holder and when the debt instrument is issued at a price not significantly in excess of the face amount.

 

  9  
 

 

Website Development Costs

 

The Company recognizes the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost” that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Relating to website development costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting for Website Development Costs”. The website development costs are divided into three stages, planning, development and production. The development stage can further be classified as application and infrastructure development, graphics development and content development. In short, website development cost for internal use should be capitalized except content input and data conversion costs in content development stage. Amortization is based on estimated useful life on a straight-line basis.

 

Mineral Properties

 

The Company expenses mineral property exploration expenditures when incurred. When it has established that a mineral deposit is commercially mineable and following a decision to commence development, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized and will be amortized against production following commencement of commercial production, or written off if the property is sold, allowed to lapse or abandoned. Mineral property acquisition costs are initially capitalized when incurred. Option payments and expenditures required to earn an interest in the properties are initially expensed and then capitalized if the option is exercised. The Company assesses the carrying costs for impairment. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

 

Equipment

 

The cost of equipment is capitalized and depreciated over its estimated useful life of 3 years on a straight-line basis.

 

Recently issued accounting pronouncements

 

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued by the FASB (including its Emerging Issues Task Force), the AICPA or the SEC would, if adopted, have a material effect on the accompanying financial statements

 

Note 4 Equipment

 

Equipment is amortized over 3 years on a straight-line basis.

 

    January 31, 2019  
    Cost    

Accumulated

Amortization

    Net  
Equipment   $ 2,150     $ -     $ 2,150  

 

Note 5 Intangible Assets

 

The assets are amortized over 3 years on a straight-line basis.

 

    January 31, 2019  
    Cost    

Accumulated

Amortization

    Net  
Website   $ 7,108     $ (987 )   $ 6,121  

 

  10  
 

 

Note 6 Accounts Payable & Accrued Interest

 

Accrued expenses as of January 31, 2019 and April 30, 2018 are summarized as follows:

 

    Jan 31, 2019     Apr 30, 2018  
Amount owing to officers   $ 32,205     $ -  
Accrued accounting fees     10,275       7,650  
Accrued legal fees     16,913       2,650  
Accrued office expenses     10,086       8,930  
Accrued interest expenses     54,538       40,380  
    $ 124,017     $ 59,610  

 

Note 7 Notes Payable

 

The Company entered into 11 unsecured notes payable. They are all due within 30 days following written demand and bears a monthly interest rate of 1% (12% per annum). The Company partially repaid one note and accrued interest totaling $2,000 on March 1, 2018. The following were the principal loan amounts and accrued interests remaining as at October 31, 2018 and April 30, 2018:

 

    Jan 31 2019         April 30, 2018  
    Principal     Interest               Principal     Interest        
    Amount     Accrued     Total         Amount     Accrued     Total  
Dec 31 12     17,000       12,410       29,410     Dec 31 12     17,000       10,880       27,880  
Aug 13 13     20,000       13,100       33,100     Aug 13 13     20,000       11,300       31,300  
Dec 04 14     11,000       5,488       16,488     Dec 04 14     11,000       4,498       15,498  
Jun 26 15     10,000       4,317       14,317     Jun 26 15     10,000       3,417       13,417  
Jan 25 16     3,671       367       4,038     Jan 25 16     3,671       36       3,707  
Mar 22 16     17,725       6,115       23,840     Mar 22 16     17,725       4,520       22,245  
Jul 28 16     2,700       810       3,510     Jul 28 16     2,700       567       3,267  
Oct 31 16     5,161       1,393       6,554     Oct 31 16     5,161       929       6,090  
Jan 31 17     3,902       936       4,838     Jan 31 17     3,902       585       4,487  
Apr 28 17     3,181       668       3,849     Apr 28 17     3,181       382       3,563  
Jun 03 17     6,961       1,392       8,353     Jun 03 17     6,961       766       7,726  
    $ 101,300     $ 46,997     $ 148,297         $ 101,300     $ 37,880     $ 139,180  

 

The Company entered into one unsecured note payable that is due November 1, 2019 with an interest of 12% per annum. The following was the principal amount and the accrued interests remaining at January 31, 2019.

 

    Amount     Interest     Total  
Nov 01 18   $ 12,500     $ 378     $ 12,878  

 

The Company entered into one unsecured note payable that is due on December 7, 2019 with an interest of 3% per annum. The following was the principal amount and the accrued interests remaining at January 31, 2019.

 

  11  
 

 

    Amount     Interest     Total  
Dec 12 18   $ 39,000     $ 163     $ 39,163  

 

The Company entered into one unsecured convertible note payable on December 4, 2017. The note is due within 30 days following written demand and bears a monthly interest rate of 1% (12% per annum). At any time prior to repayment, the holder may convert all or part of the principal loan into common stock of the Company at a conversion price of $1.00 of debt to 1 common share. The effect that conversion would have on earnings per share has not been disclosed due to the current anti-dilutive effect. The conversion rate of $1.00 creates a zero conversion benefit at current stock prices at that time. Therefore, no beneficial conversion feature has been recorded.

 

    January 31, 2019     April 30, 2018
    Principal     Interest               Principal     Interest        
    Amount     Accrued     Total         Amount     Accrued     Total  
Dec 04 17     50,000       7,000       57,000     Dec 04 17     50,000       2,500       52,500  

 

Note 8 Common Shares

 

On May 10, 2018, the Company effected a forward stock split on a 20 to 1 basis, thereby increasing the issued and outstanding share capital from 3,750,000 common shares to 75,000,000 common shares. The common stock par value was changed from $0.001 to $0.0001. These financial statements presented provide the retroactive effect to the changes.

 

On August 15, 2018, the Company issued 600,000 common shares at $0.75 per share for the purchase of the mineral properties. The share price was issued at market.

 

On August 17, 2018, the Company issued 83,333 common shares for cash at $0.60 per share to an investor. The share price was negotiated with a 20% discount when the market was at $0.75 per share.

 

On August 17, 2018, the Company issued 30,000 common shares at $0.95 per share for consulting services. The share price was issued at market.

 

On August 20, 2018, the Company issued 156,862 common shares for cash at $0.6375 per share to an investor. The share price was negotiated with a 15% discount when the market was at $0.75 per share.

 

On August 20, 2018, the Company issued 125,000 common shares at $0.95 per share to its Chief Operating Officer. The share price was issued at market

 

On August 20, 2018, the Company issued 50,000 common shares at $0.95 per share for board advisory services. The share price was issued at market.

 

On November 1, 2018, the Company issued 38,660 common shares for cash at $1.034 per share to a shareholder. The share price was negotiated with a 15% discount from the previous 10 days closing average price of $1.2175 per share.

 

On November 14, 2018, the Company issued 100,000 common shares at $1.03 per share for the purchase of the mineral properties. The share price was issued at market.

 

At January 31, 2019, the Company had 76,183,855 common shares outstanding (75,000,000 common shares at April 30, 2018). There were no warrants or stock options outstanding as of January 31, 2019 and April 30, 2018.

 

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Note 9 Mineral Properties

 

On August 9, 2018, the Company entered into a property lease assignment agreement with a third party (the “Assignor”) to purchase 200 mineral claims totaling 4,000 acres located in the State of Nevada known as the Railroad Valley, in Nye County. The Company agreed to assume all the rights, titles and interest in the lease in exchange for issuing to the Assignor 500,000 common shares and to the lessor of the property (the “Lessor”) 300,000 common shares as follows (see Note 7):

 

To the Assignor – 500,000 common shares upon completion of the agreement (issued)
     
To the Lessor – 100,000 common shares upon completion of the agreement (issued); and
  – 100,000 common shares within 90 days upon completion of the agreement (issued); and
  – 100,000 common shares within 180 days upon completion of the agreement (to be issued)

 

In addition, the Company further acknowledged and agreed that the Lessor shall reserve onto itself a royalty on revenues derived from the sale of lithium concentrate and other ores extracted from the property. The Lessor shall have the right to buy 1% of the royalty at any time for $2,000,000 from the Company. Such cash payment will be paid in 90 days intervals, upon completion of an inferred resource calculation that confirms the presence on the property of a minimum 500,000 tons of lithium carbonate equivalent grading no lower than a 40 parts per million lithium grade average.

 

Note 10 Commitments

 

Effective August 15, 2018, the Company entered into a consulting agreement with John P Hart for a period of one year. Upon signing, the Company issued 30,000 common shares valued at $28,500. (see Note 8).

 

Effective August 20, 2018, the Company entered into an annual consulting agreement with Peter R Murray, the Company’s Chief Operating Officer and director. The agreement requires the Company to pay Mr. Murray a monthly consulting fee of $3,000 and a stock remuneration of up to 500,000 common shares as follows (see Note 8):

 

125,000 common shares effective immediately (issued)

125,000 common shares in the event the agreement is first renewed on the first anniversary date

125,000 common shares in the event the agreement is renewed on the second anniversary date

125,000 common shares in the event the agreement is renewed on the third anniversary date

 

On August 20, 2018, the Company entered into an annual consulting agreement with Robert FE Jones as a board advisor. The agreement requires the Company to pay Mr. Jones a daily rate of $350 and a stock remuneration of up to 200,000 common shares as follows (see Note 8):

 

50,000 common shares effective immediately (issued)

50,000 common shares in the event the agreement is first renewed on the first anniversary date

50,000 common shares in the event the agreement is renewed on the second anniversary date

50,000 common shares in the event the agreement is renewed on the third anniversary date

 

Note 11 Subsequent Events

 

The Company evaluated all events and transactions that occurred after January 31, 2019 up through the date the Company issued these financial statements and found no other subsequent events that needed to be reported.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

OVERVIEW

 

Blue Eagle Lithium Inc. (“the company”) is a Nevada corporation that was incorporated on July 30, 2009. The company was initially incorporated under the name “Wishbone Pet Products Inc.” with the intent to commence business operations by developing, manufacturing, marketing, and selling dog waste removal devices.

 

Effective July 20, 2018, the company changed its name to “Blue Eagle Lithium Inc.” and affected a 20-for-1 forward split of its common stock by a majority vote of the shareholders. See Item 5.03 filed on Form 8-K filed July 26, 2018 for more details.

 

Effective August 9, 2018, the company entered into a property assignment agreement (“the Property Purchase Agreement”) between Blue Eagle Lithium Inc., and Oriental Rainbow Group Limited, pursuant to which the Company acquired 200 mineral claims or 4,000 Acres in the Railroad Valley of Nevada. The parties agreed on a purchase price for the 200 mineral claims, which was paid in by the Company issuing and delivering to Oriental Rainbow Group Limited 500,000 restricted shares in the common stock of the capital of the company as well as a further Issuance to Plateau Ventures LLC of 300,000 restricted shares as follows; 100,000 restricted shares upon the effective date, 100,000 restricted shares ninety (90) days following the effective date and a final 100,000 restricted shares one hundred and eighty (180) days. See Exhibit 10.2 - Property Purchase Agreement filed on Form 8-K filed August 16, 2018 for more details.

 

Effective August 14, 2018, Rami Tabet (“Tabet”) and Rupert Ireland (“Ireland”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”), which provided for the sale by Tabet to Ireland of 40,000,000 shares (the “Shares”) of Common Stock, $0.0001 par value (“Common Stock”), of the Company for a purchase price of $100,000. The transfer of the Shares to Ireland was effective on August 14, 2018. Upon his acquisition of the Shares, Ireland became the holder of a majority (approximately 53.3%) of the outstanding shares of Common Stock of the Company, which is sufficient ownership to give him the power to elect all of the members of our Board of Directors. Tabet owned no shares of Common Stock immediately after giving effect to the sale of the Shares to Ireland. For more details see Exhibit 10.1 – Share Purchase Agreement filed on Form 8-K filed August 16, 2018 for more details.

 

Effective August 20, 2018, Mr. Peter Roderick Murray (“Mr. Murray”) was appointed and accepted the opportunity to serve as an additional member on the Board of Directors, Mr. Murray was also appointed by the Board, and accepted the opportunity to serve, as the Company’s Chief Operating Officer (“COO”) on a consultancy basis. Pursuant to Mr. Murray’s appointment as COO and a director of the Board, the Company and Mr. Murray entered into a consulting agreement effective as of August 20, 2018. See Item 5.02 filed on form 8-K filed August 23, 2018 for more details.

 

The company maintains its statutory resident agent’s office at 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and its business office is located at 2831 St Rose Parkway, Suite 200, Henderson, NV, 89052. The company’s office telephone number is (702) 889-3369.

 

The company is authorized to issue up to 200,000,000 shares of Common Stock with a par value of $0.0001 per share, of which 76,183,855 shares of Common Stock are currently issued and outstanding as at March 15, 2019. The Company’s common shares are listed on the OTCQB under the symbol “BEAG”.

 

The company has not been involved in any bankruptcy, receivership or similar proceedings. There have been no material reclassifications, merger consolidations or purchase or sale of a significant amount of assets not in the ordinary course of the company’s business.

 

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Railroad Valley Project

 

The Railroad Valley property covers 4,000 acres within Railroad Valley, Nevada, approximately 100 miles northeast of Tonopah, Nye County, Nevada and can be accessed directly from US Route 6. Railroad Valley is one of the largest trapped drainage basins in North America and was first identified as lithium rich by the US Geological Survey with the potential to host lithium bearing brines in its extensive subterranean aquifers beneath the valley floor. The property is situated in the Great Basin physiographic province of the Basin and Range tectonic province. North-south trending mountain ranges and intramontane basins often with playas characterize the area. Elevations in the Railroad Valley playa range from 4,725 to 4,760 ft, the highstand shoreline of the southeast side of Railroad Valley Lake at Heath Canyon is 4,860 ft. The rugged Grant and Quinn Ranges forms the eastern margin of the valley and rises to 10,945 ft ASL at Troy Peak, while the undulant Pancake Range west of the valley reaches 6,260 ft ASL on Hwy 6.

 

The Railroad Valley basin is a green-fields lithium target believed to be an analogue to Clayton Valley, about 124 miles to the west-southwest. Both are typical arid, closed basins with no water outflow and a common stratigraphic history of pluvial and arid climate variations. Railroad Valley hosts a larger playa, larger catchment area, and deeper basin fill than Clayton Valley. Similar graben fault structures active into Holocene time occur in both settings which suggest the potential for tectonic isolation of potential brine aquifers to retain brines. Surface reconnaissance soil sampling on nearby properties have returned samples up to 275 ppm Lithium. Similar values occur in the brine at the Albemarle Silver Peak lithium mine.

 

The Railroad Valley property is accessible from Ely, Nevada by traveling 48 miles SW on US Hwy 6 toward Tonopah. A well-marked turnoff to the southeast just inside the Railroad Valley leads to a well-maintained gravel road constructed for oil extraction and ranch access along the east margin of the Railroad Valley basin provide access west of SRRV property. A former oilfield access gravel road heads a few miles NW to the eastern side of the property. The total distance to the property form Ely is approximately 68 miles.

 

During the period ended December 31, 2018, the Company conducted baseline surface soil samples, rock samples and water samples located within the property. A total of 70 soil samples, 10 rock samples and 7 water samples have been analyzed. As a result, the Company has initiated its recommended work program from the positive technical report from Tekhne Research. The recommended work program is comprised of two phases. The first phase is the collation of relevant available data in both Railroad Valley and Clayton Valley to build a propriety database with associated exclusive GIS or 3D maps and subsequent interpretation. The Company has engaged Geologix Technologies of Houston as its strategic technology partner to provide the Company with cutting edge digitized databases and mapping. The second phase will focus on drilling to test targets defined in phase one. The Company will be using diamond drilling for physical properties and geology to provide better quality core details.

 

Geologix Technologies will provide a secure cloud database constructed with an asset focused, geological information system (GIS) compliant framework. The database is being populated with data available in historical public records, oil and water well records, seismic date, remote sensing data, digital elevation models, lithological and geological maps. The database will be utilized to produce propriety surface, sub-surface and GIS maps. The Company’s database and proprietary maps will be used to optimize a shallow borehole drilling program in Phase two. In addition, the database will help find probable properties in the Railroad Valley neighboring target areas and possibly identify suitable lithium properties.

 

The recommended work program consists of the following with a budget of approximately $950,000 exclusive of contingency allowance and applicable taxes:

 

Phase 1

 

1. Collect and synthesize existing oil field data (seismic, gravity and drill logs)

2. AMT surveys

3. Sample playa soils

4. Sample analysis

5. Geology, field supervision and support, reports and data analysis

 

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Phase 2

 

1. Re-open and sample five nearby wells

2. Diamond drilling

3. Water samples

4. Geology, field supervision and support, reports and data analysis

 

RESULTS OF OPERATIONS

 

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

Results of Operations for the Three and Nine months period ended January 31, 2019

 

    For the three months     For the nine months  
    ended January 31,     ended January 31,  
    2019     2018     2019     2018  
OPERATING EXPENSES                                
                                 
Amortization   $ 592     $ -     $ 987     $ -  
Consulting fees     -       -       76,250       -  
Management fees     33,600       -       182,550       -  
General & administrative expenses     12,952       4,500       38,004       8,564  
Marketing and promotional expenses     2,654       -       81,527       -  
Mineral exploration expenses     34,742       -       67,242       -  
Professional fees     16,450       2,175       36,762       8,225  
                                 
TOTAL EXPENSES     100,990       6,675       483,332       16,789  
                                 
OPERATING LOSS   $ (100,990 )   $ (6,675 )   $ (483,332 )   $ (16,789 )
                                 
OTHER EXPENSES                                
Interest on loans     5,081       4,064       14,159       10,122  
                                 
NET INCOME/(LOSS)   $ (106,071 )   $ (10,739 )   $ (497,481 )   $ (26,911 )
                                 
Net loss per share, basic and diluted   $ (0.0014 )   $ (0.0001 )   $ (0.007 )   $ (0.0004 )
                                 
Weighted average common shares outstanding basic and diluted     75,166,537       75,000,000       75,673,607       75,000,000  

 

Three Months Period Ended January 31, 2019

 

Net Loss. During the three months period ended January 31, 2019, the Company had a net loss of $106,071 as compared to the same period for the prior fiscal period of $10,739 net loss. The increase loss of $95,332 was primarily due to losses relating to amortization, consulting fees, management fees, general & administrative expenses, marketing and promotional expenses, mineral exploration expenses, professional fees and interest on loans. This was due to the new business activities of the Company which include operational costs relating to the start of exploratory activities, management services, start-up costs, marketing and promotional expenses and maintaining mineral rights.

 

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The weighted average number of shares outstanding was 75,166,537 for the three months period ended January 31, 2019 and 75,000,000 for the three months period ended January 31, 2018.

 

Operating Expenses. The Company’s operating expenses during the three months period ended January 31, 2019 were $100,990 compared to $6,675 for the same period ended January 31, 2018. The increase of $94,315 which was primarily due to the increase in the Company’s operations relating corporate management fees of $33,600, professional fees of $16,450, marketing and promotional expenses of $2,654, and general and administrative expenses of $12,952. The Company has commenced preliminary exploratory activities and incurred expenditures of $34,742 which included site visits and work at the mineral properties.

 

Nine Months Period Ended January 31, 2019

 

Net Loss. During the nine months period ended January 31, 2019, the Company had a net loss of $497,481 or $ (0.007) per share. The loss was primarily due to losses relating to amortization, consulting fees, management fees, general & administrative expenses, marketing and promotional expenses, mineral exploration expenses, professional fees and interest on loans, compared to the same period for the prior fiscal period when the Company had a net loss of $26,911 or $(0.0004) per share, which was primarily due to general & administrative expenses, professional fees and interest on loans.

 

The weighted average number of shares outstanding was 75,673,607 for the nine months period ended January 31, 2019 and 75,000,000 for the nine months period ended January 31, 2018.

 

Operating Expenses. The Company’s operating expenses during the nine months period ended January 31, 2019 were $483,332 compared to $16,789 for the same period ended January 31, 2018. The increase of $466,533 which was primarily due to the increase in the Company’s operations relating to shares issued to consultants for their services of $76,000, shares issued to corporate management of $118,750, corporate management fees of $63,800, professional fees of $36,762, marketing and promotional expenses of $81,527, mineral exploration expenses of $67,242, and general and administrative expenses of $38,004.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Nine Months Period Ended January 31, 2019

 

As at January 31, 2019, our current assets were $10,498 compared to $15,618 as of April 30, 2018. As of January 31, 2019, our current liabilities were $326,817 compared to $210,910 at April 30, 2018. Current liabilities as of January 31, 2019 were comprised of $152,800 in loans payable, $50,000 in convertible notes payable and $124,017 in accounts payable and accrued liabilities. The Company had working capital deficiency of $316,319 as of January 31, 2019 compared to working capital deficiency of $195,292 as of April 30, 2018.

 

During the nine months ended January 31, 2019, the Company received net proceeds of $189,975 from private placement subscriptions. As a result, stockholders’ equity (deficit) increased from $(195,292) as of April 30, 2018 to $244,952 as of January 31, 2019.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the nine months period ended January 31, 2019, net cash flow used in operating activities were $(241,837) consisting of a net loss of $497,481, an increase in accounts payable and accrued interest of $64,407, and a $4,500 decrease in prepaid expenses. For the nine months period ended January 31, 2018, net cash flow used in operating activities were $(40,024). During January 31, 2019, non-cash adjustments to reconcile net income used in operating activities include $194,750 for shares issued for consulting and management services.

 

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Cash Flows from Financing Activities

 

We have financed our operations primarily from either the issuance of our shares of common stock under private placements or from loans. In the nine months period ended January 31, 2019, we received $189,975 in Common Stock subscription proceeds, $39,000 relating to shareholder loans and $12,500 in proceeds from notes payable. In the comparative period for fiscal 2018, we generated $6,961 in proceeds relating to shareholder loans and $50,000 in proceeds from notes payable.

 

Cash Flows from Investing Activities

 

We have spent $9,258 to develop our website and infrastructure during the nine months period ended January 31, 2019 as compared to $5,000 for the same time period for the prior for fiscal period in 2018.

 

PLAN OF OPERATION AND FUNDING

 

In order to evaluate the lithium resource potential of the Railroad Valley Property, the company, plans to develop a technical database using cloud geographic information system (“GIS”) technology populated by publicly available geological, oil well, water well and seismic data. This database will be used to produce proprietary surface, subsurface and GIS maps. Additional technical studies addressing 3D mapping enhancement, age dating, source migration, burial history, glacial rebound, x-ray diffraction and grain size will help fine tune the database. A budget of $350,000 will be required for personnel, third party consultancy fees and software programs to complete these tasks by the end of October 2019.

 

The technical database development is planned to take place in parallel to work programs and is designed to fill technical data gaps and move the Railroad Valley understandings towards defensible resource estimates. Baseline surface sampling has already been conducted at the property in Railroad Valley and the Company’s operations team has commenced field mapping, environmental impact assessments, shallow surface borehole planning, drilling and evaluation, seismic acquisition program planning, 2D/3D seismic execution phase, processing and interpretation. We project that a budget of $800,000 will be required for personnel, third party consultancy fees and equipment to complete these objectives by the end of December 2019.

 

As the data gaps are filled and resource potential quantified, we are planning for deeper borehole drilling, production borehole drilling and surface production pond/equipment construction. Environmental Impact Studies and permissions will be updated to reflect planning requirements. The planning process is anticipated to require $250,000 and the execution phases is anticipated to require $5,000,000 to be ideally completed in December 2020.

 

We estimate that the company will require approximately $6,400,000 to conduct the full exploration program over a two-year period, which will be used to pay for prospecting and geological mapping, airborne surveys, lodging and food for workers, transportation of workers to and from the work sites, fuel, pick-up truck rentals, assays, drilling, equipment rental, additional claim staking and supervision.

 

Our officers and directors have agreed to pay all costs and expenses of having the Company comply with the federal and state securities laws (associated with being a public company) should the Company be unable to do so. We estimate that these costs will be approximately $20,000 per year. Our officers and directors have also agreed to pay the other expenses of the Company, excluding those direct costs and expenses of data gathering and mineral exploration, should the Company be unable to do so. To implement our business plan, we will need to secure financing for our business development. We have no source of funding at this time and, to date, have largely relied on private placement issuances of our Common Stock and debt for our operations. If we are unable to raise additional funds to implement our business plan and satisfy our reporting obligations, there is a risk the company may be unable to continue as a going concern and/or that investors will no longer have access to current financial and other information about our business affairs. Additional funding to implement our full business plan or a partial exploration program will depend upon our ability to secure loans or obtain either private or public financing. We have had some preliminary negotiations for funding that have been unsuccessful and we currently have not undertaken any further negotiations. There is no assurance that we will be able to obtain such funding on any terms or terms acceptable to us and if adequate funds are not secured in a timely fashion, then there is a substantial risk that the Company will be unable to implement its business plan and/or continue as a going concern, which could lead to significant diminution in the value of the Company or the failure of our business.

 

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OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this report, we do not have any 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.

 

RISKS

 

The Company’s financial risks arising from its financial instruments are credit risk, liquidity risk, interest rate risk and foreign exchange rate risk. The Company’s exposure to these risks and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

 

Credit risk

 

Credit risk is the risk of potential loss to the Company if the counter party to a financial instrument fails to meet is contractual obligations. The credit risk of the Company is associated with cash and cash equivalents and restricted cash. Management does not expect these counterparts to fail to meet their obligations.

 

Liquidity risk

 

Liquidity risk is the risk that the Company will not meet its obligations associated with its financial liabilities as they fall due. The Company performs cash flow forecasting for each fiscal year to ensure there is sufficient cash available to fund its projects and operations. As at January 31, 2019, the Company had a cash and cash equivalent balance of $10,498 and current liabilities of $326,817. The Company’s financial liabilities include trade and other payables which have contractual maturities of 30 days or are due on demand or notes due within a year. At present, the Company’s operations do not generate cash flow. The Company’s primary source of funding has been the issuance of equity securities through private placements and notes payable. Despite previous success in completing these financings, there is no guarantee of obtaining future financings.

 

Interest rate risk

 

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Company is currently not exposed to interest rate risk.

 

Foreign exchange rate risk

 

Foreign exchange rate risk is the risk that fair value or future cash flows of financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s functional currency is the United States dollar and major purchases are transacted in United States dollars. The Company funds certain operations, exploration and administrative expenses in Canadian dollars, Euros and UK Pounds Sterling by paying expenditures from its United States bank account. The foreign exchange rate risks on these payments are not considered significant due to the small value of the transactions. The Company does not hedge its foreign exchange risk.

 

OPERATION RISK AND UNCERTAINTIES

 

Operating hazards and risks

 

Mineral exploration involves many risks. The operation in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, any of which could result in work stoppage and damage to persons or property or the environment and possible legal liability for any and all damage. Fires, power outages, labor disruptions, flooding, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are some of the risks involved in the conduct of exploration programs.

 

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Environmental Factors

 

The Company currently conducts exploration activities in the State of Nevada. Such activities are subject to various laws, rules and regulations governing the protection of the environment. Such legislation imposes rigorous standards on the mining industry to reduce or eliminate the effects of waste generated by extraction and processing operations and subsequently deposited on the ground or emitted into the air or in the water.

 

All phases of the Company’s operations are subject to environmental regulation in the jurisdiction in which it operates. Environmental legislation is evolving in a manner which requires stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for the companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations. The cost of compliance with changes in governmental regulations has the potential to preclude entirely the economic development of a property.

 

The Company is able to conduct its exploration within the provisions of the applicable environmental legislation without undue constraint on its ability to carry on efficient operations. The estimated annual cost of environmental compliance for all properties held by the Company in the exploration stage is minimal and pertains primarily to carrying out diamond drilling, trenching or stripping. Environmental hazards may exist on the Company’s properties, which hazards are unknown to the Company at present, which have been caused by previous or existing owners or operators of the properties.

 

Governmental Regulation

 

Exploration activities on the Company’s properties are affected to varying degrees by government regulations relating to such matters as environmental protection, health, safety and labor; mining law reform; restrictions on production, price controls and tax increases; maintenance of claims; tenure; and expropriation of property. There is no assurance that future changes in such regulation, if any, will not adversely affect the Company’s operations. Changes in such regulation could result in additional expenses and capital expenditures, restrictions on the availability of capital, competition, reserve uncertainty, potential conflicts of interest, title risks, dilution and restrictions and delays in operations, the extent of which cannot be predicted.

 

The Company is at the exploration stage on all of its properties. Exploration on the Company’s properties requires responsible best exploration practices to comply with company policy, government regulations, maintenance of claims and tenure. All mining activities in Nevada, regardless of the private or public status of the land which they occurs, are regulated through the Nevada Division of Environmental Protection’s (NDEP) Bureau of Mining Regulation and Reclamation (MBRR). The Bureau administers the State mining laws and mine-related environmental permits. It is composed of three technical branches: Regulation, Closure and Reclamation, all of which protects the waters of the State under the Water Pollution Control regulations. The Regulation Branch provides permitting and inspections; the Closure Branch works with facilities at the cessation of operations to ensure that all components are left chemically stable for the long term, and that the activities will not degrade waters of the State; and the Reclamation Branch regulates exploration and mining operations for permits to explore and mine to reclaim the disturbance created to a safe condition post mining land use.

 

If any of the Company’s projects are advanced to the development stage, those operations will also be subject to various laws and regulations concerning development, production, taxes, labor standards, environmental protection, mine safety and other matters.

 

Additional funding requirements

 

Further exploration on and any development of the Company’s projects will require additional resources and funding. The Company currently does not have sufficient funds to fully explore and develop these projects. In addition, any positive production decision, if achieved, would require significant funding for project engineering and construction. Accordingly, the continuing development of the Company’s properties will depend upon the Company’s ability to obtain financing through debt financing, equity financing, joint venture projects or other means. There is no assurance that the Company will be successful in obtaining the required financing for these or other purposes, including for general working capital.

 

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GOING CONCERN

 

The independent auditors’ report accompanying our audited April 30, 2018 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

The Company is an exploration stage company. Presently, the Company’s operations do not generate cash flow and its financial success is dependent on management’s ability to discover economically viable mineral deposits. The mineral exploration process can take many years and is subject to factors that are beyond the Company’s control. In order to continue as a going concern and to meet its corporate objectives, which primarily consist of exploration work on its mineral properties, the Company will require additional financing through debt or equity issuances or other available means. The Company had working capital deficiency of $316,319 as of January 31, 2019. Although the Company has been partially successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. As described under Plan of Operation and Funding above, Management believes it may have the opportunity to raise equity capital as required in the long term but recognizes there will be risks involved that may be beyond their control. The annual and interim financial statements do not include any adjustments to the recoverability and classification of reduced asset amounts and classification of liabilities that might be necessary should the Company be unable to continue operations. These adjustments could be material. The Company is not subject to material externally-imposed capital constraints.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2019. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the nine months period ended January 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On November 16, 2018, pursuant to the property lease assignment agreement, the Company issued to the Lessor, 100,000 common shares valued at $103,000 ($1.03 per share).

 

On November 5, 2018, the Company entered into a private placement with a shareholder to issue 38,660 common shares for $39,975.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibits:

 

31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
   
31.2 Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.
   
101 Interactive data files pursuant to Rule 405 of Regulation S-T.

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BLUE EAGLE LITHIUM INC.
   
Dated: March 15, 2019 By: /s/ Rupert Ireland
    Rupert Ireland, President and Chief Executive Officer and Chief Financial Officer

 

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