BROOKMOUNT EXPLORATIONS INC.
(An
Exploration Stage Company)
BALANCE
SHEETS
|
|
|
|
|
|
August 31,
|
November 30,
|
|
|
2008
|
2007
|
|
|
(unaudited)
|
(audited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
Cash
|
$
154
|
$
23,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued liabilities
|
$
192,525
|
$
210,082
|
|
Due to related parties
|
315,249
|
200,081
|
|
|
|
|
|
|
507,774
|
410,163
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
Common stock, $0.001 par value – Note 4
|
|
|
|
200,000,000
shares authorized
|
|
|
|
37,721,600
shares issued (November 30, 2007 – 37,588,267)
|
37,721
|
37,588
|
|
Additional paid-in capital
|
4,533,919
|
4,516,067
|
|
Stock subscriptions receivable
|
(6,600)
|
(6,600)
|
|
Deficit accumulated during the exploration stage
|
(5,072,660
)
|
(4,933,268
)
|
|
|
|
|
|
|
(507,620)
|
(386,213)
|
|
|
|
|
|
|
$
154
|
$
23,950
|
SEE
ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An
Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 9, 1999
|
|
|
|
|
|
|
(Date of
|
|
|
Three months
ended
|
Nine months ended
|
Inception) to
|
|
|
August
31,
|
August 31,
|
August 31,
|
|
|
2008
|
2007
|
2008
|
2007
|
2008
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
General and administrative
|
$
96,302
|
$
108,777
|
$
108,031
|
$
292,006
|
$ 2,602,741
|
|
Mineral
property costs
–
Notes 3
|
-
|
2,806
|
31,361
|
73,502
|
2,469,919
|
|
|
|
|
|
|
|
|
Net loss
|
$
96,302
|
$
111,583
|
$
139,392
|
$
365,508
|
$
5,072,660
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per share
|
$
(0.00
)
|
$
(0.00
)
|
$
(0.00
)
|
$
(0.01
)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
37,656,383
|
26,139,312
|
37,632,873
|
26,088,912
|
|
|
|
|
|
|
|
|
SEE
ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An
Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
December 9,
|
|
|
|
|
1999
|
|
|
|
|
(date of
|
|
|
Nine months
|
Nine months
|
inception)
|
|
|
ended
|
ended
|
to
|
|
|
Aug 31, 2008
|
Aug
31, 2007
|
Aug 31, 2008
|
|
|
|
|
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
Net
loss
|
$
(139,392)
|
$
(365,508)
|
$
(5,072,660)
|
|
Add
items not affecting cash:
|
|
|
|
|
Amortization
|
-
|
195
|
1,813
|
|
Capital
contributions
|
-
|
-
|
29,250
|
|
Common
stock issued for services
|
-
|
-
|
462,880
|
|
Common
stock issued for mineral property
|
-
|
-
|
2,216,250
|
|
Provision
for unrecoverable advances
|
-
|
-
|
193,617
|
|
|
|
|
|
|
Changes
in non-cash working capital:
|
|
|
|
|
Prepaid
expenses
|
-
|
5,878
|
-
|
|
Accounts
payable and accrued liabilities
|
(17,557)
|
70,896
|
216,235
|
|
Cash Flows Used
In Operations
|
(156,949)
|
(288,539
)
|
(1,952,615)
|
|
|
|
|
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
Advances
|
-
|
-
|
(193,617)
|
|
Acquisition
of equipment
|
-
|
-
|
(
1,813
)
|
|
Cash Flows Used
In Investing Activities
|
-
|
-
|
(195,430)
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
Due
to related parties
|
115,168
|
250,973
|
708,926
|
|
Common
stock issued, net
|
17,985
|
19,896
|
1,439,273
|
|
Cash Flows
Provided by Financing Activities
|
133,153
|
270,869
|
2,148,199
|
|
|
|
|
|
|
Increase (decrease) in cash
|
(23,796)
|
(17,670)
|
154
|
|
|
|
|
|
|
Cash,
beginning
|
23,950
|
18,091
|
-
|
|
|
|
|
|
|
Cash,
ending
|
$
154
|
$
421
|
$
154
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow
Information
|
|
|
|
|
Cash
paid for:
|
|
|
|
|
Interest
|
$
-
|
$
-
|
$
-
|
|
Income
taxes
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
SEE
ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An
Exploration Stage Company)
NOTES TO
THE FINANCIAL STATEMENTS
August
31, 2008
(Unaudited)
Note
1
Basis
of Presentation
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and in accordance with the rules and regulations of the
Securities and Exchange Commission. They may not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there has been no
material changes in the information disclosed in the notes to the financial
statements for the year ended November 30, 2007, included in the Company’s Form
10-KSB filed with the Securities and Exchange Commission. The unaudited interim
financial statements should be read in conjunction with those financial
statements included in the Form 10-KSB. In the opinion of Management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal recurring adjustments, have been made. Operating results for the three
months ended August 31, 2008 are not necessarily indicative of the results that
may be expected for the year ending November 30, 2008.
Note 2
Advances
During the year ending November 30, 2006, $150,000 was withdrawn
from the Company’s bank account by a former director of the Company. The former
director was not an authorized signatory on the Company’s bank account and had
not been granted any such authority to withdraw the funds by the Company’s Board
of Directors. Upon completion of an investigation, the Company determined
that the former director had not used the funds for corporate purposes.
The Company took legal action against the former director in an effort to
recover the $150,000. As a result, the Supreme Court of British Columbia ordered
the former director to pay the Company a sum of USD $173,700 plus accrued
interest of USD $5,341. The sum of $200,000 was received by the Company in
May 2008 and included in general and administrative expenses.
Note 3
Mineral Properties
a)
Mercedes Property, Junin, Peru
Pursuant to a property acquisition agreement dated July 3, 2003,
and amended on January 24, 2005, the Company acquired a 100% interest in 2,611
hectares located in Central Peru from a director of the Company (the “Vendor”)
for consideration of $22,500 (paid) and the issuance of 5,000,000 common shares
valued at $0.40 per share (issued). The property is held in trust by the
Vendor for the Company. Upon request from the Company the title will be recorded
in the name of the Company. At August 31, 2008, the title of this property
has not been recorded in the name of the Company.
b)
Rock Creek Claims, British Columbia,
Canada
On May
25, 2006, the Company entered into an option agreement (the “Agreement”) to
acquire an option to purchase 100% of the issued share capital of 722161 B.C.
Ltd (“BC Ltd”) on the following terms:
1. The Company must issue 100,000 common shares upon
execution of the Agreement (issued);
2. The Agreement, the Company is obliged make cash payments
totaling CAD$250,000 as follows:
-
August 15, 2006
- $10,000;
(paid)
-
September 15, 2006 - $12,500;
(paid)
-
November 15, 2006 - $12,500;
(unpaid)
-
$12,500 on or before January 15, 2007 , and installment payments
of $12,500 quarterly thereafter on or before the 15
th
days of April,
July October and January of each year until the total of $250,000 has been paid
or satisfied (unpaid);
3. The Company must issue 500,000 common shares in four
equal tranches of 125,000 each on or before the 15
th
of October in
each of 2006, 2007, 2008 and 2009. During the year November 30, 2006, the
Company issued 125,000 shares. No other shares have been issued;
4. The Company must incur exploration expenses of
$1,000,000 over a period of five years from the date of the Agreement (none
incurred). BC Ltd has a 56% interest in mineral claims located in
the Rock Creek area of British Columbia, Canada.
On March 31, 2008, a formal notice of default was issued to the
Company by BC Ltd. The Company had 30 days to cure the default at which
time the agreement terminated except as to the Company’s obligations prior to
the default of approximately $80,000 which has been recorded as a liability by
the Company. The Company did not cure the default and the agreement
terminated on April 30, 2008.
Note 4
Capital Stock
During the nine month period ended August 31, 2008, the Company
issued:
-
33,333 shares of common stock for net cash proceeds of $7,999;
and
-
100,000 shares of common stock for net cash proceeds of $9,986
As at August 31, 2008, the Company has not granted any stock
options or warrants.
Item 2. Management’s Discussion and
Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This quarterly report contains
forward-looking statements that involve risks and uncertainties. We use
words such as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend” and
similar expressions to identify such forward-looking statements. You should not
place too much reliance on these forward-looking statements. Our actual
results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in the Risk Factors section of our annual report on Form 10KSB and
10KSB/A and elsewhere in this quarterly report.
Plan of Operations
Our plan of operations for the twelve
months following the date of this quarterly report is to complete a secondary
exploration program on the Mercedes property. We anticipate that this
program will cost approximately $250,000.
In addition, we anticipate spending $60,000
on professional fees, $120,000 on salaries and wages, $120,000 on consulting
fees, $40,000 on travel costs, $40,000 on promotional expenses and $40,000 on
other administrative expenses in the next 12 months.
Total expenditures over the next 12 months
are therefore expected to be $670,000
.
We will not be able to
proceed with either exploration program, or meet our administrative expense
requirements, without additional financing.
On May 25, 2006, the Company entered into
an option agreement (the “Agreement”) to acquire an option to purchase 100% of
the issued share capital of 722161 B.C. Ltd (“BC Ltd”) on the following
terms:
1.
The Company must issue
100,000 common shares upon execution of the Agreement (issued);
2. Cash
payments totaling CAD$250,000 as follows:
-
August 15, 2006
- $10,000;
(paid)
-
September 15, 2006
- $12,500; (paid)
-
November 15, 2006
- $12,500; (unpaid)
-
$12,500 (unpaid) on or
before January 15, 2007 , and installment payments of $12,500 quarterly
thereafter on or before the 15
th
days of April, July October and
January of each year until the total of $250,000 (unpaid) has been paid or
satisfied;
3.
The Company must issue
500,000 common shares in four equal tranches of 125,000 each on or before the
15
th
of October in each of 2006, 2007, 2008 and 2009. As at
February 29, 2008, he Company had issued 125,000 shares;
4.
The Company must incur
exploration expenses of $1,000,000 over a period of five years from the date of
the Agreement. BC Ltd has a 56% interest in mineral claims located
in the Rock Creek area of British Columbia, Canada.
On
March 31, 2008, a formal notice of default was issued to the Company by BC Ltd.
The Company had 30 days to cure the default at which time the agreement
terminated except as to the Company’s obligations prior to the default of
approximately $80,000 which has been recorded as a liability by the Company.
The Company did not cure the default and the agreement terminated on April
30, 2008.
Results of Operations for Three Month
Period Ended May 31, 2008
We incurred operating expenses in the
amount of $96,302 for the three month period ended August 31, 2008, as compared
to $108,777 for the comparative period in 2007. As a result, the net loss for
the three month ended August 31, 2008 was $96,302.
As of August 31, 2008, we had cash on hand
of $154 and total assets of $154. Our liabilities at the same date totaled
$507,774 and consisted of accounts payable and accrued liabilities of $192,525
and $315,249 due to related parties.
Item 3. Controls and Procedures
The Principal Executive Officer and
Principal Financial Officer conducted an evaluation of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) as of the end of the period covered by this
report. Based on that evaluation, the Principal Executive Officer and
Principal Financial Officer concluded that the Company’s disclosure controls and
procedures were effective as of the end of the period covered by this
report. There were no significant changes in internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that
occurred during the third quarter of 2008 that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On June 29, 2006, a former director of the
Company commenced legal action against the Company and its directors. The former
director is claiming damages in excess of $5,000,000 for alleged breach of
contract, libel, fraud, intentional deceit, wrongful conduct and emotional
distress. On February 12, 2007, the United States District Court issued a
notice of dismissal with respect to this legal action in its entirety.
During the year ending November 30, 2006,
$150,000 was withdrawn from the Company’s bank account by a former director of
the Company. The former director was not an authorized signatory on the
Company’s bank account and had not been granted any such authority to withdraw
the funds by the Company’s Board of Directors. Upon completion of an
investigation, the Company determined that the former director had not used the
funds for corporate purposes. The Company took legal action against the
former director in an effort to recover the $150,000. As a result, the Supreme
Court of British Columbia ordered the former director to pay the Company a sum
of USD $173,700 plus accrued interest of USD $5,341. The sum of $200,000
was received by the Company in May 2008 and included in general and
administrative expenses.
Item 2. Defaults Upon Senior
Securities.
None.
Item 3. Submission of Matters to a Vote
of Security Holders.
None.
Item 4. Exhibits.
31.1 Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
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.
Brookmount Explorations
Inc.
/s/ Peter Flueck
Peter Flueck
President, Chief Executive
Officer and Director
(Principal Executive Officer)
Date: October 14, 2008
Exhibit 31.1
CERTIFICATION
I, Peter Flueck, certify that:
1.
I have reviewed this quarterly report on Form 10-QSB of Brookmount
Explorations, Inc.;
2.
Based on my knowledge, this report does not contain any untrue
statement of 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 quarterly
report;
3.
Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such
disclosure control 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)
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;
c)
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 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: October 14, 2008
/s/ Peter Flueck
Peter Flueck, President and C.E.O.
(Principal Executive 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
In connection with the Quarterly Report of Brookmount Explorations
Inc. (the “Company”) on Form 10-QSB for the period ended May 31, 2008 as filed
with the Securities and Exchange Commission on the date hereof (the “Report”),
the undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. 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 the
Company.
Date: October 14, 2008
/s/ Peter Flueck
Peter Flueck, President and CEO
(Principal Executive Officer)
