$WOLV Lastest Q10 filing Inside Form 10-Q for
Post# of 18851
$WOLV << Lastest Q10 filing Inside
Form 10-Q for WOLVERINE EXPLORATION INC.
15-Apr-2013
Quarterly Report
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) 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 and OTCBB 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 516 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. To date, we have incurred expenditures of $710,157.
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.
Subsequent to the vend-in agreement, Richard Haderer, a consultant of Wolverine, staked twenty-four (24) additional mineral claims on behalf of Wolverine. The staking costs for these additional claims was Cdn $1,440 and the additional claims are contiguous to the 516 claims acquired pursuant to the vend-in agreement.
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.
In June of 2010, Ed Montague, transferred 37 claims to Wolverine which had been staked on behalf of Wolverine.
Wolverine currently holds a 90% interest and Shenin holds a 10% interest in a total of 133 claims.
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 Labrador, Canada. We have not yet determined whether the Labrador claims contain mineral reserves that are economically recoverable.
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 operations and conduct exploration on our Labrador Claims. We expect to review other potential exploration projects from time to time as they are presented to us.
Our working capital deficiency of $438,375, we also require additional funds to proceed with our plan of operation over the next twelve months, exclusive of any acquisition costs. The 2013 exploration budget has not yet been determined.
Our auditors have issued a going concern opinion for our year ended May 31, 2012. 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 February 28, 2013 we had cash in the amount of $44 and a working capital deficiency in the amount of $438,375. As of February 28, 2013, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.
Exploration Plan
The exploration plan for 2013 has not yet been determined.
As at February 28, 2013, we had a cash balance of $44. We will need to raise additional financing to fund our 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 February 28, 2014.
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 |
Nine Months Ended February 28, 2013 and February 28, 2012 |
Expenses |
Operating expenses for the three months ended February 28, 2013 decreased compared to the comparative period in 2012 primarily due to a decrease in general and administrative expenses.
Expenses |
Operating expenses for the nine months ended February 28, 2013 decreased compared to the comparative period in 2012 primarily due to a decrease in exploration activities and general and administrative expenses.
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 |
Operating Activities
Net cash used in operating activities during the nine months ended February 28, 2013, was $78,556 compared to $260,887 during the nine months ended February 28, 2012. The significant decrease in cash used in operating activities was mainly due to $41,148 incurred for mineral exploration costs compared to $113,432 in the comparable period.
Financing Activities
During the nine months ended February 28, 2013, we received $78,000 through the issuance of shares/shares subscribed in private placements. In the comparable period, the Company received $262,700 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.
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