PINX:DBGF Panex Resources, Inc. Quarterly Report 10-Q Filing - 2/29/2012

Effective Date 2/29/2012

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PANEX RESOURCES INC.
FINANCIAL STATEMENTS (EXPRESSED IN U.S. DOLLARS)
QUARTERLY REPORT FOR THE PERIOD ENDED FEBRUARY 29, 2012 (UNAUDITED)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 2012

ý QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 000-51707

PANEX RESOURCES INC.
(Exact name of registrant as specified in its charter)

Incorporated in the State of Nevada
(State or other jurisdiction of incorporation or organization)
00-0000000
(I.R.S. Employer Identification No.)
Coresco AG, Level 3, Gotthardstrasse 20, 6304 Zug, Switzerland
(Address of principal executive offices)
+41 7887 96966
(Issuer’s telephone number)
30 Ledgar Road, Balcatta, Western Australia, 6021
(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 past 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.
ýYes    No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
ýYes    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 definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Larger accelerated filer   Accelerated filer    Non-accelerated filer   Smaller reporting company ý
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
ýYes    No

APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
 
 
Class
 
Outstanding at April 9, 2012
 
Common Stock - $0.001 par value 87,827,461

 
 
Page - 1

 

 
 
 INDEX  Page
   
 PART I – FINANCIAL INFORMATION  3
    ITEM 1 – FINANCIAL STATEMENTS  3
        BALANCE SHEETS  3
        STATEMENTS OF OPERATIONS  4
        STATEMENTS OF CASH FLOWS  5
        STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)  6
        NOTES TO FINANCIAL STATEMENTS  7
    ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  14
    ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  17
    ITEM 4 – CONTROLS AND PROCEDURES  17
 PART II – OTHER INFORMATION   
    ITEM 1 – LEGAL PROCEEDINGS  18
    ITEM 1A – RISK FACTORS   18
    ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  18
    ITEM 3 – DEFAULTS UPON SENIOR SECURITIES  18
    ITEM 4 – MINING SAFETY DISCLOSURES  18
    ITEM 5 – OTHER INFORMATION 18
    ITEM 6 – EXHIBITS 19
    SIGNATURES 20
 

 
Page - 2

 


 
ITEM 1 – FINANCIAL STATEMENTS
BALANCE SHEETS

PANEX RESOURCES INC.
       
(An exploration stage enterprise)
As at
 
As at
 
Balance Sheets
February 29
 
August 31
 
 
2012 (Unaudited)
 
2011
 
(Expressed in U.S. Dollars)
$
 
$
 
         
ASSETS
       
Current assets
       
  Cash
168,638
 
19,357
 
Total current assets
168,638
 
19,357
 
Total assets (all current)
168,638
 
19,357
 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
       
Current liabilities
       
  Accounts payable and accrued expenses
330,755
 
100,211
 
  Accounts payable and accrued expenses
   – related parties
168,024
 
282,937
 
  Accrued liabilities, other
34,514
 
35,476
 
  Loans and borrowings
570,426
 
598,873
 
Total current liabilities
1,103,719
 
1,017,497
 
         
Stockholders’ Equity (Deficiency)
       
Common stock
       
  Authorized: 500,000,000 (2010: 500,000,000)
    common shares with par value of $0.001 each
       
  Issued and outstanding:
    87,827,461 (2011: 79,349,908) common shares
87,827
 
79,349
 
Advances for stock subscriptions
162,000
 
-
 
Additional paid-in capital
11,579,630
 
11,418,557
 
Donated capital
77,627
 
47,367
 
Accumulated deficit during the exploration stage
(12,842,165)
 
(12,543,413)
 
Stockholder’ equity (deficiency)
(935,081)
 
(998,140)
 
Total liabilities and stockholders’ equity (deficiency)
168,638
 
19,357
 

 
The accompanying notes are an integral part of these financial statements.

 
 
 
Page - 3

 

 


PANEX RESOURCES INC.
Cumulative
 
For the
 
For the
 
For the
 
For the
(An exploration stage enterprise)
May 28, 2004
 
Three Months
 
Three Months
 
Six Months
 
Six Months
Statements of Operations
(inception)
 
Ended
 
Ended
 
Ended
 
Ended
 
to February 29
 
February 29
 
February 28
 
February 29
 
February 28
(Unaudited)
2012
 
2012
 
2011
 
2012
 
2011
(Expressed in U.S. Dollars)
$
 
$
 
$
 
$
 
$
                   
Operating Expenses
                 
  Donated rent
5,250
 
-
 
-
 
-
 
-
  Donated services
72,377
 
15,000
 
-
 
30,260
 
-
  General and administrative
93,799
 
637
 
6,665
 
953
 
8,476
  Foreign currency transaction loss (gain)
101,582
 
8,465
 
15,437
 
(15,058)
 
43,506
  Mineral property and exploration costs
4,739,777
 
-
 
-
 
-
 
-
  Management fees
677,087
 
-
 
9,911
 
-
 
24,502
  Professional fees
1,294,928
 
241,772
 
37,028
 
261,044
 
61,897
  Travel costs
335,415
 
-
 
-
 
-
 
-
  Write-off deferred acquisition cost
400,000
 
-
 
-
 
-
 
-
  Provision against Minanca loan
6,100,000
 
-
 
-
 
-
 
-
 
13,820,215
 
265,874
 
69,041
 
277,199
 
138,381
Other income (expense)
                 
  Interest income
32,281
 
-
 
151
 
-
 
300
  Interest expense
(304,277)
 
(11,185)
 
(11,718)
 
(21,553)
 
(29,090)
  Loss on sale of investment
(126,182)
 
-
 
-
 
-
 
-
  Gain on sale of mineral property right
1,376,228
 
-
 
-
 
-
 
-
 
978,050
 
(11,185)
 
(11,567)
 
(21,553)
 
(28,790)
Net Loss
(12,842,165)
 
(277,059)
 
(80,608)
 
(298,752)
 
(167,171)
                   
Net Loss Per Share – Basic and Diluted
   
*
 
*
 
*
 
*
Weighted Average Shares Outstanding
   
79,908,868
 
76,615,881
 
79,584,095
 
69,406,288
                   
                   
* amount is less than $0.01 per share
                 
 
 
The accompanying notes are an integral part of these financial statements.

 
 
 
Page - 4

 

 

PANEX RESOURCES INC.
Cumulative
 
For the
 
For the
(An exploration stage enterprise)
May 28, 2004
 
Six Months
 
Six Months
Statements of Cash Flows
(inception)
 
Ended
 
Ended
 
to February 29
 
February 29
 
February 28
(Unaudited)
2012
 
2012
 
2011
(Expressed in U.S. Dollars)
$
 
$
 
$
Cash Flows From Operating Activities
         
  Net loss
(12,842,165)
 
(298,752)
 
(167,171)
 Adjustments to reconcile net loss to cash used in
 operating activities
       
-
    Foreign currency transaction loss (gain)
101,582
 
(15,058)
 
43,506
    Gain on sale of mineral property rights
(586,228)
 
-
 
-
    Loss on sale of investment
126,181
 
-
 
-
    Donated services and expenses
77,627
 
30,260
 
-
    Expenses paid by issue of common stock
500
 
-
 
-
    Write-off deferred acquisition costs
400,000
 
-
 
-
    Provision against Minanca loan
6,100,000
 
-
 
-
Change in operating assets and liabilities
         
    Increase in accounts payable and accrued liabilities
853,741
 
343,684
 
25,373
    Increase (decrease) in amounts due to related parties
298,540
 
(71,977)
 
56,718
Net Cash Used in Operating Activities
(5,470,222)
 
(11,843)
 
(41,574)
Cash Flows From Investing Activities
         
    Cash received from sale of investment
250,047
 
-
 
-
    Cash received from sale of mineral property rights
210,000
 
-
 
-
    Deferred acquisition costs
(400,000)
 
-
 
-
    Loan advances
(7,100,000)
 
-
 
-
    Repayment of loan advance
1,000,000
 
-
 
-
Net Cash Used in Investing Activities
(6,039,953)
 
-
 
-
Cash Flows From Financing Activities
         
    Loan from related parties
594,313
 
-
 
-
    Loan repaid to related parties
(576,483)
 
-
 
-
    Loan from unrelated third parties
790,000
 
-
 
50,000
    Deposits received for common shares to be issued
202,000
 
162,000
 
-
    Common shares issued for cash
10,668,750
 
-
 
-
Net Cash Provided by Financing Activities
11,678,580
 
162,000
 
50,000
Effect of Exchange Rates on Cash
233
 
(876)
 
2,452
Increase in Cash
168,638
 
149,281
 
10,878
Cash at Beginning of Period
-
 
19,357
 
29,178
Cash at End of Period
168,638
 
168,638
 
40,056
           
 
The accompanying notes are an integral part of these financial statements.

 
 
 
Page - 5

 
 

 


PANEX RESOURCES INC.
(An exploration stage enterprise)
Statements of Stockholder’s Equity (Deficiency) and Comprehensive Income (Loss)
May 28, 2004 (inception) to February 29, 2012
(Expressed in U.S. Dollars)
Common Stock
Shares              Amount
#                           $
Additional paid-in capital
$
Donated Capital
$
Accumulated (deficit) during exploration stage
$
Advances for Stock Subscriptions
$
Total stockholders' equity (deficiency)
$
Balances, May 28, 2004 (Date of inception)
             
  Common stock issued for services to president
 6,000,000
 6,000
(5,500)
-
-
-
 500
  Return and cancellation of shares
(6,000,000)
(6,000)
 6,000
-
-
-
 -
  Net loss
       
(500)
 
(500)
Balances, August 31, 2004
 -
 -
 500
 -
(500)
-
 -
  Common stock issued for cash
 64,500,000
 64,500
(17,750)
-
-
-
 46,750
  Return and cancellation of shares
(30,000,000)
(30,000)
 30,000
-
-
-
 -
  Donated rent
-
-
-
 3,000
-
-
 3,000
  Donated services
-
-
-
 6,000
-
-
 6,000
  Net loss
       
 (15,769)
 
(15,769)
Balances, August 31, 2005
 34,500,000
 34,500
 12,750
 9,000
(16,269)
-
 39,981
  Common stock issued for cash
 1,964,285
 1,964
 4,498,036
-
-
-
 4,500,000
  Donated rent
-
-
-
 2,250
-
-
 2,250
  Donated services
-
-
-
 4,500
-
-
 4,500
  Net loss
       
(848,560)
 
(848,560)
Balances, August 31, 2006
 36,464,285
 36,464
 4,510,786
 15,750
(864,829)
-
 3,698,171
  Common stock issued for cash
 7,632,500
 7,632
 6,098,368
   
-
 6,106,000
  Net loss
       
(10,943,990)
 
(10,943,990)
Balances, August 31, 2007
 44,096,785
 44,096
 10,609,154
 15,750
(11,808,819)
-
(1,139,819)
  Net loss
       
(66,651)
 
(66,651)
Balances, August 31, 2008
 44,096,785
 44,096
 10,609,154
 15,750
(11,875,470)
-
(1,206,470)
  Common stock issued for cash
 1,600,000
 1,600
 14,400
   
-
 16,000
  Common stock issued for settlement of debt
 14,000,000
 14,000
 126,000
   
-
 140,000
  Shares to be issued
-
-
 30,000
   
-
 30,000
  Net loss
       
(154,585)
 
(154,585)
Balances, August 31, 2009
 59,696,785
 59,696
 10,779,554
 15,750
(12,030,055)
-
(1,175,055)
  Common stock issued for cash received in
  December 2008
 4,000,000
 4,000
 6,000
-
-
-
 10,000
  Common stock issued for settlement of debt
 3,350,000
 3,350
 30,150
-
-
-
 33,500
  Net loss
       
(213,860)
 
(213,860)
Balances, August 31, 2010
 67,046,785
 67,046
 10,815,704
 15,750
(12,243,915)
-
(1,345,415)
  Common stock issued for settlement of accounts
  payable, accrued liabilities and debt (Notes 6 and 7)
 12,303,123
 12,303
 602,853
-
-
-
 615,156
  Donated services (Note 4 (a))
-
-
-
 31,617
-
-
 31,617
  Net loss
       
(299,498)
 
(299,498)
Balances, August 31, 2011
 79,349,908
 79,349
 11,418,557
 47,367
(12,543,413)
-
(998,140)
 Donated services (Note 4 (a))
-
-
-
30,260
-
-
30,260
Issuance of common stock for settlement of debt and accounts payable in February 2012
 
8,477,553
 
8,478
 
161,073
 
-
 
-
-
 
169,551
 Advance for stock subscriptions
-
-
-
-
-
162,000
162,000
 Net loss
       
(298,752)
-
(298,752)
Balances, February 29, 2012
 87,827,461
87,827
 11,579,630
77,627
(12,842,165)
162,000
(935,081)
 
The accompanying notes are an integral part of these financial statements.

 
 
Page - 6

 
 

 
 
1.  
Organization, Nature of Business, Going Concern and Management’s Plans
 
Panex Resources Inc. (‘Panex” or the “Company”) was incorporated in the State of Nevada on May 28, 2004. The Company is considered to be an Exploration Stage Company. The Company’s principal business is the acquisition and exploration of mineral resources.
 
Going concern and management’s plans:
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  Since its inception on May 28, 2004, the Company has not generated revenue and has incurred net losses.  The Company incurred a net loss of $298,752 for the six months ended February 29, 2012, and a deficit accumulated during the exploration stage of $12,842,165 for the period May 28, 2004 (inception) through February 29, 2012. Accordingly, it has not generated cash flow from operations and has primarily relied upon advances from shareholders and proceeds from equity financings to fund its operations.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
 
As a consequence of the Company’s withdrawal from the Minanca acquisition in Ecuador, the Colombian Projects (Titiribi and Acandi) and the Peruvian Projects (Condoroma and Suyckutambo), the Company has no mineral property interests as of the date of this report.  Certain mineral property interests are presently being considered, but it is too early to say whether they may be considered appropriate for acquisition.
 
As of February 29, 2012, the Company had cash of $168,638.
 
During the next 12 months, management’s objective is to recapitalize Panex, raise new capital and seek new investment opportunities in the mineral sector.  Management believes that its worldwide industry contacts will make it possible to identify and assess new projects for acquisition purposes.
 
Panex is seeking a viable business opportunity through acquisition, merger or other suitable business combination method, with a focus on undervalued mineral properties for eventual acquisition.  Panex intends to concentrate its acquisition efforts on mineral properties or mineral exploration businesses that management believes to be undervalued or that management believes may realize a substantial benefit from being publicly owned. Panex will continue to identify and assess undervalued mineral properties when capital raisings are completed.  A small number of mineral properties are presently being reviewed, but it is too early to say whether they may be considered appropriate for acquisition. The Company is in the process of finalizing plans to raise new capital of a maximum of $2,400,000 whereby Panex is offering up to 30,000,000 shares of common stock on a self-underwritten basis.  A Prospectus on Form 424B4 was filed on February 17, 2012 with the Securities and Exchange Commission.
 
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts or classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
 
 
2.  
Summary of Significant Accounting Policies
 
a.  
Basis of Preparation
 
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is August 31.  Certain reclassifications to the 2011 balance sheet have been made to conform with 2012 presentation, none of which had any effect on cash flows from operating, investing and financing activities or total assets, total liabilities and stockholders’ equity (deficiency).
 
b.  
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
 
 
Page - 7

 
 
 
 
 
2.         Summary of Significant Accounting Policies (Continued)
 
c.  
Basic and Diluted Net Income (Loss) Per Share
 
Basic earnings per share (EPS) calculations are computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. There were no potential dilutive securities outstanding at February 29, 2012 or February 28, 2011.
 
d.  
Cash
 
Cash includes deposits in banks which are unrestricted as to withdrawal or use.
 
e.  
Mineral Property and Exploration Costs
 
The Company has been in the exploration stage since its formation on May 28, 2004 and has not realized any revenues from its planned operations. It has been primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition and exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
 
f.  
Deferred Acquisition Costs
 
The Company capitalizes deposits paid during the acquisition of equity interests as deferred acquisition costs.  Deferred acquisition costs are recorded at cost and are included in the purchase price of the equity interest once the acquisition has been consummated.
 
g.  
Fair Value Measurements
 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.
 
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
 
Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
 
Level 3 - assets and liabilities whose significant value drivers are unobservable.
 
As of February 29, 2012, the Company did not have any assets or liabilities that were measured at fair value on a recurring or non-recurring basis.
 
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.
 
Financial instruments, which include cash, accounts payable, and loans and borrowings, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.  The financial risk to the Company’s operations that arises from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
 
 
 
Page - 8

 
 
 
 
 
2.         Summary of Significant Accounting Policies (Continued)
 
h.  
Income Taxes
 
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases, as well as net operating losses.
 
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets or liabilities of a change in tax rates is recognized in the period in which the tax change occurs.  A valuation allowance is provided to reduce the deferred tax assets to a level, that more likely than not, will be realized.
 
Management does not believe that the Company has any unrecognized tax positions. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
 
i.  
Foreign Currency Translation and Transactions
 
The Company’s functional and reporting currency is the United States dollar.  Monetary assets and liabilities denominated in foreign currencies are translated into the United States dollar using the exchange rate prevailing at the balance sheet date.   Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income.
 
j.  
Concentration of Credit Risk
 
The Company’s financial instruments that are exposed to concentration of credit risk consist of cash.  The Company’s cash is in demand deposit accounts placed with federally insured financial institutions in Canada.
 
k.  
Interim Financial Statements
 
In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
 
The unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes thereto for the year ended August 31, 2011, which are included in the Company’s Annual Report on Form 10-K.
 
l.  
Recent Accounting Pronouncements
 
The Company continually assesses any new accounting pronouncements to determine their applicability.  Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.  A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, the Company has not determined whether implementation of such proposed standards would be material to the Company’s financial statements.  New pronouncements assessed by the Company recently are discussed below:
 
In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220) – Presentation of Comprehensive Income (“ASU 2011-05”).  ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 is effective for fiscal years and interim periods beginning after December 15, 2011 (March 1, 2012 for the Company).  The Company does not expect the adoption of ASU 2011-04 to have a material impact on its results of operations, financial condition, or cash flows.
 
 
 
Page - 9

 
 
 
 
3.  
Deferred Acquisition Costs and Loan Advances and Financing Activities
 
Deferred Acquisition Costs and Loan Advances:

On June 15, 2006, the Company entered into an agreement with Emco Corporation (“Emco”) whereby the Company was granted an option to acquire 80% of the issued and outstanding shares of Minanca, which owns mineral exploration property in Ecuador (the “Property”), for an aggregate purchase price of $30,400,000 comprised of 10 million restricted common shares of the Company at an issue price of $3 per common share and a cash payment of $400,000.

Under the terms of the acquisition agreement and pursuant to settlement of the acquisition, the Company was obligated to pay loan advances of $7,000,000.

As of February 29, 2012, the loan advances equalled $6,100,000. Minanca is to undertake to grant a mortgage of all its assets to the Company as security against the loan advances noted above. Repayment of the loan advances rank in priority ahead of any dividend or distribution payments to shareholders of Minanca.

On December 9, 2007, the Company entered into an agreement with Emco to cancel the acquisition by Panex of an 80% interest in Minanca. As a consequence, neither party has any further rights or obligations to each other, except that Minanca remains indebted to Panex for an amount of $6,100,000 which it had agreed to repay as follows:

i.  
payment of US$250,000 to Panex by close of business on December 14, 2007;
ii.  
payment of US$1,750,000 to Panex within 21 days of the execution of the agreement; and
iii.  
payment of the remainder of the loan balance in accordance with the provisions of the June 2006 agreement (which provided for loan repayment from cash surpluses from the sale of mineral products) or as otherwise agreed between the parties.

Through, and, subsequent to, February 29, 2012, no repayments have been made.  The loan was fully reserved for in the financial statements during the year ended August 31, 2007, however management continues to seek recovery of all or part of the loan.

On June 16, 2006, the Company paid $400,000 as per the terms of the agreement and provided a loan advance of $100,000 to Minanca.  Prior to August 31, 2007, the Company had recorded the $400,000 as deferred acquisition costs pending the final settlement of the agreement, however this amount was expensed to the income statement during the year ended August 31, 2007.

Financing Activities:

On February 24, 2012, the Company entered into debt settlement agreements with creditors and related parties in consideration for the issuance of the Company’s common stock, par value $0.001, at a per share price of $0.02 per share.  As a result, the Company will no longer be indebted as further set forth in the debt settlement agreements as follows:

Ross Doyle, a related party for $ 39,551, for a total of 1,977,553 shares at a price of $0.02 per share.

Werte AG, a creditor, for $ 80,000, for a total of 4,000,000 shares at a price of $0.02 per share.

Lars Pearl, a creditor, for $ 50,000, for a total of 2,500,000 shares at a price of $0.02 per share.

During the period, the Company also received cash of $162,000 from a private placement of 2,025,000 shares of common stock shares at $0.08 per share.  The common stock has not yet been issued.

 
 
Page - 10

 
 
 
4.  
Related Party Transactions
 
a.  
During the three and six months ended February 29, 2012, the Company recognized a total of $15,000 and $30,260 respectively for donated services provided by the president of the Company.
 
b.  
The Company incurred nil management fees during the three and six months ended February 29, 2012 (prior periods: $9,911 and $24,502, respectively) for services provided by the president of the Company.  As of February 29, 2012, the Company has an accrued liability of $76,044 for management fees and travel expenses due to this related party.
 
c.  
Included in professional fees during the three and six months ended February 29, 2012 is $39,551 (prior period: $0) paid to the Chief Financial Officer (CFO) for consulting, administration, travel expenses and fund raising activities.  This amount has been settled for issuance of 1,977,553 shares of commons stock (Note 3).
 
d.  
In August 2007, the Company received loan proceeds totaling $105,068 from companies in which the president/chief executive officer is a director and shareholder.  Interest is charged at 8% simple interest, the loan is unsecured and has no stated maturity date.  In May 2008 $67,193 was repaid including accrued interest.  On December 20, 2010, principal of $46,892 and accrued interest of $15,751 was assigned to an unrelated third party (Note 6).  As of February 29, 2012, there was $1,228 of accrued interest outstanding in relation to the loans.
 
e.  
Included in professional fees during the three and six months ended February 29, 2012, $91,980 in consulting fees were recognized for services performed by Coresco AG.  The President and CFO exert significant influence over this company.  The fees are in relation to preliminary work performed for fund raising activities.
 
 
5.  
Mineral Properties
 
a.  
DeBeira 1 Mineral Claim
 
On May 20, 2005, the mineral claim known as “De Beira 1” was staked in British Columbia, Canada on behalf of Panex and held in trust for Panex until 2006.  During the year ended August 31, 2006, Panex relinquished ownership of the De Beira 1 mineral claim as it was not considered sufficiently prospective and turned its attention to other opportunities.  An amount of just over $600 was spent on the costs of staking this claim and commissioning a desk-top report on the geology of the area.  Other than this, no work was conducted on the property prior to relinquishing it.
 
b.  
Titiribi Gold/Copper Project
 
The Company entered into an agreement with Goldplata Corporation Limited, Goldplata Resources Inc. and Goldplata Resources Sucursal Colombia (the “Goldplata Group”) dated May 6, 2006, whereby the Company was granted an option to acquire up to 70% interest in the Titiribi Gold/Copper project in Colombia, South America. The agreement allowed the Company to acquire an initial interest of 65% by sole funding $8 million in exploration expenditures within a 3 year period (the “Option Period”).  The Option Period commenced on June 9, 2006. After acquiring 65% interest, the Company had 60 days to elect to sole fund further expenditures in order to acquire another 5%, giving it a total interest of 70%. The additional interest was to be acquired upon the earlier of completing a bankable feasibility study or spending a further $12 million, both within a period of no more than 3 years from the time of the election. The Company could not withdraw from the agreement after the start of the Option Period until it either incurred $1 million in exploration expenditures or paid $1 million to the Goldplata Group.  Through August 31, 2008, $2,830,000 of exploration expenditures have been paid by the Company and recorded as mineral property and exploration costs on the statement of operations.  No further payments were made and up to the date of this report.
 
On January 11, 2008 the Company entered into an agreement with Australian publicly traded company, Windy Knob Resources Limited (“Windy Knob”) to assign its interests in the Titiribi Gold/Copper Project for cash proceeds of $1 million being reimbursement of exploration expenditures and 3,250,000 shares of common stock in Windy Knob.
 

 
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5.         Mineral Properties (Continued)
 
The terms of the agreement were as follows:
 
i.  
payment of $250,000 to the Goldplata Group on behalf of Panex to satisfy outstanding cash call requirements (this was paid in January 2008);
ii.  
payment of $540,000 to the Goldplata Group on behalf of Panex to satisfy outstanding cash calls at the completion of due diligence by Windy Knob (this was paid in January 2008); and
iii.  
payment of $210,000 direct to Panex at the completion of due diligence by Windy Knob (this was received on February 4, 2008).

In connection with this transaction, the Company recognized a gain of $1,376,288, during the year ended August 31, 2008 which is reported in other income. As noted above, $790,000 of this gain is offset within mineral property and exploration costs, as it was paid to the Goldplata Group by Windy Knob on behalf of the Company to secure the Company’s rights under the original agreement prior to the sale.

 
The 3,250,000 shares in Windy Knob were issued to the Company on April 16, 2008 and sold on May 23, 2008 for cash proceeds of $250,047. In connection with this sale, the Company recognized a realized loss of $126,182 during the year ended August 31, 2008. This prior year loss represented the difference between the fair value at the date the shares were issued to the Company and the date the shares were sold to a third party.
 

 
c.  
Peruvian Gold / Silver Projects
 
On July 5, 2006, the Company entered into agreements with the Goldplata Group to acquire an interest of up to 70% in the Condoroma and Suyckutambo Projects in Peru. The Company was granted an option to acquire up to 70% interest in each of these two projects on identical terms. The agreements allowed the Company to acquire an initial interest of 65% by sole funding $4 million in exploration expenditures within a 3 year period (the “Option Period”).  The Option Period commenced on August 4, 2006.  After acquiring 65%, the Company had 60 days to elect to sole fund further expenditures in order to acquire another 5%, giving it a total interest of 70%. The additional interest was to be acquired upon the earlier of completing a bankable feasibility study or spending a further $6 million, both within a period of no more than 3 years from the time of the election.  The Company could not withdraw from the agreement after the start of the Option Period until it either incurred $500,000 in exploration expenditures or paid $500,000 to the Goldplata Group.  Through August 31, 2008, $1,110,000 of exploration expenditures have been paid by the Company on the Condoroma and Suyckutambo Projects and recorded as mineral property and exploration costs on the statement of operations. No further payments were made up to the date of this report.
 
In September 2007, the Company decided to withdraw from the Condoroma and Suyckutambo Projects as it became apparent that the Company and the permit holders, the Goldplata Group, had different philosophies about how the projects should be further explored and developed.  De Beira favored a measured approach, with a focus on further exploration to maximize the resource potential whereas the Goldplata Group favored a short term development and production strategy.
 
d.  
Acandi Project
 
On October 19, 2006, the Company entered into a preliminary agreement in association with the Goldplata Group to earn an 80% interest in the Acandi copper / gold project in North East Colombia, near the Panama border, by sole funding exploration expenditures and making cash payments to the present beneficial holder of the project interest.  Through August 31, 2008, $525,000 of exploration expenditures have been paid by the Company. No further payments were made up to the date of this report.
 
In September 2007, the Company withdrew from the Acandi project and there are no residual rights or financial obligations.
 

 
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6.  
Loans and Borrowings
 
In March and July 2007, the Company received loan proceeds of $240,000 and $500,000 respectively from an unrelated third party. These loans are unsecured and bear interest at 8% per annum with no fixed repayment date, but the understanding with the lender is that the loans will be repaid from the proceeds of future equity financings and/or the repayment of amounts lent to Minanca. On December 20, 2010, principal of $46,892 and interest of $15,751 was assigned to this third party (Note 4d).  In December 2010, $267,072 of this loan as well as $200,310 of accrued interest on this loan was settled by the issue of 9,347,640 shares.
 
In January 2011, the Company received loan proceeds of $50,000, from an unrelated third party. This loan is unsecured, has no stated interest rate.  This amount was settled for issuance of 2,500,000 shares of commons stock in February 2012 (Note 3).
 
 
 
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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THE FOLLOWING PRESENTATION OF MANAGEMENT’S DISCUSSION AND ANALYSIS OF PANEX RESOURCES INC. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.

Uncertainties Relating To Forward-Looking Statements

This Form 10-Q Quarterly Report for the six month period ended February 29, 2012 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These forward-looking statements involve risks and uncertainties, including statements regarding Panex Resources Incorporated capital needs, business strategy and expectations.  Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology.  Actual events or results may differ materially.  In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports Panex files with the Securities and Exchange Commission.

The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The forward-looking statements in this Form 10-Q Quarterly Report for the six month period ended February 29, 2012, are subject to risks and uncertainties that could cause actual results to differ materially from the results expressed in or implied by the statements contained in this report.  As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment.  To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and accordingly, no opinion is expressed on the achievability of those forward-looking statements.  No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate.

All forward-looking statements are made as of the date of filing of this Form 10-Q and Panex disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Panex may, from time to time, make oral forward-looking statements.  Panex strongly advises that the above paragraphs and the risk factors described in this Quarterly Report and in Panex’s other documents filed with the United States Securities and Exchange Commission should be read for a description of certain factors that could cause the actual results of Panex to materially differ from those in the oral forward-looking statements.  Panex disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise.

Background

Panex Resources Inc. (“Panex” or the “Company”) is a Nevada corporation that was incorporated on May 28, 2004.

The Company conducts principal and technical activities from Coresco AG, Level 3, Gotthardstrasse 20, 6304 Zug, Switzerland.  The telephone number is (+41) 7887-96966.  These offices are provided to the Company on a month to month basis.  The Company believes these offices are adequate for the business requirements during the next 12 months.  The Company does not own any real property.  Panex maintains its statutory registered agent’s office at 1859 Whitney Mesa Drive, Henderson, Nevada, 89014.

Panex is an exploration stage company engaged in the acquisition and exploration of mineral properties.  The Company’s plan of operations is to conduct mineral exploration activities on mineral properties in order to assess whether these claims possess commercially exploitable mineral deposits.  Panex’s exploration program will be designed to explore for commercially viable deposits of base and precious minerals, such as gold, silver, lead, barium, mercury, copper, and zinc minerals.

On June 15, 2006, Panex entered into an agreement with Emco Corporation (“Emco”) to acquire an 80% interest in Minanca Minera Nanguipa, Compañía Anónima (“Minanca”), subject to certain conditions.  Minanca owns certain mineral exploration property, including plant and equipment, in Ecuador, South America (the “Ecuador Property”).  However, on December 9, 2007 Panex entered into an agreement with Emco to cancel the previously executed acquisition agreement, as the Company concluded that it was not in its best interests to settle the acquisition.
 
 
 
Page - 14

 
 
 
Panex has an authorized capital of 500,000,000 shares of common stock with a par value of $0.001 per share with 87,827,461 shares of common stock currently issued and outstanding.  On August 30, 2010, the authorized capital was increased from 75,000,000 shares of common stock to 500,000,000 shares of common stock.

Panex has not been involved in any bankruptcy, receivership or similar proceedings.  There have been no material reclassifications, mergers, consolidations or purchases or sales of a significant amount of assets not in the ordinary course of Panex’s business.

Currently, Panex has not obtained an employer identification number for the purpose of registering to do business in the United States.  Panex does not currently conduct any business in the United States nor employ any staff in the United States and is therefore not required by law to obtain an employer identification number at this time.  Panex will take immediate steps to obtain an employer identification number if it becomes necessary to do so at any time in the future.

Plan of Operation

During the next 12 months, management’s objective is to recapitalize Panex, raise new capital and seek new investment opportunities in the mineral sector.  As is evident from the “Background” section above and previous SEC filings, Panex has in the past successfully negotiated agreements enabling it to earn an interest in a number of different mineral properties.  Consequently, management believes that its worldwide industry contacts will make it possible to identify and assess new projects for acquisition purposes.

Panex is seeking a viable business opportunity through acquisition, merger or other suitable business combination method, with a focus on undervalued mineral properties for eventual acquisition.  Panex intends to concentrate its acquisition efforts on mineral properties or mineral exploration businesses that management believes to be undervalued or that management believes may realize a substantial benefit from being publicly owned. Panex will continue to identify and assess undervalued mineral properties when capital raisings are completed.  A small number of mineral properties are presently being reviewed, but it is too early to say whether they may be considered appropriate for acquisition. The Company is in the process of finalizing plans to raise new capital of a maximum of $2,400,000 whereby Panex is offering up to 30,000,000 shares of common stock on a self underwritten basis.  Refer to Form 424B4 filed on February 17, 2012 with the SEC.

The offering price is $0.08 per share and the maximum amount to be raised is $2,400,000.  Panex intends to offer up to a maximum of 30,000,000 shares through its president and sole director to investors, outside the United States.  There will be no underwriter or broker/dealer involved in the transaction and there will be no commissions paid to any individuals from the proceeds of this sale.  Klaus Eckhof, the president and sole director of Panex, intends to sell the shares directly.  The intended methods of communication include, without limitations, telephone and personal contact.

The offering by Panex is being conducted on a best efforts basis.   There is no minimum number of shares required to be sold by Panex.   All proceeds from the sale of these shares will be delivered directly to Panex and will not be deposited in any escrow account.  If the entire 30,000,000 shares of common stock are sold, Panex will receive gross proceeds of $2,400,000 before expenses of approximately $46,000.  Panex plans to complete or terminate this offering by that date not exceeding 180 days following the effective date of this registration.  No assurance can be given on the number of shares Panex will sell or even if Panex will be able to sell any shares.

In addition, this prospectus relates to the resale of up to 38,240,623 shares of common stock by selling stockholders.  The selling stockholders will sell their shares at a price range between $0.09 to $0.15 until Panex’s shares of common stock are quoted on a national securities or a quotation system, such as the OTCBB, and, thereafter, at prevailing market prices or privately negotiated prices.  The selling stockholders will offer their shares for sale for a period not to exceed 180 days following the effective date of this registration statement.  Panex will not receive any proceeds from the sale of the shares of common stock by the selling stockholders.  However, Panex will pay for the expenses of this offering and the selling stockholders’ offering, except for any selling stockholder’s legal or accounting costs or commissions.

This investment involves a high degree of risk.  See “Risk Factors” beginning on page 8 of Form 424B4 filed on February 17, 2012 with the SEC.

Results of Operations

Panex has generated no operating revenues since its inception on May 28, 2004 through February 29, 2012.
 
 
 
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For the three and six month periods ended February 29, 2012, Panex had net interest expense of $11,185 and $21,553 respectively, compared to $11,567 and $28,790 for the three and six month periods ended February 28, 2011.  Total expenses for the three and six months ended February 29, 2012 were $265,874 and $277,199, respectively, compared to $69,041 and $138,381 for the three and six months ended February 28, 2011.  Expenses were higher in the three and six month periods ended February 29, 2012 than the three and six month periods ended February 28, 2011 due to renewed activities to recapitalize the Company and seek new investment opportunities.

Liquidity and Capital Resources

The financial statements have been prepared assuming that we will continue as a going concern. Since our inception in May 2004, we have not generated revenue and have incurred net losses.  We have a working capital deficit of $935,081 at February 29, 2012, incurred net losses of $298,752 and $167,171 for the six months ended February 29, 2012 and 2011 respectively, and have a deficit accumulated during the exploration stage of $12,842,165 for the period from May 28, 2004 (inception) through February 29, 2012.

Accordingly, we have not generated cash flows from operations and have primarily relied upon loans from related and unrelated parties and equity financing to fund our operations. These conditions (as indicated in the 2011 audit report of our Independent Registered Public Accounting Firm), raise substantial doubt about the Company’s ability to continue as a going concern.

During the six months ended February 29, 2012, Panex used cash of $11,843 in operating activities compared to $41,574 in the six months ended February 29, 2011.  There has been a slight decrease in cash used in operating activities during the six months ended February 29, 2012.  The company intends to conserve cash reserves to the greatest extent possible and use the cash for investment opportunities.  As previously noted, Panex is not generating revenues and accordingly has not generated any significant cash flow from operations.  Panex is uncertain as to when it will produce cash flows from operations that are required to meet operating and capital requirements and will require significant funding from external sources to continue its operations.

During the six months ended February 29, 2012 and 2011 respectively, no cash was used to repay any debt.  On February 24, 2012 financial liabilities were converted to common stock via the entry into debt settlement agreements with creditors and related parties in consideration for the issue of the Company’s common stock, par value $0.001, at a per share price of $0.02 per share, with the result that the Company will no longer be indebted as further set forth in the Settlement Agreements as follows:

 - Ross Doyle, a related party for $ 39,551.06 USD, for a total of 1,977,553 shares at a price of $0.02 per share.
 - Werte AG, a creditor, for $ 80,000 USD, for a total of 4,000,000 shares at a price of $0.02 per share.
 - Lars Pearl, a creditor, for $ 50,000.00 USD, for a total of 2,500,000 shares at a price of $0.02 per share.

These debt settlement agreements have been authorised by the Company and when share certificates are issued they will be entered into the Company register.

Furthermore during the period, the Company received cash of $162,000 from a private placement of 2,025,000 shares of common stock at $0.08 per share.  The common stock has not been issued and when accepted by the Company they will be entered into the Company register.

Contingencies and Commitments

Panex has no contingencies or long-term commitments.

While Panex has raised capital to meet its working capital and financing needs in the past, additional financing is required in order to fully complete its plan of operation and launch its business operations.  Panex is seeking financing in the form of equity in order to provide the necessary working capital.  Panex currently has no commitments for financing.  There are no assurances Panex will be successful in raising the funds required.

Off-Balance Sheet Arrangements

Panex has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on Panex’s financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, nor did Panex have any non-consolidated, special-purpose entities during this quarter.
 
 
 
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Recent Accounting Pronouncements
 
The Company continually assesses any new accounting pronouncements to determine their applicability.  Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.  A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, the Company has not determined whether implementation of such proposed standards would be material to the Company’s financial statements.  New pronouncements assessed by the Company recently are discussed below:

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220) – Presentation of Comprehensive Income (“ASU 2011-05”).  ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 is effective for fiscal years and interim periods beginning after December 15, 2011 (March 1, 2012 for the Company).  The Company does not expect the adoption of ASU 2011-04 to have a material impact on its results of operations, financial condition, or cash flows.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Panex is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

ITEM 4 – CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Klaus Eckhof, Panex’s Chief Executive Officer and Ross Doyle, Panex’s Chief Financial Officer, have evaluated the effectiveness of Panex’s disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this quarterly report (the “Evaluation Date”).  Based on such evaluation, Mr Eckhof and Mr Doyle have concluded that, as of the Evaluation Date, Panex’s disclosure controls and procedures are not effective in alerting Panex on a timely basis to material information required to be included in its reports filed or submitted under the Exchange Act, for the reasons listed in Item 9A of the Company’s Form 10-K filing for the year ended August 31, 2011.

While management strives to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff. Management believes that this is typical in most exploration stage companies. Panex may not be able to fully remediate the material weakness until we commence mining operations at which time management expects to employ more staff. Management will continue to monitor and address the costs and benefits of additional staffing.

Changes in Internal Controls over Financial Reporting

During the fiscal quarter covered by this report, there were no changes in Panex’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, Panex’s internal control over financial reporting.

 
 
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PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Panex is not a party to any pending legal proceedings and, to the best of Panex’s knowledge, none of Panex’s assets are the subject of any pending legal proceedings.

ITEM 1A – RISK FACTORS

Panex is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the quarter of the fiscal year covered by this report, (i) Panex did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) Panex did sell the following unregistered equity securities:

February 24, 2012 - Shares For Debt Offering

On February 24, 2012, the board of directors approved the settlement of debt for shares at a settlement price of $0.02 per restricted share.   Panex settled $169,551 in debt in this closing, and on February 24, 2012 issued an aggregate 8,477,553 restricted shares of common stock to three non-US creditors outside the United States.

Panex set the value of the restricted shares arbitrarily without reference to its assets, book value, revenues or other established criteria of value.  All the restricted shares issued in this offering were issued for investment purposes in a “private transaction”.

For the two non-US creditors outside the United States in this one closing, Panex relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission.  Management is satisfied that Panex complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933.  The settlement of debt was not a public offering and was not accompanied by any general advertisement or any general solicitation.  Panex received from each creditor a completed and signed shares for debt agreement containing certain representations and warranties, including, among others, that (a) the creditor was not a U.S. person, (b) the creditor accepted the shares for debt for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the resale of the shares with any buyer.  No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.
 
Also on January 11, 2012, the Securities and Exchange Commission declared Panex’s Form S-1 Registration Statement effective, file number 333-172375, permitting Panex to offer up to 30,000,000 shares of common stock at $0.08 per share.  The offering is being conducted on a best efforts basis and there is no underwriter involved in this public offering.  Panex has not yet received any subscription agreements nor received any proceeds from the offering.  Panex intends on applying the proceeds to ongoing operations, paying accounts payable, paying for offering expenses, assessing and evaluating possible new mineral project opportunities, and, subject to acquiring any such new projects, funding the exploration on such projects.  The offering period for the public offering expires on July 9, 2012.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

During the quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of Panex.  Also, during this quarter, no material arrearage in the payment of dividends has occurred.

ITEM 4 – MINING SAFETY DISCLOSURES

There are no current mining activities at the date of this report.

ITEM 5 – OTHER INFORMATION

During the quarter of the fiscal year covered by this report, Panex reported all information that was required to be disclosed in a report on Form 8-K.
 
 
 
 
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(a)  
Index to and Description of Exhibits

 
All Exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to Panex’s previous filings with the SEC which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-51707 and SEC File Number 333-130264.

 
Exhibit
Description
Status
3.1
Articles of Incorporation of Panex Resources Inc. filed as an Exhibit to Panex’s Form SB-2 (Registration Statement) filed on December 12, 2005 and incorporated herein by reference.
Filed
3.2
By-Laws of Panex Resources Inc. filed as an Exhibit to Panex’s Form SB-2 (Registration Statement) filed on December 12, 2005 and incorporated herein by reference.
Filed
3.3
Certificate of Amendment of Panex Resources Inc., filed as an Exhibit to Panex’s Form 8-K (Current Report) filed on September 30, 2010 and incorporated herein by reference.
Filed
10.1
Management Agreement dated April 19, 2006 between Panex Resources Inc. and Reg Gillard, filed as Exhibit 10.2 to Panex’s Form 8-K (Current Report) filed on May 10, 2006 and incorporated herein by reference.
Filed
10.2
Letter of Understanding dated May 6, 2006 among Panex Resources Inc., Goldplata Corporation Limited, Goldplata Resources Inc, and Goldplata Resources, Sucursal-Columbia, filed as an Exhibit to Panex’s Form 8-K (Current Report) filed on May 25, 2006 and incorporated herein by reference.
Filed
10.3
Letter Agreement dated June 15, 2006 between Panex Resources Inc. and Emco Corporation, filed as an Exhibit to Panex’s Form 8-K (Current Report) filed on June 29, 2006 and incorporated herein by reference.
Filed
10.4
Share Sale Agreement dated July 10, 2006, between Panex Resources Inc. and Emco Corporation Inc. S.A., filed as an Exhibit to Panex’s Form 8-K (Current Report) filed on July 17, 2006, and incorporated herein by reference.
Filed
10.5
Heads of Agreement dated July 26, 2007 among Panex Resources Inc., Goldplata Resources Peru S.A.C., Goldplata Resources Inc., Goldplata Resources Sucursal-Colombia, Goldplata Corporation Limited, and Goldplata Mining International Corporation, filed as an Exhibit to Panex’s Form 10-K (Annual Report) filed on July 28, 2009 and incorporated herein by reference.
Filed
10.6
Letter Agreement dated December 6, 2007 among Panex Resources Inc., Emco Corporation Inc. S.A. and Minanca Minera Nanguipa, Compania Anonima, filed as an Exhibit to Panex’s Form 10-K (Annual Report) filed on July 28, 2009 and incorporated herein by reference.
Filed
10.7
Deed dated January 11, 2008 among Panex Resources Inc., Windy Knob Resources Limited, Goldplata Mining International Corporation, Goldplata Resources Inc., and Goldplata Resources Sucursal-Colombia, filed as an Exhibit to Panex’s Form 10-K (Annual Report) filed on July 28, 2009 and incorporated herein by reference.
Filed
    10.8
Services Agreement dated March 14, 2012 between Panex Resources Inc. and Coresco AG, filed as an Exhibit to Panex’s Form 8-K (Current Report) filed on April 11, 2012 and incorporated herein by reference.
    Filed
14.1
Financial Code of Ethics filed as an Exhibit to Panex’s Form SB-2 (Registration Statement) filed on December 12, 2005 and incorporated herein by reference.
Filed
31.1
Included
31.2
Included
32
Included
99.1
Disclosure Committee Charter, filed as an Exhibit to Panex’s Form 10-K (Annual Report) filed on July 28, 2009 and incorporated herein by reference.
Filed
101 *
Financial statements from the quarterly report on Form 10-Q of Panex Resources Inc. for the quarter ended February 29, 2012, formatted in XBRL:  (ii) the Balance Sheets, (ii) the Statements of Operations; (iii) the Statements of Cash Flows, and (iv) the Statements of Stockholders’ Equity (Deficit).
Included
 
* In accordance with Rule 406T of Regulation S-T, the XBRL (“eXtensible Business Reporting Language”) related information is furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
 
 
 
Page - 19

 



SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, Panex Resources Inc. has caused this report to be signed on its behalf by the undersigned duly authorized person.

PANEX RESOURCES INC.
/s/ Klaus Eckhof
Name: Klaus Eckhof
Title: President and CEO
Principal Executive Officer
Dated:    April 12, 2012

/s/ Ross Doyle
Name: Ross Doyle
Title: CFO
Principal Financial Officer
Dated:    April 12, 2012


 
Page - 20

 

 
 
 




Exhibit 31.1

 
 


 
 


 
 
Page - 21

 
 

 
PANEX RESOURCES INC. CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
CERTIFICATION
 
 
I, Klaus Eckhof, certify that:
 
 
1.  I have reviewed this quarterly report on Form 10-Q for the quarter ended February 29, 2012 of Panex Resources Inc.;
 
 
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 /s/ Klaus Eckhof
 
Klaus Eckhof
 
Chief Executive Officer
 
Date:  April 12, 2012
 


 
 
Page - 22

 

 
 
 

 

 
Exhibit 31.2
 

 


 
 

 
 
Page - 23

 


 
PANEX RESOURCES INC. CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 
CERTIFICATION
 
 
I, Ross Doyle, certify that:
 
 
1.  I have reviewed this quarterly report on Form 10-Q for the quarter ended February 29, 2012 of Panex Resources Inc.;
 
 
2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
 (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
/s/ Ross Doyle

Ross Doyle

Chief Financial Officer
 
Date:  April 12, 2012
 
 
 
 
Page - 24

 
 
 
 
 

 
 


Exhibit 32
 
 


 

 

 
 
Page - 25

 

 

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 Panex Resources Inc. (the “Company”) on Form 10-Q for the period ended February 29, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Klaus Eckhof, President, Chief Executive Officer of the Company and sole member of the Board of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:
 
 
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 aspects, the financial condition and result of operations of the Company.
 
 
 /s/ Klaus Eckhof
 
Klaus Eckhof
 
Chief Executive Officer
 
April 12, 2012
 
 

 
 
Page - 26

 
 
 
 
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 Panex Resources Inc. (the “Company”) on Form 10-Q for the period ended February 29, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ross Doyle, Chief Financial Officer, Treasurer, and Corporate Secretary of the Company, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:
 
 
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 aspects, the financial condition and result of operations of the Company.
 
/s/ Ross Doyle
 
Ross Doyle
 
Chief Financial Officer
 
April 12, 2012
 
 

 
 
Page - 27

 
 
 
 

PINX:DBGF Panex Resources, Inc. Quarterly Report 10-Q Filling

Panex Resources, Inc. PINX:DBGF Stock - Get Quarterly Report SEC Filing of Panex Resources, Inc. PINX:DBGF stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:DBGF Panex Resources, Inc. Quarterly Report 10-Q Filing - 2/29/2012
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