PINX:PRDC Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

 

FORM 10-Q

_______________

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2012

 

OR

 

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______.

 

Commission File Number: 001-34858

___________________________________________________

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)

 (Exact name of registrant as specified in its charter)

___________________________________________________

 

 

Nevada     98-0568076

(State or other jurisdiction of

incorporation or organization)

    (IRS Employer Identification No.)
       

13520 Oriental St.

Rockville, MD

  20853
(Address of principal executive offices)     (Zip Code)

 

(202) 536-5191

 (Registrant’s telephone number, including area code)

_____________________________________________________

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.

Yes  x  No  o

 

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).

Yes  x  No  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer  o Accelerated Filer  o
Non-Accelerated Filer  o Smaller Reporting Company  x

 

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes x  No  o

 

As of August 15, 2012 the registrant had 1,522,800,000 shares of its Common Stock, $0.001 par value, outstanding.  

  

 

 

 
 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)
FORM 10-Q

JUNE 30, 2012

INDEX

 

PART I -- FINANCIAL INFORMATION Page
     
Item 1. Financial Statements 3
  Balance Sheets as of June 30, 2012 (unaudited) and September 30, 2011 3
  Statements of Operations for the Three and Nine Months Ended June 30, 2012 and 2011 and for the Period March 26, 2007 (Inception) to June 30, 2012 (unaudited) 4
  Statements of Cash Flows for the Nine Months Ended June 30, 2012 and 2011 and for the Period March 26, 2007 (Inception) to June 30, 2012 (unaudited) 5
  Notes to Financial Statements (unaudited) 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3 Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Controls and Procedures 12
     
PART II -- OTHER INFORMATION  
     
Item 1. Legal Proceedings 12
Item 1.A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 13
Item 4. Mine Safety Disclosures 13
Item 5. Other Information 13
Item 6. Exhibits 13
     
SIGNATURE   14

 

 

 

2
 

PART I – FINANCIAL INFORMATION

 

Item 1.    Financial Statements

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)

(A Development Stage Company)

Balance Sheets

 

 

   June 30,
2012
   September 30,
2011
 
   (unaudited)   (restated) 
ASSETS 
         
Current assets:            
Cash and cash equivalents  $    $  
             
Total assets  $    $  
         
LIABILITIES AND STOCKHOLDERS' DEFICIT 
         
Current liabilities:          
Accounts payable  $10,619   $379 
Accrued expenses   4,750    12,000 
Amount due to shareholder   121,677    57,162 
Total current liabilities   137,046    69,541 
           
Other liabilities        
           
Total liabilities   137,046    69,541 
           
Stockholders' deficit:          
Common stock, $.001 par value, 1,600,000,000 shares authorized,1,522,800,000 shares issued and outstanding   1,522,800    1,522,800 
Deficit accumulated during the development stage   (1,659,846)   (1,592,341)
Total stockholders' deficit   (137,046)   (69,541)
           
Total liabilities and stockholders' deficit  $   $ 

 

 

See accompanying notes to financial statements.

 

3
 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)

(A Development Stage Company)

Statements of Operations

(unaudited)

 

   For the Three Months Ended   For the Nine Months Ended   For the Period March 26,
2007
(Inception) to
 
   June 30,
2012
   June 30,
2011
   June 30,
2012
   June 30,
2011
   June 30,
2012
 
                          
Net revenue  $   $   $   $   $31,912 
                          
Cost of revenue                   15,731 
                          
Gross profit                   16,181 
                          
General and administrative expenses   24,702    13,604    67,505    33,879    380,464 
                          
Loss from operations   (24,702)   (13,604)   (67,505)   (33,879)   (364,283)
                          
Other income (expense):                         
Gain on disposal of subsidiaries                   118,193 
Exchange gain                   1,028 
Interest income                   293 
Other income                   903 
Interest expense                   (2,170)
Total other income (expense)                   118,247 
                          
Loss before income taxes   (24,702)   (13,604)   (67,505)   (33,879)   (246,036)
                          
Provision for income taxes                    
                          
Net loss   (24,702)   (13,604)   (67,505)   (33,879)   (246,036)
                          
Net loss attributable to noncontrolling interest                   24,430 
                          
Net loss attibutable to Paradigm ResourceManagement Corporation  $(24,702)  $(13,604)  $(67,505)  $(33,879)  $(221,606)
                          
Net loss per share - basic and diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)     
                          
Weighted average number of shares outstanding - Basic and Diluted   1,522,800,000    1,522,800,000    1,522,800,000    1,522,800,000      

 

See accompanying notes to financial statements.

 

4
 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)

(A Development Stage Company)

Statements of Cash Flows

(unaudited)

 

    For the Nine Months Ended   For the Period
March 26, 2007
(Inception) to
 
   June 30,
2012
   June 30,
2011
   June 30,
2012
 
             
Cash flows from operating activities:               
Net loss  $(67,505)  $(33,879)  $(221,606)
Adjustments to reconcile net loss to net cash used in operations:               
Depreciation           2,914 
Noncontrolling interest           (24,430)
Gain on disposal of subsidiaries           (118,193)
Common stock issued for services           400 
Changes in operating assets and liabilities:               
Accounts receivable           (859)
Other receivable           1,812 
Loan receivable           12,822 
Due from related party           (19,443)
Deposit           (5,871)
Inventory           (1,897)
Accounts payable   10,619    14,629    93,739 
Accrued expenses   4,750        19,210 
Net cash used in operating activities   (52,136)   (19,250)   (261,402)
                
Cash flows from investing activities:               
Acquisition of subsidiary, net of cash           75,650 
Disposal of subsidiary, net of cash           39,742 
Capital expenditures           (12,511)
Net cash provided by investing activities           102,881 
                
Cash flows from financing activities:               
Proceeds from loan payable           6,793 
Amounts due shareholder   52,136    19,250    106,618 
Amounts due directors           4,860 
Proceeds from sale of common stock           44,160 
Net cash provided by financing activities   52,136    19,250    162,431 
                
Effect of exchange rate fluctuations on cash           (3,910)
                
Net increase (decrease) in cash            
                
Cash and cash equivalents at beginning of period            
                
Cash and cash equivalents at end of period  $   $   $ 

 

See accompanying notes to financial statements.

 

 

Continued

 

5
 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)

(A Development Stage Company)

Statements of Cash Flows (Continued)

(unaudited)

 

   For the Nine Months Ended   For the Period
March 26, 2007
(Inception) to
 
   June 30,
2012
   June 30,
2011
   June 30,
2012
 
Supplemental disclosure of cash flow information:            
             
Cash paid for interest  $   $   $2,170 
                
Cash paid for taxes  $   $   $ 
                
Supplemental disclosure of non-cash financing activities:               
                
Amounts due to director paid by shareholder  $   $   $180 
                
Accounts payable paid by shareholder  $379   $   $379 
                
Accrued expenses paid by shareholder  $12,000   $2,000   $14,500 

 

 

 

See accompanying notes to financial statements.

 

6
 

 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)
(A Development Stage Company)

Notes to Financial Statements
June 30, 2012

(unaudited)

 

Note 1 – Nature of Business, Presentation and Going Concern

 

Organization

 

Paradigm Resource Management Corporation (the "Company") was incorporated in Nevada on March 26, 2007 under the name China Digital Ventures Corporation. The principal business of the Company was its web based telecom and IPTV businesses, both of which were disposed of during the year ended September 30, 2010. As of the date hereof, the Company has no operations.

 

On July 23, 2010, the Company experienced a change in control.  Canton Investments Ltd (“CIL”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders.  On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 1,150,000,000 shares of the Company’s outstanding common stock for $205,750.  Also on July 23, 2010, CIL purchased 244,000,000 shares of the Company’s outstanding common stock for $36,600 from various shareholders.  As a result of the change in control, CIL owns a total of 1,394,000,000 shares of the Company’s common stock representing 91.54%.

 

On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation. The Company is currently contemplating acquisitions of certain gold, copper and uranium mineral property rights.

 

Stock Split

 

On June 1, 2012, the Company's Board of Directors declared a one hundred-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased the number of shares of common stock outstanding from 15,228,000 to 1,522,800,000. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to June 1, 2012. The total number of authorized common shares and the par value thereof was not changed by the split.

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

 

These unaudited financial statements should be read in conjunction with our 2011 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on January 12, 2012.

 

Going Concern

 

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $67,505 for the nine months ended June 30, 2012 and has incurred cumulative losses since inception of $221,606. The Company has a stockholders’ deficit of $137,046 at June 30, 2012.  These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan.  No assurance can be given that the Company will be successful in these efforts.

 

The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. No assurance can be given that the Company will be successful in these efforts.

 

7
 

PARADIGM RESOURCE MANAGEMENT CORPORATION

(f/k/a China Digital Ventures Corporation)
(A Development Stage Company)

Notes to Financial Statements
June 30, 2012

(unaudited)

 

Note 1 – Nature of Business, Presentation and Going Concern (Continued)

 

Development Stage Enterprise

 

The Company is a development stage enterprise, as defined in ASC Topic 915 “Development Stage Entities” and as such, its planned principal operations have not fully commenced.

 

Note 2 – Related Party Transactions

 

In connection with the change in control which occurred on July 23, 2010, Canton Investments Ltd (“Canton”), the Company’s principal shareholder, assumed an outstanding loan from the former shareholders of the Company of $19,103. During the year ended September 30, 2011, Canton paid an additional $37,879 of expenses in connection with the Company’s operations, as well as a $180 liability due to a director, resulting in an amount due to Canton of $57,162 at September 30, 2011.

 

During the nine months ended June 30, 2012, Canton paid an additional $64,515 of expenses in connection with the Company’s operations, resulting in an amount due to Canton of $121,677 at June 30, 2012.   The loan is unsecured, non-interest bearing and there is no repayment date.

 

Note 3 – Stockholders’ Deficit

 

During the period from March 26, 2007 (date of inception) to September 30, 2007, the Company issued 1,000,000,000 shares of its common stock to founders of the Company for $10,000 cash or $0.00001 per share.

 

During the period from March 26, 2007 (date of inception) to September 30, 2007, the Company issued 300,000,000 shares of its common stock for $30,000 cash or $0.0001 per share.

 

During the year ended September 30, 2008, the Company issued 20,800,000 restricted shares of its common stock for $4,160 cash or $0.0002 per share.

 

During the year ended September 30, 2008, the Company issued 2,000,000 restricted shares of its common stock for services rendered aggregating $400 as stock based compensation.

 

On July 6, 2009, the Company issued 200,000,000 shares of its Common Stock to the then current major shareholder of the Company for the acquisition of 19,200,000 shares in China Integrated Media Corporation Limited.

 

On April 24, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to increase its authorized number of common shares to 1,600,000,000 at $0.001 par value.  As of June 30, 2012 and September 30, 2011 the Company had 1,522,800,000 shares of Common Stock issued and outstanding.  

 

On June 1, 2012, the Company's Board of Directors declared a one hundred-to-one forward stock split which was distributed on June 22, 2012 to shareholders of record and has filed an amendment to its Articles of Incorporation in the State of Nevada. The par value of $0.001 remained the same. The impact of the forward split created an increase in common stock of $1,507,572 and a resultant charge to additional paid in capital and the deficit accumulated during the development stage of $69,332 and $1,438,240, respectively.

 

Note 4 – Subsequent Events

 

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no such events that warrant disclosure or recognition in the financial statements.

 

8
 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

We believe that it is important to communicate our future expectations to our security holders and to the public.  This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions.  Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement.  Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

 

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011 and in our subsequent filings with the Securities and Exchange Commission.  The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

 

Company Overview

 

The Company was incorporated as China Digital Ventures Corporation in Nevada on March 26, 2007 and was in the web based telecom services business in China. The Company's mission was to acquire, own and manage a portfolio of "technology", "media" and "telecommunication" assets in China. During the period March 26, 2007 (inception) to June 30, 2012, all revenue was derived from the telecom business sector.

 

In July 2009, the Company acquired a 76.8% interest in China Integrated Media Corporation Limited ("CIMC"), a public company in Australia.

 

In February 2010, the Company decided to divest from its investment in CIMC due to its inability to raise the capital necessary to pursue this investment on a timely manner and concerns on its internal liquidity. On April 30, 2010 the Company disposed of CIMC.

 

On June 20, 2010, the Company disposed of its subsidiary company, Lead Concept Limited, which operated its web based VOIP business as the Company was no longer competitive in this market segment. After this disposal, the Company had no operations.

 

On July 23, 2010, the Company experienced a change in control.  Canton Investments Ltd (“CIL”) acquired a majority of the issued and outstanding common stock of the Company in accordance with stock purchase agreements by and between CIL and Wireless One International Limited (“Wireless One”), Bing HE and Ning HE, the Company’s former directors, and other various shareholders.  On the closing date, July 23, 2010, pursuant to the terms of the Stock Purchase Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 1,150,000,000 shares of the Company’s outstanding common stock for $205,750.  Also on July 23, 2010, CIL purchased 244,000,000 shares of the Company’s outstanding common stock for $36,600 from various shareholders.  As a result of the change in control, CIL owns a total of 1,394,000,000 shares of the Company’s common stock representing 91.54%.

 

On May 10, 2012, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Paradigm Resource Management Corporation. The Company is currently contemplating acquisitions of certain gold, copper and uranium mineral property rights.

 

The Company is currently a development stage enterprise.

 

9
 

 

Plan of Operation

 

On March 21, 2012, the Company signed a Letter of Intent to acquire all of the mineral rights properties of ARNEVUT Resources, Inc. (“ARNEVUT”), an exploration and mining company engaged in the identification, acquisition, evaluation, exploration and development of mineral properties in the United States. ARNEVUT holds mineral rights, or options to acquire mineral rights, on certain properties in Nevada, Utah, and New Mexico. The Company is currently negotiating definitive acquisition agreements.

 

On May 22, 2012, the Company signed a Memorandum of Understanding between the shareholder group of Sao Camilo Mineradora Ltda. Group (“Sao Camilo”) to acquire a strategic equity interest in Sao Camilo. Sao Camilo was founded in 2006 with the objective of developing an iron ore proessing project, The Sao Camilo Project, to produce and export pellet feeds from its mining resources located nearby the city of Sao Raimundo Nonato, south of Piaui State, in the northeast region of Brazil. To date, Sao Camilo has acquired two farms totaling 690 hectares, which cover most of the mining rights, including the ideal location for the construction of plant facilities, piling stocks and tailings dam. The Company is currently negotiating definitive acquisition agreements for these properties.

 

Results of Operations

 

For the Three and Nine Months Ended June 30, 2012 and 2011 and For the Period March 26, 2007 (Inception) to June 30, 2012

 

Revenues

 

The Company had no revenue for the three and nine months ended June 30, 2012 and 2011.

 

For the period from March 26, 2007 (date of inception) to June 30, 2012, the Company realized revenue of $31,912, incurred a cost of revenue of $15,731 and achieved a gross profit of $16,181. All revenue was derived from the telecom business and reflects the disposal of the Company’s operating subsidiaries during the 2010 fiscal year.

 

Operating Expenses

 

For the three months ended June 30, 2012 total operating expenses were $24,702 compared to $13,604 for the three months ended June 30, 2011 resulting in an increase of $11,098. The increase in operating expenses primarily relates to increases in legal fees, accounting and audit fees, and costs associated with regulatory reporting.

 

For the nine months ended June 30, 2012 total operating expenses were $67,505 compared to $33,879 for the nine months ended June 30, 2011 resulting in an increase of $36,626. The increase in operating expenses primarily relates to increases in legal fees, accounting and audit fees, and costs associated with regulatory reporting.

 

For the period from March 26, 2007 (date of inception) to June 30, 2012, the accumulated gross profit was $16,181, the total operating expenses were $380,464 which was all general and administrative expenses, had $118,193 in gain on disposal of subsidiaries, $1,028 in exchange gain, $2,170 in interest expense, $1,196 in interest income and other income and loss attributable to minority interest of $24,430, resulting in an accumulated net loss to our shareholders of $221,606.

 

Liquidity and Capital Resources

 

Overview

 

As of June 30, 2012, the Company had no cash and a deficit in working capital of $137,046. Since July 23, 2010, the date CIL became our majority shareholder, our operating expenses have been funded and paid by CIL.

 

We do not have sufficient resources to effectuate our business. As of June 30, 2012, we had no cash. We expect to incur a minimum of $100,000 in expenses during the next twelve months of operations, in addition to potential operating, exploration and development expenses associated with the planned acquisition of certain mineral property rights of ARVENUT and Sao Camilo. We estimate that this will be comprised of the following expenses: $25,000 for business planning and development, and $75,000 for general overhead expenses such as legal and accounting fees, office overhead and general expenses. Potential exploration and development expenses have not yet been identified at this time.

 

10
 

Liquidity and Capital Resources during the Nine Months Ended June 30, 2012 compared to the Nine Months ended June 30, 2011

 

We used cash for operating activities of $52,136 and $19,250 for the nine months ended June 30, 2012, and 2011, respectively. The elements of cash flow used in operations for the nine months ended June 30, 2012 included a net loss of $67,505, offset by increases in accounts payable of $10,619 and accrued expenses of $4,750. The elements of cash flow used in operations for the nine months ended June 30, 2011 included a net loss of $33,879, offset by increases in accounts payable of $14,629.

 

We used no cash in investing activities during the nine months ended June 30, 2012 and 2011.

 

Cash generated in our financing activities was $52,136 for the nine months ended June 30, 2012, compared to cash generated of $19,250 during the comparable period in 2011. This increase was primarily attributed to amounts due to our principal shareholder for expenses paid on our behalf by the shareholder in 2012.

 

We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

 

Going Concern

 

Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the financial statements for the year ended September 30, 2011 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

 

Our unaudited financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

 

There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

 

Off-Balance Sheet Arrangements

 

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

Critical Accounting Policies

   

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

 

11
 

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended September 30, 2011, included in our Annual Report on Form 10-K as filed on January 12, 2012, for a discussion of our critical accounting policies and estimates.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

 

Item 4.  Controls and Procedures.

 

(a)Evaluation of Disclosure Controls and Procedures

 

The Company’s principal executive officer (“PEO”) who is also the principal financial officer (“PFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based on this evaluation, the PEO/PFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the PEO/PFO, as appropriate, to allow timely decisions regarding required disclosure.

 

(b)Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company, threatened against or affecting our company or our common stock in which an adverse decision could have a material adverse effect.

 

Item 1A.  Risk Factors

 

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

There were no unregistered sales of equity securities during the quarter ended June 30, 2012.

 

12
 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits

 

 

  Exhibit 31.1 Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
     
  Exhibit 31.2 Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). *
     
  Exhibit 32.1 Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
     
  Exhibit 32.2 Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
     
  101.INS XBRL Instance Document **
     
  101.SCH XBRL Taxonomy Extension Schema Document **
     
  101.CAL XBRL Taxonomy Extension Calculation Linkbase Document **
     
  101.DEF XBRL Taxonomy Extension Definition Linkbase Document **
     
  101.LAB XBRL Taxonomy Extension Label Linkbase Document **
     
  101.PRE XBRL Taxonomy Extension Presentation Linkbase Document **

 

* Filed herewith.
   
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

13
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date:  August 20, 2012   By:  /s/ Robert M. Price
    Robert M. Price
   

Chief Executive Officer

(Principal Executive Officer)

Chief Financial Officer

(Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

14

 

 

PINX:PRDC Quarterly Report 10-Q Filling

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PINX:PRDC Quarterly Report 10-Q Filing - 6/30/2012
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