XOTC:DKMR Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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FORM 10Q MARCH 31, 2011

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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


 [  ]        Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934


              For the transition period from __________ to __________



Commission File Number 333-140177


DUKE MOUNTAIN RESOURCES, INC.

(Exact name of Small Business Issuer as specified in its charter)


 

 

 

 

Nevada

98-0503336

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)


6805 Sundance Trail, Riverside, CA 92506

(Address of principal executive offices)


(951) 907-9911

(Issuer's telephone number)


Common Stock, $0.001 par value per share

(Title of Each Class)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ] Yes   [    ] 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).   [   ] Yes   [    ] No


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


Large Accelerated Filer [   ] Accelerated Filer   [   ] Non-accelerated Filer [  ] 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).    [ X ] Yes  [   ] No


There were 12,180,000 common shares outstanding as of August 5, 2012.




1



CONTENTS


PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED CONSOLIDATED BALANCE SHEETS

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS


ITEM 4T. CONTROLS AND PROCEDURES


PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


ITEM 1A. RISK FACTORS


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


ITEM 3 DEFAULTS UPON SENIOR SECURITIES


ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS


ITEM 5. OTHER INFORMATION


ITEM 6. EXHIBITS


SIGNATURES








2



DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Balance Sheets

(Unaudited)


 

 

 

 

June 30,

 

December 31,

 

 

 

 

2012

 

2011

ASSETS

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

        136,277

 

$

        164,738

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

 

        136,277

 

 

        164,738

 

 

 

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mineral rights

 

 

          20,000

 

 

          20,000

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

        156,277

 

$

        184,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

                  -

 

$

              280

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

                  -

 

 

              280

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares: $0.001 par value, 76,000,000 shares authorized, 12,180,000 shares issued and outstanding

 

 

          12,180

 

 

          12,180

 

Additional paid-in capital

 

 

        519,820

 

 

        519,820

 

Deficit accumulated during the exploration stage

 

 

       (375,723)

 

 

       (347,542)

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity

 

 

        156,277

 

 

        184,458

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS'  EQUITY

 

$

        156,277

 

$

        184,738

 

 

 

 

 

 

 

 

 


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




3






DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

 

 

 

 

 Inception on

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

May 3, 2006

 

 

 

June 30,

 

June 30,

 

to June 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of assets

 

-

 

 

-

 

 

-

 

 

-

 

 

40,000

 

Bad debt expense

 

-

 

 

-

 

 

-

 

 

-

 

 

20,000

 

Mineral exploration expense

 

-

 

 

-

 

 

-

 

 

-

 

 

40,404

 

General and administrative

 

         7,554

 

 

14,680

 

 

28,307

 

 

27,464

 

 

300,987

 

 

Total Operating Expenses

 

7,554

 

 

14,680

 

 

28,307

 

 

27,464

 

 

401,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 (7,554)

 

 

(14,680)

 

 

 (28,307)

 

 

(27,464)

 

 

 (401,391)

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

-

 

 

-

 

 

-

 

 

-

 

 

1,520

 

Interest income

 

184

 

 

158

 

 

            183

 

 

366

 

 

24,148

 

 

Total Other Income

 

184

 

 

158

 

 

            183

 

 

366

 

 

25,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 (7,370)

 

 

(14,522)

 

 

 (28,181)

 

 

(27,098)

 

 

 (375,723)

 

Provision for income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

 (7,370)

 

$

(14,522)

 

$

 (28,181)

 

$

(27,098)

 

$

 (375,723)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER COMMON SHARE

$

 (0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

12,180,000

 

 

12,180,000

 

 

12,180,000

 

 

12,180,000

 

 

 


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



4





DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)


 

 

 

 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

 Inception on

 

 

 

 

 

For the Six Months Ended

 

May 3, 2006

 

 

 

 

 

June 30,

 

to June 30,

 

 

 

 

 

2012

 

2011

 

2012

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

       (28,181)

 

$

       (27,098)

 

$

       (375,723)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

Impairment of mineral rights

 

 

                 –

 

 

                 –

 

 

          40,000

 

 

Bad debt expense

 

 

                 –

 

 

                 –

 

 

          20,000

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

  Prepaid expenses

 

 

                 –

 

 

          5,500

 

 

                   –

 

 

  Accounts payable and accrued expenses

 

 

          (280)

 

 

         (7,004)

 

 

                   –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in Operating Activities

 

 

       (28,461)

 

 

       (28,602)

 

 

       (315,723)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Note receivable

 

 

                 –

 

 

                 –

 

 

         (20,000)

 

Investment in mineral rights

 

 

                 –

 

 

                 –

 

 

         (60,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in Investing Activities

 

 

                 –

 

 

                 –

 

 

         (80,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Proceeds from public offering

 

 

                 –

 

 

                 –

 

 

        310,000

 

Proceeds from private placements

 

 

                 –

 

 

                 –

 

 

        222,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Financing Activities

 

 

                 –

 

 

                 –

 

 

        532,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

   

       (28,461)

   

   

       (28,602)

   

   

        136,277

CASH AT BEGINNING OF PERIOD

 

   

      164,738

 

 

      228,195

 

 

                   –

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

      136,277

 

$

      199,593

 

$

        136,277

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF

 

 

 

 

 

 

 

 

 

 

CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

 

 

CASH PAID FOR:

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

                 –

 

$

                 –

 

$

              440

 

 

Income taxes

 

$

                 –

 

$

                 –

 

$

                   –


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




5



DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

June 30, 2012

(Unaudited)



NOTE 1 – BASIS OF PRESENTATION


Duke Mountain Resources, Inc. (the “Company"), a Nevada Corporation, was formed on May 3, 2006 with authorized capital of 76,000,000 shares of common stock, par value of $0.001 per share.  Duke Mountain Resources, Inc., together with its wholly-owned subsidiary, Duke Mountain Resources Canada, Inc., is an exploration stage company focused on the acquisition of mineral rights and exploration for gold, silver and base metal properties.  The subsidiary holds title to all mineral claims and has no liabilities. The Canadian operating subsidiary conducts all mineral exploration for Duke Mountain Resources, Inc.


The accompanying consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations, and cash flows at June 30, 2012, and for all periods presented herein, have been made.


Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 audited financial statements.  The results of operations for the period ended June 30, 2012 is not necessarily indicative of the operating results for the full year.


NOTE 2 - GOING CONCERN


The Company's consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated any revenues and has incurred an accumulated deficit of $375,723 since inception. The Company has incurred a loss of $28,181 during the six months ended June 30, 2012. The Company faces all the risks common to companies in their early stages of development, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth.


These factors raise substantial doubt regarding the ability of the Company to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's planned business. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


To initially meet these objectives, the Company completed a private placement for gross proceeds of $222,000 during 2006 and a public financing of $310,000 during 2007, and continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms, if at all.


NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES


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 at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


Earnings (Loss) per Share

Basic and diluted earnings (loss) per common share is calculated using the weighted average number of common shares outstanding during the period. For the periods ended June 30, 2012 and 2011, the Company’s warrants are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s losses during those periods.  There are 775,000 Class A Warrants issued and outstanding and 775,000 Class B Warrants issued and outstanding that would be potentially dilutive if the Company’s stock price exceeded the warrant exercise prices, which was not the case for any of the periods presented.


Subsequent Events

The Company’s management reviewed all material events through the date the financial statements were issued for subsequent event disclosure consideration.


Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.




6





Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS


Cautionary Note Regarding Forward Looking Statements


This report contains forward-looking statements that involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations.


Such forward-looking statements involve risks and uncertainties regarding the market price of gold, silver and lead, availability of funds, government regulations, operating costs, exploration costs, outcomes of exploration programs and other factors.  Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. 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. Our actual results may differ materially. In evaluating these statements, you should consider various factors. These factors may cause our actual results to differ materially from any forward-looking statements. While these forward-looking statements are made in good faith and reflect our current judgment regarding our business plans, our actual results will almost always vary, sometimes materially, from any future performance suggested herein.

 

General


The following discussion and analysis should be read in conjunction with our consolidated financial statements (and notes thereto) appearing elsewhere in this report.


Plan of Operations


We anticipate starting a work program on our Tonya property during the third quarter of this year by (i) initially mapping the property of its surface geology in detail followed by (ii) bulk sampling of the entire property. After an in depth review from the data gathered from mapping and sampling, and assuming we attain good results from soil and rock samples, we intend to carry out a drill program. The mapping and sampling are estimated to take 4 weeks with an additional 4 weeks to complete the assays at an estimated cost of $25,000. We do not have any assurances that a commercially viable mineral discovery will be made from this work program.


The Tonya property has no existing resource nor have any economic studies been carried out. The property is located in Pershing County, Nevada near the historic site of Mill City, approximately 40 miles northeast of Lovelock and 40 miles southeast of Winnemucca along US Interstate 80. It is approximately 13 miles northeast of the Florida Canyon Mine, 16 miles northeast of the Standard Mine and 25 miles north of the Midway Gold Corp’s Spring Valley discovery.


We acquired the Tonya property in December 2011. There are 29 unpatented lode mining claims and the mine covers an area of approximately 580 acres. The property is a split estate, the surface rights are privately owned, the mineral rights are publicly owned. We have the right to ingress and egress through the BLM (Bureau of Land Management) to carry out exploration.


As of June 30, 2012, we had cash of $136,277 and at December 31, 2011, we had cash of $164,738. We anticipate this to be enough to cover our immediate costs for general and administrative expenses; however, our ability to pay for any additional exploration work or other expenses will be subject to us obtaining additional financing as these expenditures may exceed our available cash. 


During the next twelve months, we anticipate that we will not generate any revenue. Accordingly, we could be required to obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be a feasible alternative as we do not have tangible assets to secure any debt financing.


We anticipate that additional financing will be equity financing from the sale of our common stock.


We currently have two classes of outstanding Warrants. There are 775,000 Class A Warrants issued and outstanding and 775,000 Class B Warrants issued and outstanding. Class A Warrants can be exercised and converted into one



7





common share at $0.50 per share and Class B Warrants can be exercised into one common share at $0.55 per share. If both classes of Warrants are exercised, the Company would receive $813,750. Both classes of Warrants expire on October 31, 2012.

 

We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or exercise of Warrants to fund any future exploration programs or any of our other expenses. In the absence of such financing, we will not be able to continue exploration for new mineral claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund our new exploration programs, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our present or future mineral claims. If we do not obtain additional financing, we will be forced to abandon our plan of operations.


Results of Operations


For the Three Months Ended June 30, 2012 and 2012


We had no revenues for the three months ended June 30, 2012 and 2011.  We do not anticipate generating revenues during the next 12 months.


We incurred a net loss of $7,370 for the three months ended June 30, 2012 compared to a loss of $14,522 for the same period in 2011.  The decrease is related primarily to a decrease in professional fees (legal and accounting) and other general and administrative expenses.  


For the Six Months Ended June 30, 2012 and 2012


We had no revenues for the six months ended June 30, 2012 and 2011.  We do not anticipate generating revenues during the next 12 months.


We incurred a net loss of $28,181 for the six months ended June 30, 2012 compared to a loss of $27,098 for the same period in 2011.  The decrease is related primarily to a decrease in professional fees (legal and accounting) and other general and administrative expenses.  


Liquidity and Capital Resources


Net cash used in operating activities was $28,461 for the six months ended June 30, 2012.  Cash was used primarily for professional fees and other general and administrative expenses.  We had current assets of $136,277, consisting of cash, and current liabilities of $0, resulting in working capital of $136,277.

 

Future Financing


We anticipate continuing to rely on cash on hand and equity sales of our common stock to finance our future business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or be able to arrange for debt or other financing to fund our future exploration activities.


Off-Balance Sheet Arrangements.


We do not have any off-balance sheet arrangements.


Item 4T.  CONTROLS AND PROCEDURES


Evaluation of disclosure controls and procedures. Under the supervision and with the participation of our senior management, including our chief executive officer and Principal Accounting Officer, Mr. Dave Gamache, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and Principal Accounting Officer concluded as of June 30, 2012, that our disclosure controls and procedures were not effective such that the



8





information required to be disclosed in our Securities and Exchange Commission (“SEC”) reports ( i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, that as of June 30, 2012, our disclosure controls and procedures were not effective due to the material weaknesses described in Management's Report on Internal Control over Financial Reporting as reported in our Form 10-K for the year ended December 31, 2011.


Changes in internal control over financial reporting.


There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2012, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.



9





PART II – OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS.


None.


1A.  RISK FACTORS


We have sought to identify what we believe to be the most significant risks to our business.  However, we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock. We provide the following cautionary discussion of risks and uncertainties relevant to our business. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us. If any of the following risks actually occur, our business, financial condition or operating results could be harmed. In such case, you could lose all or a portion of your investment.


We have yet to earn revenue and, our ability to sustain our operations is dependent on our ability to raise additional financing.


We are an exploration stage company; we have not generated any revenues since inception related to mineral extraction and we do not expect to generate any revenues from our operations for the foreseeable future, we incurred accumulated losses of $375,723 for the period from May 3, 2006 (inception) to June 30, 2012.  Our future is dependent upon our ability to obtain financing and upon future profitable operations from the commercial exploitation of our mineral claims.  These factors raise substantial doubt that we will be able to continue as a going concern.


If we do not obtain additional financing, we will need to curtail our exploration activities and our business may fail, in which case you may lose your investment.


For the next year of operations, our current operating funds should be sufficient to cover our administrative costs; however, in order for us to perform any further exploration or extensive testing, we will need to obtain additional financing.  As of June 30, 2012, we had cash on hand in the amount of $136,277. We currently do not have any operations and we have no income.  


We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete.  If our exploration programs are successful in discovering ore of commercial tonnage and grade, we will require additional funds in order to place our properties into commercial production.  


We currently do not have any arrangements for financing and we may not be able to obtain financing when required.  Obtaining additional financing would be subject to a number of factors, many of which are beyond our control, including the market prices for copper and gold and the costs of exploring for or mining these materials.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.


Because of the difficulties and uncertainties inherent in the mineral exploration business, we face a high risk of business failure.


At this time, we are uncertain as to whether we will be successful in acquiring new mineral claims with any potential ore deposits, we may be unable to generate revenues from these future operations and we will have to cease doing business.  


Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  


The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake.  These



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potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.


The expenditures to be made by us in the exploration of the mineral claims may not result in the discovery of mineral deposits.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.


Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.


The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  At the present time we have no coverage to insure against these hazards.  The payment of such liabilities may have a material adverse effect on our financial position.


We have no known mineral reserves and if we cannot find any, we will have to cease operations.


We have no mineral reserves. If we do not find a mineral reserves containing gold, copper, or silver or if we cannot complete the exploration of the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we will have to cease operations and you will lose your investment.


Mineral exploration is highly speculative. It involves many risks and is often non-productive. Even if we are able to find mineral reserves on our property, our production capability is subject to further risks including:


·

Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;


·

Availability and costs of financing;


·

Ongoing costs of production; and


·

Environmental compliance regulations and restraints.


The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near our properties, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.


Given the above noted risks, the chances of finding reserves on our mineral properties are remote and funds expended on exploration will likely be lost.


Because we will be subject to compliance with government regulation which may change, the anticipated costs of our exploration program may increase and require us to curtail or cease our operations.


There are several governmental regulations that materially restrict mineral exploration. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these regulations.  While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program. If any future regulatory requirements, applicable to our planned operations, increase the cost of our compliance, we may find it necessary to curtail or cease our exploration activities, in which event you may lose your investment.








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Risks Particular to the market of our Common Stock


Market for our common stock.


On June 27, 2008, we were cleared for trading under ticker symbol DKMR. Our shares are quoted on the NASD Over-the-Counter Bulletin Board (the “Bulletin Board”).  Currently, there is a limited market for trading our stock.  No market for our stock may develop.


The price of our common stock may fluctuate significantly and may be negatively affected by factors beyond our ability to control or predict.


The price of our common stock may be affected by broader market trends unrelated to our or our competitors’ operating performances. Our stock price and the stock prices of many other companies in the resource sectors have historically experienced wide fluctuations, including rapid rises and declines in the stock prices that have often been unrelated to the operating performance of such companies. Volatile trends and fluctuations are typically the result of a combination of general economic, political and market conditions. These factors are beyond our ability to control or predict.


The value and transferability of our shares may be adversely impacted by the penny stock rules.


Holders of our common stock may experience substantial difficulty in selling their securities as a result of the “penny stock rules.”  Our common stock is covered by the penny stock rules, a Securities and Exchange Commission (“SEC” or the “Commission”) rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors, generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and transaction prior to the sale.  Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers of our stock to sell their shares in the secondary market.  


It may also cause fewer broker dealers to make a market in our stock. In addition to the "penny stock" rules promulgated by the SEC, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information.  Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.  The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.


We may compete for time and efforts of our officer and directors.


Our officer and directors are also officers and directors of other companies, and we may have to compete with the other companies for their time, attention and efforts.


Our President, Mr. Dave Gamache expects to devote approximately twenty (20%) of his time to our affairs.  Our proposed business raises potential conflicts of interests between our officer and directors and us.


Our directors are or may become a director of other mineral exploration companies and, to the extent that such companies may participate in ventures in which we may participate, our directors may have a conflict of interest in negotiating and concluding terms regarding the extent of such participation by us and such other companies.


In addition, our directors may present potential prospects to such other companies rather than presenting the opportunities to us or be affiliated with other exploration companies which may compete with our mineral claims. We have not established any mechanisms regarding the resolution of any such conflict if it were to arise;



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accordingly, there is no assurance that any such conflict will be resolved in a manner that would not be adverse to our interest.


We have a large number of restricted shares outstanding, a portion of which may be sold under rule 144 which may reduce the market price of our shares.


Of the 12,180,000 shares of common stock issued and outstanding, assuming no warrants are exercised, 11,405,000 shares are deemed “restricted securities,” within the meaning of Rule 144; eighty two (82%) percent of these restricted shares are owned by a former Director.


Absent registration under the Securities Act, the sale of such shares is subject to Rule 144, as promulgated under the Securities Act.


It is anticipated that all of the “restricted securities” will be eligible for resale under Rule 144. In general, under Rule 144, subject to the satisfaction of certain other conditions, a person, who is not an affiliate (and who has not been an affiliate for a period of at least three months immediately preceding the sale) and who has beneficially owned restricted shares of our common stock for at least six months is permitted to sell such shares without restriction, provided that there is sufficient public information about us as contemplated by Rule 144. An affiliate who has beneficially owned restricted shares of our common stock for a period of at least one year may sell a number of shares equal to one percent of our issued and outstanding common stock approximately every three months.


With one affiliate and non-affiliates holding restricted securities as of the date of this report, the respective holding periods commenced on February 14, 2008.


The possibility that substantial amounts of our common stock may be sold under Rule 144 into the public market may adversely affect prevailing market prices for the common stock and could impair our ability to raise capital in the future through the sale of equity securities.


Competition


We operate in a highly competitive industry, competing with other mining and exploration companies, institutional and individual investors, which are actively seeking mineral exploration properties throughout the world together with the equipment, labor and materials required for the exploration of such properties. Many of our competitors have financial resources, staff and facilities substantially greater than ours.

The principal area of competition is encountered in the financial ability to effectively acquire prime mineral exploration properties and having the ability to explore these properties. Competition for the acquisition of mineral exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of competition. No assurance can be given that a sufficient number of suitable mineral exploration properties will be available for acquisition, exploration and development.            


Because our former executive officer and director, owns 82% of our outstanding common stock, investors may find that corporate decisions controlled by Mr. Rayat are inconsistent with the interests of other stockholders. 


Our former President controls 82% of our issued and outstanding shares of common stock. Accordingly, in accordance with our Articles of Incorporation and Bylaws, our former Director is able to control who is elected to our board of directors and thus could act, or could have the power to act, as our management. Since our former Director is our majority shareholder, his interests as a controlling shareholder may, at times, be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our former Director exercising in a manner fair to all of our shareholders. Also, due to his stock ownership position, our former Director will have:  (i) the ability to control the outcome of substantially all corporate actions requiring stockholder approval, including amendments to our articles of incorporation; (ii) the ability to control corporate combinations or similar transactions that might benefit minority stockholders which may be rejected by our former Director to their detriment, and (iii) control over transactions between him and us.



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Future sales of shares by us may reduce the value of our stock.


Since our inception, we have relied on such equity sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake.


If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, your percentage interest in us will be diluted. The result of this could reduce the value of your stock.


We rely on our management, the loss of whose services could have a material adverse effect on our business.


We rely upon the services of our director and president, Mr. Dave Gamache, and director Jared Beebe, the loss of which could have a material adverse effect on our business and prospects.  Competition for qualified personnel to serve in a senior management position is intense.  If we are not able to retain our directors and officer, or attract other qualified personnel when we chose to do so, we may not be able to fully implement our business strategy; failure to do so would have a materially adverse impact on our future prospects.


We currently have no employment agreement with our officer and directors imposing any specific condition on our officer and directors regarding his continued employment by us.


We do not maintain key man insurance on our directors or officer.


Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.


Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and, in the event we are ever approved for listing on either NASDAQ or a registered exchange, NASDAQ and stock exchange rules, will require an increased amount of management attention and external resources. We intend to continue to invest all reasonably necessary resources to comply with evolving standards, which may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.


We do not intend to pay dividends for the foreseeable future.


We currently intend to retain future earnings, if any, to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize their investment.



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

  

None.


Item 3.  DEFAULTS UPON SENIOR SECURITIES.


None.






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Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


None.


Item 5.  OTHER INFORMATION.


There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.


Item 6.  EXHIBITS


(a) Exhibits


 

 

 

 

  Exhibit 31.1     

Certification of C.E.O. and Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  

 

  Exhibit 32.1

Certification of C.E.O. and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

    





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SIGNATURES


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



Date: August 14, 2012




DUKE MOUNTAIN RESOURCES, INC.


By:  /s/ Dave Gamache

Name:  Dave Gamache

Title: President, Chief Executive Officer

Principal Accounting Officer and Director



16



XOTC:DKMR Quarterly Report 10-Q Filling

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

XOTC:DKMR Quarterly Report 10-Q Filing - 6/30/2012
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