VNUE, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended
May 31, 2011
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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:
000-53462
Buckingham Exploration Inc.
(Exact name of registrant as specified in its charter)
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Nevada
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98-054-3851
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(State or Other Jurisdiction of Incorporation of Organization)
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(I.R.S. Employer Identification No.)
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Suite 418-831 Royal Gorge Blvd.
Cañon City, CO 81212, USA
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(604) 737 0203
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(Address of Principal Executive Offices)
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(Registrant’s Telephone Number, Including Area Code)
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Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
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No
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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.
Yes
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes
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No
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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 “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes
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No
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The aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant at November 30, 2010 was Nil.
The number of shares of common stock of the registrant outstanding at August 29, 2011 was
56,751,954
shares.
TABLE OF CONTENTS
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1
Forward-Looking Statements
The statements in this annual report that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995
, as amended. These statements appear in a number of different places in this report and can be identified by words such as “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other comparable words. Also look for discussions of strategy that involve risks and uncertainties. Forward-looking statements include, among others, statements regarding our business plans and availability of financing for our business.
You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our estimates. Some of these risks and assumptions include those set forth in reports and other documents we have filed with or furnished to the United States Securities and Exchange Commission (“SEC”). We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Unless required by law, we do not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations. However, you should carefully review the reports and other documents we file from time to time with the SEC.
Presentation of Information
As used in this annual report, the terms "we", "us", "our" and the “Company” mean Buckingham Exploration Inc. and its subsidiaries, unless the context requires otherwise.
All dollar amounts in this annual report refer to US dollars unless otherwise indicated.
On July 23, 2010, we completed a reverse split of our shares of common stock on a 1-for-400 basis. All share amounts in this annual report are presented on a post-split basis, unless otherwise indicated.
Overview
We were incorporated as a Nevada company on April 4, 2006. We have been engaged in the acquisition and exploration of mineral properties since our inception. We have not generated any revenues and have incurred losses since inception.
We currently own an option to acquire a 100% interest in the Lady Ermalina mineral properties, and a 100% interest in the Dome mineral properties, both located in the Province of British Columbia, Canada. We have conducted limited exploration work on our mineral properties and none of our properties has been determined to contain any mineral resources or reserves of any kind.
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Name of Property
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Location
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Nature of Interest
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Status
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Lady Ermalina Claims
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Vancouver Island, British Columbia, Canada
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An option to acquire 100% interest.
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Exploration permit has been obtained.
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Dome Claims
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Beaverdell Area, Greenwood Mining Division in British Columbia, Canada
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100% interest.
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Exploration permit has been obtained.
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We previously owned interests in two mineral properties located in the State of Colorado, the High Park mineral property and the Proteus mineral property, which we transferred to a debenture holder in October 2009, pursuant to a settlement agreement entered in August 2009, in settlement of amounts owing to our debenture holders.
Our plan of operations for the next 12 months is to explore our mineral properties. We plan to begin by conducting a small exploration project on each of our properties in the next month involving mapping and property surveys, among other things, at a cost of approximately $10,000 per property. We anticipate we will require approximately $0.5 million to carry out any further exploration plans over the next 12 months. As at May 31, 2011, we had cash of $64,753
and a working capital deficit of $62,177
and will require significant financing to pursue our exploration plans. There can be no assurance that we will obtain the required financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, our business may fail. An investment in our securities involves significant risks and you could lose your entire investment.
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Development of Business
We were incorporated under the laws of the State of Nevada in April 2006. In June 2007, we acquired the High Park mineral property through our wholly-owned subsidiary High Park Uranium Inc, which consisted of 29 unpatented mineral claims located in the State of Colorado. In January 2008, we acquired the Proteus mineral property through our wholly-owned subsidiary Alpha Beta Uranium Inc, which consisted of 419 unpatented lode mining claims also located in the State of Colorado.
On September 24, 2008, we entered into secured convertible debenture purchase agreements with three investors pursuant to which we sold three convertible debentures to the investors in the aggregate amount of $500,000 and we also granted to them warrants to purchase up to an aggregate of 12,500 shares of our common stock at an exercise price of $40 per share exercisable for a period of two years. The debentures accrued interest at a rate of 10% per annum and were convertible into shares of our common stock at a price of $20 per share. As collateral security, we granted the investors a security interest in all the right, title and interest of all of our present and future assets.
On June 5, 2009, we entered into agreements with the debenture holders to issue an aggregate of 8,455 shares of common stock to settle interest accrued up to May 31, 2009. On June 25, 2009, we issued an aggregate of 2,536 restricted shares of common stock to a debenture holder to settle interest accrued up to May 31, 2009 in the amount of $10,146. Subsequent to May 31, 2010, we issued a further 5,918 restricted shares of common stock to two debenture holders to settle interest accrued in the amount of $23,674.
On August 27, 2009, we entered into a settlement agreement with one of the debenture holders, subsequent to an event of default under the terms of the debentures, to settle the outstanding debenture in the amount of $150,000 plus accrued interest. Under the terms of the settlement agreement, we agreed to transfer all of our interest in our wholly-owned subsidiaries, Hyde Park Uranium Inc. and Alpha Beta Uranium Inc., to the debenture holder along with all of our property and equipment and intellectual property rights related to these properties. The debenture holder agreed to pay us $50,000 and had the other two debentures in the aggregate amount of $350,000 assigned to it.
In October 2009, we completed the transfer all our interest in the High Park and Proteus properties to Regal Uranium pursuant to the settlement agreement. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information relating to the debentures.
On January 29, 2010, we entered into an option agreement (the “Lady Ermalina Option Agreement”) with Argus Metals Corp. (“Argus”) in relation to three mining claims known as the Lady Ermalina Chemainus Claims located on Vancouver Island, British Columbia, Canada (the “Lady Ermalina Property”).
Pursuant to the Lady Ermalina Option Agreement, we agreed to issue an aggregate of 1,500 shares of our common stock and to pay an aggregate of $5,000 in cash in consideration for the grant of the sole and exclusive right and option to acquire a 100% undivided interest in the Lady Ermalina Property. Further, we agreed to incur not less than $600,000 in expenditures related to exploration and development on the Lady Ermalina Property before January 6, 2012. We issued 250 shares to Argus under the Lady Ermalina Option Agreement in February 2010.
On July 9, 2010, we received stockholder approval to effect a one-for-four hundred reverse stock split of our issued and outstanding common stock, which would take effect upon FINRA approval. The number of shares that we are authorized to issue did not change as a result of the reverse stock split.
On July 22, 2010, we received approval from FINRA and the reverse stock split took effect on July 23, 2010. On the effective date of the reverse split , the Company’s trading symbol was changed from “BUKX” to “BUKXD” for approximately 20 business days after which it reverted to BUKX.
On August 23, 2010, 0887717 B.C. Ltd. (“0887717”), our wholly-owned subsidiary which we incorporated in British Columbia, Canada on August 9, 2010, entered into an option agreement (the “Dome Option Agreement”) with Murray Scott Morrison, pursuant to which 0887717 had the right to acquire 100% interest in the mineral property known as the Dome Claim Group located on Mount Vallace in the Beaverdell Area, Greenwood Mining Division in the Province of British Columbia, Canada (the “Dome Property”).
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In accordance with the provisions of the Dome Option Agreement, 0887717 paid $5,000 to Mr. Morrison on the date of the agreement, is required to incur not less than $10,000 in expenditures related to exploration and development on the Dome Property prior to September 30, 2010 (incurred) and is required to pay $1,000 to Mr. Morrison on or before November 30, 2010(paid). Pursuant to the terms of the Dome Option Agreement, 0887717 granted to Mr. Morrison stock options (the “Stock Options”) to purchase up to 10% of its total issued and outstanding share capital at a total price of $1.00, which may be exercised when a probable mineral reserve is discovered on the property. The Stock Options expire 36 months after the date of the Dome Option Agreement.
In October 2010, we changed our independent auditors from Manning Elliott LLP to MaloneBailey, LLP. See our Current Report on Form 8-K filed with the SEC on October 13, 2010 for more information.
In December 2010, we completed the sale of 15,000,000 units at a price of $0.01 per unit, with each unit comprised of one share of common stock and one-half of one common stock purchase warrant, with each full warrant exercisable at a price of $0.10 per share for 12 months, for gross proceeds of $150,000, to an investor resident in Australia that acquired the securities for investment purposes. This represented a change-in-control of our Company. In connection with the offering, we appointed Simon Eley as a director of our company. Mr. Eley is a director of the investor in the private placement and was appointed as a director of our company as a result of the investment.
In December 2010, the holders of a majority of our issued and outstanding common stock approved an amendment to our bylaws to make them more comprehensive, as well as an increase in our authorized capital from 80,000,000 shares of common stock, par value $0.0001, to 300,000,000 shares of common stock, par value $0.0001 to better position us to attract financing. The number of shares of preferred stock we are authorized to issue did not change as a result of the authorized capital Increase.
In February 2011, we completed the sale of 35,000,000 units at a price of $0.01 per unit, with each unit comprised of one share of common stock and one-half of one common stock purchase warrant, with each full warrant exercisable at a price of $0.10 per share for 12 months, for gross proceeds of $350,000, to certain off-shore investors that acquired the securities for investment purposes.
In April 2011, we and Christopher Robin Relph, our President and Chief Executive Officer, mutually agreed to the termination of the management agreement between us and Mr. Relph, effective December 1, 2010 pursuant to the terms of the management agreement. Under the terms of the management agreement, Mr. Relph had agreed to act as our principal officer in consideration of a salary of $20,000 per month. We have agreed to pay Mr. Relph CDN$24,000 for his services for the quarter ended February 28, 2011 and to pay Mr. Relph CDN$8,000 per month for his services going forward. No early termination penalties were incurred as a result of the termination of the Management Agreement.
Effective April 18, 2011, we completed the conversion of an aggregate of approximately $66,332 in debt owed by us to six offshore lenders into shares of our common stock at a price of $0.01 per share. As a result, we issued an aggregate of 6,633,200 shares of our common stock to the six lenders.
Subsidiaries
We currently have one wholly-owned subsidiary, 0887717 BC Ltd. which is incorporated under the laws of the Province of British Columbia, Canada.
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Competition
We are an exploration stage mineral resource exploration company that competes with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to achieve the financing necessary for us to conduct further exploration of our mineral properties. We also compete with other mineral exploration companies for financing from a limited number of investors that are prepared to make investments in mineral exploration companies. The presence of competing mineral exploration companies may impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors. We also compete with other mineral companies for available resources, including, but not limited to, professional geologists, camp staff, mineral exploration supplies and drill rigs.
Intellectual Property
We currently do not own any intellectual property other than copyright in the contents of our website, www.buckinghamexploration.com.
Research and Development Expenditures
We have not engaged in any research and development activities since our inception.
Environmental Laws
Mineral resource exploration, production and related operations are subject to extensive rules and regulations of federal, provincial, state and local agencies. Failure to comply with these rules and regulations can result in substantial penalties. Our cost of doing business may be affected by the regulatory burden on the mineral industry. Although we intend to substantially comply with all applicable laws and regulations, because these rules and regulations frequently are amended or interpreted, we cannot predict the future cost or impact of complying with these laws.
Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulations could expand and have a greater impact on future mineral exploration operations. Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the costs of which could materially adversely affect our results of operations and financial condition. We cannot be sure that our proposed business operations will not violate environmental laws in the future.
Our operations and properties are subject to extensive federal, state, provincial and local laws and regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. These laws and regulations may (i) require the acquisition of a permit or other authorization before exploration commences, (ii) restrict the types, quantities and concentration of various substances that can be released in the environment in connection with exploration activities, (iii) limit or prohibit mineral exploration on certain lands lying within wilderness, wetlands and other protected areas, (iv) require remedial measures to mitigate pollution from former operations and (v) impose substantial liabilities for pollution resulting from our proposed operations.
There are no costs to us at the present time in connection with compliance with environmental laws. However, since we do anticipate engaging in natural resource projects, these costs could occur and any significant liability could materially adversely affect our business, financial condition and results of operations.
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Employees
We have no part time or full time employees, other than our officers. We do not intend to hire any employees until our financial condition improves.
Not Applicable.
None.
We lease premises, at the rate of $1,073 per month, located at Suite 418- 831 Royal Gorge Blvd, Cañon City, Colorado 81212, from where we oversee our business activities. During the year ended May 31, 2010, we terminated a lease for an additional facility located in Burnaby, British Columbia, Canada.
Lady Ermalina Chemainus Claims
On January 6, 2010, we entered into the Lady Ermalina Option Agreement with Argus Metals Corp. in relation to three mining claims known as the Lady Ermalina Chemainus Claims located on Vancouver Island, British Columbia, Canada.
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Location
The Lady Ermalina Chemainus group of claims consists of approximately 550 hectares of British Columbia MTO mineral claims located approximately 11 kilometres SW of Ladysmith, B.C. in the Victoria Mining Division. The Project covers a NW trending section of the Mt. Sicker formation with a strong exploration potential for VMS Copper/Lead/Zinc deposits. These claims cover the old Lady A, B and C showings that were drilled for magnetite in 1953 and host the Project’s focus the “Iron Formation
Figure 1: Location of Lady Ermalina Claims on Vancouver Island, British Columbia.
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Ownership Interest
In January 2010, we entered into the Lady Ermalina Option Agreement with Argus Metals Corp. providing us with the option to earn a 100% interest (subject to a 2% NSR in favor of Argus Metals Corp.) in this project by:
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paying $5,000 on the date of execution of the agreement (completed);
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issuing to Argus Metals Corp. a total of 1,500 common shares (250 issued and 1,250 shares to be issued on or before two years from the date of execution of the agreement); and
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incurring not less than $600,000 in expenditures on the property prior to January 6, 2012.
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Argus Metals Corp. retains a 2.0% NSR, of which we can acquire 1.0% by making a payment to Argus in the sum of $1,000,000.
History of Operations
The Lady Ermalina "Iron Formation" has been re-interpreted as a possible exhalative from a massive sulphide ore zone at depth, as is common in the New Brunswick camp. The thickness of the zone in the Lady C area (up to 46 metres thick) in horizontal drill holes across the steeply dipping mineralization suggests the possibility of economic size to the zone. This section is 1.5 kilometres NW of, and on strike with, the Randy North Zone discovered by Laramide Resources Ltd. and five kilometres NW of the Coronation zone which has a reported resources. These deposits, and the Mt. Sicker Mine which is 13 kilometres SE, are all in the Paleozoic Sicker formation, of equivalent age to the Myra Falls formation hosting the Breakwater deposits including the large VMS high grade HW ore body now operated by Breakwater Resources Ltd. The Lady showing is easily accessible by logging roads for a drill program.
The 1953 drilling program consisted of twenty AX core holes totalmg 2280.5 feet (695 m), of which 12 drill holes were on the Lady A, 4 on the Lady B and 4 on the Lady C showing.
Massive sulphide copper was produced from Mt Sicker deposits, 13km SE of the Lady deposit, between 1898 and 1907 when two copper smelters were in operation at Ladysmith and Crofton and again between 1944-45. Laramide R sources discovered the Coronation Zone in 1984, which lies approximately 5 km SE of the Lady Claims. Laramide drilled over 200 holes and also conducted exploration work on a new discovery, the Randy North Zone, which lies 1.5Km SE of the Lady zone and trends on strike with the Lady C zone.
Present Condition of the Property and Current State of Exploration
To date there has been no drilling or trenching between the Lady A and Lady C showings or south of the Lady C to prove this continuity. The “iron formation” consists of lenses of extremely fine-grained magnetite with minor specular hematite in grey chert and red jasperoid rock. Some pyrite is present in talus south of the Lady C zone.
In 1988 a soil sampling program consisting of 871 soil samples collected at 25 and 50 meter intervals on lines 100 meters apart in a NE-SW orientation was conducted. 52 rock samples were also collected and all samples were analyzed by Acme Laboratories using 30 element ICP. In general the soil sampling shows moderately anomalous gold, silver, copper, lead, zinc and arsenic in the vicinity of the “iron formation” with a gap in the sampling where the topography in the vicinity of the Lady C showing was too steep. Both soil and rock samples from the iron formation area were anomalous in molybdenum.
A VLF-EM survey was run by Ashworth Exploration in 1987 over a southern grid with conductors appearing both NE and SW of the “iron formation”. In-phase readings only were recorded and the power line through the property had a disruptive effect. The magnetometer survey was run using a singma proton magnetometer but no base readings were taken.
The magnetic profiles show strong peaks over the iron formation but again readings could not be taken within 200 meters of the power lines.
The Project requires a detailed compilation program to bring together the entirety of the historic exploration work to date. Once that has been accomplished, an on-the-ground property survey is required to locate the historic exploration areas drillholes. Subsequent to this, a drilling program is envisioned to test the continuity of the iron formation between the Lady A and Lady C showings.
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Geology
Regional mapping by GSC (Muller, 1980) shows the area of the Lady Claims to be underlain by Paleozoic Sicker Group which is intruded to the NE by the dioritic Ladysmith Stock of Jurassic Intrusions. The Pennsylvanian to Mississipian argillites, greywackes and cherts which underlie the Property are intruded by diabase sills. The southern part of the Property is underlain by the Lower Devonian or older Myra Formation consisting of felsic tuff and breccias, argillites, rhyodacite flows and phyllites. The Iron formation strikes NW at 45 to 60 degrees East and dips steeply with average thicknesses of 30 feet (10m) up to 160feet (50m).
Figure 2: Geology of Lady Ermalina Clams
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Dome Claim Group Property
On August 23, 2010, through our wholly owned subsidiary 0887717 B.C. Ltd., we entered into the Dome Option Agreement, pursuant to which we have the right to acquire 100% interest in mining claims known as Dome Claim Group located on Mount Vallace in Beaverdell Area, Greenwood Mining Division in British Columbia, Canada.
Location
Figures 3 and 4: Location of the Dome Claims in Beaverdel Area, British Columbia.
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Ownership Interest
On August 23, 2010, 0887717 B.C. Ltd., our wholly owned subsidiary, entered into the Dome Option Agreement with Murray Scott Morrison, pursuant to which 0887717 has the right to acquire a 100% interest in the mineral property known as the Dome Claim Group located on Mount Vallace in the Beaverdell Area, Greenwood Mining Division in the Province of British Columbia, Canada.
In accordance with the provisions of the Dome Option Agreement, 0887717 paid $5,000 to Mr. Morrison on the date of the agreement, is required to incur not less than $10,000 in expenditures related to exploration and development on the Dome Property prior to September 30, 2010 (incurred) and is required to pay $1,000 to Mr. Morrison on or before November 30, 2010 (paid). Pursuant to the terms of the Dome Option Agreement, 0887717 granted to Mr. Morrison Stock Options to purchase up to 10% of its total issued and outstanding share capital at a total price of $1.00, which may be exercised when a probable mineral reserve is discovered on the property. The Stock Options expire 36 months after the date of the Dome Option Agreement.
History of Operations
The Dome property is comprised of sixteen mineral claims covering approximately 360 hectares (890 acres), located four (4) kilometreres southeast of Beaverdell, B.C. in the heart of the historic Beaverdell Mining Camp. The Dome mineral claims cover the historic workings of the Nepanee prospect that, according to the B. C. Minister of Mines Annual Reports, was worked intermittently between 1904 to 1935. In more recent years, sulphide mineralization including galena and sphalerite has been located near the old workings. The property is accessible by logging roads.
Present Condition of the Property and Current State of Exploration
No material exploration work has been carried out on the Dome Property. A sampling and drilling program was conducted in 1989, however the property was determined to be uneconomical due to the the price of gold at the time. A small mapping project was undertaken on the property in 2009 to prepare the ground for further work.
The property will require prospecting and geological mapping on the western edge of the Dome property where granodiorite is known to outcrop with concentration on known skarn zones and mineralized shear zones that were followed with underground workings on several of the old properties that lie immediately west of the Dome property. Such old workings include those on District Lots 1091s, 1195s and 2939. Further mapping of the Tertiary cover on the eastern portion of the property will also be conducted in an attempt to determine the thickness of the cover. All known historic work will be compiled into a single system at a scale of at least 1:2500 and cross sections prepared for selected target areas.
Regional Geology
The Dome Property lies in the western portion of the Boundary District of south central British Columbia and is centred within south the historic Beaverdell Mining Camp. In broad terms the area is a graben-derived terrane consisting of Triassic-Jurassic volcanics and sediments enclosed within and/or intruded by Jurassic-Cretaceous and Tertiary granitic rocks. Regionally, the Dome Project lies near the southern end of the Omineca Crystalline Belt.
The Boundary District is situated within the mid-Jurassic accreted Quesnellia terrane. Pre-existing Proterozoic to Palaeozoic North American basement rocks do however exist within the rafted Quesnellia terrane (Kettle and Okanagan metamorphic core complexes). During the Eocene, these core complexes were uplifted separated from the overlying lithologies. The oldest of the accreted rocks in the district are the Pre-Jurassic Wallace Formation.
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Broadly speaking, the lithologies (and general ages) are broken into the following Formations and units:
1. Wallace Formation [Pre-Jurassic - Quesnellia Terrane]
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a.
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Wallace Formation undivided
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Crouse Creek Greenstone Member
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Larse Creek Limestone Member
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2. West Kettle batholiths [Jurassic]
3. Various intrusive stocks [Tertiary]
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Beaverdell stock - 58.2 ± 2 Ma
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Eugene Creek stock - 54.5 ± 1.9 Ma
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c.
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Tuzo Creek stock - 49.5 ± 2 Ma
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4. Crosscutting porphyry dykes [Tertiary] 61.9 ± 2.2 Ma and 50.6 ± 1.5 Ma
Geology
Granodiorite of the West Kettle batholith underlies much of the area within and surrounding the Dome Property. This batholith has been repeatedly intruded by stocks of quartz monzonite (the Beaverdell stock), and hosts pendants/screens of metamorphosed country rock (Wallace Formation). The Curry-Creek tuffs and conglomerates (Oligocene age) as well as mafic Miocene flows (Nipple Mountain Volcanics), unconformably overlie all these units.
In the Beaverdell Mining Camp, where the Dome Property lies, silver-lead-zinc ores have predominated historical production. In order of historical importance (production), there are two (2) distinct types of ore:
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1)
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the Beaverdell –Type – Silver rich Vein Deposits
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2)
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The Carmi-Type Gold Rich vein deposits.
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The West Kettle batholith is intruded by the Beaverdell stock in the west of the Beaverdell Camp and is overlain by Wallace Formation in the eastern portions of the Camp. Mineralization occurs within structurally controlled fissure related quartz (+/- carbonate) veins predominantly striking northeast. In order of decreasing abundance, the main metallic minerals are galena, sphalerite, pyrite, arsenopyrite, tetrahedrite, pyrargyrite, chalcopyrite, polybasite, acanthite, native silver and pyrrhotite.
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In the more northern portions of the Camp, sphalerite, pyrite and galena are the main minerals in the vein deposits with a gangue of quartz.
The Dome Property represents an epithermal vein (gold-silver +/- base metals) exploration target. Precious metal epithermal deposit exploration techniques will be applied to substantiate this assessment.
Figure 5: Geology of the Dome Claims
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Mineralization
In the Beaverdell Mining Camp silver-lead-zinc ores have predominated historical production. In order of historical importance (production), there are two (2) distinct types of ore:
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Beaverdell type – Silver Rich Deposits
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Carmi type – Gold Rich Deposits
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In the former case mineralization is typically composed of galena, sphalerite and pyrite with lesser amounts of arsenopyrite, tetrahedrite, pyrargyrite, chalcopyrite, polybasite, acanthite, native silver and pyrrhotite in a gangue of mainly quartz with lesser amounts of calcite and fluorite. In the latter, roughly equivalent with native gold in place of native silver. Both these types of mineralization are noted in the Dome Property:
|
●
|
Beaverdell-Type silver-rich veins in the West Kettle Batholith
|
|
●
|
Contact metasomatism related mineralization (within contact zone between West Kettle Batholith and the Wallace Formation
|
In general the mineralization in the Beaverdell District can be described as hosted within granodiorite of the Westkettle batholith, grading to quartz diorite and diorites with the Permian Wallace Formation metavolcanics and metasediments as roof pendants hosting the mineralization in the northen portions of the Property.
Shear zone related mineralization is the dominant geological control on the Dome Property mineralization and is commonly noted on surface and underground workings in the Beaverdell area. These shear zones are variable in widths from showing to showing, however the widths of these shear zone in the larger, well developed showings (like the Inyo-Ackworth) average approximately two metres and are well defined by rusty fault gouge and vuggy quartz and manganese staining. Lengths of these shear zones are equally as variable from showing to showing, with the larger more productive shear zones defined over 300 metres in length. The shear zones also have variable strikes however a general east-west (075-090 degree) trend can be estimated as the main control of Property mineraliztion.
In general the shear zone related mineralization is associated with vuggy quartz-calcite veins, on the order of 5 to 50 centimetres wide, and commonly carry pyrite, galena, sphalerite, tetrahedrite and native silver mineralization. Strong sericitic alteration and kaolin are known to be associated with mineralization throughout the Property.
Beaverdell silver-rich veins are found in a 3.0 by 0.8 kilometre belt, referred to as the Beaverdell silver-lead-zinc vein camp. The mineralized veins are fissure-hosted, formed along east-trending faults in the west portion of the Beaverdell camp and northeast- trending faults in the east portion of the camp. Faults have been classified into five types based on their orientation, with each type having common orientation, kind of movement and age relationship. The northeast-striking, high-angle normal faults pose the greatest obstacle to systematic exploration and mining, as these faults are commonly spaced a few metres apart dividing veins into short segments in a northwest-downward direction.
Vein-type mineralization of the Beaverdell camp is characterized by a high silver content. Mineralization is composed of galena, sphalerite and pyrite with lesser amounts of arsenopyrite, tetrahedrite, pyrargyrite, chalcopyrite, polybasite, acanthite, native silver and pyrrhotite. The gangue minerals in veins are mainly quartz with lesser amounts of calcite, fluorite and sericite with rare barite.
15
On August 14, 2009, Leslie Rudolph filed a Statement of Claim in the Provincial Court of British Columbia (Small Claims Court) to initiate a lawsuit against us. In the Statement of Claim, Mr. Rudolph seeks judgment for $7,833 and costs with respect to accounting services he provided to us from June 1, 2008 to November 30, 2008. On December 1, 2009, the Court issued a default order against us for the sum of $8,261 plus court order interest from December 30, 2008 to date. We made an application to the Court to cancel the default order, which was subsequently dismissed.
Other than as described above, we are not a party to any pending legal proceedings and are not aware of any legal proceedings threatened against us or to which our property is the subject. None of our directors, officers or affiliates: (i) are a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings.
Market Information
Our common stock is not traded on any exchange. Our common stock is quoted on OTC Bulletin Board under the trading symbol “BUKX.OB”. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to or not correspondence to a company’s operations or business products. We cannot assure you there will be a market for our common stock in the future.
The table below shows the high and low prices of our shares on the OTC Bulletin Board for the periods indicated on a quarterly basis. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
|
Period
|
High
($)
|
Low
($)
|
|
June 1, 2011 – August 31, 2011
|
0.09
|
0.14
|
|
March 1, 2011 – May 31, 2011
|
-
|
-
|
|
December 1, 2010 – February 28, 2011
|
-
|
-
|
|
September 1, 2010 – November 30, 2010
|
-
|
-
|
|
June 1, 2010 – August 31, 2010
|
0.03(1)
|
0.02(1)
|
|
March 1, 2010 – May 31, 2010
|
0.03(1)
|
0.01(1)
|
|
December 1, 2009 – February 28, 2010
|
0.04(1)
|
0.01(1)
|
|
September 1, 2009 – November 30, 2009
|
0.02(1)
|
0.01(1)
|
|
June 1, 2009 – August 31, 2009
|
0.01(1)
|
0.01(1)
|
|
(1)
|
We completed a reverse split of our common stock on a 1:400 basis on July 23, 2010. These prices do not reflect the effect of the reverse stock split.
|
16
Holders
As of August 26, 2011, there were 149 holders of record of our common stock.
Dividends
To date, we have not paid any dividends on our common stock and do not expect to declare or pay any dividends on our common stock in the foreseeable future. Payment of any dividends will depend upon future earnings, if any, our financial condition, and other factors as deemed relevant by our Board of Directors.
Equity Compensation Plans
We implemented two equity compensation plans on November 23, 2007:
|
●
|
2007 Stock Compensation Plan: A total of 5,000 shares of common stock are authorized under the plan. All 5,000 shares underlying the plan were reserved for issuance on the date the plan was adopted. As of May 31, 2011, a total of 375 shares have been issued under the plan.
|
|
●
|
2007 Non-Qualified Stock Option Plan: Options to purchase up to 5,000 shares of common stock are authorized to be granted under this plan. All 5,000 shares underlying the plan were reserved as of the date the plan was adopted. As of May 31, 2011, options to purchase up to 62 shares have been granted under the plan.
|
Our Stock Option Committee, or the Board of Directors in lieu thereof, is authorized to administer our 2007 Stock Compensation Plan and 2007 Non-Qualified Stock Option Plan, and has the authority and discretion to determine the eligible recipients, the amount of the securities to be issued, and the terms and conditions of the securities issued as they may deem necessary in accordance with the terms of each of these plans.
Pursuant to the terms of the 2007 Stock Compensation Plan and the 2007 Non-Qualified Stock Option Plan, we may issue up to 5,000 shares and options to purchase up to 5,000 shares of our common stock, respectively, to our employees, consultants, directors, and other persons associated with us and any of our subsidiaries. Options may have a term of up to five years and an exercise price as determined by the plan administrator. Options vest as specified by the plan administrator, and if no vesting date is specified, options vest on the following basis:
|
●
|
Directors and senior officers – 50% upon the grant date, and 50% one calendar year thereafter;
|
|
●
|
Employees – 10% at the end of any probation period or three months from the date of engagement and 5% at the end of each calendar month thereafter; and
|
|
●
|
Other option holders – 10% at the end of the first thirty days of engagement, 20% upon completion of 50% of the first term or upon 50% of completion of the project term, and the remainder 30 days thereafter.
|
17
Equity Compensation Plan Information
|
As of May 31, 2010
|
||||||||||||
|
Number of Common Shares
Issued or
to be Issued Under Equity Compensation Plans
|
Weighted-
Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
($)
|
Number of Common Shares
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
|
||||||||||
|
Equity compensation plans not approved by shareholders
|
||||||||||||
|
2007 Stock Compensation Plan
|
375
|
-
|
4,625
|
|||||||||
|
2007 Non-Qualified Stock Option Plan
|
62
|
0.27
|
4,938
|
|||||||||
|
Equity compensation plans approved by shareholders
|
0
|
0
|
0
|
|||||||||
|
Total
|
||||||||||||
Recent Sales of Unregistered Securities
There are no previously unreported sales of our unregistered securities.
Not applicable.
The following discussion and analysis should be read in conjunction with our audited financial statements, including the notes thereto, appearing elsewhere in this annual report, as well as the section in this annual report entitled “Description of Business”. These financial statements have been prepared in accordance with U.S. GAAP and are presented in U.S. dollars.
We are an exploration stage company with limited operations and no revenues from our business operations since inception in April 2006. Our auditors have issued a going concern opinion relating to our business which means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next twelve months unless we obtain additional financing to fund our operations.
We currently own an option to acquire a 100% interest in the Lady Ermalina mineral properties, and a 100% interest in the Dome mineral properties, both located in the Province of British Columbia, Canada, which we acquired in January and August 2010. We have conducted limited exploration work on these properties. We previously held interests in two mineral properties located in the State of Colorado which we acquired in June 2007 and January 2008. Pursuant to the terms of a settlement agreement entered in August 2009, we transferred all of our interest in these properties to a debenture holder in October 2009 in settlement of amounts owing by us under certain debentures upon an event of default under the debentures.
Our plan of operations for the next 12 months is to explore our mineral properties. We plan to begin by conducting a small exploration project on each of our properties in the next month involving mapping and property surveys, among other things, at a cost of approximately $10,000 per property. We anticipate we will require approximately $0.5 million to carry out any further exploration plans over the next 12 months. As at May 31, 2011, we had cash of $64,753 and a working capital deficit of $62,177 and will require significant financing to pursue our exploration plans. There can be no assurance that we will obtain the required financing, on terms acceptable to us or at all. In the event we are unable to obtain the required financing, our business may fail. An investment in our securities involves significant risks and you could lose your entire investment.
18
Results of Operations
Lack of Revenues
We have earned no revenues and have sustained operational losses since our inception on April 4, 2006 to May 31, 2011. As of May 31, 2011, we had an accumulated deficit of $7,600,250. We anticipate that we will not earn any revenues during the current fiscal year or in the foreseeable future as we are an exploration stage company.
During the year ended May 31, 2009, we defaulted under three secured convertible debenture purchase agreements as we were unable to pay fees to maintain our interest in any of our 472 mineral claims located in Colorado. We entered into a settlement agreement on August 27, 2009 with one of our debenture holders in settlement of amounts owning under our convertible debentures which required the transfer of all of our interest in two subsidiaries and all of their assets to the debenture holder, including all mineral claims, intellectual property rights and property and equipment, which was completed in October 2009.
Expenses
From April 4, 2006 (inception) to May 31, 2011, our total expenses were $2,489,797, comprised of $617,414 in professional fees, $21,531 in mineral property costs and $1,850,852 in general and administrative expenses.
Our total expenses increased to $278,821 for the year ended May 31, 2011 from $240,982 for the year ended May 31, 2010. The increase in total expenses was due to an increase in costs related to obtaining financing and the acquisition of a mineral property during the current fiscal year, partially offset by a decrease in general and administrative expenses related to our operations.
We recognized total other expenses of $79,964 from our inception to May 31, 2011, primarily due to interest expense and amounts owing under our convertible debentures. For the year ended May 31, 2011, we recognized total other expenses of $0, compared to $13,877 for the year ended May 31, 2010, due to interest expense and amounts owing under our convertible debentures.
Our net loss from continuing operations was $278,821 for the year ended May 31, 2011, compared to $254,859 for the prior period.
Loss From Discontinued Operations
We recognized a loss from discontinued operations of $0 during the year ended May 31, 2011, compared to a loss from discontinued operations of $4,320 during the year ended May 31, 2010, due to the transfer of all of our interest in two subsidiaries (and related assets) as a result of our default under our convertible debentures. See Note 9 to our audited financial statements included in this annual report for more information.
Net Loss
For the year ended May 31, 2011, we recognized a net loss of $278,821, compared to a net loss of $259,179 for the year ended May 31, 2010.
19
Liquidity and Capital Resources
As of May 31, 2011, we had cash of $64,753, a working capital deficit of $62,177, total assets of $71,028, total liabilities of $131,908 and an accumulated deficit of $7,600,250.
We have funded our operations primarily by a combination of private placements, advances from related parties and loans. From April 4, 2006 (date of inception) to May 31, 2011, financing activities provided cash of $4,452,620, primarily from the sale of our common stock. During the fiscal year ended May 31, 2011, financing activities provided cash of $439,191, compared to $16,117 in the year ended May 31, 2010 primarily from sales of our common stock.
Operating activities used cash of $376,632 for the year ended May 31, 2011, compared to $55,466 for the year ended May 31, 2010, primarily as a result of an increased operations. An increase in accounts payable and accrued liabilities used cash of $10,984 in the year ended May 31, 2011, compared to an increase in same providing cash of $201,746 in the prior year. Amounts due to related parties used cash of $86,146 in the current year.
Investing activities during the year ended May 31, 2011 provided cash of $0, compared to $38,217 in the prior year, primarily due to the disposition of our interest in our subsidiaries resulting from the settlement of our convertible debentures.
We expect that our total expenses will increase over the next year as we increase our business operations and exploration activities on our mineral properties. We do not anticipate generating any revenues for the foreseeable future. Our plan of operations for the next 12 months is to explore our mineral properties. We anticipate we will require approximately $0.5 million to carry out our exploration plans over the next 12 months and will require significant financing to pursue our exploration plans.
We intend to raise additional capital for the next 12 months from the sale of our equity securities or loans from related and other parties. If we are unsuccessful in raising sufficient capital through such efforts, we may consider other financing avenues such as bank financing. There is no assurance that any financing will be available to us or if available, on terms that will be acceptable to us. If we are unable to raise additional capital, our business may fail.
Even though we plan to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for funding our operations as we do not have tangible assets to secure any such financing. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide any assurance that we will be able to raise sufficient funds from the sale of our common stock to finance our operations. In the absence of such financing, we may be forced to abandon our business plan.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Going Concern
Our financial statements for the period ended May 31, 2011 have been prepared on a going concern basis and Note 2 to the statements identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our common stock and loans from related and other parties to fund our operations. We do not anticipate generating any revenues in the foreseeable future, and if we are unable to raise equity or secure alternative financing, we may not be able to pursue our plans and our business may fail.
20
Critical Accounting Policies
Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.
Mineral Property Costs
The Company has been in the exploration stage since its inception on April 4, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360,
Property, Plant, and Equipment
at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation – Stock Based Compensation
, and ASC 505,
Equity based payments to non employees
, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
Not Applicable.
21
Buckingham Exploration Inc.
(An Exploration Stage Company)
May 31, 2011
(Expressed in US dollars)
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
Balance Sheets
|
F-3
|
|
Statements of Operations
|
F-4
|
|
Statements of Cash Flows
|
F-5
|
|
Statements of Stockholders’ Equity (Deficit)
|
F-6
|
|
Notes to the Financial Statements
|
F-7
|
22
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Buckingham Exploration Inc.
(An Exploration Stage Company)
Carson City, Nevada
We have audited the accompanying consolidated balance sheet of Buckingham Exploration Inc. and its subsidiaries (collectively, the “Company” ) as of May 31, 2011 and the related consolidated statements of expenses, stockholders’ deficit and cash flows for the year then ended and the period from April 4, 2006 (inception) through May 31, 2011. The financial statements for the period from April 4, 2006 (inception) through May 31, 2010 were audited by other auditors whose report expressed an unqualified opinion on those financial statements. The financial statements for the period from April 4, 2006 (inception) through May 31, 2010 include no revenue and an accumulated net loss of $7,321,429. Our opinion on the statements of expenses, stockholder’ deficit, and cash flows for the year then ended , in so far as it relates to amounts for prior periods through May 31, 2010 is based solely on the report of the other auditor. These financial statements are the responsibility of Buckingham Exploration Inc. management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Buckingham Exploration Inc. internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2011 and their results of its operations and their cash flows for the year then ended and the period from inception through May 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
August 29, 2011
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
of Buckingham Exploration Inc.
(an Exploration Stage Company)
We have audited the accompanying balance sheet of Buckingham Exploration Inc. (An Exploration Stage Company) as of May 31, 2010 and the related statements of operations, stockholders’ deficit and cash flows for the year then ended and accumulated for the period from April 4, 2006 (Date of Inception) to May 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of Buckingham Exploration Inc. (An Exploration Stage Company) as of May 31, 2010 and the results of its operations and cash flows for the year then ended and accumulated for the period from April 4, 2006 (Date of Inception) to May 31, 2010 in conformity with generally accepted accounting principles used in the United States.
/s/ “Manning Elliott LLP”
CHARTERED ACCOUNTANTS
Vancouver, Canada
September 14, 2010
F-2
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets
|
May 31,
|
May 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
$ | 64,753 | $ | 2,194 | ||||
|
Other receivables
|
3,429 | 3,621 | ||||||
|
Prepaid expense
|
1,549 | – | ||||||
|
Total Current Assets
|
69,731 | 5,815 | ||||||
|
Property and Equipment, net accumulated depreciation
|
1,297 | 1,973 | ||||||
|
Total Assets
|
$ | 71,028 | $ | 7,788 | ||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
$ | 26,134 | $ | 49,038 | ||||
|
Accounts payable – related party
|
104,000 | 190,146 | ||||||
|
Advances-related party
|
– | 23,027 | ||||||
|
Accrued liabilities
|
1,774 | 13,528 | ||||||
|
Loans payable
|
– | 104,114 | ||||||
|
Total Current Liabilities
|
131,908 | 379,853 | ||||||
|
Stockholders’ Deficit
|
||||||||
|
Preferred Stock, 20,000,000 shares authorized, $0.0001 par value,
|
||||||||
|
None issued and outstanding
|
– | – | ||||||
|
Common Stock, 300,000,000 shares authorized, $0.0001 par value
|
||||||||
|
56,751,936 and 112,818 shares issued and outstanding respectively
|
5,675 | 11 | ||||||
|
Additional Paid-in Capital
|
7,533,695 | 6,949,353 | ||||||
|
Deficit Accumulated During the Exploration Stage
|
(7,600,250 | ) | (7,321,429 | ) | ||||
|
Total Stockholders’ Deficit
|
(60,880 | ) | (372,065 | ) | ||||
|
Total Liabilities and Stockholders’ Deficit
|
$ | 71,028 | $ | 7,788 | ||||
The accompanying notes are an integral part of these consolidated financial statements
F-3
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statements of Expenses
|
For the Year
Ended
May 31,
2011
|
For the Year
Ended
May 31,
2010
|
April 4,
2006
(Inception) to
May 31,
2011
|
||||||||||
|
Expenses
|
||||||||||||
|
General and administrative
|
$ | 126,334 | $ | 131,954 | $ | 1,850,852 | ||||||
|
Exploration mineral property costs
|
15,681 | 5,850 | 21,531 | |||||||||
|
Professional fees
|
136,806 | 103,178 | 617,414 | |||||||||
|
Total Expenses
|
278,821 | 240,982 | 2,489,797 | |||||||||
|
Net Loss Before Other Expenses
|
(278,821 | ) | (240,982 | ) | (2,489,797 | ) | ||||||
|
Other Income (Expenses)
|
||||||||||||
|
Interest income
|
– | – | 2,276 | |||||||||
|
Miscellaneous income
|
– | – | 1,467 | |||||||||
|
Interest expense
|
– | (12,721 | ) | (59,588 | ) | |||||||
|
Accretion of convertible debenture discount
|
– | (8,433 | ) | (31,396 | ) | |||||||
|
Gain on disposal of property and equipment
|
– | 7,277 | 7,277 | |||||||||
|
Total Other Income (Expenses)
|
– | (13,877 | ) | (79,964 | ) | |||||||
|
Net Loss From Continuing Operations
|
(278,821 | ) | (254,859 | ) | (2,569,761 | ) | ||||||
|
Gain on disposal of discontinued operations
|
– | – | - | |||||||||
|
Results from discontinued operations
|
– | (4,320 | ) | (5,030,489 | ) | |||||||
|
Net Loss
|
$ | (278,821 | ) | $ | (259,179 | ) | $ | (7,600,250 | ) | |||
|
Net Loss Per Share – Basic and Diluted
|
||||||||||||
|
Net Income Loss Before Discontinued Operations
|
$ | (0.02 | ) | $ | (2.26 | ) | ||||||
|
Discontinued Operations
|
– | (0.04 | ) | |||||||||
|
Net Loss
|
$ | (0.02 | ) | $ | (2.30 | ) | ||||||
|
Weighted Average Shares Outstanding
|
18,381,000 | 112,607 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-4
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
|
For the Year
Ended
May 31,
2011
|
For the Year
Ended
May 31,
2010
|
April 4,
2006
(Inception) to
May 31,
2011
|
||||||||||
|
Operating Activities
|
||||||||||||
|
Net loss
|
$ | (278,821 | ) | $ | (259,179 | ) | $ | (7,600,250 | ) | |||
|
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||||||
|
Accretion of convertible debenture discount
|
– | 8,433 | 31,396 | |||||||||
|
Amortization
|
676 | 57 | 733 | |||||||||
|
Common shares issued for services
|
– | – | 32,000 | |||||||||
|
Shares issued for mineral property costs
|
– | 1,100 | 2,301,100 | |||||||||
|
Impairment of mineral property costs
|
– | – | 2,230,125 | |||||||||
|
Stock-based compensation
|
– | – | 576,120 | |||||||||
|
Gain on disposal of property and equipment
|
– | (7,277 | ) | (7,277 | ) | |||||||
|
Loss from discontinued operations
|
– | 1,087 | 37,785 | |||||||||
|
Changes in operating assets and liabilities
|
||||||||||||
|
Accounts payable and accrued liabilities
|
(10,984 | ) | 201,746 | 363,584 | ||||||||
|
Other receivables
|
192 | (1,433 | ) | (5,717 | ) | |||||||
|
Prepaid expenses
|
(1,549 | ) | – | (2,592 | ) | |||||||
|
Due to related parties
|
(86,146 | ) | – | (98,229 | ) | |||||||
|
Net Cash Used in Operating Activities
|
(376,632 | ) | (55,466 | ) | (2,141,222 | ) | ||||||
|
Investing Activities
|
||||||||||||
|
Acquisition of mineral properties
|
– | – | (2,230,125 | ) | ||||||||
|
Acquisition of property and equipment
|
– | (2,030 | ) | (86,763 | ) | |||||||
|
Proceeds from disposition of subsidiaries
|
– | 32,970 | 32,970 | |||||||||
|
Proceeds from disposal of property and equipment
|
– | 7,277 | 24,777 | |||||||||
|
Proceeds from disposal of property and equipment in discontinued operations
|
– | – | 12,496 | |||||||||
|
Net Cash Provided by (Used in) Investing Activities
|
– | 38,217 | (2,246,645 | ) | ||||||||
|
Financing Activities
|
||||||||||||
|
Advances from related parties
|
- | 28,400 | 196,671 | |||||||||
|
Repayments to related parties
|
(23,027 | ) | (50,561 | ) | (59,026 | ) | ||||||
|
Proceeds from notes payable
|
– | 38,332 | 61,694 | |||||||||
|
Repayment of note payable
|
(50,000 | ) | – | (73,362 | ) | |||||||
|
Proceeds from loans payable
|
12,218 | – | 387,218 | |||||||||
|
Repayment of loans payable
|
– | – | (25,000 | ) | ||||||||
|
Proceeds from the issuance of common stock
|
500,000 | – | 4,161,575 | |||||||||
|
Proceeds from common stock subscription
|
– | – | 10,350 | |||||||||
|
Share issuance costs
|
– | – | (207,500 | ) | ||||||||
|
Net Cash Provided by Financing Activities
|
439,191 | 16,117 | 4,452,620 | |||||||||
|
Increase (Decrease) In Cash
|
62,559 | (1,078 | ) | 64,753 | ||||||||
|
Cash - Beginning of Period
|
2,194 | 3,272 | – | |||||||||
|
Cash - End of Period
|
$ | 64,753 | $ | 2,194 | $ | 64,753 | ||||||
|
Non-Cash Investing and Financing Activities:
|
||||||||||||
|
Convertible debt issued to settle loans payable
|
$ | – | $ | – | $ | 350,000 | ||||||
|
Convertible debt issued to settle related party advances
|
$ | – | $ | – | $ | 150,000 | ||||||
|
Common stock issued for mineral property acquisitions
|
$ | – | $ | 1,100 | $ | 2,201,100 | ||||||
|
Common stock issued for finders fee
|
$ | – | $ | – | $ | 100,000 | ||||||
|
Common stock issued for services
|
$ | – | $ | – | $ | 172,000 | ||||||
|
Disposal of property and equipment for debt settlement
|
$ | – | $ | 16,952 | $ | 16,952 | ||||||
|
Conversion of debt to stock
|
$ | 66,332 | $ | - | $ | 66,332 | ||||||
|
Issuance of stock for settlement of accrued interest
|
$ | 23,674 | $ | 453,987 | $ | 477,661 | ||||||
|
Supplemental Disclosures
|
||||||||||||
|
Interest paid
|
$ | – | $ | – | $ | 21,897 | ||||||
|
Income tax paid
|
$ | – | $ | – | $ | – | ||||||
The accompanying notes are an integral part of these consolidated financial statements
F-5
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statement of Stockholders’ Equity (Deficit)
For the Period from April 4, 2006 (Inception) to May 31, 2011
|
Deficit
|
||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||
|
Common
|
Additional
|
During the
|
||||||||||||||||||||||
|
Common Stock
|
Stock
|
Paid-in
|
Exploration
|
|||||||||||||||||||||
|
Shares
|
Par Value
|
Subscribed
|
Capital
|
Stage
|
Total
|
|||||||||||||||||||
|
#
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
|
Balance - April 4, 2006 (Date of Inception)
|
– | – | – | – | – | – | ||||||||||||||||||
|
May 8, 2006 - issuance of common shares for cash proceeds at $0.04 per share
|
50,000 | 5 | – | 1,995 | – | 2,000 | ||||||||||||||||||
|
May 20, 2006 - issuance of common shares for cash proceeds at $0.04 per share
|
2,500 | – | – | 100 | – | 100 | ||||||||||||||||||
|
May 26, 2006 - issuance of common shares for cash proceeds at $0.04 per share
|
2,500 | – | – | 100 | – | 100 | ||||||||||||||||||
|
May 31, 2006 - common shares subscribed at $40 per share
|
– | – | 10,350 | – | – | 10,350 | ||||||||||||||||||
|
Net loss for the period
|
– | – | – | – | (6,416 | ) | (6,416 | ) | ||||||||||||||||
|
Balance - May 31, 2006
|
55,000 | 5 | 10,350 | 2,195 | (6,416 | ) | 6,134 | |||||||||||||||||
|
July 1, 2006 - issuance of common shares for cash proceeds at $40 per share
|
1,318 | – | (10,350 | ) | 52,725 | – | 42,375 | |||||||||||||||||
|
August 8, 2006 - issuance of common shares for acquisition of mineral property at $40 per share
|
5,000 | 1 | – | 199,999 | – | 200,000 | ||||||||||||||||||
|
September 28, 2006 - issuance of common shares for transfer agent expenses at $40 per share
|
300 | – | – | 12,000 | – | 12,000 | ||||||||||||||||||
|
May 7, 2007 - issuance of common shares for cash proceeds at $40 per share
|
50 | – | – | 2,000 | – | 2,000 | ||||||||||||||||||
|
May 7, 2007 - issuance of common shares for cash proceeds at $40 per share
|
500 | – | – | 20,000 | – | 20,000 | ||||||||||||||||||
|
May 7, 2007 - issuance of common shares for acquisition of mineral property at $40 per share
|
12,500 | 1 | – | 499,999 | – | 500,000 | ||||||||||||||||||
|
May 11, 2007 - issuance of common shares for mineral property finders fee at $40 per share
|
2,500 | – | – | 100,000 | – | 100,000 | ||||||||||||||||||
|
May 16, 2007 - issuance of common shares for cash proceeds at $100 per share
|
10,750 | 1 | – | 1,074,999 | – | 1,075,000 | ||||||||||||||||||
|
May 16, 2007 - issuance of common shares for finders fee at $100 per share
|
538 | – | – | 53,750 | – | 53,750 | ||||||||||||||||||
|
Stock-based compensation
|
– | – | – | 134,999 | – | 134,999 | ||||||||||||||||||
|
Share issuance expenses
|
– | – | – | (53,750 | ) | – | (53,750 | ) | ||||||||||||||||
|
Net loss for the year
|
– | – | – | – | (1,663,949 | ) | (1,663,949 | ) | ||||||||||||||||
|
Balance - May 31, 2007
|
88,456 | 8 | – | 2,098,916 | (1,670,365 | ) | 428,559 | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-6
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statement of Stockholders’ Equity (Deficit)
For the Period from April 4, 2006 (f Inception) to May 31, 2011
|
Deficit
|
||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||
|
Common
|
Additional
|
During the
|
||||||||||||||||||||||
|
Common Stock
|
Stock
|
Paid-in
|
Exploration
|
|||||||||||||||||||||
|
Shares
|
Par Value
|
Subscribed
|
Capital
|
Stage
|
Total
|
|||||||||||||||||||
| # | $ | $ | $ | $ | $ | |||||||||||||||||||
|
Balance - May 31, 2007
|
88,456 | 8 | – | 2,098,916 | (1,670,365 | ) | 428,559 | |||||||||||||||||
|
August 10, 2007 - issuance of common shares for cash proceeds at $200 per share
|
8,750 | 1 | – | 1,749,999 | – | 1,750,000 | ||||||||||||||||||
|
September 4, 2007 - issuance of common shares for cash proceeds at $200 per share
|
500 | – | – | 100,000 | – | 100,000 | ||||||||||||||||||
|
September 12, 2007 - issuance of common shares for cash proceeds at $200 per share
|
1,000 | – | – | 200,000 | – | 200,000 | ||||||||||||||||||
|
September 12, 2007 - issuance of common shares for cash proceeds at $200 per share
|
125 | – | – | 25,000 | – | 25,000 | ||||||||||||||||||
|
September 25, 2007 - issuance of common shares for cash proceeds at $200 per share
|
500 | – | – | 100,000 | – | 100,000 | ||||||||||||||||||
|
October 5, 2007 - issuance of common shares for cash proceeds at $200 per share
|
750 | – | – | 150,000 | – | 150,000 | ||||||||||||||||||
|
October 18, 2007 - issuance of common shares for cash proceeds at $200 per share
|
500 | – | – | 100,000 | – | 100,000 | ||||||||||||||||||
|
November 6, 2007 - issuance of common shares for cash proceeds at $200 per share
|
500 | – | – | 100,000 | – | 100,000 | ||||||||||||||||||
|
January 8, 2008 - issuance of common shares for mineral property at $200 per share
|
7,500 | 1 | – | 1,499,999 | – | 1,500,000 | ||||||||||||||||||
|
April 18, 2008 - issuance of common shares for consulting fees at $356 per share
|
125 | – | – | 44,500 | – | 44,500 | ||||||||||||||||||
|
April 21, 2008 - issuance of common shares for cash proceeds at $200 per share
|
75 | – | – | 15,000 | – | 15,000 | ||||||||||||||||||
|
May 7, 2008 - issuance of common shares for investor relations at $180 per share
|
625 | – | – | 112,500 | – | 112,500 | ||||||||||||||||||
|
Stock-based compensation
|
– | – | – | 337,490 | – | 337,490 | ||||||||||||||||||
|
Share issuance expenses
|
– | – | – | (207,500 | ) | – | (207,500 | ) | ||||||||||||||||
|
Net loss for the year
|
– | – | – | – | (4,769,456 | ) | (4,769,456 | ) | ||||||||||||||||
|
Balance - May 31, 2008
|
109,406 | 10 | – | 6,425,904 | (6,439,821 | ) | (13,907 | ) | ||||||||||||||||
|
October 9, 2008 - cancellation of common shares issued for investor relations at $180 per share
|
(625 | ) | – | – | (68,339 | ) | – | (68,339 | ) | |||||||||||||||
|
September 24, 2008 - Fair value of warrants issued with convertible debentures
|
– | – | – | 111,556 | – | 111,556 | ||||||||||||||||||
|
December 9, 2008 - issuance of common shares for consulting services at $12 per share
|
1,250 | – | – | 15,000 | – | 15,000 | ||||||||||||||||||
|
Net loss for the year
|
– | – | – | – | (622,429 | ) | (622,429 | ) | ||||||||||||||||
|
Balance - May 31, 2009
|
110,031 | 10 | – | 6,484,121 | (7,062,250 | ) | (578,119 | ) | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-7
Buckingham Exploration Inc.
(An Exploration Stage Company)
Consolidated Statement of Stockholders’ Equity (Deficit)
For the Period from April 4, 2006 (Inception) to May 31, 2011
|
Deficit
|
||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||
|
Common
|
Additional
|
During the
|
||||||||||||||||||||||
|
Common Stock
|
Stock
|
Paid-in
|
Exploration
|
|||||||||||||||||||||
|
Shares
|
Par Value
|
Subscribed
|
Capital
|
Stage
|
Total
|
|||||||||||||||||||
|
#
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
|
Balance - May 31, 2009
|
110,031 | 10 | – | 6,484,121 | (7,062,250 | ) | (578,119 | ) | ||||||||||||||||
|
June 5, 2009 - issuance of common stock in lieu of interest at $4 per share
|
2,537 | 1 | – | 10,145 | – | 10,146 | ||||||||||||||||||
|
February 12, 2010 - issuance of common stock for mineral property at $4.40 per share
|
250 | – | – | 1,100 | – | 1,100 | ||||||||||||||||||
|
Gain on settlement of debt (Note 10)
|
– | – | – | 453,987 | – | 453,987 | ||||||||||||||||||
|
Net loss
|
– | – | – | – | (259,179 | ) | (259,179 | ) | ||||||||||||||||
|
Balance - May 31, 2010
|
112,818 | 11 | – | 6,949,353 | (7,321,429 | ) | (372,065 | ) | ||||||||||||||||
|
August 20, 2010 - issuance of common stock in lieu of interest at $4 per share
|
5,918 | 1 | – | 23,673 | – | 23,674 | ||||||||||||||||||
|
December 16, 2010 - issuance of common shares for cash proceeds of $0.01 per share
|
15,000,000 | 1,500 | – | 148,500 | – | 150,000 | ||||||||||||||||||
|
February 10, 2011 - issuance of common shares for cash proceeds of $0.01 per share
|
35,000,000 | 3,500 | – | 346,500 | – | 350,000 | ||||||||||||||||||
|
February 25, 2011 - issuance of common shares for settlement of debt at $0.01 per share
|
540,000 | 54 | – | 5,346 | – | 5,400 | ||||||||||||||||||
|
April 5, 2011 - issuance of common shares for settlement of debt at $0.01 per share
|
1,000,000 | 100 | – | 9,900 | – | 10,000 | ||||||||||||||||||
|
April 18, 2011 - issuance of common shares for settlement of debt at $0.01 per share
|
5,093,200 | 509 | – | 50,423 | – | 50,932 | ||||||||||||||||||
|
Net loss
|
– | – | – | – | (278,821 | ) | (278,821 | ) | ||||||||||||||||
|
Balance - May 31, 2011
|
56,751,936 | 5,675 | – | 7,533,695 | (7,600,250 | ) | (60,880 | ) | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-8
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
1.
Nature of Operations and Continuance of Business
Buckingham Exploration Inc. (the “Company”) was incorporated in the State of Nevada on April 4, 2006. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915,
Development Stage Entities.
The Company’s principal business is the acquisition and exploration of mineral properties.
On August 9, 2010, the Company incorporated 0887717 B.C. Ltd., a wholly-owned subsidiary in British Columbia, Canada.
2.
Going Concern
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has not paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at May 31, 2011, the Company has a working capital deficit of $62,177 and an accumulated deficit of $7,600,250. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.
As at May 31, 2011, the Company had $64,753 cash in the bank. The Company requires a minimum of $200,000 to proceed with their plan of operations over the next twelve months. If they achieve less than the full amount of financing that they require they will scale back planned exploration activities and day to day operations in order to reduce exploration expenses and general and administrative expenses to a level appropriate to the financial resources available. There can be no assurance that the Company will be able to raise sufficient funds to pay the expected operating expenses for the next twelve months.
3.
Summary of Significant Accounting Policies
a)
Principles of consolidation
The consolidated financial statements include the accounts of Buckingham Exploration Inc. and its controlled subsidiaries. Equity investments in which we exercise significant influence, but do not control and are not the primary beneficiary, are accounted for using the equity method of accounting. Investments in which we do not exercise significant influence over the investee are accounted for using the cost method of accounting. Intercompany transactions are eliminated
(b)
Use of Estimates
The preparation of these financial statements in conformity with U.S. generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions related to long lived assets, stock-based compensation expense, secured convertible debentures and deferred income tax asset allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
(c)
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
F-9
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
3.
Summary of Significant Accounting Policies (continued)
(d)
Property and Equipment
Property and equipment comprised of computer is recorded at cost and amortized over 3 years using the straight line method.
(e)
Basic and Diluted Net Earnings (Loss) Per Share
The Company computes net earnings (loss) per share in accordance with ASC 260,
Earnings per Share
which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is 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 using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. A total of 25,000,000 (2010 – 12,500) outstanding warrants have been excluded from the year ended May 31, 2011 and 2010 as they would be anti-dilutive.
Components of basic and diluted earnings per share for the year ended May 31, 2011 and 2010 were as follows:
|
For the year ended
|
||||||||
|
May 31,
2011
|
May 31,
2010
|
|||||||
|
Net loss (A)
|
$ | (278,821 | ) | $ | (259,179 | ) | ||
|
Weighted average outstanding shares of common stock -
Basic (B)
|
18,381,000 | 112,607 | ||||||
|
Dilutive securities - Diluted (C)
|
– | – | ||||||
| 18,381,000 | 112,607 | |||||||
|
Earnings per share:
|
||||||||
|
Basic (A/B)
|
$ | (0.02 | ) | $ | (2.30 | ) | ||
|
Diluted (A/C)
|
$ | (0.02 | ) | $ | (2.30 | ) | ||
(f)
Comprehensive Loss
ASC 220,
Comprehensive Income
establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2010 and 2009 the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
(g)
Mineral Property Costs
The Company has been in the exploration stage since its inception on April 4, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360,
Property, Plant, and Equipment
at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
(h)
Asset Retirement Obligations
The Company records the fair value of an asset retirement obligation as a liability for closure and removal costs associated with the legal obligations upon retirement or removal of any tangible long-lived assets that result from the acquisition, construction, development and/or normal use of assets in accordance with ASC 440
Asset Retirement and Environmental Obligations
. The initial recognition of any liability will be capitalized as part of the asset cost and depreciated over its estimated useful life. As at May 31, 2011 and 2010, the Company has not incurred any asset retirement obligations.
F-10
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
3.
Summary of Significant Accounting Policies (continued)
(i)
Long-Lived Assets
In accordance with ASC 360,
Property Plant and Equipment,
the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
(j)
Financial Instruments
ASC 825,
Financial Instruments,
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, receivables, accounts payable and loans payable.
Pursuant to ASC 825, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
(k)
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740,
Income Taxes
as of its inception. Pursuant to ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
F-11
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
3.
Summary of Significant Accounting Policies (continued)
(l)
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation – Stock Based Compensation
, and ASC 505,
Equity based payments to non employees
, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
(m)
Foreign Currency Translation
The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 740
Foreign Currency Translation Matters
, 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. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
(n)
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
(o)
Reclassification
Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.
(p)
Development stage
The Company complies with Statement of Financial Accounting Standard ASC 915-15 and the Securities and Exchange Commission Exchange Act 7 for its characterization of the Company as development stage.
4.
Mineral Property
On August 23, 2010, 0887717 B.C. Ltd. a British Columbia company and wholly owned subsidiary of the Company, entered into an option agreement (the “Option Agreement”) with Murray Scott Morrison, pursuant to which the Company was granted the option to acquire a 100% interest in a mineral property located in the Greenwood Mining Division, British Columbia, Canada (the “Property”). In accordance with the provisions of the Option Agreement, the Company exercised its option by making a payment of $5,000 on the date of execution of the Option Agreement, incurring not less than $10,000 in expenditures related to exploration and development on the Property prior to September 30, 2010 and paying a sum of $1,000 before November 30, 2010. Pursuant to the terms of the Option Agreement, Mr. Morrison was granted a stock option to purchase up to 10% of the total issued and outstanding share capital of the Company at the total price of $1.00, which may be exercised when a probable mineral reserve is discovered on the Property. The Stock Option expires after 36 months from the date of the Option Agreement.
5.
Related Party Transactions and Balances
Included in accounts payable-related party and advances by related party at May 31, 2011 and 2010, respectively, is $104,000 and - $213,173 , which is due to the President of the Company. The amounts represent unpaid management fees, cash advances and expenses paid on behalf of the Company. These amounts are unsecured, non-interest bearing and have no repayment terms.
6.
Property and Equipment
|
Cost
|
Accumulated
Amortization
|
Net Book
Value
May 31,
2011
|
Net Book
Value
May 31,
2010
|
|||||||||||||
|
$
|
$
|
$
|
$
|
|||||||||||||
|
Computer
|
2,030 | 733 | 1,297 | 1,973 | ||||||||||||
F-12
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
7. Loans Payable
During the year ended May 31, 2010, the Company received proceeds from notes payable of $38,332 . During the year ended May 31, 2011, this amount was increased by $12,218. The loans were unsecured, bear 1% interest per month and payable upon demand. During the year ended May 31, 2011, the Company repaid the loan balance and accrued interest.
On May 5, 2010, the Company entered into two promissory note agreements with its legal counsel for $65,782, which represents the debt owed by the Company to its legal counsel for services rendered on or before April 30, 2010. The loans are unsecured, non-interest bearing, and payable on demand.
On February 25, 2011, the Company entered into a debt conversion agreement whereby it converted $4,850 of the loan and $550 of accounts payable into 540,000 shares of common stock. On April 5, 2011, the Company entered into a debt conversion agreement whereby it converted $10,000 of the loan into 1,000,000 shares of common stock. On April 18, 2011, the Company entered into various debt conversion agreements whereby it converted the balance of $50,932 of the loan into 5,093,200 shares of common stock.
8. Common Stock
On July 23, 2010, the Company effected a 1 for 400 reverse stock split of the issued and outstanding common stock. As a result, the issued and outstanding shares decreased from 45,126,850 shares of common stock to 112,818 shares of common stock. The number of shares that the Company is authorized to issue did not change as a result of the common stock split and remain at 80,000,000 common shares and 20,000,000 preferred shares all with a par value of $0.0001. All share, stock option and warrant amounts have been retroactively adjusted for all periods presented.
On August 20, 2010, the Company issued 2,536 post-split restricted common shares at $4 per share in full consideration of $10,146 in interest accrued.
On August 20, 2010, the Company issued 3,382 post-split restricted common shares at $4 per share in full consideration of $13,528 in interest accrued.
On December 20, 2010, the Company completed a private placement of 15,000,000 units at $0.01 per unit, for proceeds of $150,000. Each unit is comprised of one share of common stock and one-half of one common stock purchase warrant, with each full warrant exercisable at a price of $0.10 per share for 12 months.
On December 21, 2010, the Company increased its authorized capital from 80,000,000 shares of common stock with a par value of $0.0001 to 300,000,000 shares of common stock with a par value of $0.0001.
On February 10, 2011, the Company completed a private placement of 35,000,000 units at $0.01 per unit, for proceeds of $350,000. Each unit is comprised of one share of common stock and one-half of one common stock purchase warrant, with each full warrant exercisable at a price of $0.10 per share for 12 months.
On February 25, 2011, the Company issued 540,000 shares of common stock at a fair value of $0.01 per share in exchange for the settlement of $5,400 in debt.
On April 5, 2011, the Company issued 1,000,000 shares of common stock at a fair value of $0.01 per share in exchange for the settlement of $10,000 in debt.
On April 18, 2011, the Company issued 5,093,200 shares of common stock at a fair value of $0.01 per share in exchange for the settlement of $50,932 in debt.
F-13
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
9. Share Purchase Warrants
A summary of the changes in the Company’s common share purchase warrants is presented below:
|
Number
|
Weighted Average
Exercise Price
|
|||||||
|
Balance, May 31, 2010
|
5,000,000 | $ | 0.10 | |||||
|
Expired
|
(5,000,000 | ) | $ | 0.10 | ||||
|
Issued
|
25,000,000 | $ | 0.10 | |||||
|
Balance, May 31, 2011
|
25,000,000 | $ | 0.10 | |||||
As at May 31, 2011, the intrinsic value of the common share purchase warrants was $0.00.
Additional information regarding warrants as at May 31, 2011, is as follows:
|
Number of Warrants
|
Exercise Price
|
Expiration Date
|
|
7,500,000
|
$ 0.10
|
December 20, 2011
|
|
17,500,000
|
$ 0.10
|
February 10, 2012
|
|
25,000,000
|
F-14
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
10. Discontinued Operations
The Company entered into an Execution and Settlement Agreement dated August 27, 2009 with Regal Uranium Inc. for the settlement of its outstanding convertible debentures in consideration for the transfer of all interests in the Company’s wholly-owned subsidiaries and its property and equipment and mineral properties. Regal is considered a related party as the sole director and officer of the Company was a director of Regal and owns 15% of the outstanding common stock of Regal at the time of the transaction. Accordingly, the gain on discontinued operations of $453,987 has been recorded in additional paid-in capital.
Gain on disposal of discontinued operations is summarized as follows:
|
May 31,
2011
|
May 31,
2010
|
|||||||
|
$
|
$
|
|||||||
|
Proceeds received from disposition
|
– | 32,970 | ||||||
|
Prepaid expenses
|
– | (1,073 | ) | |||||
|
Office furniture and equipment, net of accumulated depreciation of $12,190
|
– | (16,952 | ) | |||||
|
Assumption of liabilities of subsidiaries
|
– | 7,144 | ||||||
|
Accrued interest
|
– | 12,059 | ||||||
|
Convertible debt, net of discount of $80,161
|
– | 419,839 | ||||||
|
Gain on disposal of discontinued operations
|
– | 453,987 | ||||||
The results of discontinued operations are summarized as follows:
|
Period from
|
||||||||||||
|
For the year
|
For the year
|
April 4,
2006
|
||||||||||
|
Ended
|
Ended
|
(Inception)
|
||||||||||
|
May 31,
|
May 31,
|
To May 31,
|
||||||||||
|
2011
|
2010
|
2011
|
||||||||||
|
$
|
$
|
$
|
||||||||||
|
Expenses
|
||||||||||||
|
Amortization
|
– | 1,087 | 22,525 | |||||||||
|
General and administrative
|
– | 3,233 | 67,478 | |||||||||
|
Impairment of mineral property costs
|
– | – | 4,530,126 | |||||||||
|
Professional fees
|
– | – | 10,382 | |||||||||
|
Mineral property costs
|
– | – | 385,920 | |||||||||
|
Loss on disposal of property and equipment
|
– | – | 14,058 | |||||||||
|
Net Loss from Discontinued Operations
|
– | (4,320 | ) | (5,030,489 | ) | |||||||
F-15
Buckingham Exploration Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
11. Commitments
On May 7, 2007, the Company entered into a management agreement (the “Agreement”) with the President of the Company for management services. Per the Agreement, the Company is required to pay $10,000 per month, commencing May 7, 2007, and will remain in effect on month-to-month basis until terminated by either party giving 14 days notice. The agreement was amended on April 30, 2008 to increase the monthly fee to $20,000 effective March 15, 2008. The agreement was amended on May 6, 2009 to reduce the monthly fee to $10,000 effective December 1, 2008. On April 8, 2011, the agreement was further amended to reduce the monthly fee to CDN$8,000 effective December 1, 2010.
The Company leases premises, at the rate of $1,073 per month, located at Suite 418- 831 Royal Gorge Blvd, Cañon City, Colorado 81212.
12. Income Taxes
The Company has a net operating loss carryforward of $2,506,829 available to offset taxable income in future years which commence expiring in fiscal 2029.
The Company is subject to United States federal and state income taxes at an approximate rate of 35%. The reconciliation of recovery for income taxes at the United States federal statutory rate compared to the Company’s income tax recovery reported is as follows:
|
May 31,
2011
|
May 31,
2010
|
|||||||
|
$
|
$
|
|||||||
|
Income tax recovery at statutory rate
|
(97,587 | ) | (90,713 | ) | ||||
|
Non-deductible expenses
|
– | 385 | ||||||
|
Change in valuation allowance
|
97,587 | 90,328 | ||||||
|
Provision for income taxes
|
– | – | ||||||
The significant components of deferred income tax assets and liabilities at May 31, 2011 and 2010, are as follows:
|
May 31,
2011
|
May 31,
2010
|
|||||||
|
$
|
$
|
|||||||
|
Net operating loss carryforward
|
877,389 | 779,804 | ||||||
|
Valuation allowance
|
(877,389 | ) | (779,804 | ) | ||||
|
Net deferred income tax asset
|
– | – | ||||||
F-16
On October 7, 2010, Manning Elliott LLP resigned as our independent registered public accounting firm and we appointed MaloneBailey, LLP to act as our independent auditors. Manning Elliott served as our independent registered public accounting firm during the past two fiscal years and through October 7, 2010.
During the two most recent fiscal years and through October 7, 2010, there were no disagreements (as defined in Item 304(a)(1)(v) of Regulation S-K) or reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K), except that our sole director and officer discussed with Manning Elliott the existence of material weaknesses in our internal control over financial reporting, as more fully described in our amended annual report on Form 10-K/A for the year ended May 31, 2010, filed on September 24, 2010 with the SEC.
See our Current Report on Form 8-K filed with the SEC on October 13, 2010 for more information.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by our management, with the participation of our sole officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of May 31, 2011. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.
Based on that evaluation, and the material weaknesses outlined below under Internal Control Over Financial Reporting, our principal executive officer and principal accounting officer concluded, as of the end of the period covered by this annual report, that, due to weaknesses in our internal controls described below, our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting information required to be disclosed, within the time periods specified in the SEC’s rules and forms, and that such information may not be accumulated and communicated to our principal executive officer and principal accounting officer to allow timely decisions regarding required disclosures.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Under the supervision of our sole officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of May 31, 2011 using the criteria established in
Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of May 31, 2011, the Company determined that there were significant deficiencies that constituted material weaknesses, as described below.
|
1.
|
Certain entity level controls establishing a “tone at the top” were considered material weaknesses. There are no segregation of duties due to the small size of the Company. The Company has a sole officer/director and does not have a majority of independent directors on its board or audit committee. The Company has no policy on fraud and no code of ethics at this time.
|
|
2.
|
All cash management is conducted by our sole officer, with may result in misappropriation of funds.
|
|
3.
|
The lack of independent directors exercising an oversight role increases the risk of management override and potential fraud.
|
|
4.
|
The Company is in the development stage with limited resources and limited monitoring of internal control and assessment of risk is conducted.
|
23
Management is currently evaluating remediation plans for the above control deficiencies.
In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result, management has concluded that the Company did not maintain effective internal control over financial reporting as of May 31, 2011 based on criteria established in
Internal Control—Integrated Framework
issued by COSO.
MaloneBailey LLP, an independent registered public accounting firm, is not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of May 31, 2011 pursuant to rules of the SEC.
Changes in Internal Control
During the quarter ended May 31, 2011, there were no other changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Not Applicable.
None.
24
Our bylaws allow the number of directors to be fixed by the Board of Directors. Our Board of Directors has fixed the number of directors at two.
Our directors and officers are as follows:
|
Name
|
Age
|
Position
|
|
Christopher Robin Relph
|
62
|
Director, President, Chief Executive Officer,
|
|
Chief Financial Officer
|
||
|
Treasurer, Secretary, Principal Accounting Officer
|
||
|
Simon Eley
|
39
|
Director
|
|
Karim Lalani
|
45
|
Corporate Secretary
|
Our directors serve as directors until our next annual shareholders’ meeting or until a successor is elected and qualified. Officers hold their positions at the discretion of the Board of Directors. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.
Christopher Robin Relph, Director, President, CEO and CFO
Mr. Relph was our founder and has been our President, CEO, CFO and since April 4, 2006 and was our sole director from April 4, 2006 until December 2010. From May 2002 to April 2006, Mr. Relph's principal occupation was acting as the President of Garuda Capital Corp., a company formerly in the businesses of mining and chocolate manufacturing, and formerly quoted on the Pink Sheets. Also for the past 15 years, Mr. Relph has been the managing director of Buckingham Securities Ltd., an investment company in London, UK. As a former member of various international stock exchanges and the London Life Market, Mr. Relph has considerable experience in public company affairs, fund raising and deal structuring. Mr. Relph is also Chairman of the Rigpa Foundation, a charitable trust.
Simon Eley, Director
Mr. Eley has been a director since December 20, 2010. He is an Australian solicitor with wide experience in the resources sector. Mr. Eley is currently a director of Auricup Resources Ltd and was a director of Aragon Resources Ltd. He led the team that secured the Central Murchison Gold Project which became Aragon's core asset with approximately 2 million ounces in JORC compliant resources. Aragon was taken over by Westgold Resources Ltd in 2011 valuing Aragon at $76 million. He worked for Woodside in Mauritania, West Africa in an advisory and commercial role dealing with government, joint venture partners and local and international contractors. He has also worked for Aquila Resources, Manhattan Corporation, Clough and Clayton Utz. Mr. Eley’s experience includes capital raisings, corporate matters, various commercial arrangements (including joint venture and farm-in agreements), and matters relating to mining law, toll treatment arrangements, litigation and alternative dispute resolution. At Aquila and Manhattan he was engaged in corporate management and strategy. He also has hands on experience in operating base metal and gold mines in Western Australia and the Northern Territory.
Karim Lalani, Corporate Secretary
Mr. Lalani was appointed our Corporate Secretary effective August 1, 2011. Mr. Lalani has over 15 years of experience as an attorney practicing primarily in the areas of corporate finance and securities law, mergers and acquisitions and corporate and commercial law. He has represented a number of domestic and international clients in transactions of various types and sizes, including U.S and cross border public and private equity and debt financings, mergers and acquisitions, corporate governance and regulatory compliance matters. Mr. Lalani received an LL.B. from the University of Ottawa, Canada in 1994 and is a member of the Washington State Bar Association and Law Society of British Columbia, Canada.
25
Significant Employees
Other than the officers described above, there are no other individuals that make a significant contribution to our business.
Family Relationships
None.
Involvement in Certain Legal Proceedings
None of our directors, executive officers, promoters or control persons have been involved in any of the following events during the past five years:
|
●
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
|
●
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
●
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
|
|
●
|
being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Director Independence
We currently have two directors, none of whom is considered to be independent under applicable SEC rules.
Nominating Committee
Given our size and limited financial resources, we have not implemented a nominating committee. Our current directors consider nominations to our board. We have not implemented any material changes to the procedures by which security holders may recommend nominees to our Board of Directors during the twelve months ended May 31, 2011.
Audit Committee
On September 25, 2009, we implemented an audit committee currently comprised of our directors. The audit committee adopted an audit committee charter governing the duties of the audit committee. In accordance with the audit committee charter, our audit committee is responsible for: (1) the selection and oversight of our independent auditors; (2) the selection, evaluation and recommendation to the Board, for shareholder approval, of the auditor to examine our accounts, controls and financial statements; (3) recommending to the Board the compensation to be paid to our external auditors; (4) pre-approval of all non-audit services to be provided by the auditor to us or our subsidiaries; (5) oversight of the work of the auditor; (6) review of our audited consolidated financial statements, interim financial statements, our management’s discussion and analysis, and recommendation of their approval to the Board; and (7) review and consideration of any significant reports and recommendations issued by our auditors. A copy of our audit committee charter is filed as an exhibit to this report.
26
Audit Committee Financial Expert
We do not have an audit committee financial expert as we believe that the cost related to retaining a financial expert at this time is prohibitive. Further, because we have limited operations at the present time, we believe the services of a financial expert are not warranted.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions as we currently have limited financial resources and only two directors and officers. We plan to adopt a code of ethics as our business develops and we appoint additional directors and officers.
Section 16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of the Securities Exchange Act of 1934 requires a company’s directors and officers, and persons who own more than ten-percent (10%) of the company’s common stock, to file with the Securities and Exchange Commission reports of ownership on Form 3 and reports of change in ownership on Forms 4 and 5. Such officers, directors and ten-percent stockholders are also required to furnish the company with copies of all Section 16(a) reports they file. Based on information provided to us, all such reports have been filed under Section 16(a) of the Securities Exchange Act of 1934, however, Aviador Corporation, Simon Eley, Six Fingers Pty Ltd., Smart Train Australian Pty Ltd. and BC & N Pollard ATF Geovet Family Trust were late in filing Form 3s.
Summary Compensation Table
The following table sets forth, as of May 31, 2011, the compensation paid to our sole executive officer during the last two completed fiscal years.
|
Summary Compensation Table
|
|||||||||
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Non-Equity Incentive Plan Compen-sation
|
Nonqualified Deferred Compensation Earnings
|
All Other Compen-sation
|
Total
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||
|
C. Robin Relph (1)
|
2011
|
$108,000(1)
|
0
|
0
|
0
|
0
|
0
|
0
|
$108,000
|
|
2010
|
$120,000(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
$120,000
|
|
|
(1)
|
Christopher Robin Relph was our President, Chief Executive Officer and Chief Financial Officer during the last two fiscal years. Represents management fees incurred and paid or payable to Mr. Relph as CEO during the year ended May 31, 2011.
|
|
(2)
|
Represents management fees incurred and paid or payable to Mr. Relph as CEO during the year ended May 31, 2010 during the year ended May 31, 2010.
|
27
Option Grants
We did not grant any stock options or other similar securities to our directors or officers during the year ended May 31, 2011 or 2010. Our directors and officers do not own any stock options or other similar securities of our company, except that Mr. Relph holds warrants to acquire up to two million shares at a price of $0.10 per share expiring February 12, 2012. See Item 12.
Management Agreements
We entered into a management agreement with Christopher Robin Relph on May 7, 2007 with effect from March 1, 2007 regarding Mr. Relph’s service as our President, CEO and CFO. Pursuant to this agreement, Mr. Relph receives remuneration at the rate of $10,000 per month commencing March 1, 2007, payable at the beginning of each month, or accruing as a debt owing by us to Mr. Relph. In addition, Mr. Relph also received options to purchase 5,000 shares of our common stock at $40 per share until May 7, 2010, which expired unexercised.
On April 30, 2008 we entered into an amendment to the management agreement with Mr. Relph whereby we agreed to pay Mr. Relph $20,000 per month commencing March 15, 2008; payable at the beginning of each month, or accruing as a debt owing by us to Mr. Relph. By further amendment, Mr. Relph’s pay was reduced to $10,000 per month effective December 1, 2008.
We and Mr. Relph mutually terminated this management agreement effective December 1, 2010 pursuant to the terms of the agreement. We agreed to pay Mr. Relph CDN$24,000 for his services for the quarter ended February 28, 2011 and to pay Mr. Relph CDN$8,000 for his services going forward. No early termination penalties were incurred as a result of the termination of the Management Agreement.
We appointed Karim Lalani as our Corporate Secretary effective August 1, 2011. We have agreed to pay Mr. Lalani CDN$5,000 per month for his services and plan to enter into a formal agreement with him in due course.
Compensation upon Change of Control
As of May 31, 2011, we had no pension plans or compensatory plans or other arrangements, which provide compensation on the event of termination of employment or change in control of us.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation of Directors
We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended May 31, 2011 or 2010.
We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. No director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.
28
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of August 26, 2011 by: (i) each of our directors, (ii) each of our named executive officers and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.
|
Title of Class
|
Name and Address
of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Class
|
|
Common Stock
|
Simon Eley
|
Nil(1)
|
Nil
|
|
Common Stock
|
Christopher Robin Relf
|
6,600,000(2)
|
11.2%
|
|
Common Stock
|
Karim Lalani
|
250,000
|
*
|
|
All Officers and Directors as a Group
|
6,850,000 | 11.6% | |
|
Common Stock
|
Aviador Corporation Pty. Ltd.
|
22,500,000(3)
|
35.0%
|
|
Common Stock
|
BC & N Pollard ATF Geovet Family Trust
|
5,400,000(4)
|
9.2%
|
|
Common Stock
|
Six Fingers Pty Ltd.
|
5,400,000(5)
|
9.2%
|
|
Common Stock
|
Smart Train Australian Pty Ltd.
|
5,400,000(6)
|
9.2%
|
|
Common Stock
|
Resmin Pty Ltd.
|
4,500,000(7)
|
7.7%
|
|
Common Stock
|
Aran Asset Management SA
|
3,000,000(8)
|
5.2%
|
|
*
|
Less than 1%.
|
|
(1)
|
Aviador Corporation Pty. Ltd. owns 15,000,000 shares of common stock and warrants to acquire 7,500,000 shares of common stock of the Company and Resmin Pty Ltd. owns 3,000,000 shares of common stock and warrants to acquire 1,500,000 shares of common stock of the Company. Mr. Eley is a director of both Aviador and Resmin and disclaims beneficial ownership of these securities as investment and voting control over these securities rests with the board of directors of Aviador and Resmin, respectively.
|
|
(2)
|
Represents 4,000,000 shares of common stock and warrants to acquire 2,000,000 shares of common stock of the Company held by Mr. Relph, and 400,000 shares of common stock and warrants to acquire 200,000 shares of common stock of the Company held by Buckingham Securities Limited of which Mr. Relph is the President. Mr. Relph disclaims beneficial ownership of these securities as investment and voting control over these securities rests with the board of directors of Buckingham Securities Limited.
|
|
(3)
|
Represents 15,000,000 shares of common stock and warrants to acquire 7,500,000 shares of common stock of the Company.
|
|
(4)
|
Represents 3,600,000 shares of common stock and warrants to acquire 1,800,000 shares of common stock of the Company.
|
|
(5)
|
Represents 3,600,000 shares of common stock and warrants to acquire 1,800,000 shares of common stock of the Company.
|
|
(6)
|
Represents 3,600,000 shares of common stock and warrants to acquire 1,800,000 shares of common stock of the Company.
|
|
(7)
|
Represents 3,000,000 shares of common stock and warrants to acquire 1,500,000 shares of common stock of the Company.
|
|
(8)
|
Represents 2,000,000 shares of common stock and warrants to acquire 1,000,000 shares of common stock of the Company.
|
29
During the years ended May 31, 2011 and 2010, we incurred $104,000 and $213,173, respectively, which is due to Christopher Robin Relph, the President of the Company. The amounts represent unpaid management fees, cash advances and expenses paid on behalf of the Company. These amounts are unsecured, non-interest bearing and have no repayment terms.
Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Audit and Non-Audit Fees
The following table represents fees for the professional audit services and fees billed for other services rendered by our auditors, Manning Elliott LLP, for the audit of our annual financial statements for the years ended May 31, 2010 and 2011 and any other fees billed for other services rendered by Manning Elliott LLP during these periods. All fees are in US dollars.
|
Year Ended
May 31,
2010
|
Year Ended
May 31,
2011
|
|||||||
|
Audit fees
|
$ | 25,000 | $ | 15,000 | ||||
|
Audit-related fees
|
0 | 0 | ||||||
|
Tax fees
|
0 | 0 | ||||||
|
All other fees
|
0 | 0 | ||||||
|
Total
|
$ | 25,000 | $ | 15,000 | ||||
Since our inception, our Board of Directors, performing the duties of the Audit Committee, reviews all audit and non-audit related fees at least annually. The Board of Directors as the Audit Committee pre-approved all audit related services in fiscal 2011.
30
Financial Statement Schedules
None.
Exhibits
|
Exhibit
Number
|
Exhibit
Description
|
|
10.1
|
Debt Conversion Agreements with various investors (1)
|
|
10.1
|
Option Agreement, between 0887717 B.C. Ltd. and Mr. M. S. Morrison, dated August 23, 2010 (2)
|
|
10.2
|
Option Agreement with Argus Metals Corp., dated January 6, 2010 (3)
|
|
10.3
|
Execution and Settlement Agreement with Regal Uranium Inc. (4)
|
|
10.4
|
Amendment to Christopher Robin Relph Management Agreement, dated December 1, 2008 (4)
|
|
10.5
|
Amendment to Christopher Robin Relph Management Agreement, dated April 10, 2008 (5)
|
|
10.6
|
Robin Relph Management Agreement, dated May 7, 2007 (6)
|
|
10.7
|
2007 Non-Qualified Stock Plan (7)
|
|
10.8
|
2007 Non-Qualified Stock Option Plan (6)
|
|
99.1
|
Audit Committee Charter, dated September 25, 2009 (8)
|
(1) Included as an exhibit with our Form 8-K filed June 2, 2011.
(2) Included as an exhibit with our Form 8-K filed August 24, 2010.
(3) Included as an exhibit with our Form 8-K filed February 5, 2010.
(4) Included as an exhibit with our Form 10-K filed on September 15, 2009.
(5) Included as an exhibit with our Form 10-K filed on September 15, 2008.
(6) Included as an exhibit with our Form 10-KSB filed on September 4, 2007.
(7) Included as an exhibit with our Form S-8 filed on November 23, 2007.
(8) Included as an exhibit with our Form 10-Q for quarterly period ended November 30, 2009, filed January 19, 2010.
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Buckingham Exploration Inc.
|
||
|
Date: August 29, 2011
|
By:
|
/s/ Christopher Robin Relph
|
|
Christopher Robin Relph
|
||
|
President, Chief Executive Officer
Chief Financial Officer
|
||
Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
SIGNATURES
|
TITLE
|
DATE
|
||
|
/s/ Christopher Robin Relph
|
August 29, 2011
|
|||
|
Christopher Robin Relph
|
Director, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer
|
|||
|
/s/ Simon Eley
|
Director
|
August 29, 2011
|
||
|
Simon Eley
|
|
32
TABLE OF CONTENTS
Part IItem 1. Description Of BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. (removed and Reserved)Part IIItem 5. Market For Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesItem 6. Selected Financial DataItem 7. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9a(t). Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers, Promoters and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPart IVItem 15. Exhibits and Financial Statement Schedules