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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended February 28, 2006
-------------------
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period _________________ to ________________
Commission File Number 0-26709
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BROOKMOUNT EXPLORATIONS INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0201259
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
999 Canada Place - Suite 404
Vancouver, British Columbia V6C 3EZ
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 604-676-5244
None
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 25,770,677 shares of $0.001
par value common stock outstanding as of May 23, 2006.
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Stated in US Dollars)
(Unaudited)
BALANCE SHEETS
INTERIM STATEMENTS OF OPERATIONS
INTERIM STATEMENTS OF CASH FLOWS
STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
BALANCE SHEETS
February 28, November 30,
2006 2005
---- ----
ASSETS (Unaudited) (Audited)
------
Current assets
Cash $ 12,224 $ 20,447
Prepaid expenses 4,352 5,000
Advances - Note 2 43,617 43,617
--------------------------------------
60,193 69,064
Capital assets - Note 3 1,149 1,242
----------------- -----------------
$ 61,342 $ 70,306
================= =================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 35,251 $ 33,223
Due to related parties - Note 6 59,556 58,516
----------------- -----------------
94,807 91,739
----------------- -----------------
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value - Note 5
200,000,000 shares authorized
21,992,661 shares issued (2005 - 16,768,685) 21,992 16,768
Additional paid-in capital 4,799,559 3,031,999
Stock subscriptions receivable (6,600) (6,600)
Deferred compensation (1,039,495) -
-----------------
Deficit accumulated during the exploration stage (3,808,921) (3,063,600)
----------------- -----------------
(33,465) (21,433)
------------------ ------------------
$ 61,342 $ 70,306
================= =================
Going Concern - Note 1
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
December 9, 1999
(Date of
Three months ended Inception) to
February 28, February 28,
2006 2005 2006
---- ---- ----
Expenses
General and administrative - Note 2,5 and 6 $ 732,671 $ 91,097 $ 1,551,545
Mineral property costs - Notes 5 and 6 12,650 1,278,595 2,257,376
-------------------------------------------------------------
Net loss for the period $ (745,321) $ (1,369,692) $ (3,808,921)
================= ================= ====================
Basic and diluted loss per share $ (0.03) $ (0.13)
================ ================
Weighted average number of common shares outstanding
21,040,432 10,426,421
================= =================
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
December 9,
1999
(Date of
Inception)
Three months ended to
February 28, February 28,
2006 2005 2006
---- ---- ----
Cash Flows from Operating Activities
Net loss $ (745,321) $ (1,369,692) $ (3,808,921)
Add items not affecting cash:
Depreciation 93 133 664
Capital contributions - - 29,250
Capital stock issued for services 350,789 - 350,789
Mineral property costs 7,500 1,250,000 2,157,500
Provision for irrecoverable advance 150,000
- 150,000
Changes in non-cash working capital balances
related to operations
Prepaid expenses 648 (5,704) (4,352)
Accounts payable and accrued liabilities 2,028 (116) 35,251
Due to related parties 1,040 922 59,556
----------------- ----------------- -----------------
Net cash used in operations (233,223) (124,457) (1,030,263)
----------------- ----------------- -----------------
Cash Flows from Investing Activities
Advances (150,000) - (193,617)
Acquisition of capital assets - - ( 1,813)
----------------- ----------------- -----------------
Net cash used in investing activities (150,000) - (195,430)
------------------ ---------------- ------------------
Cash Flows from Financing Activities
Capital stock issued, net 375,000 158,400 1,237,917
----------------- ----------------- -----------------
Increase (decrease) in cash (8,223) 33,943 12,224
Cash, beginning 20,447 51,103 -
----------------- ----------------- -----------------
Cash, end $ 12,224 $ 85,046 $ 12,224
================= ================= =================
Supplemental Disclosure of Cash Flow
Information
Cash paid for:
Interest $ - $ - $ -
================= ================= =================
Income taxes $ - $ - $ -
================= ================= =================
Non-cash transactions - Note 7
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT) for the period December 9, 1999 (Date
of Inception) to February 28, 2006
(Unaudited)
Deficit
Accumulated
Additional Stock During the
Common Shares Paid-in Deferred Subscriptions Exploration
-------------------
Number Par Value Capital Compensation Receivable Stage Total
------ --------- ------- ------------ ---------- ----- -----
Balance, as at December 9, 1999 - $ - $ - $ - $ - $ - $ -
Capital stock issued for cash - at $0.001 3,500,000 3,500 - - - - 3,500
Capital stock issued for cash - at $0.002 5,750,000 5,750 5,750 - - - 11,500
- at $0.20 32,400 32 6,448 - - - 6,480
Contributions to capital by officers - - 9,000 - - - 9,000
Net loss for the year - - - - - (31,327) (31,327)
------------ ----------- ---------- ---------- -------- --------- ---------
Balance, as at November 30, 2000 9,282,400 9,282 21,198 - - (31,327) (847)
Contributions to capital by officers - - 9,000 - - - 9,000
Net loss for the year - - - - - (17,215) (17,215)
------------ ----------- ---------- ---------- -------- --------- ---------
Balance, as at November 30, 2001 9,282,400 9,282 30,198 - - (48,542) (9,062)
Contributions to capital by officers - - 9,000 - - - 9,000
Net loss for the year - - - - - (17,811) (17,811)
------------ ----------- ---------- ---------- -------- --------- ---------
Balance, as at November 30, 2002 9,282,400 9,282 39,198 - - (66,353) (17,873)
Capital stock issued for cash - at $0.25 176,500 177 43,948 - - - 44,125
- at $0.50 250,000 250 125,262 - - - 125,512
Contributions to capital by officers - - 2,250 - - - 2,250
Net loss for the year - - - - - (164,407) (164,407)
------------ ----------- ---------- ---------- -------- --------- ---------
Balance, as at November 30, 2003 9,708,900 9,709 210,658 - - (230,760) (10,393)
Capital stock issued for cash - at $0.50 575,948 576 287,398 - (100) - 287,874
Net loss for the year - - - - - (322,261) (322,261)
------------ ----------- ---------- ---------- -------- --------- ---------
Balance, as at November 30, 2004 10,284,848 10,285 498,056 - (100) (553,021) (44,780)
...Cont'd
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT) for the period December 9, 1999 (Date
of Inception) to February 28, 2006
(Unaudited)
Deficit
Accumulated
Additional Stock During the
Common Shares Paid-in Deferred Subscriptions Exploration
-------------------
Number Par Value Capital Compensation Receivable Stage Total
------ --------- ------- ------------ ---------- ----- -----
Capital stock issued for cash - at $0.21 100,000 100 21,130 - - - 21,230
Capital stock issued for cash - at $0.25 200,000 200 46,300 - - - 46,500
Capital stock issued for cash - at $0.35 134,100 134 46,867 - (6,500) - 40,501
Capital stock issued for cash - at $0.40 62,500 63 24,937 - - - 25,000
Capital stock issued for cash - at $0.50 411,190 411 205,184 - - - 205,595
Capital stock issued for cash - at $0.56 35,714 35 19,965 - - - 20,000
Capital stock issued for cash - at $0.60 10,333 10 6,190 - - - 6,200
Capital stock issued for cash - at $0.63 30,000 30 18,870 - - - 18,900
Capital stock issued for mineral
property - at $0.40 5,000,000 5,000 1,995,000 - - - 2,000,000
Capital stock issued for mineral
property - at $0.30 500,000 500 149,500 - - - 150,000
Net loss for the year - - - - - (2,510,579) (2,510,579)
------------ ----------- ---------- ---------- -------- ----------- -----------
Balance, as at November 30, 2005 16,768,685 16,768 3,031,999 - (6,600) (3,063,600) (21,433)
Capital stock issued for cash - at $0.40 759,975 760 274,240 - - - 275,000
- at $0.60 163,001 163 99,837 - - - 100,000
Capital stock issued for mineral
property - at $0.75 10,000 10 7,490 - - - 7,500
Capital stock issued for services 4,291,000 4,291 1,385,993 - - - 1,390,284
Deferred compensation - - - (1,039,495) - - (1,039,495)
Net loss for the period - - - - - (745,321) (745,321)
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Balance, as at February 28, 2006 21,992,661 $ 21,992 $4,799,559 $(1,039,495) $ (6,600) $ (3,808,921)$ (33,465)
========== ========== ========== =========== ========== ============= =============
SEE ACCOMPANYING NOTES
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Unaudited)
Note 1 Nature of Continued Operations and Basis of Presentation
Brookmount Explorations, Inc. (the "Company") is an exploration
stage company. The Company was organized for the purpose of
acquiring, exploring and developing mineral properties. The
recoverability of amounts from properties acquired will be
dependant upon discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying property,
the ability of the Company to obtain necessary financing to
satisfy the expenditure requirements under the property agreement
and to complete the development of the property, and upon future
profitable production.
Going Concern
The financial statements have been prepared on the basis of a
going concern which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company has a working capital deficiency of $34,626 at February
28, 2006 and has incurred losses since inception of $3,658,933 and
further losses are anticipated in the development of its mineral
properties raising substantial doubt as to the Company's ability
to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on raising additional
capital to fund ongoing exploration and development and ultimately
on generating future profitable operations. The Company will
continue to fund operations with advances, other debt sources, and
further equity placements.
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been
prepared in accordance with United States generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-QSB of Regulation S-B. They do not
include all information and footnotes required by United States
generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there has been no
material changes in the information disclosed in the notes to the
financial statements for the year ended November 30, 2005 included
in the Company's Annual Report on Form 10-KSB/A filed with the
Securities and Exchange Commission. The interim unaudited
financial statements should be read in conjunction with those
financial statements included in the Form 10-KSB/A. In the opinion
of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments,
have been made. Operating results for the three months ended
February 28, 2006 are not necessarily indicative of the results
that may be expected for the year ending November 30, 2006.
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Unaudited)
Note 2 Advances
On May 13, 2005, the Company signed a "Letter of Agreement" with a
private corporation Jemma Resources Corp. ("Jemma") to acquire
100% of the outstanding capital stock of Jemma. Significant terms
contained in the Letter of Agreement were the appointment of two
of Jemma's directors to the Company's board of directors, Jemma
completing a debt financing of $15 million, and the Company's
right to elect not to proceed with the transaction thereby
resulting in all advances made to Jemma by the Company being
refundable, and the replacement of the Letter of Agreement with a
binding contract. The purchase price consisted of 3,000,000 shares
of common stock of the Company, 3,000,000 share purchase warrants
at $1.50 per warrant exercisable within 24 months from the date of
the agreement and approximately CDN$75,000 in refundable advances
to secure an extension for the option to purchase a mineral
property and for operating costs. During May 2005 two directors of
Jemma were appointed to the Company's board of directors. During
the year ended November 30, 2005, the Company advanced US$43,617
(CDN $54,400) pursuant to the Letter of Agreement. At November 30,
2005 the Letter of Agreement had not been replaced by a binding
contract and Jemma had not raised the debt financing as
contemplated in the Letter of Agreement. Accordingly the Company's
management decided not to proceed with this transaction. The
decision was as a result of the Company's due diligence and
Jemma's inability to raise the agreed financing. As a result, the
advances totaling $43,617 became refundable pursuant to the terms
of the Letter of Agreement. As of February 28, 2006, the Company
has not received the funds from Jemma; however, management
believes these funds are recoverable as Jemma has expressed its
intention to repay theses advances.
During the period ending February 28, 2006, $150,000 was withdrawn
from the Company's bank account by a director of the Company. The
director was not an authorized signatory on the Company's bank
account and had not been granted any such authority to withdraw
the funds by the Company's Board of Directors. Upon completion of
an investigation, the Company determined that the director had not
used the funds for corporate purposes. The Company had worked for
several weeks to have this director return the money to the
Company on a voluntary basis. As of the date of this filing, the
money has not been returned. The Company has also demanded from
the bank that the money be returned, as it believes the bank is
responsible since the director was not a signatory to the account
and did not otherwise have authority to have the funds removed
from the account. The Company has reported this incident to
authorities in Canada and the United States and is currently
assessing its criminal and civil litigation options. Due to the
uncertainty of collection, the Company has fully written off the
$150,000 during the period ending February 28, 2006.
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Unaudited)
Note 3 Capital Assets
November 30,
February 28, 2006 2005
------------------------------------------------- ------------------
Accumulated
Cost Depreciation Net Net
Computer equipment $ 1,813 $ 664 $ 1,149 $ 1,242
============ =============== =============== ==============
Note 4 Mineral Properties
a) Brookmount Claims, Abitibi West County, Quebec, Canada
During 2003 the Company acquired five mineral claims
located in the Chazel Township, in the Province of Quebec for $48,079. The
claims are in good standing until November 14, 2006.
b) Mercedes Property, Junin, Peru
Pursuant to a property acquisition agreement dated
July 3, 2003 and amended on January 24, 2005, the Company acquired a 100%
interest in 2,611 hectares located in Central Peru from a director of the
Company (the "Vendor") for consideration of $22,500 (paid) and the issuance of
5,000,000 common shares valued at $0.40 per share (issued). The property is
held in trust by the Vendor for the Company. Upon request from the Company the
title will be recorded in the name of the Company. At February 28, 2006 the
title of this property has not been recorded in the name of the Company.
c) Rock Creek Claims, British Columbia, Canada
On February 2, 2006 the Company entered into a letter
of intent to acquire an option to purchase 100% of the issued share capital of
722161 B.C. Ltd ("BC Ltd"). BC Ltd has a 56% interest in mineral claims located
in the Rock Creek area of British Columbia, Canada. In consideration for
signing the letter of intent the Company issued 10,000 of its shares of common
stock to the owner of BC Ltd. Upon replacing the letter of intent with a
formal agreement, the Company will issue additional 20,000 shares of its common
stock to the owner of BC Ltd. To earn the option the Company would be required
to make cash payments of $250,000 over a period of four years and incur
exploration expenses of $1,000,000 over a period of five years from the date
of the formal agreement.
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Unaudited)
At February 28, 2006 the letter on intent has not been replaced
with a formal agreement. The Company has until April 21, 2006 to
negotiate a formal agreement at which time the letter of intent
expires. As at May 23, 2006 the parties were continuing to
finalize the terms of a formal agreement, which the parties
expect to be finalized and executed during the second quarter of
2006.
Note 5 Capital Stock
During the three months ended February 28, 2006, the Company
issued 922,976 shares of common stock pursuant a private placement
for total proceeds of $375,000.
During the three months ended February 28, 2006, the Company
issued 10,000 shares of common stock pursuant the proposed
acquisition of a mineral property (See Note 4c) and issued
4,291,000 shares of common stock with a fair value of $1,390,284
to the its newly appointed chairman for business and consulting
services that will be provided over the 2006 fiscal year (See Note
6).
To February 28, 2006, the Company has not granted any stock
options or warrants.
Note 6 Related Party Transactions
The Company paid or incurred the following amounts to directors of
the Company, a former director and/or companies with directors or
officers in common:
Three months ended
February 28,
2006 2005
General and administrative:
Consulting fees $ 355,973 $ -
Management fees 90,000 $ 52,500
$ 445,973 $ 52,500
The management fees were measured by the exchange amount that is
the amount agreed upon by the transacting parties.
Amounts due to related parties at February 28, 2006 are due to
directors of the Company in respect to unpaid management fees and
advances. These amounts are unsecured, non-interest bearing and
have no specific terms for repayment.
During the quarter ended February 28, 2006, the Company issued
4,291,000 shares of its common stock with a fair value of
$1,390,284 to its newly appointed chairman for services to be
rendered during the 2006 fiscal year. During the quarter ended
February 28, 2006 $350,789 of this amount was expensed. The
balance has been deferred and will be expensed over the remainder
of the 2006 fiscal year.
BROOKMOUNT EXPLORATIONS INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 28, 2006
(Unaudited)
Note 7 Non-cash Transactions
Investing and financing activities that do not have a direct
impact on current cash flows are excluded from the statement of
cash flows. During the three months ended February 28, 2006, the
Company issued:
a) 10,000 common shares valued at $0.75 per share pursuant to
the letter of intent with BC Ltd (See note 3c);
b) 4,291,000 shares of common stock with a fair value of
$1,390,284 to the Chairman for business and consulting
services that will be provided over the 2006 fiscal year.
These transactions were excluded from the statement of cash flows
for the period ended February 28, 2006, and for the period
December 9, 1999 (Date of Inception) to February 28, 2006.
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipate," "believe," "plan," "expect,"
"future," "intend" and similar expressions to identify such forward-looking
statements. You should not place too much reliance on these forward-looking
statements. Our actual results are likely to differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us described in this Risk Factors section of our annual report on
Form 10KSB/A and elsewhere in this quarterly report.
Plan of Operation
Our plan of operations for the twelve months following the date of this
quarterly report is to complete initial exploration programs on the Brookmount
and Mercedes properties. We anticipate that the programs on the Brookmount and
Mercedes properties will cost $25,000 and $480,000 respectively.
In addition, we anticipate spending $25,000 on professional fees, $132,000 on
salaries and wages, $30,000 on travel costs, $50,000 on promotional expenses and
$40,000 on other administrative expenses in the next 12 months.
Total expenditures over the next 12 months are therefore expected to be
$782,000. We will not be able to proceed with either exploration program, or
meet our administrative expense requirements, without additional financing.
On February 2, 2006 the Company entered into a letter of intent to acquire an
option to purchase 100% of the issued share capital of 722161 B.C. Ltd ("BC
Ltd"). BC Ltd has a 56% interest in mineral claims located in the Rock Creek
area of British Columbia, Canada. In consideration for signing the letter of
intent the Company issued 10,000 of its shares of common stock to the owner of
BC Ltd. Upon replacing the letter of intent with a formal agreement, the Company
will issue additional 20,000 shares of its common stock to the owner of BC Ltd.
To earn the option the Company would be required to make cash payments of
$250,000 over a period of four years and incur exploration expenses of
$1,000,000 over a period of five years from the date of the formal agreement.
At February 28, 2006 the letter on intent has not been replaced with a formal
agreement. The Company has until April 21, 2006 to negotiate a formal agreement
at which time the letter of intent expires. At May 23, 2006, the parties were
finalizing definitive documentation, and the transaction is expected to close
during before the end of the second quarter.
We will not be able to complete the initial exploration programs on our mineral
properties without additional financing. We currently do not have a specific
plan of how we will obtain such funding; however, we anticipate that additional
funding will be in the form of equity financing from the sale of our common
stock. We may also seek to obtain short-term loans from our directors, although
no such arrangement has been made. At this time, we cannot provide investors
with any assurance that we will be able to raise sufficient funding from the
sale of our common stock or through a loan from our directors to meet our
obligations over the next twelve months. We do not have any arrangements in
place for any future equity or equity financing.
Results of Operations for Three-Month Period Ended February 28, 2006
We incurred operating expenses in the amount of $745,321 for the three-month
period ended February 28, 2006, as compared to $1,369,692 for the comparative
period in 2005. The substantial decrease in net loss was due to mineral property
costs during the first quarter of 2006 related to the issuance of 5,000,000
shares of common stock at a recorded value of $1,250,000 in connection with the
completion of our acquisition of the Mercedes property
Under instruction from the property vendor, the 5,000,000 shares were issued to
our directors and officers in the following amounts during the first quarter of
2005:
Peter Flueck (property vendor) 2,900,000
Zaf Sungur 1,050,000
Victor Stillwell 1,050,000
General and administrative expenses for the three-month period ended February
28, 2006 increased $641,574 from the prior comparative period from $91,097 for
the period ended February 28, 2005 to $732,671 for the same period in 2006. The
increase was attributable to the following: the write off of $150,000, which was
removed without authority by a director and the amortization of shares issued to
a former director in the amount of $350,789, and an increase in management and
consulting services of $37,500.
At quarter end on February 28, 2006, we had cash on hand of $12,224 and total
assets of $61,342. Our liabilities at the same date totaled $91,807 and
consisted of accounts payable and accrued liabilities of $32,251 and $59,556 due
to related parties.
Subsequent Events
Effective April 26, 2006, David Jacob Dadon was removed as a director and as
Chairman of the Board of the Company for cause. Mr. Dadon withdrew $150,000 from
the Company's bank account. Mr. Dadon was not an authorized signatory on the
Company's bank account and had not been granted any such authority to withdraw
the funds by the Company's Board of Directors. Upon completion of an
investigation, the Company determined that Mr. Dadon had not used the funds for
corporate purposes. The Company had worked for several weeks to have Mr. Dadon
return the money to the Company on a voluntary basis. To date, the money has not
been returned. The Company has reported the incident to the proper authorities
in Canada and the United States.
Effective May 5, 2006, Mr. Dadon responded to his removal as a director for
cause, which response was filed with a Form 8-K, dated May 11, 2006. We replied
to Mr. Dadon's letter in that same filing by noting that "[t]the Company has
endeavored to work with Mr. Dadon for several months to determine why the money
was removed from its account and to see that the money is replaced. The
assertions and accusations contained in Mr. Dadon's letter are outrageous and as
such are impossible to respond to. The Company steadfastly stands by its
assertions and the actions that it has taken."
On December 19, 2005, we filed an 8-K announcing that, among other
things, Jay Jeffery Shapiro, represented by Mr. Dadon to us as a close colleague
and friend, had been appointed to serve as our Chief Financial Officer. Mr.
Dadon had arranged for a conference call prior to Mr. Shapiro's appointment to
introduce someone whose resume we were provided and we were led to believe was
Mr. Shapiro ostensibly in order to provide us with an opportunity to interview
him prior to his appointment. On May 9, 2006, we learned that the person
represented to us to be Jay Jeffery Shapiro was not, in fact, Mr. Shapiro. On
May 9, 2006, the individual we now know to be the true Mr. Shapiro contacted us
to inform us that he had no knowledge of Brookmount, had not been asked to serve
as our Chief Financial Officer by Mr. Dadon, had not been the person interviewed
by our Chief Operating Officer, and had in fact previously informed Mr. Dadon in
writing that he no longer wished to be associated with Mr. Dadon in any venture
and that Mr. Dadon was no longer to use his resume in connection with any of his
activities. As a result, on May 11, 2006 we filed a current report on Form 8-K
to, among other reasons, assure that all Brookmount shareholders are made aware
that individual we now know to be Jay Jeffery Shapiro and whose biography was
contained in our annual report on Form 10-KSB and Form 10-KSB/A, never played
any role in our company or in any of our disclosures.
Effective May 9, 2006, we appointed Zaf Sungur to serve as our Chief Financial
Officer.
Item 3. Controls and Procedures
The Principal Executive Officer and Principal Financial Officer conducted an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on that evaluation, the Principal
Executive Officer and Principal Financial Officer concluded that the Company's
disclosure controls and procedures were effective as of the end of the period
covered by this report. There were no significant changes in internal control
over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that occurred during the first quarter of 2006 that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.
PART II- OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments. The Company is
contemplating its options against its former director in respect of the removal
of $150,000 from the Company's bank account, including, among other things,
cancellation of the previously issued shares. It is possible that Mr. Dadon may
respond to any litigation we initiate or may preemptively seek to sue us for
actions that we have taken or may take in the future against him.
Item 2. Changes in Securities
During the three-month period ended February 28, 2006, the Company accepted
subscriptions for the following share issuances:
Price per Share Number of Shares
$0.40 759,975
$0.60 163,001
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
During the three-month period ended February 28, 2006, the Company filed
following current report on the Form 8-K:
Current report on the Form 8-K dated
December 19, 2005
The current report was issued due to the fact that Mr. Dadon was
appointed to the Company's Board of Directors and would also act
as the Chairman of the Board. On December 16, 2005, the Company
also appointed Jay Jeffery Shapiro as its Chief Financial
Officer. In addition On December 14, 2005, the Company issued
4,291,000 shares of its restricted common stock to Mr. David
Dadon in connection for business and consulting services that he
would provide to the Company over fiscal year 2006.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Brookmount Explorations Inc.
/s/ Peter Flueck
---------------------------
Peter Flueck
President, Chief Executive
Officer and Director
(Principal Executive Officer)
Dated: May 24, 2006
Brookmount Explorations Inc.
/s/ Zaf Sungur
---------------------------
Zaf Sungur
C.O.O., Secretary, treasurer,
Director and principal accounting
officer
Dated: May 24, 2006