10-Q 1 s11411110.htm s11411110.htm


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

FORM 10-Q

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

For the quarterly period ended September 30, 2011

o        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-26669
 
 
CAN-CAL RESOURCES LTD.
(Exact name of registrant as specified in its charter)
 
 
Nevada
88-0336988
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

8205 Aqua Spray Avenue
Las Vegas, Nevada
(Address of principal executive offices)
 
(702) 243-1849
(Registrant’s telephone number, including area code)
 
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.          x Yes   o No

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data Filed 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 the registrant was requires to submit and post such files)          x Yes   o No

Large accelerated filer ¨
      Accelerated filer ¨
   
Non-accelerated filer ¨  (Do not check if a smaller reporting company)
Smaller reporting company   x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).          Yes o       No x
 
The number of shares of Common Stock, $0.001 par value, outstanding on November 7, 2011 was 38,901,246.
 


 
 

 
 
CAN-CAL RESOURCES LTD.
FORM 10-Q
TABLE OF CONTENTS

   
Page
     
PART I – FINANCIAL INFORMATION
 
1
 
Item 1. Financial Statements
 
1
   
Balance Sheets as of September 30, 2011 (Unaudited) and December 31, 2010
 
1
   
Condensed Statements of Operations (Unaudited)
 
2
   
Statement of Stockholders’ Equity (Deficit) (unaudited)
 
3
   
Condensed Statements of Cash Flows (unaudited)
 
4
   
Notes to Condensed Financial Statements (Unaudited)
 
5
 
Item 2. Management’s Discussion and Analysis
 
20
 
Item 3. Quantitative and Qualitative Disclosures about Market Risk
 
25
 
Item 4T. Controls and Procedures
 
25
       
PART II – OTHER INFORMATION
 
26
 
Item 1. Legal Proceedings
 
26
 
Item 1A. Risk Factors
 
27
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
27
 
Item 3. Defaults Upon Senior Securities
 
28
 
Item 4. Submission of Matters to a Vote of Security Holders
 
28
 
Item 5. Other Information
 
28
 
Item 6. Exhibits
 
29
 
 
 
 
 
 
 
 

 
 
CAN-CAL RESOURCES LTD.
 
(AN EXPLORATION STAGE COMPANY)
 
CONDENSED BALANCE SHEETS
 
             
             
   
September 30,
   
December 31,
 
   
2011
   
2010
 
ASSETS
 
(Unaudited)
       
             
Current assets:
           
Cash
  $ 106,209     $ 17,202  
Other current assets
    23,562       18,427  
Total current assets
    129,771       35,629  
                 
Property and equipment (net of accumulated
               
depreciation of $34,031 and $27,454, respectively)
    31,909       38,486  
                 
Total assets
  $ 161,680     $ 74,115  
                 
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
               
                 
Current liabilities:
               
Accounts payable and accrued expenses
  $ 54,831     $ 98,795  
Accounts payable and accrued expenses, related parties
    105,632       60,000  
Accrued interest
    509,485       469,852  
Accrued interest, related parties
    2,228       680  
Accrued salaries
    492,004       403,328  
Notes payable
    360,550       360,550  
Notes payable, related parties
    53,062       57,191  
Unearned rental revenues
    16,042       9,167  
Total current liabilities
    1,593,834       1,459,563  
                 
Total liabilities
    1,593,834       1,459,563  
                 
Commitments and contingencies
               
                 
Stockholders' (deficit):
               
Preferred stock, $0.001 par value, 10,000,000 shares
               
authorized, no shares issued and outstanding
    -       -  
Common stock, $0.001 par value, 100,000,000 shares authorized,
               
37,548,453 and 30,711,203 shares issued and outstanding
               
as of September 30, 2011 and December 31, 2010, respectively
    37,548       30,711  
Subscriptions payable, 985,293 and 2,193,166 shares at
               
September 30, 2011 and December 31, 2010, respectively
    59,118       131,590  
Additional paid-in capital
    9,168,858       8,707,834  
(Deficit) accumulated during exploration stage
    (10,697,678 )     (10,255,583 )
Total stockholders' (deficit)
    (1,432,154 )     (1,385,448 )
                 
Total liabilities and stockholders' (deficit)
  $ 161,680     $ 74,115  
                 
                 
See accompanying notes to financial statements.
 

 
1

 
 
CAN-CAL RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 
                               
                               
                           
March 22, 1995
 
   
For the three months ended
   
For the nine months ended
   
(inception) to
 
   
September 30,
   
September 30,
   
September 30,
 
   
2011
   
2010
   
2011
   
2010
   
2011
 
                               
Material sales
  $ -     $ -     $ -     $ -     $ 245,500  
Cost of sales
    -       -       -       -       263,400  
                                         
Gross loss
    -       -       -       -       (17,900 )
                                         
Operating expenses:
                                       
General and administrative
    86,943       98,035       234,849       256,566       6,933,577  
Exploration costs
    15,381       -       35,387       8,390       584,737  
Depreciation
    2,192       2,252       6,577       7,189       257,131  
Officer salary
    30,000       30,000       90,000       90,000       1,051,176  
Impairment of operating assets
    -       -       -       -       443,772  
Total operating expenses
    134,516       130,287       366,813       362,145       9,270,393  
                                         
Loss from operations
    (134,516 )     (130,287 )     (366,813 )     (362,145 )     (9,288,293 )
                                         
Other income (expense):
                                       
Other income
    3,000       -       9,000       -       59,798  
Interest income
    -       -       -       23       52,945  
Rental revenue
    6,875       6,876       31,125       22,917       387,033  
Gain on sale of fixed assets
    -       -       -       -       26,801  
Interest expense
    (18,572 )     (18,084 )     (115,407 )     (52,362 )     (1,462,362 )
Total other income (expense)
    (8,697 )     (11,208 )     (75,282 )     (29,422 )     (935,785 )
                                         
Loss before provision for income taxes
    (143,213 )     (141,495 )     (442,095 )     (391,567 )     (10,224,078 )
                                         
Provision for income taxes
    -       -       -       -       -  
                               
Net loss from continuing operations
  (143,213 )   (141,495 )   (442,095 )   (391,567
)
  (10,224,078
)
                               
Income from discontinued operations
                             
Income from discontinued operations
    -       -       -       -       116,400  
Loss on disposal of operations (net of taxes)
    -       -       -       -       (590,000 )
                                         
                                         
Net (loss)
  $ (143,213 )   $ (141,495 )   $ (442,095 )   $ (391,567 )   $ (10,697,678 )
                                         
                                         
Weighted average number of common shares
                                       
outstanding - basic and fully diluted
    37,548,453       30,738,196       35,507,874       30,735,119          
                                         
Net (loss) per share - basic and fully diluted
  $ -     $ -     $ (0.01 )   $ (0.01 )        
                                         
                                         
See accompanying notes to financial statements.
 

 
2

 
 
CAN-CAL RESOURCES LTD.
 
(AN EXPLORATION STAGE COMPANY)
 
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
 
 
                                                   
(Deficit)
       
                                       
Foreign
         
accumulated
       
   
Common stock
               
Rescission
         
currency
   
Additional
   
during
   
Total
 
   
Number of
         
Subscriptions
   
Subscriptions
   
liability
   
Unamortized
   
translation
   
paid-in
   
exploration
   
stockholders'
 
   
shares
   
Amount
   
receivable
   
payable
   
receivable
   
equity grants
   
adjustment
   
capital
   
stage
   
equity/(deficit)
 
                                                             
Balance, March 22, 1995
    -     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -     $ -  
                                                                                 
Common shares issued for services
    -       -       -       -       -       -       -       -       -       -  
Net loss
                                                                    (1,000 )     (1,000 )
                                                                                 
Balance, December 31, 1995
    -       -       -       -       -       -       -       -       (1,000 )     (1,000 )
                                                                                 
Common shares issued for services
    3,441,217       3,400       -       -       -       -       -       625,000       -       628,400  
Prior period adjustment, investment in joint venture
    -       -       -       -       -       -       -       -       497,900       497,900  
Net loss
                                                                    (497,000 )     (497,000 )
                                                                                 
Balance, December 31, 1996
    3,441,217       3,400       -       -       -       -       -       625,000       (100 )     628,300  
                                                                                 
Common shares issued for services
    3,006,435       3,000       -       -       -       -       -       1,051,400       -       1,054,400  
Net loss
                                                                    (1,044,700 )     (1,044,700 )
                                                                                 
Balance, December 31, 1997
    6,447,652       6,400       -       -       -       -       -       1,676,400       (1,044,800 )     638,000  
                                                                                 
Common shares issued for cash
    557,509       600       -       -       -       -       -       211,200       -       211,800  
Foreign currency translation adjustment
    -       -       -       -       -       -       8,500       -       -       8,500  
Net loss
                                                                    (353,000 )     (353,000 )
                                                                                 
Balance, December 31, 1998
    7,005,161       7,000       -       -       -       -       8,500       1,887,600       (1,397,800 )     505,300  
                                                                                 
Common shares issued for cash
    1,248,621       1,200       -       -       -       -       -       572,600       -       573,800  
Foreign currency translation adjustment
    -       -       -       -       -       -       (11,800 )     -       -       (11,800 )
Realized foreign currency translation loss
    -       -       -       -       -       -       3,300       -       -       3,300  
Prior period Adjustment
    -       -       -       -       -       -       -       -       15,000       15,000  
Elimination of subsidiary upon disposal
    -       -       -       -       -       -       -       -       116,400       116,400  
Net loss
                                                                    (1,038,500 )     (1,038,500 )
                                                                                 
Balance, December 31, 1999
    8,253,782       8,200       -       -       -       -       -       2,460,200       (2,304,900 )     163,500  
                                                                                 
Common shares issued for cash
    1,119,009       1,200       -       -       -       -       -       948,400       -       949,600  
Net loss
                                                                    (962,500 )     (962,500 )
                                                                                 
Balance, December 31, 2000
    9,372,791       9,400       -       -       -       -       -       3,408,600       (3,267,400 )     150,600  
                                                                                 
Common shares issued for cash
    785,947       800       -       -       -       -       -       81,500       -       82,300  
Net loss
                                                                    (704,500 )     (704,500 )
                                                                                 
Balance, December 31, 2001
    10,158,738       10,200       -       -       -       -       -       3,490,100       (3,971,900 )     (471,600 )
                                                                                 
Common shares issued for cash
    1,093,280       1,100       -       -       -       -       -       269,900       -       271,000  
Common shares issued for services
    92,292       100       -       -       -       -       -       23,800       -       23,900  
Options granted for services
    -       -       -       -       -       -       -       7,100       -       7,100  
Common shares issued for repayment of note
                                                                               
payable, related party in the amount of
                                                                               
$119,800, including accrued interest of $71,800
    309,677       300       -       -       -       -       -       119,500       -       119,800  
Warrants granted for loan fees on
                                                                               
convertible notes payable, related party
    -       -       (16,700 )     -       (16,700 )     (16,700 )     -       16,700       -       (33,400 )
Common shares issued for loan fees on
                                                                               
convertible notes payable, related party
    30,000       -       (13,500 )     -       (13,500 )     (13,500 )     -       13,500       -       (27,000 )
Deemed interest on beneficial conversion
                                                                               
feature of notes payable, related party
    -       -       -       -       -       -       -       20,500       -       20,500  
Amortization of loan fees
    -       -       8,200       -       8,200       8,200       -       -       -       24,600  
Net loss
                                                                    (709,300 )     (709,300 )
                                                                                 
Balance, December 31, 2002
    11,683,987       11,700       (22,000 )     -       (22,000 )     (22,000 )     -       3,961,100       (4,681,200 )     (774,400 )
                                                                                 
Common shares issued for cash
    823,410       800       -       -       -       -       -       163,900       -       164,700  
Common shares issued for services
    381,260       400       -       -       -       -       -       63,800       -       64,200  
Options granted for services
    -       -       -       -       -       -       -       61,300       -       61,300  
Common shares issued for repayment of note payable,
                                                                               
related party common shares issued for repayment of
                                                                               
note payable, related party in the amount of $78,300,
                                                                               
including accrued interest of $43,300
    364,305       400       -       -       -       -       -       77,900       -       78,300  
Deemed interest on beneficial conversion
                                                                               
feature of notes payable, related party
    -       -       -       -       -       -       -       38,300       -       38,300  
Amortization of loan fees
    -       -       15,000       -       15,000       15,000       -       -       -       45,000  
Net loss
                                                                    (711,100 )     (711,100 )
                                                                                 
Balance, December 31, 2003
    13,252,962       13,300       (7,000 )     -       (7,000 )     (7,000 )     -       4,366,300       (5,392,300 )     (1,033,700 )
                                                                                 
Common shares issued for cash
    1,564,311       1,600       -       -       -       -       -       306,400       -       308,000  
Common shares issued for exercise of warrants
    701,275       700       -       -       -       -       -       124,900       -       125,600  
Common shares issued for services
    390,224       400       -       -       -       -       -       73,800       -       74,200  
Warrants granted for services
    -       -       -       -       -       -       -       12,200       -       12,200  
Interest expense for warrants granted
    -       -       -       -       -       -       -       280,200       -       280,200  
Common shares issued in satisfaction of accounts payable
                                                                               
and accrued liabilities in the amount of $229,400
    917,747       900       -       -       -       -       -       228,500       -       229,400  
Common shares issued for repayment of note payable in the
                                                                               
amount of $99,700, including accrued interest of $14,700
    702,760       700       -       -       -       -       -       99,000       -       99,700  
Common shares issued for repayment of note payable,
                                                                               
related party in the amount of $82,700
    330,747       300       -       -       -       -       -       82,400       -       82,700  
Deemed interest on beneficial conversion
                                                                               
feature of notes payable, related party
    -       -       -       -       -       -       -       17,600       -       17,600  
Amortization of loan fees
    -       -       7,000       -       7,000       7,000       -       -       -       21,000  
Net loss
                                                                    (1,030,500 )     (1,030,500 )
                                                                                 
Balance, December 31, 2004
    17,860,026       17,900       -       -       -       -       -       5,591,300       (6,422,800 )     (813,600 )
                                                                                 
Common shares issued for cash
    762,500       800       -       -       -       -       -       152,700       -       153,500  
Common shares issued for exercise of warrants
    349,545       300       -       -       -       -       -       69,500       -       69,800  
Net loss
                                                                    (421,800 )     (421,800 )
                                                                                 
Balance, December 31, 2005
    18,972,071       19,000       -       -       -       -       -       5,813,500       (6,844,600 )     (1,012,100 )
                                                                                 
Common shares issued for cash
    2,448,213       2,400       -       -       -       -       -       642,100       -       644,500  
Common warrants exercised for cash
    174,000       200       -       -       -       -       -       43,300       -       43,500  
Common shares issued for services
    19,500       -       -       -       -       -       -       5,000       -       5,000  
Common shares issued in satisfaction of accounts
                                                                               
   payable and accrued liabilities
    385,714       400       -       -       -       -       -       80,600       -       81,000  
Common shares issued in satisfaction of notes
                                                                               
   payable-related parties
    56,821       100       -       -       -       -       -       11,800       -       11,900  
Common shares issued in satisfaction of convertible
                                                                               
   debenture, (including accrued interest of $1,895)
    206,767       200       -       -       -       -       -       41,700       -       41,900  
Common shares issued for asset acquisition
    1,000,000       1,000       -       -       -       -       -       399,000       -       400,000  
Option granted to officers and directors
    -       -       -       -       -       -       -       123,500       -       123,500  
Warrants granted for services
    -       -       -       -       -       -       -       2,200       -       2,200  
Warrants granted in satisfaction of accounts
                                                                               
   payable and accrued liabilities
    -       -       -       -       -       -       -       65,400       -       65,400  
Warrants granted in satisfaction of notes
                                                                               
   payable-related parties
    -       -       -       -       -       -       -       9,600       -       9,600  
Warrants granted in satisfaction of convertible
                                                                               
   debenture
    -       -       -       -       -       -       -       40,000       -       40,000  
Net loss
                                                                    (621,000 )     (621,000 )
                                                                                 
Balance, December 31, 2006 (Restated)
    23,263,086       23,264       -       -       -       -       -     <