10-Q 1 bcij0810q.txt JUNE 2008 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the Quarter Ended June 30, 2008 Commission File #07883 BAGDAD CHASE, INC. State of Incorporation: Nevada I.R.S. I.D. 95-236978 Address of Principal Executive Office: 33440 Barrington Drive Temecula, CA 92592 Registrants Telephone Number including Area Code: (951) 302-9966 or 200-9877 (cellphone) Securities registered pursuant to Section 12(b)of the Act: None Securities registered pursuant to Section 12(g) of the Act: $1.00 par value common stock. BAGDAD CHASE, INC. is currently not registered with any exchange. Shares of common stock issued and outstanding on June 30, 2008: 1,462,991. Number of Shareholders: 290. The registrant has filed all reports required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the preceding twelve months and has been subject to such filing requirements for the past ninety (90) days. X Yes No PART I FINANCIAL INFORMATION 1. Financial Statements Please see the financial statements herein. BAGDAD-CHASE, Inc. Financial Statements Three Months June 30, 2008 CONTENTS ACCOUNTANT'S REVIEW REPORT FINANCIAL STATEMENTS Balance Sheets Statements of Income (Loss) and Accumulated Deficit Statements of Cash Flows Notes to Financial Statements To the Board of Directors Bagdad-Chase, Inc. Temecula, CA I have reviewed the accompanying balance sheets of Bagdad-Chase, Inc. as of June 30, 2008 and the related statements of income (loss) and accumulated deficit , and cash flows for the six months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Bagdad-Chase, Inc. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. Donald C. Collie, CPA December 11, 2008 Note 1 THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES The Company was incorporated under the laws of the State of Nevada on November 6, 1926. The Company issued one million shares of stock on December 12, 1926, in payment for mining claims. The corporate name was changed to Bagdad Chase, Inc. on May 4, 1968, at a special stockholders' meeting. The Company primarily engages in leasing its property, consisting of patented and unpatented mining claims, and exploration income, sold at spot prices. Cash and cash equivalents: Cash consists of deposits held in checking accounts. Basis of accounting: For financial statement reporting, revenues are recognized when mining royalties received and costs are recognized when incurred. Income taxes: The Financial Accounting Standards Board approved Statement of Financial Accounting Standards, No. 109 on accounting for income taxes. Generally, this standard requires a recalculation of deferred taxes in conformity with the liability method, in contrast to the deferred method currently in effect. The Company has elected to implement this accounting standard. Marketable equity securities: Marketable equity securities are carried at lower of cost or market value with an allowance for excess of cost of marketable equity securities over market value. Equipment and improvements: Equipment and improvements are stated at cost. Major renewals and improvements are charged to the property accounts while replacements, maintenance, and repairs which do not improve or extend the life of the respective assets are expensed currently. At the time properties are retired or otherwise disposed of, the property and related accumulated depreciation accounts are relieved of the applicable amounts and any gain or loss is recorded. Earnings per share information: Earnings per share information is computed by dividing net income (loss) by the weighted average number of capital shares outstanding during the year. The preparation of financial statements, in conformity with 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 results of operations during the reporting period. Actual results could differ from those estimates. Depreciation is computed using the straight-line method for financial statement purposes and accelerated methods for income tax purposes over the estimated useful lives of the respective assets. The estimated useful lives of the assets are as follows: ASSETS ESTIMATED USEFUL LIVES Office equipment & field equipment 5 years Office furniture & mining equipment 7 years Depletion of mining properties of mining properties is computed using the units-of-production method. NOTE 2 PROPERTY AND EQUIPMENT Non-producing mining and equipment consist of the following at June 30:

Non-producing mining properties of $59,540 carried cost represent. Ora Belle patents that were mined out by Viceroy and its successors and are no longer producing. Claims abandoned when operations were no longer profitable. The Ora Belle mining property once produced royalty income, plus a percentage of pooled mining income if it exceeded minimum royalty lease payments. Upon abandonment all royalty income terminated. NOTE 3 REVENUES The Company's entire gross revenue is derived from exploration income when the gold is sold at spot prices. Payments from exploration income are as follows:

NOTE 4 MINING COSTS The Company pays the Bureau of Land Management for mining claims in the Stedman Mining District of California, the Marshall Lake Mining District in Idaho and the Oro Bell Mining District in California. Collectively, all three mines contain gold, copper and silver mineralization. There are 243 lodes claims with an annual average of $125 fee paid to the Bureau of Land Management. Stedman Mining District has 197 claims, Marshall Lakes Mining District has 46 claims and Oro Bell Mining District has 0 claims. Annual claim costs increased from $100 in 2003 to $125 during 2004 and 2005. The Oro Belle had three patented claims all of which have been "mined out" by Viceroy in the Castle Mountain mine joint venture. Additionally, the Company has several patented mining claims on which there is no Bureau Land management rental costs; however, property taxes are paid on their claims.

NOTE 5 RELATED PARTY TRANSACTIONS The Company receives legal and administrative services from a firm in which a director of the Company is a principal. Also, the Company incurred annual office rent expense on a month-to-month basis, on a holdover status. Commencing April 2008, the Company pays monthly storage fees and basic telephone service to a shareholder.

NOTE 6 MARKETABLE EQUITY SECURITIES The Company exchanged 5,000 shares of Viceroy Gold Corporation stock for 500 shares of Yamana Gold and 1,667 shares of Quest Capital Corporation.

NOTE 7 EXPLORATION AND DEVELOPMENT ACTIVITIES No research and development has been conducted in the last three years related to mineral exploration. However, payments have been allocated in 2008 to board members for exploration in the Marshal Lake Mining District and the Stedman Mining District.

NOTE 8 SUBSEQUENT EVENTS 33+ acres of Oro Belle patented claims have been sold to the Castle Mountain Joint Venture for $50,000 and will be reflected in subsequent reporting. June 30, 2008 December 31, 2007 CURRENT ASSETS Cash $10,765 $7,408 Marketable equity securities, carried at aggregate cost 83,085 83,085 Allowance for excess of cost of Marketable equity securities over market value (Notes 1 & 6) (71,949) (72,088) Prepaid mining costs 0 0 Total current assets $21,901 $18,405 PROPERTY & EQUIPMENT - at cost (Notes 1 & 2) $73,376 $73,375 Less accumulated depreciation (13,835) (13,835) $59,541 $59,540 OTHER ASSETS Deposits 0 0 Total other assets 0 0 TOTAL ASSETS $81,4428 $77,945 LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 2008 December 31, 2007 CURRENT LIABILITIES Accounts Payable $ 0 $1,809 Accrued State Taxes 800 800 Total current liabilities $ 800 $2,609 STOCKHOLDERS' EQUITY Common stock, $1.00 par value: 4,000,000 shares authorized: 1,462,991 issued and outstanding $1,462,991 $1,462,991 Paid in capital below par (1,168,986) (1,168,955) Accumulated deficit (Note 8) (213,363) (218,701) TOTAL STOCKHOLDERS' EQUITY $80,642 $75,335 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $81,442 $77,944
BAGDAD-CHASE, INC. STATEMENTS OF INCOME (See Independent Accountant's Review Report)
Unaudited Three Months Ended June 30, 2007 2008 EXPLORATION INCOME (Note 3) $22,989 $18,075 COSTS AND EXPENSES Mining expenses (Note 4) $0 $0 Exploration Costs (Note 7) 2,625 6,852 Depreciation (Note 2) 0 0 Registration Fees 0 0 Director fees 0 0 Newmont Records 0 0 Shareholder List 0 0 Resident Agent fee 50 0 Filing fee 25 25 Board Meeting 1,800 1,600 Bank Charges 61 24 Insurance 0 0 Interest Expense 0 0 Repair and maintenance 520 0 Office expense 151 261 Relocation and Storage 0 3,261 Legal fees (Note 5) 5,556 6,627 Professional fees 300 4,636 Rent (Note 5) 500 0 Taxes & licenses 1,109 633 $12,697 $23,919 INCOME (LOSS) FROM OPERATIONS $10,292 $(5,844) OTHER INCOME (EXPENSE) Dividend income $48 $40 Unrealized loss on valuation of marketable equity securities (1,387) 0 Net realized gain (loss) on sale of current marketable equity securities (Note 6) 0 1,2230 INCOME (LOSS) BEFORE INCOME TAX $8,953 $(4,581) PROVISION (BENEFIT) FOR INCOME TAX (Note 1) 0 0 NET INCOME (LOSS) $8,953 $(4,581) NET INCOME (LOSS) PER SHARE 0.006 (0.003) Number of shares of common stock used to calculate earnings per share 1,462,991 1,462,991
BAGDAD-CHASE, INC. STATEMENTS OF CASH FLOWS (See Independent Accountant's Review Report)
Unaudited Three Months Ended June 30, 2007 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $16,401 $5,338 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 0 0 Decrease in current assets 0 0 Unrealized loss on valuation of current marketable equity securities 1,387 1,082 Net realized (gain) loss on sale of current marketable equity securities (1,223) 0 Decrease (Increase) 0 0 in other assets/ mining costs (Increase) decrease in: 0 0 Deferred tax benefit Advance from Shareholder $6,000 0 Increase (decrease) in accounts payable (2,775) (1,840) Net Cash provided (Used) by Operating Activities $21,013 $3,357 CASH FLOWS FROM INVESTING ACTIVITIES: Adjustment for paid-in capital 0 0 NET INCREASE (DECREASE) IN CASH $21,013 $3,357 CASH AT BEGINNING OF PERIOD $2,493 $7,408 CASH AT END OF PERIOD $23,506 $10,765 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for taxes 0 0 Cash paid for interest 0 0
2. Management's Discussion and Analysis of Financial Condition and Results of Operations Precious metals spot prices have had a major move upward trend during second quarter 2008 which directly and proximately influenced the value of the Registrant's mines. However, until precious metals are extracted and refined that value is speculatory. Registrant determined that site visitors at the Bagdad Chase mine had been removing large quantities of precious metals without approval. In an effort to preserve the endangered desert tortoise, Registrant has secured the Stedman District from visitors and placed signs where any invited guests would mitigate the desert tortoise. While securing the District, Registrant located an active gold mine with a sistern, bucket line and ladder down into the mine shaft. The process used with similar to panning for free gold and even included a faucet to control the flow of water. Another major discovery during the securing of the Stedman District was stray munitions from nearby Twentynine Palms Marine Corps Training facilities. Although Registrant lacks the capital to actively mine its total mineral properties, the Board may consider mining a small portion thereof. There have been no reportable transactions during this Quarter. Management has completed having the required historical documents, since the late 19th century, scanned for the Securities & Exchange Commission (SEC) to bring Company into full SEC compliance. Company has also hired a fully qualified PCAOB Donald Collie, CPA, as its Independent auditor. The scanned documents and other Company maps and engineering were loaned to Dr. Delmer Ross, Department of History, La Sierra University, Riverside, California. Company who has completed for publication of a the most comprehensive and well researched history of the colorful Bagdad Chase mine and its 8-mile long Ludlow and Southern Railway ever written. The Bagdad Chase Mine and its Ludlow and Southern Railway has been approved for publication. Additionally, management has cooperated in the highly successful Castle Mountain Mine joint venture gold and silver mining operation in Lanfair Valley, California. This Castle Mountain Mine joint venture involved the Oro Belle, Leslie Ann and Jumbo claims. The Castle Mountain Mine's reclamation of the "mined out" lands became the quintessential marriage of environmental preservation in the history of modern mining, winning the coveted Bureau of Land Management's "Friends of the Lands" award. The total reclamation is to be completed in 2008 with a plan for the completely restored lands to be added to the Mojave National Preserve for the enjoyment of future generations yet unborn. This proves that mining and the environment can live together in harmony. Management is actively seeking a Joint Venture partner for a total Stedman District mining effort to top its Castle Mountain Mine joint venture in the recovery of precious metals and the environmental restoration of the Bagdad Chase Stedman District mining properties. Registrant alone is responsible for the accuracy of the disclosure herein and hereby waives, saves, holds harmless and indemnifies the Securities and Exchange Commission from any staff comments regarding any filings by Registrant with the Commission. 3. Quantitative and Qualitative Disclosure about Market Risk The last known trade for registrant's stock was at $0.25 per share. In as much as there has been no market for registrant's stock for over 2 decades, and that purchases of the stock have been limited to estate closures the risk to shareholders is great. 4. Controls and Procedures As of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of the company's management, including the President and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation and in light of the limited activities of registrant over the last two decades, the President and the Chief Financial Officer have concluded that our disclosure controls and procedures are effective. Management believes there is no material weakness in internal control. Accordingly, management has not changed its conclusion that the company's internal controls over financial reporting are designed and operating. Other than described herein, there have been no changes in our internal controls or in other factors that could materially affect the controls subsequent to the date the controls were evaluated. We have not identified or detected any material control weaknesses or material changes in our internal controls in previous filings. Further, annual reconciliation and formal accounting is conducted by the registrant's Certified Public Accountant, Donald C. Collie, CPA, PCAOB. Although Registrant believes it could qualify as a Voluntary Filer it continues to utilize the EDGAR electronic submittals of 10Q and 10K reports so that its shareholders may access the Commission's filing system. PART II OTHER INFORMATION 1. Legal Proceedings During the reporting period, Registrant was not and is not currently subject to any material legal proceedings. 2. Unregistered Sales of Equity Securities and Use of Proceeds None. 3. Defaults Upon Senior Securities None. 4. Submission of Matters to a Vote of Security Holders. During the reporting period, no matters were submitted to a vote of security holders. 5. Other Information None. 6. Exhibits None Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Bagdad Chase, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BAGDAD CHASE, INC. Date: February 10, 2009 By: /s/ Philip Buller Philip Buller President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Bagdad Chase, Inc., and in the capacities and on the dates indicated. Date Title Signature February 10, 2009 President /s/ Philip Buller Philip Buller February 10, 2009 C.F.O. /s/ George Rodda,Jr. George Rodda,Jr Directors: February 10, 2009 Director /s/ Paul Buller Paul Buller February 10, 2009 Director /s/ Kermit Skeie Kermit Skeie Certification I, Phillip Buller, certify that: 1. I have reviewed this 2nd Quarter (2008) 10Q report of Bagdad Chase,Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's reporting period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's Certified Public Accountant, PCAOB (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 10, 2009 /s/ Phillip Buller Phillip Buller President Certification I, George Rodda, Jr., certify that: 1. I have reviewed this 2nd Quarter (2008) 10Q report of Bagdad Chase, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's reporting period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's Certified Public Accountant, PCAOB (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 10, 2009 /s/ George Rodda, Jr. George Rodda Chief Financial Officer Certification Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350, As Adopted) In connection with the Quarterly Report of BAGDAD CHASE, INC. (the Company) on Form 10-Q for the period ending June 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Phillip Buller, President, and George Rodda, Jr., Chief Financial Officer of the Company, each certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350, as adopted), that: 1. The Report fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: February 10, 2009 /s/ Phillip Buller /s/ George Rodda, Jr. Phillip Buller George Rodda, Jr. President Chief Financial Officer

BAGDAD CHASE INC 10-Q