UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q








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


For the quarterly period ended June 30, 2012





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


For the transition period from ______ to _______





Commission File Number 333-170096





SOLO INTERNATIONAL, INC.


(Name of small business issuer in its charter)





Nevada

68-0680819(State of incorporation)

(I.R.S. Employer Identification No.)





871 Coronado Center Drive


Suite 200


Henderson, NV 89052





(Address of principal executive offices)





(702) 330-3285





(Registrant’s telephone number)







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  x    No  o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No (Not required)   o




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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.





Large Accelerated Filer      o                                                Accelerated Filer                     o





Non-Accelerated Filer         o                                                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





As of August 8, 2012, there were 288,200,000shares of the registrant’s $0.001 par value common stock issued and outstanding.





1




SOLO INTERNATIONAL, INC. *





TABLE OF CONTENTS


PagePART I. FINANCIAL INFORMATION
3ITEM 1.
FINANCIAL STATEMENTS
3ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
15ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
18ITEM 4.
CONTROLS AND PROCEDURES
18PART II.OTHER INFORMATION
19ITEM 1.
LEGAL PROCEEDINGS
19ITEM 1A.
RISK FACTORS
19ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
19ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
19ITEM 4.
MINE SAFETY DISCLOSURES
20ITEM 5.
OTHER INFORMATION
20ITEM 6.
EXHIBITS
20





Special Note Regarding Forward-Looking Statements




Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Solo International, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.





*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," “SLIO,” “SOLO,” the "Company," refers to Solo International, Inc.


2


PART I - FINANCIALINFORMATION







ITEM 1.               FINANCIAL STATEMENTS





SOLO INTERNATIONAL, INC.


(An Exploration Stage Company)


Consolidated Financial Statements


(Expressed in US dollars)


June 30, 2012








Financial Statement Index





Consolidated Balance Sheets (unaudited)
4Consolidated Statements of Operations (unaudited)
5Consolidated Statements of Cash Flows (unaudited)
6Notes to the Consolidated Financial Statements unaudited)
7 to 14


3


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


CONSOLIDATED BALANCE SHEETS







June 30,

2012

(unaudited)


September 30,

2011

(audited)ASSETSCurrentCash

$
46,677


$
32Prepaid expense


10,084



833Total Current Assets


56,761



865Total Assets

$
56,761


$
865LIABILTIES  AND STOCKHOLDERS’ DEFICITCurrent liabilitiesAccounts payable and accrued expenses

$
19,274


$
100Advances from related parties


6,417



4,639Convertible promissory notes, net (Note 5)


266,898



-Total Current Liabilities


292,589



4,739STOCKHOLDERS’ DEFICITCommon stock: 900,000,000 shares authorized, at $0.001 par value288,200,000 and 388,000,000 shares issued and outstanding as at June 30, 2012 and September 30, 2011, respectively


288,200



388,000Capital in excess of par value


(28,804
)


(365,800
)Deficit accumulated during the exploration stage


(495,224
)


(26,074
)Total Stockholders’ Deficit


(235,828
)


(3,874
)Total Liabilities and Stockholders’ Deficit

$
56,761


$
865




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




4


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


CONSOLIDATED STATEMENTS OF OPERATIONS


For the three month and nine month periods ended June 30, 2012 and 2011


and for the period from


April 30, 2010 (date of inception) to June 30, 2012


(Unaudited)





Three months ended June 30,


Nine months ended June 30,


April 30, 2010

(date of Inception)

to June 30,2012


2011


2012


2011


2012REVENUE

$
-


$
-


$
-


$
-


$
-EXPENSESProfessional fees


8,796



1,800



54,236



11,500



67,536Management fees


7,500



-



22,500



-



22,500Impairment of mineral property option costs


20,000



-



225,000



-



225,000Other general and administrative expenses


14,138



3,113



51,207



8,431



63,981OPERATING LOSS


(50,434
)


(4,913
)


(352,943
)


(19,931
)


(379,017
)OTHER INCOME (EXPENSES)Interest expense


(58,997
)


-



(116,207
)


-



(116,207
)NET LOSS

$
(109,431
)

$
(4,913
)


(469,150
)


(19,931
)


(495,224
)Basic and diluted loss per share

$
(0.00
)*

$
(0.00
)*

$
(0.00
)*

$
(0.00
)*Weighted average number of shares outstanding, basic and diluted


290,314,286



388,000,000



355,556,934



388,000,000·Less than $0.01 per share.




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




5


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


CONSOLIDATED STATEMENTS OF CASH FLOWS


For the Nine month periods ended June 30, 2012 and 2011


and for the period from


April 30, 2010 (date of inception) to June 30, 2012


(Unaudited)





Nine months ended June 30, 2012


Nine months ended June 30, 2011


From Inception (April 30, 2010) to June 30, 2012CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(469,150
)

$
(19,931
)

$
(495,224
)Adjustments to reconcile net (loss) to cash (used) in exploration stage activities:Interest expense-amortization on discount on convertible promissory notes


99,094



-



99,094Impairment of mineral property option costs


225,000



-



225,000Changes in current assets and liabilities:(Increase) decrease in prepaid expense


(9,251
)


(3,889
)


(10,084
)Increase (decrease) in accounts payable and accrued liabilities


19,174



-



19,274Net cash (used) in operating activities


(135,133
)


(23,820
)


(161,940
)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of mineral claims


(205,000
)


-



(205,000
)Net cash used in investing activities


(205,000
)


-



(205,000
)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related party


1,778



2,200



6,417Proceeds from convertible  notes payable


385,000



-



385,000Proceeds from issuance of common stock


-



-



22,200Net cash provided by financing activities


386,778



2,200



413,617Increase (decrease) in cash during the period


46,645



(21,620
)


46,677Cash, beginning of period


32



21,660



-Cash, end of period

$
46,677


$
40


$
46,677Supplement cash flow information:Cash paid for:Interest

$
-


$
-


$
-Taxes

$
-


$
-


$
-Non-cash transactions:Shares issued for acquisition of mineral property

$
20,000


$
-


$
20,000





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




6


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





1. ORGANIZATION





SOLO INTERNATIONAL, INC. was founded in the State of Nevada on April 30, 2010 as a Poland based corporation intending to provide services in interior architectural design in Poland.





On October 12, 2011, Mr. Michel Plante acquired control of three million (3,000,000) pre-split shares of the Company’s issued and outstanding common stock, representing approximately 77.32% of the Company’s total issued and outstanding common stock, from Mr. Yury Shcharbakou in accordance with a stock purchase agreement by and between Mr. Plante and Mr. Shcharbakou, thus effecting a change in control of the Company.





On October 13, 2011, the Board of Directors of the Company authorized a forward split of its issued and outstanding common shares, whereby every one (1) old share of common stock will be exchanged for one hundred (100) new shares of the Company's common stock.





The effect of the stock split has been recognized retroactively in the stockholders’ deficit accounts as of April 30, 2010, and in all shares and per share data in the financial statements.





With the change in control of the Company, management determined not to pursue its operations in Poland and determined to enter into the mining business in the Province of Quebec and incorporated a wholly-owned Quebec subsidiary, 9252-4768 Quebec Inc. On November 15, 2011, the Company, through its wholly-owned Quebec subsidiary, entered into a Property Option Agreement with 9228-6202 Quebec Inc., a Quebec corporation. Pursuant to the Option Agreement, 9252-4768 Quebec Inc. acquired the exclusive option to acquire an undivided 100% right, title and interest in and to certain mineral claims located in Portland Township, Outaouais, Quebec subject to a royalty reserved to 9228-6202 Quebec Inc.




The Company is an Exploration Stage Company, as defined by 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 resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.





Since Inception (April 30, 2010) through June 30, 2012, the Company has not generated any revenue and has an accumulated deficit of $495,224.





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Interim Financial Statements





The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Consolidated operating results for the nine month period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2012.  For further information, refer to the consolidated financial statements and footnotes thereto included in our Form 10-K Report for the fiscal year ended September 30 2011.




7


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued





Basis of Presentation


The unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim consolidated financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete consolidated financial statements. However, management believes that the disclosures made are adequate to make the information not misleading. Management has evaluated subsequent events through the date the financial statements were issued.





Going Concern


The consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since Inception resulting in an accumulated deficit of $495,224 as of June 30, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans as may be negotiated and/or private placement of common stock. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.





Cash and Cash equivalents


The Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.





Use of Estimates and Assumptions


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 reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.





Foreign Currency Translation


The Company's functional currency and its reporting currency is the United States dollar.





Fair Value of Financial Instruments


The carrying value of cash and accounts payable and accrued liabilities approximates their fair value because of the short maturity of these instruments. Unless otherwise noted, it is management’s opinion the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.





Income Taxes


The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.


8


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued





Basic and Diluted Loss Per Share




The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.  Diluted loss per share is the same as basic loss per share for the three and nine months ended June 30, 2012 and 2011.   We incurred losses during these periods and   the effects of the additional securities would be anti-dilutive.




Advertising


The Company follows the policy of charging the costs of advertising to expenses incurred. The Company did not incur any advertising costs during the three and nine month periods ended June 30, 2012 and 2011.





Stock-based Compensation


The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.





Mineral Property Costs


Mineral exploration and development costs are accounted for using the successful efforts method of accounting.





Property acquisition costs - Mineral property acquisition costs are capitalized as mineral exploration properties. Upon achievement of all conditions necessary for reserves to be classified as proved, the associated acquisition costs are reclassified to proven properties





Exploration costs - Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are expensed as incurred.





Impairment of Mineral Properties


Unproven mineral properties are assessed at each reporting period for impairment of value, and a loss is recognized at the time of the impairment by providing an impairment allowance. An asset would be impaired if the undiscounted cash flows were less than its carrying value. Impairments are measured by the amount by which the carrying value exceeds its fair value. Because the Company uses the successful efforts method, the Company assesses its properties individually for impairment, instead of on an aggregate pool of costs. Impairment of unproven properties is based on the facts and circumstances surrounding each lease and is recognized based on management’s evaluation. Management’s evaluation follows a two-step process where (1) recoverability of the carrying value of the asset is reviewed to determine if there is sufficient value recoverable to support the capitalized value at the report date; and, (2) if assets fail the recoverability test, impairment testing is conducted, including the evaluation of various criteria such as: prior history of successful operations; production currently in place and/or future projected cash flows (if any); reserve reports or evaluations from which management can prepare future cash flow analyses; the Company’s ability to monetize the asset(s) under evaluation; and, Management’s intent regarding future development.





During the three months and nine month periods ended June 30, 2012, the Company recognized an impairment charge in respect of its mineral properties of $20,000  (2011 - $0)  and $225,000(2011-$0)  respectively.


9


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued





Beneficial Conversion Feature


From time to time, the Company may issue convertible notes that may have conversion prices that create an embedded beneficial conversion feature pursuant to the Emerging Issues Task Force guidance on beneficial conversion features. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of any attached equity instruments, if any related equity instruments were granted with the debt. In accordance with this guidance, the intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discounts amortized to interest expense over the life of the note using the effective interest method.





3. MINERAL PROPERTY OPTION AGREEMENT





On November 15, 2011, the Company through its wholly-owned Quebec subsidiary, 9252-4768 Quebec Inc., entered into a Property Option Agreement with 9228-6202 Quebec Inc., a Quebec corporation (the “Optionor”). Pursuant to the option agreement, the Company received the exclusive option to acquire an undivided 100% right, title and interest in and to certain mineral claims located in Portland Township, Outaouais, Quebec subject to a royalty reserved to the Optionor.  To fully exercise the option and acquire an undivided 100% right, title and interest in and to the Property, the Company was required to: 1) pay an aggregate sum of two hundred and five thousand dollars ($205,000) to Optionor; 2) incur an aggregate of at least sixty-five thousand dollars ($65,000) of expenditures on or with respect to the Property; and 3) issue to Optionor an aggregate number of restricted shares of common stock of the Company equal to twenty thousand US dollars ($20,000). The cash payments, expenditures and stock issuance were scheduled to be completed as follows:





Cash Payments: The Company was required to pay the cash payments to Optionor, in the following amounts and by the dates described below:


i.
$50,000 within 2 business days of the execution of the Option Agreementii.
$70,000 within 30 days following the First Option Payment


iii.
$70,000 within 30 days following the Second Option Paymentiv.
$15,000 within 30 days following the Third Option Payment





All these payments had been made by March 31, 2012.





Expenditures: The Company is required to incur not less than $65,000 by way of exploration on or before November 15, 2012.  The exploration expenditures remain outstanding and the Company will be required to complete these expenditures to exercise the option.  The Company has received a budget for initial exploration which it expects to conduct in late September 2012.   The budget for this work is $14,975 and the Company has sufficient funds to pay for this program.  The Company does not have sufficient funds currently to pay for the total required exploration expenditures in the amount of $65,000, and will need to raise additional capital to fulfill the terms of of the option.





Stock Issuances:The Company was required to issue an aggregate number of restricted shares of common stock of the Company equal to twenty thousand US dollars ($20,000) pursuant to the terms and conditions of the Property Option Agreement, The Company was required to issue the shares within 10 days of the completion of the forward split or no later than 90 days of execution of the Property Option Agreement.   The Company issued a total of 200,000 shares of common stock at a deemed price of $0.10 per share on May 8, 2012.


10





SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





3. MINERAL PROPERTY OPTION AGREEMENT (continued)





Upon satisfaction of the foregoing terms and conditions, the Company will have fully exercised the Option and will have acquired an undivided 100% right, title and interest in and to the property, subject to a 2% net smelter return. If the Company fails to comply with all these requirements within the time periods set forth above, the Option shall terminate 30 days after the Optionor provides written notice to the Company of such failure, subsequent to which the Company has 60 days from the receipt of the notice of default to cure.





During the nine month period ended June 30, 2012, the Company made cash payments in the amount of $205,000 and issued a total of 200,000 shares of common stock at a deemed price of $0.10 per share to 9228-6202 Quebec Inc. pursuant to the cash payment and stock payment schedule noted above, which amount was capitalized as option costs on the mineral property. At the close of the quarter ended June 30, 2012, the Company evaluated the recoverability of the amount paid for the option and determined to impair the amount in full, as the Company is currently in the exploration phase, with no proven or probable reserves having yet been determined.





4. COMMON STOCK





The authorized capital of the Company is 900,000,000 common shares with a par value of $ 0.001 per share.





On June 21, 2010, the Company issued 300,000,000 shares of common stock to Yury Shcharbakou, its sole Director, for total cash proceeds of $3,000.





On August 27, 2010, the Company issued 72,000,000 shares of common stock for total cash proceeds of $14,400.





On September 30, 2010, the Company issued 16,000,000 shares of common stock for total cash proceeds of $4,800.





As reflected in the dates above, during the period April 30, 2010 (Inception) to September 30, 2010, the Company sold a total of 388,000,000 shares of common stock for total cash proceeds of $22,200.





The Board of Directors determined on October 12, 2011 to forward split the issued and outstanding shares of the Company on the basis of 100 for 1, whereby the Company would issue as a dividend a total of 99 additional shares for each share currently held. FINRA confirmed approval of the forward split, payable as a dividend to shareholders, and the forward split became effective on October 21, 2011. The forward split shares are payable upon surrender of certificates to the Company's transfer agent. The effect of the stock split has been recognized retroactively in the stockholders’ deficit accounts as of April 30, 2010, and in all shares and per share data in these financial statements.





On April 2, 2012, the principal and controlling shareholder of Solo International Inc. (the “Company”) returned 100,000,000 shares (100 Million) of the Company’s issued shares of common stock held by the shareholder for cancellation by the Company.





On May 8, 2012, the Company issued 200,000 shares of common stock at a deemed price of $0.10 per share for total proceeds of $20,000.





As of June 30, 2012, 288,200,000 shares of common stock were issued and outstanding.





11


SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





5.  CONVERTIBLE PROMISSORY NOTE, NET





On November 4, 2011, the Company entered into a Securities Purchase Agreement with Craigstone Ltd. pursuant to which the Company received $100,000 as a loan from Craigstone in exchange for one (1) Unit consisting of: a Convertible Promissory Note convertible to common stock in whole or in part, at any time and from time to time before maturity at the option of the holder at seventy-five percent (75%) of the average traded price of the common stock for the thirty (30) trading days immediately preceding the conversion date; and a three (3) year Warrant (the “Warrant”) to purchase two hundred fifty thousand (250,000) shares of the Company’s Common Stock exercisable at the lower of : (i) a price of $0.20 per share or (ii) seventy-five percent (75%) of the average traded price of common stock for the thirty (30) trading days immediately preceding the exercise date. The Note earns simple interest accruing at ten percent (10%) per annum and is due on or before the twelfth month anniversary of the date of execution.





During the nine month period ended June 30, 2012, the Company further entered into Securities Purchase Agreements with Craigstone Ltd. pursuant to which the Company received $285,000 as  loans from Craigstone in exchange for one (1) Unit consisting of: a Convertible Promissory Note convertible to common stock in whole or in part, at any time and from time to time before maturity at the option of the holder at seventy-five percent (75%) of the average traded price of the common stock for the thirty (30) trading days immediately preceding the conversion date; and a three (3) year Warrant (the “Warrant”) to purchase six hundred twenty-five thousand (625,000) shares of the Company’s Common Stock exercisable at the lower of : (i) a price of $0.20 per share or (ii) seventy-five percent (75%) of the average traded price of common stock for the thirty (30) trading days immediately preceding the exercise date. The Notes earn simple interest accruing at ten percent (10%) per annum and are due on or before the twelfth month anniversary of the date of execution.





The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $172,764 on the notes, and $44,431 on the warrants. This value was recorded as a discount on debt and offset to additional paid in capital. Amortization of the discount was $50,227 and $99,094 respectively for the three and nine months ended June 30, 2012, which amounts have been recorded as interest expense.





June 30, 2012


Issue DateConvertible Promissory Note – face value, due on November  4, 2012

$
100,000


$
100,000Convertible Promissory Note – face value, due on January 4, 2013


115,000



115,000Convertible Promissory Note – face value, due on February 3, 2013


85,000



85,000Convertible Promissory Note – face value, due on March 8, 2013


35,000



35,000Convertible Promissory Note – face value, due on May 11, 2013


25,000



25,000Convertible Promissory Note – face value, due on June 19, 2013


25,000



25,000Total convertible promissory note – face value


385,000



385,000Less: beneficial conversion feature


(94,695
)


(172,764
)Warrant discount


(23,407
)


(44,431
)$
266,898


$
167,805





3 Month period ended


9 Month period endedJune 30, 2012


June 30, 2012Amortization of debt discount

$
50,227


$
99,094Interest at contractual rate


8,770



17,113$
58,997


$
116,207





12




SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





6. RELATED PARTY TRANSACTIONS





The Company entered into a management consulting agreement with the Company’s sole director and officer, commencing October 1, 2011. Under the terms of the agreement, payments of $2,500 a month, are payable on the 1st of each month.  During the nine month period ended June 30, 2012, the Company made cash payments of $22,500 to its sole director and officer.  In addition, included in prepaid expenses is $2,500 remitted on June 29, 2012 in respect of the July 1, 2012 payment due.





On April 2, 2012, the Company’s principal and controlling shareholder returned 100,000,000 shares (100 Million) of the Company’s issued shares of common stock held by the shareholder for cancellation by the Company.





The Company’s prior Director has loans outstanding with the Company as at June 30, 2012 of $6,417. The amount is due on demand, non-interest bearing and unsecured.





7. WARRANTS





875,000 warrants were issued during the nine month period as required under the terms of Securities Purchase Agreements discussed above in Note 5.  The warrants are exercisable for a period of three years from the date of issue, exercisable at the lower of : (i) a price of $0.20 per share or (ii) seventy-five percent (75%) of the average traded price of common stock for the thirty (30) trading days immediately preceding the exercise date.





The fair value of the 875,000 warrants totaling $44,431 was recorded as a discount on the convertible notes payable upon issuance. This value was calculated using the Black-Scholes model. The key inputs for the calculation are shown below.





Stock Price on Measurement Date

$
0.054 ~ 0.135Exercise Price of Warrants

$
0.041 ~ 0.101Term of Warrants (years)



3.00Computed Volatility


131.65% ~ 145.86 %Annual Dividends



0.00
%Discount Rate



1.038
%





A summary of the Company’s warrants as of June 30, 2012 is as follows:





Warrants


Weightedaverage

exercisepriceOutstanding at October 1, 2011


0


$
0Granted


875,000


$
0.073Exercised


0



0Cancelled


0


$
0Outstanding at June 30, 2012


875,000


$
0.073Vested and exercisable at June 30, 2012


875,000Weighted average fair value per share of warrants granted during the period





$
0.073


13




SOLO INTERNATIONAL, INC,


(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


June 30, 2012


(Unaudited)





7. WARRANTS (continued)





The following table summarizes information regarding stock purchase warrants outstanding at June 30, 2012:


Exercise prices

Number

Outstanding

Weightedaverage

remainingcontractuallife (years)

Weightedaverage

exerciseprice

Number

exercisable

Weightedaverage

remainingcontractuallife (years)

Weightedaverage

exerciseprice$
0.073

875,000

2.55

$
0.073

875,000

2.55

$
0.073





9. COMMITMENTS





The Company had entered into an engagement agreement for legal services with a professional law corporation whereby the Company agreed to a retainer on signing of $10,000, with a recurring monthly retainer of $4,000 each month until such time as the agreement is terminated.  The Company recorded the amount of the retainer to accrued expenses which are offset upon receipt of invoices for services rendered. On March 1, 2012, the engagement agreement was terminated and on May 22, 2012 an amount of $13,718 was paid in full and final settlement of the account,





The Company has committed to pay $65,000 in cash under an option agreement to acquire a mineral property as disclosed above in Note 3 – Mineral Property.





10. SUBSEQUENT EVENTS




We have evaluated subsequent events through August 8, 2012. Other than those set out above, there have been no subsequent events after June 30, 2012 for which disclosure is required.


14


ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION




FORWARD-LOOKING STATEMENTS




This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.





RESULTS OF OPERATIONS





Working Capital





June 30, 2012

$


September 30, 2011

$Current Assets


56,761



865Current Liabilities


292,589



4,739Working Capital (Deficit)


(235,828
)


(3,874
)





Cash Flows





June 30, 2012

$


June 30, 2011

$Cash Flows from (used in) Operating Activities


(135,133
)


(23,820
)Cash Flows from (used in) Investing Activities


(205,000
)


-Cash Flows from (used in) Financing Activities


386,778



2,200Net Increase (decrease) in Cash During Period


46,645



(21,620
)





Operating Revenues





Operating revenues for the three and nine month periods ended June 30, 2012 and 2011 were $0.





Operating Expenses and Net Loss





Comparison of three month periods ended June 30, 2012 and 2011





Operating and other expenses for the three month period ended June 30, 2012 totaled $50,434 and comprised f $20,000 for impairment of mineral claims, $8,796 in professional fees, $7,500 in fees paid under a management contract and $14,138 in other general administrative expenses.   In addition the Company recorded $58,997 as interest expenses, $50,227 of which was the amortization of the debt discount from the beneficial conversion feature and warrant discount relating to convertible promissory notes issued during the period.





Operating and other expenses for the period ended June 30, 2011 were $4,913 and are comprised of $1,800 in professional fees and $3,113 in other general administrative expenses.


15




Net loss for the three month period ended June 30, 2012 was $109,431 as compared to $4,913 for the three month period ended June 30, 2011.





The increase in operating expenses and losses is predominantly due to the increase in operational activity as the Company undertook new operations in the field of mineral exploration, acquired an option on a mineral property and secured financing.





Comparison of nine month periods ended June 30, 2012 and 2011





Operating and other expenses for the nine month period ended June 30, 2012 totaled $352,943 and are comprised of $225,000 for impairment of mineral claims, $54,236 in professional fees, $22,500 in fees paid under a management contract and $51,207 in other general administrative expenses.   In addition the Company recorded $116,207 as interest expenses, $99,094 of which was the amortization of the debt discount from the beneficial conversion feature and warrant discount  relating to convertible promissory notes issued during the period.





Operating and other expenses for the nine month period ended June 30, 2011were $19,931, and comprised of $11,500 in professional fees and $8,431 in other general administrative expenses.





Net loss for the nine month period ended June 30, 2012 was $469,150 as compared to $19,931 for the same period ended June 30, 2011.





The increase in operating expenses and  losses was predominantly related to the increase in operational activity as the Company undertook new operations in the field of mineral exploration, acquired an option on a mineral property and secured financing.





Liquidity and Capital Resources





As at June 30, 2012, the Company hadtotal assets of $56,761 compared to $865 as at September 30, 2011. The increase in total assets is attributable to the receipt of cash proceeds in the amount of $385,000 as a result of financing agreements entered into during the nine month period ended June 30, 2012.





As at June 30, 2012, the Company had total liabilities of $292,589 as compared with total liabilities of $4,739 as at September 30, 2011. The increase in total liabilities was primarily attributed to the completion of a financing agreement whereby the Company received proceeds totaling $385,000 as part of a Securities Purchase Agreement which allows the investor to convert the principal balance to shares of the Company’s common stock during the term of the one year loan agreement, and granted a total of 875,000 share purchase warrants for exercise for a three year term.  The note is convertible at a discount to market price during the term, resulting in a beneficial conversion feature which was valued at $172,764 on the note, and $44,431 on the warrants. This value was recorded as a discount on debt and offset to capital in excess of par value on the date the transactions were concluded. The unamortized balance of these discounts as at June 30, 2012 was $118,102.  During the nine month period ended June 30, 2012 accounts payable and accrued expenses and advances from related parties increased by $19,274 and $1,778 respectively.





As at June 30, 2012, the Company had a working capital deficit of $235,828 compared with a working capital deficit of $3,874 as at September 30, 2011.  The increase in working capital deficit is mainly attributable to the increase in current liabilities as a result of the financing activities of the Company by way of convertible loans, and the Company’s expenditures to acquire an option on certain mineral property.





The Company is commencing the exploration as required under its mineral property option agreement.





The initial proposed work program and budget is as detailed below:


16


A first ground prospection survey will verify the exact localization of each apatite occurrence which will allow us to select targets for our work program.  Various sampling for rare earth metals (“REE”) will be done on each occurrence for each geological element.  A small compilation of available data will also be done to provide for basic historic information about these occurrences:




1.5 days of senior geologist
($650/day)

$
9756 days of junior geologist
($450/day)


2,7005 days of technician
($325/day)


1,62540 samples
($100/sample)


4,000Sample storage
($25/sample)


1,000Lodging and food for 5 days for two (10)
($170/day)


1,700950 km
($1/km)


950Report



1,700$
14,675


The Company will require a minimum of $350,000 for the upcoming twelve month period for exploration on its Quebec property totaling $65,000, general working capital and maintenance of its reporting status.    This amount does not include any funds for ongoing acquisitions or any additional funds for exploration and development of the Company’s current mineral properties.   The Company does not currently have sufficient funds to fund the next twelve months of operations.    We will be required to raise additional funds either through equity financings or by way of loans.   There is no assurance that we will be able to raise the funds as required or at all.  If we are unable to raise funds to continue operations we may have to cease operations.  The Company believes that it will be able to raise funds from it current lender to continue operations but there is no assurance that it will be able to do so and there are currently no agreements for ongoing financing.  We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.





Cashflow from Operating Activities





During the period ended June 30, 2012, the Company used $135,133 cash in its operating activities, compared to $23,820 during the period ended June 30, 2011. The increase in net cash used in operating activities is attributed to the Company’s acquisition of an option on certain mineral claims, which caused the increase cash used in professional, management, and consulting fees and other operating expenses.





Cashflow from Investing Activities





During the nine month period ended June 30, 2012 the Company used $205,000 cash to acquire certain mineral claims.  There was no similar activity in the nine month period ended June 30, 2011.





Cashflow from Financing Activities





During the nine month period ended June 30, 2012, the Company received $386,778 of cash from financing activities compared to $0 for the nine month period ended June 30, 2011.  The change in cash flows from financing activities is attributed to advances from related parties totaling $1,778 and proceeds from the issuance of convertible notes totaling $385,000.





Going Concern





We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our 2011 and 2010 audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.




17


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, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.





Critical Accounting Policies





Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.





We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.





Recently Issued Accounting Pronouncements





We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may cause a material impact on our financial condition, or the results of our operations.





ITEM 3.               QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.





ITEM 4.               CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2012, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on January 13, 2012, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.





18


Changes in Internal Control over Financial Reporting





Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.





The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.





PART II - OTHER INFORMATION





ITEM 1.               LEGAL PROCEEDINGS





We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.





ITEM 1A.            RISK FACTORS





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.





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





On May 11, 2012 and June 19, 2012 respectively the Company entered into two further Securities Purchase Agreements with Craigstone Ltd. pursuant to which the Company received a total of $50,000 as  loans from Craigstone in exchange for one (1) Unit consisting of: a Convertible Promissory Note convertible to common stock in whole or in part, at any time and from time to time before maturity at the option of the holder at seventy-five percent (75%) of the average traded price of the common stock for the thirty (30) trading days immediately preceding the conversion date; and a three (3) year Warrant (the “Warrant”) to purchase one hundred and twenty-five thousand (125,000) shares of the Company’s Common Stock exercisable at the lower of : (i) a price of $0.20 per share or (ii) seventy-five percent (75%) of the average traded price of common stock for the thirty (30) trading days immediately preceding the exercise date. The Notes earn simple interest accruing at ten percent (10%) per annum and are due on or before the twelfth month anniversary of the date of execution.





The shares of Common Stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, (“Securities Act”), and/or Regulation D, as promulgated by the U.S. Securities and Exchange Commission under the Securities Act, based upon the following: (a) each of the persons to whom the shares of Common Stock were issued (each such person, an “Investor”) confirmed to the Company that it or he is an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and has such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities, (b) there was no public offering or general solicitation with respect to the offering of such shares, (c) each Investor was provided with certain disclosure materials and all other information requested with respect to the Company, (d) each Investor acknowledged that all securities being purchased were being purchased for investment intent and were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act and (e) a legend has been, or will be, placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.





ITEM 3.               DEFAULTS UPON SENIOR SECURITIES




None.


19




ITEM 4.               MINE SAFETY DISCLOSURES





Not applicable.





ITEM 5.               OTHER INFORMATION





On May 7, 2012, Solo International, Inc. (“SOLO”) received notification from the British Columbia Securities Commission (“BCSC”) that the company which was providing investor relations for tus was providing such investor relations from an office located in theProvince of British Columbia.   As a result, the BCSC Executive Director  issued an order that all trading in the SOLO’s securities in the Province of British Columbia cease until SOLO filed the required records and the Executive Director revokes the order.  On June 28, 2012, we received notification from the BCSC that all of its required filings were current and the cease trade order was revoked.





ITEM 6.                EXHIBITS




Exhibit Number
Description of Exhibit
Filing3.01
Articles of Incorporation
Filed with the SEC on October 22, 2010 as part of our Registration Statement on Form S-1.3.01(a)
Certificate of Change
Filed with the SEC on November 7, 2011 as part of our Current Report on Form 8-K.3.02
Bylaws
Filed with the SEC on October 22, 2010 as part of our Registration Statement on Form S-1.10.01
Service Agreement between Solo International, Inc. and “TIRCARS” Sp. J dated August 30, 2010
Filed with the SEC on October 22, 2010 as part of our Registration Statement on Form S-1.10.02
Securities Purchase Agreement between Solo International, Inc. and Craigstone Ltd., dated November 4, 2011
Filed with the SEC on November 15, 2011 as part of our Current Report on Form 8-K.10.03
Option Agreement by and between Solo International, Inc. and 9228-6202 Quebec Inc., dated November 15, 2011
Filed with the SEC on November 23, 2011 as part of our Current Report on Form 8-K10.04
Amended Option Agreement by and between 9252-4768 Quebec Inc. and 9228-6202 Quebec Inc. dated December 20, 2011
Filed with the SEC on January 3, 2012 as part of our Amended Current Report on Form 8-K/A.10.05
Securities Purchase Agreement between Solo International, Inc. and Craigstone Ltd., dated January 10, 2012
Filed with the SEC on January 12, 2012 as part of our Current Report on Form 8-K.31.01
Certification of Principal Executive Officer Pursuant to Rule 13a-14
Filed herewith.31.02
Certification of Principal Financial Officer Pursuant to Rule 13a-14
Filed herewith.32.01
CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
Filed herewith.








20


SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





SOLO INTERNATIONAL, INC.








Dated:  August 13, 2012                                                       /s/ Michel Plante


By: Michel Plante


Its: President, Principal Executive Officer & Principal Financial Officer (Principal Accounting Officer)




21