Table of Contents

 

 

 

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-Q**

 

**(Mark One)**

 

**x****     ****QUARTERLY REPORT UNDERSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thequarterly period ended March 31, 2010**

 

**o****        ****TRANSITION REPORT UNDERSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thetransition period from                 to                 **

 

**Commissionfile number 333-141690**

 

**KABEEXPLORATION INC.**

(Nameregistrant as specified in its charter)

 

| **NEVADA**                                                      | ** ** | **39-2052145**                        |
|-----------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |       | (I.R.S. Employer  Identification No.) |

 

| **5050 Avenida Encinas, Suite 270, Carlsbad, CA** | ** ** | **92008**   |
|--------------------------------------------------------|------------|-------------|
| (Address  of principal executive offices)              |       | (Zip  Code) |

 

Registrant’s telephonenumber, including area code:  **(760)931-1048**

 

Check whether the issuer (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Actduring the past 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant hassubmitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405of Regulation S-T during the preceding 12 months (or for such shorter periodthat the registrant was required to submit and post such files).  Yes o  No o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See definition of “largeaccelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act. (Check one):

 

| Large  accelerated filer o                   |   | Accelerated  filer o               |
|----------------------------------------------|--------|------------------------------------|
|                                         |   |                               |
| Non-accelerated  filer o                     |   | Smaller  reporting company  x |
| (do  not check if smaller reporting company) |   |                               |

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act). Yes x  No o

 

Number of shares of the registrant’s common stockoutstanding as of May 14, 2010: 38,647,250 shares of Common Stock

 

 

 

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**TABLE OFCONTENTS**

 
| **Part I**  |                                                                                       |   | 3      |
|------------------|--------------------------------------------------------------------------------------------|--------|--------|
|             |                                                                                       |   |   |
| Item 1.          | Financial  Statements                                                                      |   | 3      |
|             |                                                                                       |   |   |
| Item 2.          | Management’s  Discussion and Analysis of Financial Condition and Results of Operation |   | 10     |
|             |                                                                                       |   |   |
| Item 3.          | Quantitative  and Qualitative Disclosures About Market Risk                                |   | 15     |
|             |                                                                                       |   |   |
| Item 4T.         | Controls and  Procedures                                                                   |   | 15     |
|             |                                                                                       |   |   |
| **Part II** |                                                                                       |   | 15     |
|             |                                                                                       |   |   |
| Item 1.          | Legal Proceedings.                                                                         |   | 15     |
|             |                                                                                       |   |   |
| Item  6.         | Exhibits.                                                                                  |   | 16     |
|             |                                                                                       |   |   |
|             | Signatures                                                                                 |   | 16     |

 

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**PART I**

 

**Item 1.**                                   **Financial Statements.**

** **

**KABE EXPLORATION, INC.**

(A Development Stage Company)

Balance Sheet

as at

 
| ** **                                                                             | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|----------------------------------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                                             | ** ** | **2010**           | ** ** | **2009**              | ** ** |
| ** **                                                                             | ** ** | **(Unaudited)**    | ** ** | ** **            | ** ** |
| ** **                                                                             |       |               |       |                  |       |
| ASSETS                                                                                 |       |               |       |                  |       |
| Current Assets                                                                         |       |               |       |                  |       |
| Cash                                                                                   |       | $                  | 6          |                  | $          | 28 |   |
|                                                                                   |       |               |       |                  |       |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                             |       |               |       |                  |       |
| Current Liabilities                                                                    |       |               |       |                  |       |
| Accounts Payable                                                                       |       | $                  | 16,509     |                  | $          | 16,509 |   |
| Chapman Industries Loan                                                                |       | 6,516              |       | 6,066                 |       |
| Loan Payable - EPS                                                                     |       | 10,232             |       | 8,487                 |       |
|                                                                                   |       |               |       |                  |       |
| Total Liabilities                                                                      |       | 33,257             |       | 31,062                |       |
|                                                                                   |       |               |       |                  |       |
| Stockholders’ Equity (Deficit)                                                    |       |               |       |                  |       |
| Common Stock, $0.001 par value; authorized  75,000,000 shares; issued and outstanding: |       |               |       |                  |       |
| 38,647,250 as at March 31, 2009                                                   |       |               |       |                  |       |
| 38,647,250 as at December 31, 2009                                                |       | 38,647             |       | 38,647                |       |
| Additional Paid-In Capital                                                             |       | 202,578            |       | 202,578               |       |
| Deficit accumulated during the development stage                                       |       | (274,476           | )          | (272,259              | )          |
|                                                                                   |       |               |       |                  |       |
| Total Shareholders’ Equity                                                        |       | (33,251            | )          | (31,034               | )          |
|                                                                                   |       |               |       |                  |       |
| Total Liabilities and Shareholders’ Equity                                        |       | $                  | 6          |                  | $          | 28 |   |

 

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KABE EXPLORATION, INC.

(A Development Stage Company)

Statement of Operations

(Unaudited)

 

 
| ** **                                              | ** ** | ** **                     | ** ** | ** **                 | ** ** | **For the Period** | ** ** |
|---------------------------------------------------------|------------|--------------------------------|------------|----------------------------|------------|--------------------|------------|
| ** **                                              | ** ** | ** **                     | ** ** | ** **                 | ** ** | **of Inception**   | ** ** |
| ** **                                              | ** ** | **For the Three Months Ended** | ** ** | **from Jan. 1, 2006** | ** ** |
| ** **                                              | ** ** | **March 31,**             | ** ** | **through Mar. 31,**  | ** ** |
| ** **                                              | ** ** | **2010**                       | ** ** | **2009**                   | ** ** | **2010**           | ** ** |
|                                                    |       |                           |       |                       |       |               |       |
| Revenue                                                 |       | $                              | —     |                       | $          | —             |       | $ | — |   |
|                                                    |       |                           |       |                       |       |               |       |
| Cost of Sales                                           |       | —                         |       | —                     |       | —             |       |
|                                                    |       |                           |       |                       |       |               |       |
| Operating Income                                        |       | —                         |       | —                     |       | —             |       |
|                                                    |       |                           |       |                       |       |               |       |
| General and Administrative Expenses:                    |       |                           |       |                       |       |               |       |
| Mineral Lease Fees                                      |       | —                         |       | —                     |       | 6,713              |       |
| Professional Fees                                       |       | 1,725                          |       | 400                        |       | 180,598            |       |
| Consultant Fees                                         |       |                           |       |                       |       | 50,000             |       |
| Other Administrative Expenses                           |       | 492                            |       | 733                        |       | 32,174             |       |
| Loss on abandonment of Mineral Leases                   |       |                           |       |                       |       | 5,000              |       |
| Total General and Adminstrative Expenses                |       | 2,217                          |       | 1,133                      |       | 274,485            |       |
|                                                    |       |                           |       |                       |       |               |       |
| Other Inocme                                            |       |                           |       |                       |       |               |       |
| Interest Income                                         |       | —                         |       |                       |       | 22                 |       |
| Interest Expense                                        |       | —                         |       |                       |       | (13                | )          |
|                                                    |       | —                         |       | —                     |       | 9                  |       |
|                                                    |       |                           |       |                       |       |               |       |
| Net Income (Loss)                                       |       | $                              | (2,217     | )                          | $          | (1,133             | )          | $ | (274,476 | ) |
|                                                    |       |                           |       |                       |       |               |       |
| Income/Loss Per Common Share:                           |       |                           |       |                       |       |               |       |
| Basic and Diluted                                       |       | $                              | (0.001     | )                          | $          | (0.000             | )          |   |   |
|                                                    |       |                           |       |                       |       |               |       |
| Weighted Average Shares Outstanding Basic and  Diluted: |       | 3,719,444                      |       | 3,687,500                  |       |               |       |

 

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KABE EXPLORATION, INC.

(A Development Stage Company)

Statement of Cash Flows

(Unaudited)

 
| ** **                                                                   | ** ** | ** **                     | ** ** | ** **                 | ** ** | **For the Period** | ** ** |
|------------------------------------------------------------------------------|------------|--------------------------------|------------|----------------------------|------------|--------------------|------------|
| ** **                                                                   | ** ** | ** **                     | ** ** | ** **                 | ** ** | **of Inception**   | ** ** |
| ** **                                                                   | ** ** | **For The Three Months Ended** | ** ** | **from Jan. 1, 2006** | ** ** |
| ** **                                                                   | ** ** | **March 31,**             | ** ** | **through Mar. 31,**  | ** ** |
| ** **                                                                   | ** ** | **2010**                       | ** ** | **2009**                   | ** ** | **2010**           | ** ** |
|                                                                         |       |                           |       |                       |       |               |       |
| Cash flows from operating activities:                                        |       |                           |       |                       |       |               |       |
| Net loss                                                                     |       | $                              | (2,217     | )                          | $          | (1,133             | )          | $ | (274,476 | ) |
| Adjustments to reconcile net loss to net cash used  by operating activities: |       |                           |       |                       |       |               |       |
| Stock issued for services                                                    |       | —                         |       | —                     |       | 177,225            |       |
| Change in operating assets and liabilities:                                  |       |                           |       |                       |       |               |       |
| Accounts Payable                                                             |       | —                         |       | —                     |       | 16,509             |       |
| Net cash (used by) operating activities                                      |       | (2,217                         | )          | (1,133                     | )          | (80,742            | )          |
|                                                                         |       |                           |       |                       |       |               |       |
| Cash flows from investing activities                                         |       |                           |       |                       |       |               |       |
| Abandonment of mining leases                                                 |       | —                         |       | —                     |       | —             |       |
| Net cash (used by) investing activities                                      |       | —                         |       | —                     |       | —             |       |
|                                                                         |       |                           |       |                       |       |               |       |
| Cash flows from financing activities:                                        |       |                           |       |                       |       |               |       |
| Common stock issued for cash                                                 |       |                           |       |                       |       | 62,250             |       |
| Proceeds (repayment) of loans                                                |       | 2,195                          |       | (700                       | )          | 16,748             |       |
| Contibution of capital                                                       |       | —                         |       | 1,750                      |       | 1,750              |       |
| Net cash (used) provided by financing activities                             |       | 2,195                          |       | 1,050                      |       | 80,748             |       |
|                                                                         |       |                           |       |                       |       |               |       |
| Net increase (decrease) in cash                                              |       | (22                            | )          | (83                        | )          | 6                  |       |
|                                                                         |       |                           |       |                       |       |               |       |
| Cash, beginning of the period                                                |       | 28                             |       | —                     |       | —             |       |
|                                                                         |       |                           |       |                       |       |               |       |
| Cash, end of the period                                                      |       | $                              | 6          |                       | $          | (83                | )          | $ | 6 |   |
|                                                                         |       |                           |       |                       |       |               |       |
| Supplemental cash flow disclosure:                                           |       |                           |       |                       |       |               |       |
| Interest paid                                                                |       | $                              | —     |                       | $          | —             |       | $ | 13 |   |
| Taxes paid                                                                   |       | $                              | —     |                       | $          | —             |       | $ | — |   |

 

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KABE EXPLORATION, INC.

(A Development Stage Company)

Statement of Shareholders’ Equity

For the period from inception,  January 1,2006, to March 31, 2009

(Unaudited)

 
| ** **                                                               | ** ** | ** **            | ** ** | ** **     | ** ** | ** **          | ** ** | **Deficit**            | ** ** | ** **    | ** ** |
|--------------------------------------------------------------------------|------------|-----------------------|------------|----------------|------------|---------------------|------------|------------------------|------------|---------------|------------|
| ** **                                                               | ** ** | ** **            | ** ** | ** **     | ** ** | ** **          | ** ** | **Accumulated**        | ** ** | **Total**     | ** ** |
| ** **                                                               | ** ** | **Common Stock** | ** ** | **Additional** | ** ** | **during the** | ** ** | **Shareholders’** | ** ** |
| ** **                                                               | ** ** | **Number of**    | ** ** | ** **     | ** ** | **Paid-In**         | ** ** | **Development**        | ** ** | **Equity**    | ** ** |
| ** **                                                               | ** ** | **Shares**            | ** ** | **Amount**     | ** ** | **Capital**         | ** ** | **Stage**              | ** ** | **(Deficit)** | ** ** |
|                                                                     |       |                  |       |           |       |                |       |                   |       |          |       |
| Inception, January 1, 2006                                          |       | —                |       | $              | —     |                | $          | —                 |       | $             | —     |   | $ | — |   |
| Common stock issued for cash, Jan. 16, 2006                         |       | 1,500,000             |       | 1,500          |       | 13500               |       |                   |       | 15,000        |       |
| Common stock issued for cash, Aug.23, 2006                               |       | 250,000               |       | 250            |       | 2250                |       |                   |       | 2,500         |       |
| Common stock issued for cash, Sep. 21, 2006                         |       | 575,000               |       | 575            |       | 10925               |       |                   |       | 11,500        |       |
| Common stock issued for cash, Oct. 31, 2006                         |       | 800,000               |       | 800            |       | 15200               |       |                   |       | 16,000        |       |
| Common stock issued for cash, Nov.30, 2006                               |       | 262,500               |       | 263            |       | 4987                |       |                   |       | 5,250         |       |
| Net loss for the year ended December 31, 2006                       |       |                  |       |           |       |                |       | (226                   | )          | (226          | )          |
| Balances, December 31, 2006                                         |       | 3,387,500             |       | $              | 3,388      |                | $          | 46,862                 |       | $             | (226       | ) | $ | 50,024 |   |
| Net loss for the year ended December 31, 2007                       |       |                  |       |           |       |                |       | (37,753                | )          | (37,753       | )          |
| Balances, December 31, 2007                                         |       | 3,387,500             |       | $              | 3,388      |                | $          | 46,862                 |       | $             | (37,979    | ) | $ | 12,271 |   |
| Common stock issued for cash, Apr. 15, 2008 at  $0.04 per share     |       | 300,000               |       | 300            |       | 11,700              |       |                   |       | 12,000        |       |
| Net loss for the year ended Dec. 31, 2008                           |       |                  |       |           |       |                |       | (50,938                | )          | (50,938       | )          |
| Balances, December 31, 2008                                         |       | 3,687,500             |       | $              | 3,688      |                | $          | 58,562                 |       | $             | (88,917    | ) | $ | (26,667 | ) |
|                                                                     |       |                  |       |           |       |                |       |                   |       |          |       |
| Balances restated for 10-for-1 forward stock split,  April 13, 2009 |       | 36,875,000            |       | $              | 36,875     |                | $          | 25,375                 |       | $             | (88,917    | ) | $ | (26,667 | ) |
| Additional Paid-in Capital January 2009                             |       |                  |       |           |       | 1,750               |       |                   |       | 1,750         |       |
| Common stock issued for services Apr. 13, 2009,  @ $0.10 per share  |       | 450,000               |       | 450            |       | 44,550              |       |                   |       | 45,000        |       |
| Common stock issued for services Apr. 13, 2009,  @ $0.10 per share  |       | 256,000               |       | 256            |       | 25,344              |       |                   |       | 25,600        |       |
| Common stock issued for services Apr. 13, 2009,  @ $0.10 per share  |       | 50,000                |       | 50             |       | 4,950               |       |                   |       | 5,000         |       |
| Common stock issued for services Apr. 13, 2009,  @ $0.10 per share  |       | 1,016,250             |       | 1,016          |       | 100,609             |       |                   |       | 101,625       |       |
| Net loss for the year ended Dec. 31, 2009                           |       |                  |       |           |       |                |       | $                      | (183,342   | )             | $          | (183,342 | ) |
|                                                                     |       |                  |       |           |       |                |       |                   |       |          |       |
| Balances, December 31, 2009                                         |       | 38,647,250            |       | $              | 38,647     |                | $          | 202,578                |       | $             | (272,259   | ) | $ | (31,034 | ) |
|                                                                     |       |                  |       |           |       |                |       |                   |       |          |       |
| Net loss for the 3 mo. ended Mar. 31, 2010                          |       |                  |       |           |       |                |       | (2,217                 | )          | (2,217        | )          |
|                                                                     |       |                  |       |           |       |                |       |                   |       |          |       |
|                                                                     |       | 38,647,250            |       | $              | 38,647     |                | $          | 202,578                |       | $             | (274,476   | ) | $ | (33,251 | ) |

 

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**Kabe Exploration, Inc.**

**(A Development Stage Company)**

**Notes to Financial Statements**

**March 31, 2010**

**(Unaudited)**

 

**1.    Basis of Presentation and Nature ofOperations**

** **

Theinterim financial statements as of and for the three ended March 31, 2010reflect all adjustments which, in the opinion of management, are necessary tofairly state the Company’s financial position and the results of its operationsfor the periods presented.

 

Theseinterim financial statements should be read in conjunction with the Company’sfinancial statements and notes thereto included in the Company’s December 31,2009 report. The Company assumes that the users of the interim financialinformation herein have read, or have access to, the audited financialstatements for the preceding period, and that the adequacy of additionaldisclosure needed for a fair presentation may be determined in that context.The results of operations for the three month period ended March 31, 2010are not necessarily indicative of results for the entire year ending December 31,2010.

 

**2.    Organization**

 

KabeExploration, Inc. (the “Company”) was incorporated under the laws of theState of Nevada December 16, 2005. The company was originally formed for mineral exploration in the UnitedStates.  The Company abandoned itsMineral Leases in 2008 and is seeking new business opportunities.

 

**3.    Summary of Significant Accounting Policies**

 

Basisof Presentation

 

Thefinancial statements of the Company have been prepared using the accrual basisof accounting in accordance with generally accepted accounting principles inthe United States.  Because a precisedetermination of many assets and liabilities is dependent upon future events,the preparation of financial statements for a period necessarily involves theuse of estimates which have been made using careful judgment.

 

Useof Estimates

 

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makecertain estimates and assumptions that affect the reported amounts of assetsand liabilities at the date of the financial statements, and 

 

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reportedamounts of revenue and expenses during the reporting period.  Actual results could differ materially fromthose estimates. Significant estimates made by management are, among others,realizability of long-lived assets, deferred taxes and stock option valuation.

 

Thefinancial statements have, in management’s opinion, been properly preparedwithin the reasonable limits of materiality and within the framework of thesignificant accounting.

 

IncomeTaxes

 

TheCompany utilizes SFAS No. 109, “Accounting for Income Taxes,” whichrequires the recognition of deferred tax assets and liabilities for theexpected future tax consequences of events that have been included in thefinancial statements or tax returns. Under this method, deferred tax assets and liabilities are determinedbased on the difference between the tax basis of assets and liabilities andtheir financial reporting amounts based on enacted tax laws and statutory taxrates applicable to the periods in which the differences are expected to affecttaxable income.  Valuation allowances areestablished, when necessary, to reduce deferred tax assets to the amountexpected to be realized. The Company generated a deferred tax credit throughnet operating loss carryforward. However, a valuation allowance of 100% has been established, as therealization of the deferred tax credits is not reasonably certain, based ongoing concern considerations outlined as follows.

 

GoingConcern

 

The Company’s financial statements are prepared using accountingprinciples generally accepted in the United States of America applicable to agoing concern, which contemplates the realization of assets and liquidation ofliabilities in the normal course of business. The Company has not yet established an ongoing source of revenuessufficient to cover its operating costs and to allow it to continue as a goingconcern.  The Company incurred a net lossof $2,217 in the three months ended March 31, 2010 and has a cumulativenet loss of $274,476 since inception. The ability of the Company to continue asa going concern is dependent on the Company obtaining adequate capital to fundoperating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forcedto cease development of operations.

 

Theability of the Company to continue as a going concern is dependent upon itsability to successfully accomplish its plans to exploit or lease mining claims,or engage a working interest partner, in order to  eventually secure other sources of financingand attain profitable operations.  Theaccompanying financial statements do not include any adjustments relating tothe recoverability and classification of recorded asset amounts or the amountand classifications or liabilities or other adjustments that might be necessaryshould the Company be unable to continue as a going concern.

 

Development-StageCompany

 

The Company is considered adevelopment-stage company, with limited operating revenues during the periodspresented, as defined by Statement of Financial Accounting Standards (“SFAS”) No. 7.  SFAS.  No. 7requires companies to report their operations, shareholders deficit and cashflows since inception through the date that revenues are generated frommanagement’s intended operations, among other things.  Management has defined inception as January 1,2006. Since inception, the Company has incurred an operating loss of $272,259.The Company’s working capital has been generated through the sales of commonstock.  Management has provided financialdata since January 1, 2006, “Inception” in the financial statements, as ameans to provide readers of the Company’s financial information to makeinformed investment decisions.

 

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RecentAccounting Pronouncements

 

In  May, 2009, the FASB issued SFAS No. 165,Subsequent Events, which established general accounting standards anddisclosure for subsequent events.  Inaccordance with SFAS No. 165, the Company has evaluated subsequent eventsthrough the date the financial statements were filed.

 

InJune, 2009, the FASB issued SFAS No. 168 — The FASB Accounting Standards Codificationand the Hierarchy of Generally Accepted Accounting Principles — a replacementof FASB Statement No. 162.  SFAS 168establishes the FASB Accounting Standards Codification as the single source ofauthoritative US generally accepted accounting principles recognized by theFASB to be applied to nongovernmental entities. SFAS 168 is effective for financial statements issued for interim andannual periods ending after September 15, 2009.   The adoption of SFAS 168 will not have an impacton the Company’s financial position, results of operations or cash flows.

 

FairValue of Financial Instruments

 

TheFinancial Accounting Standards Board issued Statement of Financial AccountingStandards (“SFAS”) No. 107, “Disclosures About Fair Value of FinancialInstruments.”  SFAS No. 107 requires disclosure of fair valueinformation about financial instruments when it is practicable to estimate thatvalue.  The carrying amounts of the Company’s financial instruments as of March 31,2009 approximate their respective fair values because of the short-term natureof these instruments.  Such instruments consist of cash, accounts payableand accrued expenses, and loans payable.

 

Basicand Diluted Net Loss Per Share

 

Netloss per share is calculated in accordance with SFAS 128, Earnings Per Sharefor the period presented.  Basic net lossper share is based upon the weighted average number of common sharesoutstanding.  Diluted net loss per shareis based on the assumption that all dilative convertible shares and stockoptions were converted or exercised. Dilution is computed by applying the treasury stock method.  Under this method, options and warrants areassumed exercised at the beginning of the period (or at the time of issuance,if later), and as if funds obtained thereby we used to purchase common stock atthe average market price during the period.

 

TheCompany has no potentially dilutive securities outstanding as of March 31,2010.

 

**Thefollowing is a reconciliation of the numerator and denominator of the basic anddiluted earnings per share computations for the three months ended March 31,2010 and 2009:**

** **
| ** **                                                      | ** ** | **2010**  | ** ** | **2009**  | ** ** |
|-----------------------------------------------------------------|------------|-----------|------------|-----------|------------|
|                                                            |       |      |       |      |       |
| Numerator:                                                      |       |      |       |      |       |
|                                                            |       |      |       |      |       |
| Basic and diluted net loss per share:                           |       |      |       |      |       |
|                                                            |       |      |       |      |       |
| Net Loss                                                        |       | $         | (2,217     | )         | $          | (1,133 | ) |
|                                                            |       |      |       |      |       |
| Denominator                                                     |       |      |       |      |       |
|                                                            |       |      |       |      |       |
| Basic and diluted weighted averagenumber of  shares outstanding |       | 3,719,444 |       | 3,687,500 |       |
|                                                            |       |      |       |      |       |
| Basic and Diluted Net Loss Per Share                            |       | $         | (0.001     | )         | $          | (0.000 | ) |

 

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**4.    Capital Structure**

 

Asof March 31, 2010 the Company has authorized 75,000,000 of $ 0.001 parcommon stock, of which 38,647,250 shares were issued and outstanding.

 

**5.    Contigencies, Litigation**

 

Therewere no loss contingencies or legal proceedings against the Company withrespect to matters arising in the ordinary course of business. Neither theCompany nor any of its officers or directors is involved in any otherlitigation either as plaintiffs or defendants, and have no knowledge of anythreatened or pending litigation against them or any of the officers ordirectors.

 

**6.    Subsequent Events**

 

OnMay 5, 2010, the Company entered into a Share Exchange Agreement withCentiuum Holdings Inc. and its stockholders whereby Centiuum’s stockholderswill exchange all of their shares of common stock of Centiuum for 10,000,000newly issued shares of the Company’s common stock.  In addition, the Company’s principal stockholder,Erik Ulsteen has agreed to deposit all of the shares of common stock owned byhim aggregating 17,646,000 shares (the “Escrow Shares”) into escrow uponclosing of the exchange.  At any timewithin 120 days after execution of the escrow agreement, the Escrow Shares willbe released to Centiuum upon a cash investment of a minimum of $500,000invested in the Company or the Company enters into executed contractsaggregating a minimum of $500,000 in cash flow to it.  The closing of the transactions are subjectto customary closing conditions including due diligence.  Centiuum Holdings is a provider of consultingservices, environmental engineering, clean development mechanism and projectmanagement services worldwide.

 

**Item 2.****                                  ****Management’s Discussion and Analysis of Financial Condition and Resultsof Operations.**

 

*Except asotherwise required by the context, all references in this prospectus to “we”, “us”,“our”, or “Company” refer to the operations of Kabe Exploration Inc., a Nevadacorporation.*

 

**Forward-LookingStatements and Associated Risks**

 

*ThePrivate Securities Litigation Reform Act of 1995 provides a “safe harbor” forcertain forward-looking statements. Some of the statements contained in thisannual report of the Company discuss future expectations, containprojections of our operations or financial condition or state otherforward-looking information. Some statements contained in this annual report onForm 10-Q that are not historical facts (including without limitationstatements to the*

 

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*effectthat we “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” orother similar expressions) and are forward-looking statements. Theseforward-looking statements are based on our current expectations and beliefsconcerning future developments and their potential effects on us. There can beno assurance that future developments affecting us will be those anticipated byus. All comments concerning our expectations for future revenue and operatingresults are based on our forecasts of our plan of operation and do not includethe potential impact of any future acquisitions or operations. Theseforward-looking statements involve significant risks and uncertainties (some ofwhich are beyond our control) and assumptions. Should one or more of theserisks or uncertainties materialize, or should any of our assumptions proveincorrect, actual results may vary in material respects from those projected inthe forward-looking statements.*

 

**Overview**

 

We are a “shell company”defined in Rule 405 under the Securities Act of 1933 and Rule 12b-2under the Securities Exchange Act of 1934, since we have only conducted nominaloperations and have only nominal assets.

 

During 2007, we were anexploration stage company engaged in the acquisition and exploration of mineralproperties. We entered into a lease agreement with George J. Eliopuloseffective March 31, 2006, granting us the exclusive right to explore,develop, and mine the property for gold, silver, copper and other valuableminerals.  The property consisted of one unpatented mining claim locatedin section 12, Township 16 North, Range 20 East, Mt. Diablo Baseline &Meridian, Storey County, Nevada, USA, owned by Mr. Eliopulos.

 

On December 18, 2007,Erik Ulsteen entered into an agreement with Antony Claydon, our formerPresident and a director and Rory Moss, a director, to purchase 1,500,000 and250,000 shares of common stock, respectively, for an aggregate purchase priceof $50,000. The transaction closed on February 14, 2008 at which time, Mr. Claydonresigned as President, Chief Financial Officer and Secretary and Mr. Ulsteen was appointed President,Chief Financial Officer, Secretary and director.  On January 28, 2008, we terminated ourlease agreement with Mr. Eliopulos.

 

On May 5, 2010, weentered into a Share Exchange Agreement with Centiuum Holdings Inc. and itsstockholders whereby Centiuum’s stockholders will exchange all of their sharesof common stock of Centiuum for 10,000,000 newly issued shares of our commonstock.  In addition, our principalstockholder, Erik Ulsteen has agreed to deposit all of the shares of our commonstock owned by him aggregating 17,646,000 shares (the “Escrow Shares”) intoescrow upon closing of the exchange.  Atany time within 120 days after execution of the escrow agreement, the EscrowShares will be released to Centiuum upon a cash investment of a minimum of$500,000 invested in Kabe or Kabe enters into executed contracts aggregating aminimum of $500,000 in cash flow to Kabe. The closing of the transactions are subject to customary closingconditions including due diligence. Centiuum Holdings is a provider of consulting services, environmentalengineering, clean development mechanism and project management servicesworldwide.

 

The following factors raisesubstantial doubt regarding the ability of our business to continue as a goingconcern: (i) the losses we have incurred since our inception; (ii) ourfailure to generate 

 

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revenues since ourinception; and (iiI) our dependence on the sale of our equity securities and onthe receipt of capital from outside sources to continue our operations. Ourauditors have issued a going concern opinion regarding our business. Thefinancial statements do not include any adjustments that might result from theuncertainty about our ability to continue in business. As such we may have tocease operations and you could lose your investment.

 

**Plan ofOperation**

 

We have redirected our focus towards identifying and pursuing options regarding the development of a new business plan and direction. We are exploring various business opportunities that have the potential to generate positive revenue, profits and cash flow in order to financially accommodate the costs of being a publicly held company.

 

As stated above, on May 5, 2010, we entered into an Share ExchangeAgreement with Centiuum pursuant to which Centiuum’s stockholders will exchangeall of their shares of common stock of Centiuum for 10,000,000 newly issuedshares of our common stock.  Centiuum isa provider of consulting services, environmental engineering, clean developmentmechanism and project management services worldwide.

 

It is anticipated that any securities issued in the exchange will beissued in reliance upon exemption from registration under applicable federaland state securities laws.   The issuanceof additional securities and their potential sale into any trading market whichmay develop in our securities may depress the market value of our securities inthe future if such a market develops, of which there is no assurance.

 

Closing of the exchange is subject to, among other things, customary closing conditions including due diligence.  There can be no assurance that the exchange will close.  In the event that the exchange does not close, we will continue to identify and pursue various business opportunities that have the potential to generate positive revenue, profits and cash flow.

 

**Results ofOperations**

 

*ThreeMonths Ended March 31, 2010 Compared to Three Months Ended March 31,2009*

 

**Revenues**

 

We have generated nooperating revenues from operations from our inception.

 

**Costs andExpenses**

 

From our inception through March 31,2010, we have incurred cumulative losses of $274,476.  Professional fees increased to $1,725 for thethree months ended March 31, 2010 from $400 for the three months ended March 31,2009.

 

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**Liquidity and Capital Resources**

 

As of March 31, 2010, wehad a working capital deficit of $33,251 as compared to a working capitaldeficit of $31,034 as of December 31, 2009.  Our cash position was $6 as of March 31,2010 compared to $28 as of December 31, 2009.  We have financed our company principallythrough the private placement of our common stock.  As of March 31, 2010, we have no longterm debt.

 

**Summary ofSignificant Accounting Policies**

 

Basisof Presentation

 

Ourfinancial statements have been prepared using the accrual basis of accountingin accordance with generally accepted accounting principles in the UnitedStates.  Because a precise determination of many assets and liabilities isdependent upon future events, the preparation of financial statements for aperiod necessarily involves the use of estimates which have been made usingcareful judgment.

 

Useof Estimates

 

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makecertain estimates and assumptions that affect the reported amounts of assetsand liabilities at the date of the financial statements, and reported amountsof revenue and expenses during the reporting period.  Actual results coulddiffer materially from those estimates. Significant estimates made bymanagement are, among others, realizability of long-lived assets, deferredtaxes and stock option valuation.

 

Thefinancial statements have, in management’s opinion, been properly preparedwithin the reasonable limits of materiality and within the framework of thesignificant accounting.

 

IncomeTaxes

 

Weutilize SFAS No. 109, “Accounting for Income Taxes,” which requires therecognition of deferred tax assets and liabilities for the expected future taxconsequences of events that have been included in the financial statements ortax returns.  Under this method, deferred tax assets and liabilities aredetermined based on the difference between the tax basis of assets andliabilities and their financial reporting amounts based on enacted tax laws andstatutory tax rates applicable to the periods in which the differences areexpected to affect taxable income.  Valuation allowances are established,when necessary, to reduce deferred tax assets to the amount expected to berealized. We generated a deferred tax credit through net operating losscarryforward.  However, a valuation allowance of 100% has beenestablished, as the realization of the deferred tax credits is not reasonablycertain, based on going concern considerations outlined as follows.

 

GoingConcern

 

Ourfinancial statements are prepared using accounting principles generallyaccepted in the 

 

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UnitedStates of America applicable to a going concern, which contemplates therealization of assets and liquidation of liabilities in the normal course ofbusiness.  We have not yet established an ongoing source of revenuessufficient to cover our operating costs and to allow us to continue as a goingconcern.   Our ability to continue as a going concern is dependent onus obtaining adequate capital to fund operating losses until we becomeprofitable.  If we are unable to obtain adequate capital, we could beforced to cease operations.

 

Ourability to continue as a going concern is dependent upon our ability tosuccessfully accomplish our plan to develop a new business plan, or mergercandidate in order to eventually secure other sources of financing andattain profitable operations.  The accompanying financial statements donot include any adjustments relating to the recoverability and classificationof recorded asset amounts or the amount and classifications or liabilities orother adjustments that might be necessary should we be unable to continue as agoing concern.

 

Development-StageCompany

 

Weare considered a development-stage company, with limited operating revenuesduring the periods presented, as defined by Statement of Financial AccountingStandards (“SFAS”) No. 7.  SFAS.  No. 7 requires companiesto report their operations, shareholders deficit and cash flows since inceptionthrough the date that revenues are generated from management’s intendedoperations, among other things.  Management has defined inception as January 1,2006. Since inception until March 31, 2010, we have incurred an operatingloss of $274,476.  Our working capitalhas been generated through sales of common stock.  Management has providedfinancial data since January 1, 2006, “Inception” in the financialstatements, as a means to provide readers of our financial information to makeinformed investment decisions.

 

Basicand Diluted Net Loss Per Share

 

Netloss per share is calculated in accordance with SFAS 128, Earnings Per Sharefor the period presented.  Basic net loss per share is based upon theweighted average number of common shares outstanding.  Diluted net lossper share is based on the assumption that all dilative convertible shares andstock options were converted or exercised.  Dilution is computed byapplying the treasury stock method.  Under this method, options andwarrants are assumed exercised at the beginning of the period (or at the timeof issuance, if later), and as if funds obtained thereby we used to purchasecommon stock at the average market price during the period.

 

Wehad no potentially dilutive securities outstanding as of March 31, 2010.

 

Off-BalanceSheet Arrangements

 

We have no significantoff-balance sheet arrangements that have or are reasonably likely to have acurrent or future effect on our financial condition, changes in financialcondition, revenues or expenses, results of operations, liquidity, capitalexpenditures or capital resources that is material to our stockholders.

 

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**Item 3.****                                  ****Quantitative and Qualitative Disclosures About Market Risk.**

 

N/A

 

**Item 4(T)****                     ****Controls and Procedures.**

 

*Evaluation of Disclosure Controls and Procedures*. Under the supervision and with  the  participation  of  our  management, including  our President, Chief Financial Officer  and  Secretary, we  evaluated  the  effectiveness  of the design and operation  of our  disclosure  controls  and  procedures  (as  defined  in  Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the  period  covered  by this  report.  Based  upon that evaluation, our  President, Chief Financial Officer and Secretary  concluded  that our disclosure  controls and  procedures as of the end of the period covered by this report were effective such that the  information  required to be disclosed by us in reports  filed under the  Securities  Exchange  Act of 1934 is (i)  recorded, processed, summarized  and reported  within the time  periods  specified in the SEC’s rules and forms and (ii)  accumulated and  communicated to our management to allow timely decisions  regarding  disclosure.  A controls  system  cannot  provide  absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide  absolute  assurance  that all control issues and  instances  of  fraud, if  any, within  a  company  have  been  detected.

 

*Changes in  Internal  Control  Over  Financial  Reporting.*  During the most recent quarter ended March 31, 2010, there has been no change in our internal control over  financial  reporting  (as defined in Rule  13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

**PART II**

 

**Item 1.****                                  ****Legal Proceedings.**

 

We are not a party to anypending legal proceeding, nor is our property the subject of a pending legalproceeding, that is not in the ordinary course of business or otherwisematerial to the financial condition of our business.

 

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**Item 6.**                                   **Exhibits.**

 
| **Exhibit No.** | ** ** | **Title of Document**                                                                                                                                         |
|----------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |       |                                                                                                                                                          |
| 31.1                 |       | Certification of Chief  Executive Officer Pursuant to Rule 13a-14(a) of the Securities  Exchange Act of 1934                                        |
|                 |       |                                                                                                                                                          |
| 32.1                 |       | Certification of Chief  Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

 

**SIGNATURES**

 

In accordance with Section 13or 15(d) of the Exchange Act, the registrant caused this report to besigned on its behalf by the undersigned, thereunto duly authorized.

 
| **KABE EXPLORATION, INC.** |
|----------------------------|
|                       |   |
| By:                        | /s/ Erik Ulsteen |   |
|                       | Erik Ulsteen |   |
|                       | President, Chief Financial  Officer,  Secretary |   |
|                       |   |   |
| Date:                      | May  14, 2010 |   |

 

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