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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lode Star Mining Inc (PK) | USOTC:LSMG | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.008 | 0.0077 | 0.0203 | 0.00 | 14:30:24 |
UNITED STATES
|
|
SECURITIES AND EXCHANGE COMMISSION
|
|
Washington, D.C. 20549
|
|
FORM 10-Q
|
|
þ
|
QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Commission file number 000-53676
|
NEVADA
|
47-4347638
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
Large Accelerated Filer
|
o
|
Accelerated Filer
|
o
|
Non-accelerated Filer
|
o
|
Smaller Reporting Company
|
þ
|
Page
|
|
PART I - FINANCIAL INFORMATION
|
|
Item 1. Financial Statements
|
3 |
Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015
|
4 |
Statements of Operations for the Three Months ended March 31, 2016 and 2015 (unaudited)
|
5 |
Statements of Cash Flows for the Three Months ended March 31 2016 and 2015 (unaudited)
|
6 |
Notes to Financial Statements (unaudited)
|
7 |
Item 2. Management’s Discussion and Analysis Of Financial Condition and Results of Operations
|
10 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
16 |
Item 4. Controls and Procedures
|
16 |
PART II - OTHER INFORMATION
|
|
Item 1A. Risk Factors
|
16 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
16 |
Item 6. Exhibits
|
17 |
SIGNATURES
|
18 |
MARCH 31
|
DECEMBER 31
|
|||||||
2016
|
2015
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
|
||||||||
Cash
|
$
|
374
|
$
|
12,456
|
||||
Prepaid fees
|
3,217
|
3,217
|
||||||
3,591
|
15,673
|
|||||||
Mineral Property Interest
|
230,180
|
230,180
|
||||||
$
|
233,771
|
$
|
245,853
|
|||||
LIABILITIES
|
||||||||
Current
|
||||||||
Accounts payable and accrued liabilities
|
$
|
48,882
|
$
|
14,302
|
||||
Due to related parties
|
422,426
|
371,471
|
||||||
Loans payable
|
67,892
|
76,180
|
||||||
539,200
|
461,953
|
|||||||
Contractual Obligations, Commitments And Subsequent Events (Notes 3, 7 and 8)
|
||||||||
STOCKHOLDERS’ DEFICIENCY
|
||||||||
Capital Stock
|
||||||||
Authorized:
|
||||||||
480,000,000 voting common shares with a par value of $0.001 per share
|
||||||||
20,000,0000 preferred shares with a par value of $0.001 per share
|
||||||||
Issued:
|
||||||||
49,127,825 common shares at March 31, 2016 and December 31, 2015
|
1,947
|
1,947
|
||||||
Additional Paid-In Capital
|
1,070,064
|
1,070,064
|
||||||
Accumulated Deficit
|
(1,377,440
|
)
|
(1,288,111
|
)
|
||||
(305,429
|
)
|
(216,100
|
)
|
|||||
$
|
233,771
|
$
|
245,853
|
THREE MONTHS ENDED
|
||||||||
MARCH 31
|
||||||||
2016
|
2015
|
|||||||
Revenue
|
$ | - | $ | - | ||||
Operating Expenses
|
||||||||
Consulting services
|
$ | 5,702 | $ | 423 | ||||
Corporate support services
|
570 | 1,285 | ||||||
Office, foreign exchange and sundry
|
4,361 | 10,297 | ||||||
Professional fees
|
15,567 | 20,352 | ||||||
Transfer and filing fees
|
16,327 | 4,982 | ||||||
42,527 | 37,339 | |||||||
Operating Loss Before Other Income (Expense)
|
(42,527 | ) | (37,339 | ) | ||||
Other Income (Expense)
|
||||||||
Interest, bank and finance charges
|
(6,576 | ) | (4,188 | ) | ||||
Penalties
|
(40,226 | ) | - | |||||
(46,802 | ) | (4,188 | ) | |||||
Net Loss For The Period
|
$ | (89,329 | ) | $ | (41,527 | ) | ||
Basic And Diluted Loss Per Common Share
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted Average Number Of Common Shares Outstanding
|
49,127,825 | 46,509,000 |
THREE MONTHS ENDED
|
||||||||
MARCH 31
|
||||||||
2016
|
2015
|
|||||||
Cash Provided By (Used In)
|
||||||||
Operating Activities
|
||||||||
Net loss for the period
|
$
|
(89,329
|
)
|
$
|
(41,527
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Foreign exchange loss (gain)
|
1,806
|
(2,498
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
-
|
(697
|
)
|
|||||
Accounts payable and accrued liabilities
|
63,932
|
(8,429
|
)
|
|||||
Accrued interest payable
|
6,509
|
4,021
|
||||||
(17,082
|
)
|
(49,130
|
)
|
|||||
Financing Activities
|
||||||||
Repayment of loans payable
|
(10,000
|
)
|
(4,000
|
)
|
||||
Repayment of loans payable – related party
|
-
|
(4,000
|
)
|
|||||
Proceeds from loans payable – related party
|
15,000
|
65,000
|
||||||
5,000
|
57,000
|
|||||||
Net Increase (Decrease) In Cash
|
(12,082
|
)
|
7,870
|
|||||
Cash, Beginning Of Period
|
12,456
|
5,372
|
||||||
Cash, End Of Period
|
$
|
374
|
$
|
13,242
|
||||
Supplemental Disclosure Of Cash Flow Information
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Income taxes
|
$
|
-
|
$
|
-
|
||||
Non-cash Financing Activity
|
||||||||
Expenses paid by related party on behalf of the Company
|
$
|
29,352
|
$
|
8,526
|
||||
Debt settlements for common shares, to be issued
|
$
|
-
|
$
|
53,213
|
1.
|
BASIS OF PRESENTATION AND NATURE OF OPERATIONS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
3.
|
MINERAL PROPERTY INTEREST
|
4.
|
CAPITAL STOCK
|
Number of Warrants
|
Exercise Price
|
Weighted Average Exercise Price
|
Weighted Average Life Remaining
(Years)
|
Expiry Date
|
||||||||||||||
Balance, December 31, 2015
|
3,336,060 | $ | 0.02 | $ | 0.02 | 4.86 |
November 10, 2020
|
|||||||||||
Granted
|
- | $ | - | $ | - | - | ||||||||||||
Expired
|
- | $ | - | $ | - | - | ||||||||||||
Exercised
|
- | $ | - | $ | - | - | ||||||||||||
Balance March 31, 2016
|
3,333,060 | $ | 0.02 | $ | 0.02 | 4.61 |
November 10, 2020
|
5.
|
LOANS PAYABLE
|
i)
|
$1,000 (December 31, 2015 - $1,000): unsecured; interest at 15% per annum; originally due on April 20, 2012.
|
ii)
|
$55,000 (December 31, 2015 - $65,000): unsecured; interest at 10% per annum from January 10, 2015.
|
|
§
|
$27,500, and any accrued interest was due and payable on written demand in full (not received to date) on the earlier of June 9, 2015 or the date on which the Company completes one or more debt or equity financings that generate aggregate gross proceeds of at least $250,000;
|
|
§
|
The balance of the outstanding principal, now $27,500, and any accrued interest was due and payable on written demand in full (not received to date) on January 9, 2016; and
|
|
§
|
The Company shall have the right to repay all or any part of the principal and any accrued interest to the lender at any time and from time to time, without any premium.
|
iii)
|
$42,353 (December 31, 2015 - $40,789): unsecured; interest at 5% per annum; with no specific terms of repayment, due to a related party, the president of the Company.
|
iv)
|
$305,000 (December 31, 2015 - $290,000): unsecured; interest at 5% per annum from January 1, 2015; with no specific terms of repayment, due to a related party, LSG, the Company’s majority shareholder.
|
v)
|
$53,318 (December 31, 2015 - $23,966): unsecured; interest at 5% per annum; with no specific terms of repayment, due to a related party, LSG, the Company’s majority shareholder.
|
vi)
|
$3,855 (December 31, 2015 - $3,613): unsecured; non-interest bearing; with no specific terms of repayment, due to a related party, the controlling shareholder of LSG.
|
6.
|
RELATED PARTY TRANSACTIONS AND AMOUNTS DUE
|
Loan iii)
|
$3,253 (December 31, 2015 - $2,609) to the president of the Company.
|
Loan iv)
|
$13,864 (December 31, 2015 - $10,157) to the majority shareholder of the Company.
|
Loan v)
|
$783 (December 31, 2015 - $336) to the majority shareholder of the Company.
|
7.
|
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
|
8.
|
SUBSEQUENT EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
§
|
Consider, develop and submit work programs to the management committee for consideration and approval, and to implement work programs when approved;
|
|
§
|
Carry out operations in a prudent and workmanlike manner and in accordance with all applicable laws and regulations, and all agreements, permits and licenses relating to the Property and LSG;
|
|
§
|
Pay and discharge all wages and accounts for material and services and all other costs and expenses that may be incurred by us in connection with our operations on the property;
|
|
§
|
Maintain and keep in force and, upon request by LSG provide reasonable documentary verification of, levels of insurance as are reasonable in respect of our activities in connection with the Property;
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
|
§
|
Maintain true and correct books, accounts and records of expenditures; and
|
|
§
|
Deliver to the management committee quarterly and annual progress reports.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
|
·
|
Rubicon Environmental Consulting to act as the lead consultant
|
|
·
|
Hydrogeologica Inc. to consult on water and geology
|
|
·
|
Tierra Group International to consult on mine planning and engineering
|
Rubicon
|
$40,000
|
Hydrogeologica
|
$135,000
|
Tierra
|
$75,000
|
State / NDEP
|
$0
|
Total
|
$250,000
|
Office/Shop Building (existing)
|
$0
|
Trailer Accommodations
|
$60,000
|
Contingency
|
$40,000
|
Total
|
$100,000
|
Pneumatic Jacklegs (6)
|
$24,000
|
Pneumatic Slusher/with bucket (used) (4)
|
$80,000
|
Pneumatic Tugger (used) (2)
|
$10,000
|
1-Yard Scoop (used)
|
$208,000
|
Stopers/Buzzies (4)
|
$8,000
|
Schwing Pump
|
$10,000
|
Compressor
|
$60,000
|
Hoist Rehab & Retrofitting
|
$100,000
|
Total
|
$500,000
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Labor - 3.75 man crew x 10 hrs/day x 1 month
|
$31,428
|
Equipment Maintenance
|
$38,212
|
Ground Support
|
$20,000
|
Consumables – small hand tools
|
$1,000
|
Utilities
|
$19,600
|
Total
|
$110,240
|
Total
|
$50,000
|
Labor – 3.75 man crew x 10 hrs/day x 5 months
|
$145,620
|
Timber
|
$13,200
|
Equipment Maintenance
|
$28,320
|
Ground Support
|
$13,400
|
Explosives
|
$10,665
|
Backfill Material
|
$46,454
|
Consumables - small hand tools
|
$5,000
|
Utilities
|
$4,835
|
Total
|
$267,494
|
Personnel
|
$320,000
|
Regulatory
|
$120,000
|
General
|
$280,000
|
Total
|
$720,000
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Three Months Ended
March 31
|
Change
|
|||||||||||||||
2016
|
2015
|
Amount
|
Percentage
|
|||||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
|||||||||
Operating Expenses
|
42,527
|
37,339
|
5,188
|
14%
|
||||||||||||
Loss from Operations
|
(42,527
|
)
|
(37,339
|
)
|
(5,188
|
)
|
14%
|
|||||||||
Other Income (Expense)
|
(46,802
|
)
|
(4,188
|
)
|
(42,614
|
)
|
1,018%
|
|||||||||
Net Loss For The Period
|
$
|
(89,329
|
)
|
$
|
(41,527
|
)
|
$
|
(47,802
|
)
|
115%
|
Three Months Ended March 31
|
Change
|
||||||||||||
2016
|
2015
|
Amount
|
Percentage
|
||||||||||
Consulting services
|
$
|
5,702
|
$
|
423
|
$
|
5,279
|
1,248%
|
||||||
Office, foreign exchange and sundry
|
$
|
4,361
|
$
|
10,297
|
$
|
(5,936
|
)
|
(58%)
|
|||||
Professional fees
|
$
|
15,567
|
$
|
20,352
|
$
|
(4,785
|
)
|
(24%)
|
|||||
Transfer and filing fees
|
$
|
16,327
|
$
|
4,982
|
$
|
11,345
|
228%
|
||||||
Interest, bank and finance charges
|
$
|
6,576
|
$
|
4,188
|
$
|
2,388
|
57%
|
||||||
Penalties
|
$
|
40,226
|
$
|
-
|
$
|
40,226
|
-
|
|
§
|
Consulting services
- A consultant was retained, starting in Q2 of 2015, to maintain a corporate and marketing presence in Vancouver, Canada. The majority of our shareholders, other than LSG, are located in Canada and Vancouver is a major Canadian mining center. With our management now located in Texas, a consultant was needed to provide that presence. There were no costs for the consultant in Q1 of 2015, resulting in the higher costs in Q1 of 2016.
|
|
§
|
Office, foreign exchange and sundry
was lower in 2016 primarily due to a decrease in IT expenses, resulting from one-time requirements in 2015.
|
|
§
|
Professional fees
were lower in 2016 primarily due to differences in the timing and amounts for the 2015 and 2014 audit fees, expensed in Q1 2016 and Q1 2015 respectively. Also, legal fees decreased nominally.
|
|
§
|
Transfer and filing fees
were higher in 2016 primarily due to a $10,000 annual fee for the OTCQB marketplace that was first charged in April, 2015, resulting in no expense in the first quarter of that year. In 2016, the fee was charged in Q1.
|
|
§
|
Interest, bank and finance charges
were higher in 2016 mainly due to increased loan amounts. The average interest-bearing principal balance outstanding was approximately $259,000 in Q1 2015 compared to approximately $438,000 in Q1 2016.
|
|
§
|
Penalties
consist of amounts charged by the IRS for 2012 and 2013 for failure to file Forms 5472 by the due date of our income tax returns for those years. We are appealing those penalties and requesting that they be waived or abated on the grounds that we had reasonable cause. The outcome of our appeal is not determinable at this time.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
March 31
|
December 31
|
Change
|
|||||||||||
2016
|
2015
|
Amount
|
Percentage
|
||||||||||
Cash
|
$
|
374
|
$
|
12,456
|
$
|
(12,082
|
)
|
(97%)
|
|||||
Accounts payable and accrued liabilities
|
$
|
48,882
|
$
|
14,302
|
$
|
34,580
|
242%
|
||||||
Due to related parties
|
$
|
422,426
|
$
|
371,471
|
$
|
50,955
|
14%
|
||||||
Loans payable
|
$
|
67,892
|
$
|
76,180
|
$
|
(8,288
|
)
|
(11%)
|
|
§
|
Cash
decreased primarily due to the settlement of certain Accounts payable and accrued liabilities.
|
|
§
|
Accounts payable and accrued liabilities
increased primarily due to penalties from the IRS of approximately $40,000, offset somewhat by the payment of approximately $7,000 for non-recurring 2015 legal fees.
|
|
§
|
Due to related parties
increased primarily as a result of new loan amounts totaling $15,000 and new accrued interest of approximately $5,000, together with expenses paid by related parties on our behalf totaling approximately 29,000.
|
|
§
|
Loans payable
decreased due to a loan repayment of $10,000, offset by new accrued interest of approximately $2,000.
|
|
March 31
|
December 31
|
Increase/(Decrease)
|
||||||||||
2016
|
2015
|
Amount
|
Percentage
|
||||||||||
Current Assets
|
$
|
3,591
|
$
|
15,673
|
$
|
(12,082
|
)
|
(77%)
|
|||||
Current Liabilities
|
539,200
|
461,953
|
77,247
|
17%
|
|||||||||
Working Capital (Deficiency)
|
$
|
(535,609
|
)
|
$
|
(446,280
|
)
|
$
|
(89,329
|
)
|
20%
|
Three Months Ended March 31
|
Change
|
||||||||||||
2016
|
2015
|
Amount
|
Percentage
|
||||||||||
Cash Provided By (Used In):
|
|||||||||||||
Operating Activities
|
$
|
(17,082
|
)
|
$
|
(49,130
|
)
|
$
|
32,048
|
(65%)
|
||||
Financing Activities
|
5,000
|
57,000
|
(52,000
|
)
|
(91%)
|
||||||||
Net increase (decrease) in cash
|
$
|
(12,082
|
)
|
$
|
7,870
|
$
|
(19,952
|
)
|
(254%)
|
|
1.
|
an approximate $4,000 swing from a foreign exchange gain in Q1 2015 to a loss in Q1 2016
|
|
2.
|
an approximate $72,000 swing in the change in accounts payable and accrued liabilities
|
|
3.
|
an approximate $3,000 swing in the change in accrued interest
|
|
4.
|
an approximate $1,000 swing in the change in prepaid expenses
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4.
|
CONTROLS AND PROCEDURES.
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
ITEM 6.
|
EXHIBITS.
|
Exhibit No.
|
Document Description
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
LODE-STAR GOLD INC.
|
|||
BY
|
“Mark Walmesley”
|
||
Mark Walmesley
|
|||
President, Principal Executive Officer, Treasurer, Principal Financial Officer, and Principal Accounting Officer
|
|||
Signature
|
Title
|
Date
|
/s/ Mark Walmesley
|
Director, President, Chief Executive Officer and Chief Financial Officer
|
May 11, 2016
|
Mark Walmesley
|
||
/s/
Thomas Temkin
|
Director and Chief Operating Officer
|
May 11, 2016
|
Thomas Temkin
|
Exhibit No.
|
Document Description
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
1 Year Lode Star Mining (PK) Chart |
1 Month Lode Star Mining (PK) Chart |
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