Item
1. Financial Statements
NEVADA
CANYON GOLD CORP.
(Formerly
Tech Foundry Ventures, Inc.)
Condensed
Balance Sheets
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June 30, 2016
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December 31, 2015
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(unaudited)
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ASSETS
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Current Assets
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Cash
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$
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364,445
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$
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39,027
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Prepaid expenses
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5,405
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910
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369,850
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39,937
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Mineral property interest
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65,000
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65,000
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TOTAL ASSETS
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$
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434,850
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$
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104,937
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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Current Liabilities
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Accounts payable and accrued liabilities
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$
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8,862
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$
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1,406
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Related party advances
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95,907
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63,000
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Note payable, net with accrued interest of $2,918 and $425, respectively
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102,918
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100,425
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207,687
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164,831
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Stockholders’ Equity (Deficit)
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Preferrred Stock: Authorized 10,000,000 preferred shares, $0.0001 par, none
issued and outstanding as of June 30, 2016 and December 31, 2015
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-
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-
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Common Stock: Authorized 100,000,000 common shares, $0.0001 par, 44,050,000
issued and outstanding as of June 30, 2016 and 219,500,000 issued and outstanding as of December 31, 2015
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4,405
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21,950
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Additional Paid in Capital
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475,695
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75,150
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Accumulated deficit
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(252,937
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)
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(156,994
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)
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227,163
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(59,894
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)
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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$
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434,850
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$
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104,937
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NEVADA
CANYON GOLD CORP.
(Formerly
Tech Foundry Ventures, Inc.)
Statements
of Operations
(Unaudited)
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For the three months ended
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For the six months ended
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June 30, 2016
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June 30, 2015
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June 30, 2016
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June 30, 2015
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Revenue
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$
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-
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$
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1,000
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$
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-
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$
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1,000
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Operating expenses
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Exploration expenses
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14,171
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-
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39,124
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-
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General and administrative expenses
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11,133
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3,979
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14,597
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4,249
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Professional fees
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23,677
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6,125
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26,177
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19,089
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Transfer agent and filing fees
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3,326
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-
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5,552
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14,183
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(52,307
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)
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(10,104
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)
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(85,450
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)
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(37,521
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)
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Other items
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Accrued interest expense
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(1,260
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)
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-
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(2,493
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)
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-
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Impairment
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-
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-
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(8,000
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)
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-
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Net and comprehensive loss
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$
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(53,567
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)
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$
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(9,104
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)
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$
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(95,943
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)
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$
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(36,521
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)
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Net loss per common share - basic and diluted
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted average number of common shares outstanding
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Basic and diluted
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48,582,967
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218,500,000
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134,045,880
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218,490,330
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NEVADA
CANYON GOLD CORP.
(Formerly
Tech Foundry Ventures, Inc.)
Statements
of Cash Flow
(Unaudited)
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For the six months
ended
June 30, 2016
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For the six months
ended
June 30, 2015
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OPERATING ACTIVITIES
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Cash flows used in operating activities
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Net loss
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$
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(95,943
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)
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$
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(36,521
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)
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Adjustment to reconcile net loss to net cashused by operating activities:
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Accrued interest expense
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2,493
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-
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Share-based payment
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8,000
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-
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Changes in operating assets and liabilities:
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Accounts payable
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7,456
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(10,869
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)
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Deferred revenue
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-
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3,000
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Prepaid expenses
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(4,495
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)
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(3,000
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)
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Net cashed used by operating activities
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(82,489
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)
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(47,390
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)
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FINANCING ACTIVITIES
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Subscription deposits
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-
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(3,500
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)
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Undeposited funds
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-
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8,500
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Common stock
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375,000
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3,500
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Advances from shareholders
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32,907
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-
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Net cash provided by financing activities
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407,907
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8,500
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Net increase (decrease) in cash
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325,418
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(38,890
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)
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Cash, at beginning
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39,027
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81,600
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Cash, at end
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$
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364,445
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$
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42,710
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Supplemental cash flow information:
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Cash paid for interest
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$
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-
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$
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-
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Cash paid for income taxes
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$
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-
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$
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-
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Significant non-cash transactions:
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Common stock issued for corporate name
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$
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8,000
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$
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-
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NEVADA
CANYON GOLD CORP.
(Formerly
Tech Foundry Ventures, Inc.)
Notes
to the Interim Financial Statements
(Unaudited)
For
the three and six months ended June 30, 2016 and 2015
NOTE
1 - NATURE OF BUSINESS
Nevada
Canyon Gold Corp. (formerly Tech Foundry Ventures, Inc.) (the “Company”) was incorporated under the laws of the state
of Nevada on February 27, 2014. On July 6, 2016, the Company changed its name from Tech Foundry Ventures, Inc. to Nevada Canyon
Gold Corp.
On
April 28, 2016, the Company split its common stock on a 10:1 basis. All shares and per share amounts have been retroactively restated
to account for the split.
Going
Concern
The
Company’s financial statements are prepared using accounting principles generally accepted in the United States of America
(“US GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company is an exploration stage Company, and has only recently begun its exploration operations
and has not generated or realized any revenues from these business operations. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company
is unable to obtain adequate capital, it could be forced to cease operations.
The
outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will
be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications
of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends
to obtain additional funding by borrowing funds, and/or a private placement of common stock.
NOTE
2 - BASIS OF PRESENTATION
The
unaudited interim consolidated financial statements of the Company have been prepared in accordance with US GAAP for interim financial
information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all
information and footnotes required by US GAAP for complete financial statements. Except as disclosed herein, there have been no
material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2015, included
in the Company’s Annual Report on Form 10-K, filed with the SEC. The unaudited interim consolidated financial statements
should be read in conjunction with those financial statements included in Form 10-K. In the opinion of management, all adjustments
considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results
for the three and six month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2016.
Recent
Accounting Pronouncements
The
Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and
does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact
on its financial position or results of operations.
NOTE
3 – RELATED PARTY TRANSACTIONS
Amounts
due to related parties at June 30, 2016 and December 31, 2015:
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June 30, 2016
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December 31, 2015
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Advances due to the Chief Executive Officer (“CEO”)
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$
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51,000
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$
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21,000
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Due to the CEO for reimbursable expenses
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781
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-
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Advances due to a director
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21,000
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21,000
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Due to the director for reimbursable expenses
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2,126
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-
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Advances due to a major shareholder
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21,000
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21,000
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Due to related parties
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$
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95,907
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$
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63,000
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Amounts
are unsecured, due on demand and bear no interest.
As
at June 30, 2016, the Company’s three shareholders had advanced $95,907 (December 31, 2015 - $63,000) to fund working capital
expenses. These advances are unsecured and do not carry an interest rate or repayment terms.
On
April 4, 2016, each of the Company’s three shareholders tendered 60,000,000 shares (6,000,000 pre-split shares) of common
stock for cancellation. As a result, a total of 180,000,000 shares of common stock were cancelled and returned to the Company’s
treasury to a status of authorized but unissued. The cancelling shareholders provided a release for the benefit of the Company
releasing the Company from any potential loss resulting from their cancellation.
During
the six month period ended June 30, 2016, the Company issued 800,000 shares to Nevada Canyon Gold Corporation, a Company with
the President and CEO in common with the Company, to purchase its corporate name, domain name, and all related content (Note 6).
During
the year ended December 31, 2015, the Company entered into a definitive agreement with Nevada Canyon Gold Corporation, a company
with the President and CEO in common with the Company (Note 4).
NOTE
4 – MINERAL PROPERTY INTEREST
On
December 17, 2015, the Company entered into a definitive agreement with Nevada Canyon Gold Corporation, a Nevada corporation (“NCG”),
to acquire all of NCG’s rights, titles and interests in and into an exploration agreement with an option to form a joint
venture with Walker River Resources Corp., a Canadian public company (“WRR”), dated September 15, 2015 (the “Agreement”).
WRR owns a 100% undivided interest in and to the Lapon Canyon Gold Property, containing the Lapon Canyon claims, which is the
subject of the Agreement.
The
Agreement does not grant the Company an interest in or to the Lapon Canyon claims, or any equity interest in WRR, but rather,
grants the Company the right to earn up to an undivided 50% interest in the Lapon Canyon claims by incurring expenditures of $500,000,
over a two-year period, in exploration expenses in a work program established and operated by WRR on the Lapon Canyon claims and,
thereafter, grants the Company an option to enter into a joint venture with WRR for further exploration and development of the
Lapon Canyon claims. The Agreement also grants the Company the first right of refusal to acquire an additional 20% interest in
the Lapon Canyon claims by the expenditure of additional funds and performance of additional tasks, all related to the joint venture.
Full
consideration for all rights in and to the Agreement consisted of the following: payment of $65,000 by the Company to NGC, consisting
of an initial cash payment of $25,000 deposit, a cash payment of $30,000 and the balance of $10,000 paid through the issuance
of 1,000,000 restricted common shares of the Company issued to NGC at a price of $0.01. All consideration had been fully paid
as at December 31, 2015.
NOTE
5 – NOTE PAYABLE
During
the year ended December 31, 2015, the Company loaned $100,000 from an unrelated party (the “Loan”). The Loan bears
an interest rate of 5%, with all outstanding principal and interest due on July 31, 2016. As at June 30, 2016, the Company had
recorded $2,918 in interest under the Loan.
Subsequent
to June 30, 2016, on August 1, 2016, the Company renegotiated the terms of the Loan, extending the maturity date to August 2,
2016, and reducing the interest rate to 0.75%. The Company repaid the Loan and accrued interest totaling $100,505 in accordance
with the new terms on August 2, 2016.
NOTE
6 – STOCKHOLDERS’ EQUITY (DEFICIT)
The
Company was formed with one class of common stock, $0.0001 par value and is authorized to issue 100,000,000 common shares, and
one class of preferred stock, $0.0001 par value and is authorized to issue 10,000,000 preferred shares. Voting rights are not
cumulative and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the directors
of the Company.
On
April 28, 2016, the Company split its common stock on a 10:1 basis. All shares and per share amounts have been retroactively restated
to account for the split. The outstanding share capital of the Company as at December 31, 2015 exceeded the authorized share capital
as a result of the forward split, however, prior to the stock split, on April 4, 2016, the Company cancelled 180,000,000 common
shares held by three founding shareholders of the Company. As a result, the actual common shares outstanding at December 31, 2015
did not exceed those authorized.
The
stock split did not affect the par value of the Company’s common stock. As a result, the stated capital on the Company’s
balance sheet attributable to the Company’s common stock was increased proportionately based on the stock split ratio, and
the additional paid-in capital account was credited with the amount by which the stated capital was increased.
On
March 30, 2016, the Company issued 800,000 shares with a total fair value of $8,000 to purchase the intangible assets of NCG which
included its corporate name and its domain name and all related content, which was expensed and included in corporate costs.
On
April 4, 2016, each of the Company’s three shareholders tendered 60,000,000 shares (6,000,000 pre-split shares) of common
stock for cancellation. As a result, a total of 180,000,000 shares of common stock were cancelled and returned to the Company’s
treasury to a status of authorized but unissued. The cancelling shareholders provided a release for the benefit of the Company
releasing the Company from any potential loss resulting from their cancellation.
On
June 21, 2016, the Company completed its private placement offering by issuing to the subscribers a total of 3,750,000 shares
of $0.0001 par value restricted common stock at $0.10 per share for total proceeds of $375,000.
Item
2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations
Forward
Looking Statements
This
Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in Item 2 of Part I of this report include forward-looking statements within the meaning of Section 27A of
the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the “Reform
Act”). The Reform Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective
information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the projected results. All statements, other than
statements of historical fact that we make in this Quarterly Report on Form 10-Q are forward-looking. The words “anticipates,”
“believes,” “expects,” “intends,” “will continue,” “estimates,” “plans,”
“projects,” the negative of these terms and similar expressions are intended to identify forward-looking statements.
However, the absence of these words does not mean the statement is not forward-looking.
Forward-looking
statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results,
performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management’s
beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important
factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with
the Securities and Exchange Commission, including on Forms 8-K and 10-K.
Examples
of forward looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding
our ability to generate operating cash flows and to fund our working capital and capital expenditure requirements. Important assumptions
relating to the forward-looking statements include, among others, assumptions regarding demand for our future products, the timing
and cost of capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate.
Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations
may prove to be incorrect. Important factors that could cause actual results to differ materially from the results and events
anticipated or implied by such forward-looking statements include:
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●
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the
risks of a development stage company;
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●
|
management’s
plans, objectives and budgets for its future operations and future economic performance;
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●
|
capital
budget and future capital requirements;
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|
●
|
meeting
future capital needs;
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●
|
our
dependence on management and the need to recruit additional personnel;
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●
|
limited
trading for our common stock, if listed or quoted
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|
●
|
the
level of future expenditures;
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●
|
impact
of recent accounting pronouncements;
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|
●
|
the
outcome of regulatory and litigation matters; and
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|
●
|
the
assumptions described in this report underlying such forward-looking statements. Actual results and developments may materially
differ from those expressed in or implied by such statements due to a number of factors, including:
|
|
●
|
those
described in the context of such forward-looking statements;
|
|
●
|
future
product development and marketing costs;
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|
●
|
timely
development and acceptance of our consulting services;
|
|
●
|
the
markets of our domestic operations;
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|
●
|
the
impact of competitive products and pricing;
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|
●
|
the
political, social and economic climate in which we conduct operations; and
|
|
●
|
the
risk factors described in other documents and reports filed with the Securities and Exchange Commission, including our Registration
Statement on Form S-1/A (SEC File No. 333-196075).
|
We
operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us
to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor
may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking
statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on
current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law,
we expressly disclaim any obligation or undertaking to update publicly any of them in light of new information or future events.
The
following is management’s discussion and analysis of financial condition and results of operations and is provided as a
supplement to the accompanying unaudited condensed interim financial statements and notes to help provide an understanding of
our financial condition, results of operations and cash flows during the periods included in the accompanying unaudited condensed
interim financial statements.
In
this Quarterly Report on Form 10-Q, “Company,” “the Company,” “us,” and “our”
refer to Nevada Canyon Gold Corp., a Nevada corporation, unless the context requires otherwise.
We
intend the following discussion to assist in the understanding of our financial position and our results of operations for the
three and six months ended June 30, 2016 and 2015. You should refer to the Financial Statements and related Notes in conjunction
with this discussion.
General
We
are an exploration stage Company. We have only recently begun our exploration operations and have not generated or realized any
revenues from these business operations.
We
are a party to an Exploration Agreement (the “Agreement”) with Option to form a Joint Venture with Walker River Resources
Corp. (“WRR”) on its wholly-owned Lapon Canyon Gold Project (“Lapon Canyon Project”, or “the Property”)
located approximately 40 miles southeast of Yerington, Nevada. The Agreement does not grant us an interest in or to the Property,
or any equity interest in WRR, but rather, grants us the right to earn up to an undivided 50% interest in the Property by incurring
expenditures of $500,000 (over a two-year period) in exploration expenses in a work program established and operated by WRR on
the Property. Thereafter, the Agreement grants us an option to enter into a joint venture with WRR for further exploration and
development of the Property.
Even
if we complete our current exploration programs and are successful in identifying a mineralized deposit, we will have to spend
substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit,
called a reserve.
We
will be conducting exploration of the Property with what we anticipate is sufficient funding for approximately one year of operations.
We are not going to buy or sell any significant equipment during the next twelve months. If we find mineralized materials in the
Property, we have no intention to develop the reserves ourselves, but rather, will attempt to find a mining operations company
to whom we can sell the property or with whom we can enter into a business arrangement to put the ore deposit into operation.
We
do not intend to hire employees at this time. All of the work on the Property will be conducted by WRR, who will be responsible
for surveying, geology, engineering, exploration, and excavation, and we will be responsible for paying all of the expenses incurred
in such activities. Walker River will be solely responsible for conducting the exploration stage operations, and we will pay the
expense of such operations, all devoted to exploration. Once we have paid $250,000 in exploration expenses, we will have earned
our 25% in the Property, and once we have paid an additional $250,000, we will have earned an additional 25% interest, for a total
50% in the Property.
One
of our directors will be present on the Property as a representative for the Company during most exploration operations. If we
hire an independent geologist, he/she will evaluate the information derived from the exploration and excavation and the engineers
will advise us on the economic feasibility of removing the mineralized material.
Mineral
property exploration is typically conducted in phases. We intend to follow our consultant’s recommendations and begin drilling
to determine if there is sufficient mineralization on the property to warrant continued exploration and development activities.
We estimate the cost of the drilling, shipping samples, as well as geological mapping, rock chip sampling, grid establishment,
hiring geologists, and soil sampling, to be approximately $500,000, which is the amount we expect to pay in order to acquire a
50% interest in the Property.
After
the completion of the first phase of the exploration program, we will review the results and conclusions and evaluate the advisability
of additional exploration work on the Property.
If
we are unable to complete any phase of exploration because we don’t have enough funds, we will cease activities until we
raise more money. At the present time, we have made arrangements to raise the additional funds required to do advanced exploration
but not to place our Property into production. If we need additional cash and cannot raise it, we will either have to suspend
activities until we do raise the cash, or cease activities entirely. Other than as described in this paragraph, we have no financing
plans.
Critical
Accounting Policy and Estimates.
Our
financial statements and related public financial information are based on the application of accounting principles generally
accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective
interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported.
These estimates can also affect supplemental information contained in our external disclosures including information regarding
contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP
and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different
assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our
Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our unaudited condensed
interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United
States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those
related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our unaudited condensed interim financial statements include estimates
as to the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources.
The
following discussion of our financial condition and results of operations should be read in conjunction with our unaudited interim
financial statements for the three and six months ended June 30, 2016 and 2015, together with notes thereto, which are included
in this Quarterly Report on Form 10-Q, as well as our most recent audited financial statements on Form 10-K for the year ended
December 31, 2015.
Results
of Operations
Three
and six months ended June 30, 2016 compared to the three and six months ended June 30, 2015
|
|
Three months
ended June 30,
|
|
|
Changes between
|
|
|
Six months
ended June 30,
|
|
|
Changes between
|
|
|
|
2016
|
|
|
2015
|
|
|
the periods
|
|
|
2016
|
|
|
2015
|
|
|
the periods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
1,000
|
|
|
$
|
(1,000
|
)
|
|
$
|
-
|
|
|
$
|
1,000
|
|
|
$
|
(1,000
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expenses
|
|
|
14,171
|
|
|
|
-
|
|
|
|
14,171
|
|
|
|
39,124
|
|
|
|
-
|
|
|
|
39,124
|
|
General and administrative expenses
|
|
|
11,133
|
|
|
|
3,979
|
|
|
|
7,154
|
|
|
|
14,597
|
|
|
|
4,249
|
|
|
|
10,348
|
|
Professional fees
|
|
|
23,677
|
|
|
|
6,125
|
|
|
|
17,552
|
|
|
|
26,177
|
|
|
|
19,089
|
|
|
|
7,088
|
|
Transfer agent and filing fees
|
|
|
3,326
|
|
|
|
-
|
|
|
|
3,326
|
|
|
|
5,552
|
|
|
|
14,183
|
|
|
|
(8,631
|
)
|
Total operating expenses
|
|
|
(52,307
|
)
|
|
|
(10,104
|
)
|
|
|
42,203
|
|
|
|
(85,450
|
)
|
|
|
(37,521
|
)
|
|
|
47,929
|
|
Other items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued interest
|
|
|
(1,260
|
)
|
|
|
-
|
|
|
|
1,260
|
|
|
|
(2,493
|
)
|
|
|
-
|
|
|
|
2,493
|
|
Impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,000
|
)
|
|
|
-
|
|
|
|
8,000
|
|
Net and comprehensive loss
|
|
$
|
(53,567
|
)
|
|
$
|
(9,104
|
)
|
|
$
|
44,463
|
|
|
$
|
(95,943
|
)
|
|
$
|
(36,521
|
)
|
|
$
|
59,422
|
|
Revenues
.
We had no revenues for the three and six months ended June 30, 2016. During the comparable period we have recorded $1,000 in consulting
fees we received from our consulting agreement with a client. Due to the exploration rather than the production nature of our
business, we do not expect to have significant operating revenue in the foreseeable future.
Operating
expenses.
Our operating expenses include exploration expenses, general and administrative expenses, professional fees and
transfer agent and filing fees. During the three month period ended June 30, 2016, our operating expenses increased by $42,203,
or 418%, to $52,307 for the three months then ended, compared to $10,104 for the comparable period in 2015. During the six month
period ended June 30, 2016, our operating expenses increased by $47,929, or 128%, to $85,450 for the six months ended June 30,
2016 compared to $37,521 for the comparable period in 2015.
The
most significant year-to-date changes included the following:
|
●
|
Exploration
expenses increased by $39,124, or 100%, to $39,124 for the six months ended June 30, 2016. The increase was due to the
exploration expenses the Company was required to incur in order to earn a 50% interest in a joint venture with Walker River
Resources Corp.
|
|
|
|
|
●
|
General
and administrative expenses increased by $10,348, or 244%, to $14,597 for the six months ended June 30, 2016 compared with
$4,249 for the comparable period in 2015. The increase was primarily attributable to an increase of travel and entertainment
expenses, as well as investor relation activities.
|
|
|
|
|
●
|
Professional
fees increased by $7,088, or 37%, to $26,177 for the six months ended June 30, 2016 compared with $19,089 for the comparable
period in 2015. The increase was attributable to an increase in legal and audit fees due to the increase in business activity.
|
|
|
|
|
●
|
Transfer
agent and filing fees decreased by $8,631, or 61%, to $5,552 for the six months ended June 30, 2016 compared with $14,183
for the comparable period in 2015. The decrease was primarily attributable to the reduction in transfer agent fees that were
previously incurred in engaging the Company’s transfer agent.
|
Net
loss.
Our net loss increased by $44,463, or 488%, to $53,567 for the three months ended June 30, 2016 compared to $9,104 for
the comparable period in 2015. The increase was primarily attributable to the operating expenses discussed above plus $1,260 in
interest we accrued on a $100,000 note payable we issued to an arms-length party (“Note Payable”).
Our
net loss increased by $59,422, or 163%, to $95,943 for the six months ended June 30, 2016 compared to $36,521 for the comparable
period in 2015. The increase was primarily attributable to the operating expenses discussed above plus a one-time $8,000 write
off of our intangible asset due to impairment, as well as $2,493 in interest accrued on the Note Payable.
Liquidity
and Capital Resources
.
Working capital
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
369,850
|
|
|
$
|
39,937
|
|
Current liabilities
|
|
|
207,687
|
|
|
|
164,831
|
|
Working capital (deficit)
|
|
$
|
162,163
|
|
|
$
|
(124,894
|
)
|
As
of June 30, 2016, we had a cash balance of $364,445, and working capital of $162,163 with cash flows used in operations totaling
$82,489 for the period then ended. During the six month period ended June 30, 2016, we funded our operations with proceeds from
a private placement for gross proceeds of $375,000, and with $32,907 interest-free advances we received from our related
parties, of which $2,907 was associated with reimbursable expenses paid on behalf of the Company.
We
did not generate sufficient cash flows from our operating activities to satisfy our cash requirements for the six month period
ended June 30, 2016. There is no assurance that we will be able to generate sufficient cash from our operations to repay the amounts
owing under these notes and advances payable, or to service our other debt obligations. If we are unable to generate sufficient
cash flow from our operations to repay the amounts owing when due, we may be required to raise additional financing from other
sources.
We
intend to seek additional financing for our working capital, in the form of equity or debt, to provide us with the necessary capital
to accomplish our plan of operation. There can be no assurance that we will be successful in our efforts to raise additional capital.
Cash
Flow
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
Cash flows used in operating activities
|
|
$
|
(82,489
|
)
|
|
$
|
(47,390
|
)
|
Cash flows provided by financing activities
|
|
|
407,907
|
|
|
|
8,500
|
|
Net increase (decrease) in cash during the period
|
|
$
|
325,418
|
|
|
$
|
(38,890
|
)
|
Net
cash used in operating activities
: Our net cash used in operating activities increased by $35,099, or 74%, to $82,489 for
the six months ended June 30, 2016, compared with $47,390 for the comparable period in 2015. During the six months ended June
30, 2016 we used $85,450 to cover our cash operating costs, and to increase our prepaid expenses by $4,495. These uses of cash
were offset by increase in our accounts payable of $7,456.
During
the six months ended June 30, 2015 we used $36,521 to cover our cash operating costs, increase our prepaid expenses by $3,000,
and to decrease our account payable by $10,869. These uses of cash were offset by $3,000 increase in our deferred revenue associated
with consulting services agreement.
Net
cash
provided by financing activities
: Our net cash provided by financing activities increased by $399,407, or 4,699%,
to $407,907 for the six months ended June 30, 2016 compared with $8,500 for the comparable period in 2015. We received $375,000
in gross proceeds from a private placement for 3,750,000 shares of our common stock at $0.10 per share, which we closed on June
21, 2016. We received $30,000 advance from our CEO and President free of interest and payable on demand. In addition, our CEO
and a director made certain payments on behalf of the Company, which payments amounted to $2,907.
Subsequent
to June 30, 2016, on August 1, 2016, we renegotiated the terms of the Note Payable, extending the maturity date to August 2, 2016,
and reducing the interest rate to 0.75%. We repaid the Note Payable and accrued interest totaling $100,505 in accordance with
the new terms on August 2, 2016.
During
the six months ended June 30, 2015, we received $8,500 in subscriptions to the shares of our common stock.
During
the six months ended June 30, 2016 and 2015, we did not have any investing transactions that would have effected our cash flows.
Going
Concern
At
June 30, 2016, we had a working capital of $162,163 and cash on hand of $364,445, which is not sufficient enough to carry out
our current plan of operation, however we are in the process of trying to procure funds sufficient to fund our operations until
we are able to finance our operations through cash flow. There can be no assurance that we will be able to procure funds sufficient
for such purpose. If operating difficulties or other factors (many of which are beyond our control) delay our realization of revenues
or cash flows from operations, we may be limited in our ability to pursue our business plan. Moreover, if our resources from obtaining
additional capital or cash flows from operations, once we commence them, do not satisfy our operational needs or if unexpected
expenses arise due to unanticipated pressures or if we decide to expand our business plan beyond its currently anticipated level
or otherwise, we will require additional financing to fund our operations, in addition to anticipated cash generated from our
operations. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available
or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities,
develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In a worst-case
scenario, we might not be able to fund our operations or to remain in business, which could result in a total loss of our stockholders’
investment. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership
of our stockholders would be reduced, and these newly issued securities might have rights, preferences or privileges senior to
those of existing stockholders.
Income
Tax Expense (Benefit)
The
Company has a prospective income tax benefit resulting from a net operating loss carry forward and startup costs that may offset
any future operating profit.
Impact
of Inflation
The
Company believes that inflation has had a negligible effect on operations over the past quarter.
Capital
Expenditures
The
Company expended no amounts on capital expenditures for the six months ended June 30, 2016.
Unproved
Mineral Properties
As
discussed above, in section “
General
” of this MD&A, on December 17, 2015, we entered into a definitive
agreement (the “Agreement”) with Nevada Canyon Gold Corporation, a Nevada corporation (“NCG”), to acquire
all of NCG’s rights, titles and interests in and into an exploration agreement with an option to form a joint venture with
Walker River Resources Corp., a Canadian public company (“WRR”), dated September 15, 2015. WRR owns a 100% undivided
interest in and to the Lapon Canyon Gold Property, containing the Lapon Canyon claims (“the Property”), which is the
subject of the Agreement.
The
Agreement does not grant us an interest in or to the Property, or any equity interest in WRR, but rather, grants us the right
to earn up to an undivided 50% interest in the Property by incurring expenditures of $500,000 (over a two-year period) in exploration
expenses in a work program established and operated by WRR on the Property. Thereafter, the Agreement grants us an option to enter
into a joint venture with WRR for further exploration and development of the Property.
The
Property consists of 36 claims (Sleeper claims 1–36) comprising 720 acres situated in the Wassuk Range (Mt. Grant Mining
District), approximately 40 miles southeast of Yerington, Nevada. The Property is easily accessible by a well-maintained secondary
state road to the Lapon Canyon road, which is generally a 15% grade canyon road. A state grid power transmission line passes within
two miles of the property. An ample source of water exists (for drilling and other activities) in several locations on the Property.
As
of June 30, 2016, we have incurred $39,124 in exploration expenses associated with our exploration program on the Property.
Off-Balance
Sheet Arrangements
None.
Use
of Estimates:
Areas
where significant estimation judgments are made and where actual results could differ materially from these estimates are the
carrying value of certain assets and liabilities which are not readily apparent from other sources and the classification of net
operating loss and tax credit carry forwards.
We
believe the following is among the most critical accounting policies that impact our financial statements:
We
evaluate impairment of our long-lived assets by applying the provisions of SFAS No. 144. In applying those provisions, we have
not recognized any impairment charge on our long-lived assets during the six months ended June 30, 2016.