REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholders & Board of Directors
Black Rock Petroleum Company
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of Black Rock Petroleum Company as of April 30, 2019 and 2018 and the related statements of operations, changes in stockholders’
deficit, cash flows, and the related notes (collectively referred to as “financial statements”) for the years then
ended. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of April 30, 2019 and 2018 and the results of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. As discussed in Note #3 to the financial statements, although
the Company has limited operations it has yet to attain profitability. This raises substantial doubt about its ability to continue
as a going concern. Management’s plan in regard to these matters is also described in Note #3. The financial statements do
not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based
on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required
to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable
basis for our opinion.
/S/ MICHAEL GILLESPIE & ASSOCIATES, PLLC
We have served as the Company’s auditor since 2018.
Seattle, Washington
April 23, 2020
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Black Rock Petroleum Company, (“Black
Rock” or “The Company”) located at 1361 Peltier Drive, Point Roberts WA, 98281, was formed on April 24, 2013
under the laws of the State of Nevada. We have not commenced our planned operations. The Company’s fiscal year end
is April 30.
We have not generated any operating revenues to date.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10
of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted
in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency
and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy
which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described
below:
Level 1: Quoted market prices available in active markets for identical
assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices
in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally unobservable inputs and
not corroborated by market data.
The carrying amount of the Company’s
financial assets and liabilities, such as cash and accounts payable approximate their fair value because of the short maturity
of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s
best estimate of interest rates that would be available to the Company for similar financial arrangements at April 30, 2019.
Income Taxes
The Company follow ASC 740-10-30, which requires
recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between
the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which
the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes
it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income
in the period that includes the enactment date.
On December 22, 2017, the Tax Cuts and Jobs
Act (TCJA) was signed into law by the President of the United States. TCJA is a tax reform act that among other things, reduced
corporate tax rates to 21 percent effective January 1, 2018. FASB ASC 740, Income Taxes, requires deferred tax assets and liabilities
to be adjusted for the effect of a change in tax laws or rates in the year of enactment, which is the year in which the change
was signed into law. Accordingly, the Company adjusted its deferred tax assets and liabilities at December 31,2017, using the new
corporate tax rate of 21 percent. See Note 5.
The Company adopted ASC 740-10-25 (“ASC
740-10-25”) with regard to uncertainty income taxes. ASC 740-10-25 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood
of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and
penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments
to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Net income (loss) per common share
Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is
computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares
of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common
shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first
period presented. There were no potentially dilutive shares for the years ended April 30, 2019 and 2018.
Recently issued accounting pronouncements
In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet
and requires expanded disclosures about leasing arrangements. The new standard supersedes the present U.S. GAAP standard on
leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations.
ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after
December 15, 2018, with early adoption permitted. There has been no material impact on our financial statements as a result
of adopting this standard.
On June 20, 2018, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718):
Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve
financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers,
etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards.
Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo revaluing the award after
this date. The Company has chosen to early adopt this standard. There has been no material impact on our financial statements as
a result of adopting this standard.
The Company has implemented all new accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless
otherwise disclosed, and the Company 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 – GOING CONCERN
As reflected in the accompanying financial
statements, the Company has an accumulated deficit of $91,309 at April 30, 2019, has no current operations and has generated no
income to date. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements
have been prepared assuming that the Company will continue as a going concern. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern. The Company is currently seeking an acquisition opportunity
with a company in the mining sector.
NOTE 4 - RELATED PARTY TRANSACTIONS
Since the fiscal year ended April 30, 2016,
Zoltan Nagy, CEO and Director, has advanced the Company funds to pay for general operating expenses. As of April 30, 2019 and 2018,
$62,510 and $62,100, respectively, is due to Mr. Nagy. The amount due is unsecured, non-interest bearing and due on demand.
NOTE 5 – INCOME TAXES
At April 30, 2019, the Company had net operating
loss carry forwards of approximately $19,200 that may be offset against future taxable income. No tax benefit has been
reported in the April 30, 2019 or 2018 financial statements since the potential tax benefit is offset by a valuation allowance
of the same amount.
The provision for Federal income tax consists
of the following for the years ended April 30, 2019 and 2018:
|
|
2019
|
|
|
2018
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
Current operations
|
|
$
|
(486
|
)
|
|
$
|
(563
|
)
|
Less: valuation allowance
|
|
|
486
|
|
|
|
563
|
|
Net provision for Federal income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
The cumulative tax effect at the expected rate
of 21% (the U.S. federal income tax rate of 21% is being used due to the new tax law recently enacted) of significant items comprising
our net deferred tax amount is as follows as of April 30, 2019 and 2018:
|
|
2019
|
|
|
2018
|
|
Deferred Tax Assets:
|
|
|
|
|
|
|
NOL Carryover
|
|
$
|
19,200
|
|
|
$
|
18,700
|
|
Less valuation allowance
|
|
|
(19,200
|
)
|
|
|
(18,700
|
)
|
Net deferred tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
Due to the change in ownership provisions of
the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should
a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
ASC Topic 740 provides guidance on the accounting
for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine
whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the
position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize
in the financial statements.
The Company includes interest and penalties
arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of April 30,
2019, the Company had no accrued interest or penalties related to uncertain tax positions.
NOTE 6 – SUBSEQUENT EVENTS
Management has evaluated subsequent
events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statement were
available to be issued and has determined that there are no material subsequent events that require disclosure in these financial
statements other than the following.
On April 2, 2020, the Company entered into
a Definitive Merger Agreement with Optimum Mining, Inc. (“Optimum”). Under
the terms of the agreement, Black Rock proposes to acquire all of the 100,000,000 Issued and Outstanding Securities of Optimum
in consideration for 99,500,000 of the total 120,850,000 Black Rock Common Shares issued and outstanding. Black Rock has agreed
to appoint Mr. Walter J. Weekes, Sr. to the Board of Directors, President and Chief Financial Officer. The Board of Black Rock
appointed Kimberly S. Halvorson as Secretary of the Company. The Company plans to complete all the SEC required Filings with FINRA,
OTC Markets and the State of Nevada regarding the proposed Corporate Actions.