Item
1. Financial Statements.
AUREUS
INCORPORATED
CONDENSED
BALANCE SHEETS
|
|
January
31, 2016
|
|
|
October
31, 2015
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
518
|
|
|
$
|
924
|
|
Prepaid Professional Fees
|
|
|
999
|
|
|
|
1,248
|
|
Total assets
|
|
$
|
1,517
|
|
|
$
|
2,172
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
19,115
|
|
|
$
|
8,115
|
|
Accrued Expenses
|
|
|
962
|
|
|
|
175
|
|
Note payable
|
|
|
40,000
|
|
|
|
20,000
|
|
Loan from Related Party
|
|
|
24,656
|
|
|
|
24,656
|
|
|
|
$
|
84,733
|
|
|
$
|
52,946
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit :
|
|
|
|
|
|
|
|
|
Common stock; authorized 150,000,000;
126,450,000 shares at $0.001 par issued and outstanding at January 31, 2016 and October 31, 2015
|
|
$
|
126,450
|
|
|
$
|
126,450
|
|
Additional Paid in Capital
|
|
|
(95,700
|
)
|
|
|
(95,700
|
)
|
Accumulated deficit
|
|
$
|
(113,966
|
)
|
|
$
|
(81,524
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders’ deficit
|
|
$
|
(83,216
|
)
|
|
$
|
(50,774
|
)
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
1,517
|
|
|
$
|
2,172
|
|
The
accompanying notes are an integral part of these financial statements
AUREUS
INCORPORATED
CONDENSED
STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
For
the Three Month
Period Ended
January 31, 2016
|
|
|
For
the Three Month
Period Ended
January 31, 2015
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
$
|
31,706
|
|
|
$
|
10,931
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
$
|
31,706
|
|
|
$
|
10,931
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
736
|
|
|
|
-
|
|
Net
loss for the period
|
|
$
|
(32,442
|
)
|
|
$
|
(10,931
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
126,450,000
|
|
|
|
126,450,000
|
|
The
accompanying notes are an integral part of these financial statements
AUREUS
INCORPORATED
CONDENSED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
For
the Three Month
Period Ended
January
31, 2016
|
|
|
For
the Three Month
Period Ended
January
31, 2015
|
|
|
|
|
|
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(32,442
|
)
|
|
$
|
(10,931
|
)
|
Decrease / (Increase)
in prepaid expenses
|
|
|
250
|
|
|
|
(4,000
|
)
|
Increase in accounts
payable
|
|
|
11,000
|
|
|
|
-
|
|
Increase in accrued
expenses
|
|
|
786
|
|
|
|
-
|
|
Net
cash used in operating activities
|
|
|
(20,406
|
)
|
|
|
(14,931
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from notes
payable
|
|
|
20,000
|
|
|
|
-
|
|
Loan from related
party
|
|
|
-
|
|
|
|
597
|
|
Net cash provided
by financing activities
|
|
|
20,000
|
|
|
|
597
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash during the period
|
|
|
(406
|
)
|
|
|
(14,334
|
)
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
924
|
|
|
|
32,725
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
518
|
|
|
$
|
18,391
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information:
|
|
|
|
|
|
|
|
|
Cash paid during
the period
|
|
|
|
|
|
|
|
|
Taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these financial statements
AUREUS
INCORPORATED
NOTES
TO CONDESNED UNAUDITED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND BASIS OF PRESENTATION
Aureus
Incorporated (the “Company”) was incorporated in the State of Nevada on April 19, 2013. The Company was organized
to develop and explore mineral properties in the State of Nevada. On October 1, 2014, the Company entered into a Purchase Agreement
with Gold Exploration Management Services, Inc. (“Gold Exploration”) pursuant to which the Company purchased 100%
of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres, in Elko County, Nevada (the “Gold
Creek Property”) for $15,000. The claims were registered in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s
title to the mining claims on the Gold Creek Property expired but has been re-staked by the Company. In September 2015, the Interior
for Land and Minerals Management (“ILLM”) imposed a prohibition on mining activities on 10 million acres of public
and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage-grouse and its habitat
from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land
Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred
into the Company’s name or to conduct any activities on the Gold Creek Property.
The accompanying
unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.
It is management’s opinion, however that all material adjustments (consisting of normal recurring adjustments) have been
made which are necessary for a fair financial statements presentation. These financial statements and related notes are presented
in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars
and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended October
31, 2015. The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial
statements and accompanying notes filed with the Securities and Exchange Commission in the Company’s Annual Report on Form
10-K for the fiscal year ended October 31, 2015.
Operating results and cash flows for interim
periods are not necessarily indicative of results that can be expected for the entire year.
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES
Cash
and Cash Equivalents
The
Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible
into cash to be cash equivalents. As of January 31, 2016 and October 31, 2015, there were no cash equivalents.
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.
Impairment
of Long Lived Assets
The
Company tests its assets for recoverability whenever events or changes in circumstances indicate that the related carrying amount
may not be recoverable, which includes comparing the carrying amount of a long-lived asset to the sum of the undiscounted cash
flows expected to result from the use and eventual disposition of the asset. An impairment loss would be measured as the amount
by which the carrying amount of a long-lived asset exceeds its fair value. For the Company’s mining claims, this test includes
examining the discounted and undiscounted cash flows associated with value beyond proven and probable reserves, in determining
whether the mining claim is impaired.
Start-up
Expenses
The
Company expenses costs associated with start-up activities as incurred. Accordingly, start-up costs associated with the Company’s
formation have been included in the Company’s general and administrative expenses.
Mining
Interests and Exploration Expenditures
Exploration
costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mineral properties
and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs
would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral interests
are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.
If a property is abandoned or sold, its capitalized costs are charged to operations.
Income
Taxes
The
Company utilizes FASB ACS 740, “
Income Taxes
,” which requires the 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 determined based on the difference between the tax basis of assets and liabilities
and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The
accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition,
measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The
Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not
that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based
on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices
and precedents.
Interest
and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance
with ASC Topic 740-10-50-19.
We
have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure
for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of
the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 and have analyzed
filing positions in United States jurisdictions where we are required to file income tax returns, as well as all open tax years
in these jurisdictions. We have identified the United States as our “major” tax jurisdiction. Generally, we remain
subject to United States examination of our income tax returns.
Fair
Value of Financial Instruments
The
Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “
Fair Value
Measurements and Disclosures
” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair
value and requires expanded disclosures regarding fair value measurements.
FASB
ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer
a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement
date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs,
where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure
fair value:
|
●
|
Level
1: Quoted prices in active markets for identical assets or liabilities
|
|
|
|
|
●
|
Level
2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the related assets or liabilities.
|
|
|
|
|
●
|
Level
3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities.
|
Basic
and Diluted Loss Per Share
Net
loss per share is calculated in accordance with FASB ASC 260,
Earnings Per Share
, for the period presented. ASC 260 requires
presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”)
is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share (“Diluted EPS”) is similarly calculated. Dilution is computed by applying
the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market
price during the period. For the three months ended January 31, 2016 and 2015, there were no potentially dilutive securities.
Recent
Accounting Pronouncements
The
Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any,
on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements
will have a significant effect on its condensed consolidated financial statements.
In
June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments
When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This
ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects
vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective
for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance
to have a material impact on the consolidated financial statements.
In
August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40),”
which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going
concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new
standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is
permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.
In
April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest (Subtopic 835-30),” related to the presentation
of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented
on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized
to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods
within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement
for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial
statements.
NOTE
3 – GOING CONCERN
The
Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its
ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its
shareholders or other sources, as may be required.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the
above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications
of liabilities that may result should the Company be unable to continue as a going concern.
Management
is endeavoring to begin exploration activities however, may not be able to do so within the next fiscal year. Management is also
seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity
securities, which may not be available on commercially reasonable terms, if at all.
If
such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results
will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders.
Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve
restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership
of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to
those of the holders of our common stock.
NOTE
4 – LOAN FROM RELATED PARTY
During
the period from April 19, 2013 to October 31, 2015, the Company received advances totaling $24,656 from Dong Gu Kang and Min Jung
Kang, the Company’s former executive officers and directors (the “Selling Stockholders”). The advance was unsecured,
non-interest bearing and due upon demand giving 30 days written notice to the borrower. In connection with the Stock Purchase
Agreement, dated September 30, 2015, among the Company, the Selling Stockholders and Maverick, LLC, a Nevis limited liability
company (“Maverick”), pursuant to which Maverick purchased 90,000,000 shares of common stock of the Company from the
Selling Stockholders, Maverick assumed $24,656 in outstanding debt owed the Selling Stockholders by the Company; constituting
100% of the debt owed the Selling Stockholders of the Company, pursuant to a Debt Assumption Agreement, dated September 30, 2015,
between the Company, the Selling Stockholders and Maverick. Maverick beneficially owns 71.7% of the common stock of the Company.
The
balance of loan from related party as of January 31, 2016 and October 31, 2015 are $24,656 and $24,656, respectively.
NOTE
5 – NOTES PAYABLE
On
September 9, 2015, we sold Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate
of 5% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale. As of January 31, 2016 and October 31, 2015, accrued interest amounted to $579 and $175, respectively.
On
November 16, 2015, we sold Craigstone a promissory note in the principal amount of $20,000, bearing interest at the rate of 5%
per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale. As of January 31, 2016 accrued interest amounted to $333.
NOTE
6 – DEPOSIT ON MINERAL PROPERTY ACQUISITION
On
October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. to purchase 11
claims in Mineral County Nevada known as the Gold Creek Property (the “Gold Creek Property”). The Company paid a total
of $15,000 for the purchase of the Gold Creek Property, and was reflected in the financial statements as a deposit, until such
time as the ownership transferred to the Company. In September 2015, the Interior for Land and Minerals Management (“ILLM”)
imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold
Creek Property, in order to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration
and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has
not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities
on the Gold Creek Property. On October 31, 2015 the Company recorded an impairment of $15,000 due the Land Freeze.
NOTE
7 – COMMON STOCK
On
November 17, 2015, the Company, authorized a fifteen-for-one (15:1) forward stock split of the Company’s common stock, par
value $0.001 per share without changing the authorized number or par value of the Common Stock and with fractional shares resulting
from the Forward Split being rounded up to the nearest whole number. The Forward Split became effective on November 25, 2015.
As a result of the Forward Split, the number of the Company’s issued and outstanding shares of Common Stock were increased
from 8,430,000 to 126,450,000. The amounts are being presented retroactive in the financial statements at January 31, 2016.
NOTE
8 – SUBSEQUENT EVENTS
On
March 22, 2016, we sold Craigstone Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of
5% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward
Looking Statements
Some
of the information in this section contains forward-looking statements that involve substantial risks and uncertainties. You can
identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,”
“believe,” “estimate” and “continue,” or similar words. You should read statements that contain
these words carefully because they:
●
|
|
discuss
our future expectations;
|
|
|
|
●
|
|
contain
projections of our future results of operations or of our financial condition; and
|
|
|
|
●
|
|
state
other “forward-looking” information.
|
We
believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately
predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those
anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors,”
“Business” and elsewhere in this report.
Unless
stated otherwise, the words “we,” “us,” “our,” the “Company” or “Aureus,”
“ARSN” in this section collectively refer to Aureus Incorporated, a Nevada corporation.
Plan
of Operations
We are a startup mining exploration company
without mining operations. Since our inception, we have not generated any revenues and our net losses were $(32,442) for the three
months ended January 31, 2016 and our accumulated stockholders deficit was $(83,216) at January 31, 2016. In their audit report
included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2015, our auditors have expressed their doubt
as to our ability to continue as a going concern. To date, we have funded our operations by issuing equity and debt and our lack
of capital has delayed the implementation of our business plan. There can be no assurances that we will be able to obtain such
capital on sufficient terms, if at all.
Corporate
History; Overview
The
Company was incorporated in the Nevada on April 19, 2013.
On
September 30, 2015, the Company, Dong Gu Kang and Min Jung Kang, the principal stockholders of the Company (the “Selling
Stockholders”), and Maverick, LLC, a Nevis limited liability company (“Maverick”), entered into a stock purchase
agreement (the “Stock Purchase Agreement”), pursuant to which Maverick purchased an aggregate of 90,000,000 shares
(the “Shares”) of common stock, par value $0.001 per share (the “Common Stock”), of the Company from the
Selling Stockholders in consideration for $0.001 per share, for a total purchase price of $6,000. The Shares represent approximately
71.17% of the 126,450,000 outstanding shares of Common Stock of the Company, and the transaction constituted a change in control
of the Company. Maverick purchased the Shares by issuing each Selling Stockholder a non-interest bearing promissory note for his
pro rata portion of the Shares. Both promissory notes are unsecured, mature December 30, 2016 and may be prepaid without penalty.
Ester Barrios is the Managing Member of Maverick has voting and dispositive control over these securities.
In
connection with the Stock Purchase Agreement, the Company, Selling Stockholders and Maverick entered into a debt assumption agreement
(the “Debt Assumption Agreement”) pursuant to which Maverick assumed an aggregate of $24,656 in outstanding debt owed
the Selling Stockholders by the Company; constituting 100% of the debt owed the Selling Stockholders of the Company.
The
Stock Purchase Agreement and Debt Assumption Agreement contained customary representations, warranties and covenants made by the
Selling Stockholders, Maverick and the Company.
On
September 17, 2015, the board of directors (the “Board”) of the Company increased the size of the Board to three persons
and appointed Mr. Tracy Fortner to fill the created vacancy. Directors serve for a period of one year until the next stockholders’
meeting and until their respective successor is elected and qualifies.
On
September 17, 2015, Dong Gu Kang and Min Jung Kang resigned from the Board and as executive officers of the Company, effective
immediately. Dong Gu Kang had been serving as the President, Chief Executive Officer, Secretary of the Company. Min Jung Kang
had been serving as the Treasurer of the Company. Their respective departures were not related to any issues regarding financial
disclosures or accounting or legal matters.
On
September 17, 2015, the Board appointed Tracy Fortner as the President, Chief Executive Officer, Secretary and Treasurer of the
Company.
On
November 25, 2015, we effected a fifteen-for-one (15:1) forward stock split (the “Forward Split”) of the Company’s
common stock, without changing the authorized number or par value of the Common Stock and with fractional shares resulting from
the Forward Split being rounded up to the nearest whole number. As a result of the Forward Split, the number of the Company’s
issued and outstanding shares of Common Stock was increased from 8,430,000 to 126,450,000. Unless noted otherwise, all share amounts
in this Report reflect the Forward Split.
Overview
On
October 1, 2014, we entered into a Purchase Agreement with Gold Exploration Management Services, Inc. (“Gold Exploration”)
pursuant to which we purchased 100% of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres,
in Elko County, Nevada (the “Gold Creek Property”) for $15,000. The Gold Creek Property is accessible via Nevada State
Route #225 connecting to county road USFS Road #745) which provide access to the immediately adjacent Gold Creek Ranger Station.
The nearest commercial airport is in Reno, approximately 260 road miles from the Gold Creek Property. The claims were registered
in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s title to the mining claims on the Gold Creek Property
expired but has been re-staked by the Company. Due to the Land Freeze (as defined below) by the ILLM in 2015 of 10 million acres
of public and National Forest System lands identified as Sagebrush Focal Areas in Idaho, Montana, Oregon, Utah, Wyoming and Nevada,
including the Gold Creek Property, to protect the greater sage-grouse, Gold Creek’s title to the mining claims on the Gold
Creek Property has not been transferred into the Company’s name. The Company anticipates once the Land Freeze is lifted,
of which there can be no assurances, Gold Exploration will apply to renew the claims and at that point the claims are expected
to be transferred to the Company. There can be no assurances that the Land Freeze will be lifted or that if lifted, we will have
sufficient funds to have the mining claims transferred into the Company’s name. The $15,000 paid by the Company for the
purchase of the Gold Creek Property is reflected in the financial statements as a deposit, until such time as the ownership transferred
to the Company.
Land
Freeze – Force Majeure
Commencing
in 2010, there has been heightened awareness of the conservation of the greater sage-grouse, the largest grouse found in North
America currently inhabiting the sage-steppe ecosystems in Montana, southern Idaho, northeastern California, eastern Oregon, northwestern
Colorado, and broader sections of Wyoming, Utah and Nevada.
In
2014, Nevada adopted the Nevada Greater Sage-grouse Conservation Plan of 2014 (“2014 State Plan”), a sage-grouse conservation
plan which provides broad goals, objectives, and management actions to ameliorate the primary threats to sage-grouse in Nevada.
Nevada is also in the process of developing a Nevada Sage-Grouse Strategic Action Plan (“SAP”) which is expected to
into greater detail and identify areas to focus conservation efforts in order to achieve the broad goals and objectives outlined
in the 2014 State Plan.
Also,
on September 23, 2015, the Assistant Secretary of the Interior for Land and Minerals Management (“ILLM”) approved
an application to withdraw (
i.e.,
prohibiting mining) approximately 10 million acres of public and National Forest System
lands identified as Sagebrush Focal Areas in Idaho, Montana, Nevada, Oregon, Utah, and Wyoming from location and entry under the
United States mining laws to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration
and mining, subject to valid existing rights (the “Land Freeze”). Comments on the proposed withdrawal application
or scoping comments on issues to be analyzed in the Environmental Impact Statement must have been received by December 23, 2015.
The
Company’s Property is included in the approximately 10 million acres of land currently closed for mining exploration under
the Land Freeze by the ILLM and being studied by Nevada in connection with SAP. Therefore, under this force majeure event, the
Company is currently prohibited from conducting any mining activities on the Gold Creek Property and, depending on the outcomes
of the ILLM’s Environmental Impact Statement and Nevada’s SAP, the Company may be permanently prohibited or restricted
from conducting any activities on the Gold Creek Property. The Company intends, however, to pursue potential acquisitions of other
land on which it may conduct mining activities. The Company is not currently a party to any oral or written agreement to purchase
any land at this point in time.
If
and when we are permitted to conduct exploration activities on the Gold Creek Property or any additional land we acquire, our
goal is to assess whether our claim or claims possess any commercially viable mineral deposits by a four phase program.
During
the next 12 months, we do not anticipate generating any revenue. If additional funds become required, the additional funding will
come from equity financing from the sale of our equity of debt securities or sale of part of our interest in our mining claims.
If we are successful in completing an equity or convertible debt financing, existing shareholders will experience dilution of
their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we
will be able to raise sufficient funding from the sale of our securities to fund our operations or programs. In the absence of
such financing, our business will fail.
We
may consider entering into a joint venture partnership by linking with another resource company to provide the required funding
to complete our four phase exploration program. We have not undertaken any efforts to locate a joint venture partner for the program.
If we enter into a joint venture arrangement, we will assign a percentage of our interest in our mining claims to the joint venture
partner.
Based
on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We base this expectation, in
part, on the fact that very few mining claims in the exploration stage ultimately develop into producing, profitable mines. Our
future financial results are also uncertain due to a number of factors, some of which are outside of our control. These factors
include, but are not limited to:
|
●
|
Our
ability to raise additional funding;
|
|
●
|
The
market price for, gold and silver;
|
|
●
|
The
results of our proposed exploration programs on the mineral property; and
|
|
●
|
Our
ability to find joint venture partners for the development of our property interests
|
Due
to our lack of operating history and present inability to generate revenues, our auditors have stated their opinion that there
currently exists substantial doubt about our ability to continue as a going concern. Even if we complete our current exploration
program and it is successful in identifying a mineral 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 reserve.
Below
is our budget for our proposed four phase exploration program.
Phases
I-IV Exploration Program
BUDGET
Phase I
|
|
Unit
Cost Incl Tax
|
|
|
Units
|
|
|
Total
Cost
|
|
Budget–Initial Engineering Report
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost Element
|
|
|
|
|
|
|
|
|
|
|
|
|
Geologist Professional Fees
|
|
|
800
|
|
|
|
6
|
|
|
|
4,800
|
|
Rock, Soil and Stream Sediment Samples
40 Samples
|
|
|
30
|
|
|
|
40
|
|
|
|
1,200
|
|
Field Vehicles: Transportation Inclusive
|
|
|
100
|
|
|
|
5
|
|
|
|
500
|
|
Compilation and Data Input
|
|
|
700
|
|
|
|
3
|
|
|
|
2,100
|
|
Report Preparation ,Drafting and Copying,
Communications
|
|
|
900
|
|
|
|
1
|
|
|
|
900
|
|
Total Including Contingencies
|
|
|
|
|
|
|
|
|
|
|
9,500
|
|
BUDGET
PHASE II
|
|
Unit
Cost Incl Tax
|
|
|
Units
|
|
|
Total
Cost
|
|
Geochemical Sampling: Soil,
rock and Talus Fines:
|
|
|
300
|
|
|
|
10
|
|
|
|
3,000
|
|
Geological Mapping and Supervision
|
|
|
800
|
|
|
|
10
|
|
|
|
8,000
|
|
Environmental Permitting and Bonding
|
|
|
8,000
|
|
|
|
1
|
|
|
|
8,000
|
|
Assays and Analyses
|
|
|
28
|
|
|
|
50
|
|
|
|
1,400
|
|
Sample and Materials Transportations
|
|
|
1,000
|
|
|
|
1
|
|
|
|
1,000
|
|
Field Vehicles
|
|
|
120
|
|
|
|
10
|
|
|
|
1,200
|
|
Compilation and Data Input
|
|
|
700
|
|
|
|
2
|
|
|
|
1,400
|
|
Report Preparation ,Drafting and Copying,
Communications
|
|
|
1,000
|
|
|
|
1
|
|
|
|
1,000
|
|
Subtotal
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
Contingency 10%
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
BUDGET PHASE II
|
|
|
|
|
|
|
|
|
|
|
27,500
|
|
BUDGET
PHASE III
|
|
Unit
Cost Incl Tax
|
|
|
Units
|
|
|
Total
Cost
|
|
Geochemical Sampling: Rock
,Detailed Target Definition
|
|
|
20
|
|
|
|
300
|
|
|
|
6,000
|
|
Geological Mapping and Supervision
|
|
|
800
|
|
|
|
16
|
|
|
|
12,800
|
|
Environmental Permitting and Bonding
|
|
|
11,000
|
|
|
|
1
|
|
|
|
11,000
|
|
Road and Trail preparation
|
|
|
6,000
|
|
|
|
1
|
|
|
|
6,000
|
|
Trenching and detailed sampling
|
|
|
10,000
|
|
|
|
1
|
|
|
|
10,000
|
|
Assays and Analyses
|
|
|
28
|
|
|
|
150
|
|
|
|
4,200
|
|
Sample and Materials Transportations
|
|
|
50
|
|
|
|
40
|
|
|
|
2,000
|
|
Field Vehicles
|
|
|
120
|
|
|
|
12
|
|
|
|
1,440
|
|
Compilation and Data Input
|
|
|
700
|
|
|
|
8
|
|
|
|
5,600
|
|
Report Preparation, Drafting and Copying,
Communications
|
|
|
2,000
|
|
|
|
1
|
|
|
|
2,000
|
|
Subtotal
|
|
|
|
|
|
|
|
|
|
|
61,040
|
|
Contingency10%
|
|
|
|
|
|
|
|
|
|
|
6,104
|
|
BUDGET PHASE III
|
|
|
|
|
|
|
|
|
|
|
67,144
|
|
BUDGET-
PHASE IV
|
|
Unit
Cost Incl Tax
|
|
|
Units
|
|
|
Total
Cost
|
|
Diamond Drilling 3000Feet
|
|
|
40
|
|
|
|
3,000
|
|
|
|
120,000
|
|
Mob/Demob
|
|
|
10,000
|
|
|
|
1
|
|
|
|
10,000
|
|
Geological Mapping and Supervision
|
|
|
800
|
|
|
|
30
|
|
|
|
24,000
|
|
Environmental Permitting and Bonding
|
|
|
15,000
|
|
|
|
1
|
|
|
|
15,000
|
|
Road and Trail preparation
|
|
|
6,000
|
|
|
|
1
|
|
|
|
6,000
|
|
Assays and Analyses
|
|
|
25
|
|
|
|
1,000
|
|
|
|
25,000
|
|
Sample and Materials Transportations
|
|
|
50
|
|
|
|
50
|
|
|
|
2,500
|
|
Field Vehicles
|
|
|
120
|
|
|
|
40
|
|
|
|
4,800
|
|
Compilation and Data Input
|
|
|
700
|
|
|
|
20
|
|
|
|
14,000
|
|
Report Preparation ,Drafting and Copying,
Communications
|
|
|
5,000
|
|
|
|
1
|
|
|
|
5,000
|
|
Subtotal
|
|
|
|
|
|
|
|
|
|
|
226,300
|
|
Contingency10%
|
|
|
|
|
|
|
|
|
|
|
22,630
|
|
BUDGET PHASE IV
|
|
|
|
|
|
|
|
|
|
|
248,930
|
|
Risks
and Uncertainties
There
are a number of known material risks and uncertainties that are reasonably likely to have a material impact on our revenues, operations,
liquidity and income over the short and long term. The primary risk that we face over the long term is that our mining claims
may not contain a commercially viable mineral deposit. If our mining claims do not contain a commercially viable deposit, this
will have a material effect on our ability to earn revenue and income as we will not be able to sell any minerals.
There
are a number of industry-wide risk factors that may affect our business. The most significant industry-wide risk factor is that
mineral exploration is an inherently risky business. Very few exploration companies go on to discover economically viable mineral
deposits or reserves that ultimately result in an operating mine.
In
order for us to commence mining operations we face a number of challenges which include finding qualified professionals to conduct
our exploration program, obtaining adequate financing to continue our exploration program, locating a viable ore body, partnering
with a senior mining company, obtaining mining permits, and ultimately selling minerals in order to generate revenue. Another
important industry-wide risk factor is that the price of commodities can fluctuate based on world demand and other factors. For
example, if the price of a mineral were to dramatically decline this could make any ore we have on our mining claims uneconomical
to mine. We and other companies in our business are relying on a price of ore that will allow us to develop a mine and ultimately
generate revenue by selling minerals.
Finally,
we face a risk of not being able to finance our exploration plans. With each unsuccessful attempt at locating a commercially viable
mineral deposit we become more and more unattractive in the eyes of investors. For the short term this is less of an issue because
we have enough funds to complete the first phase of our exploration program. However, over the long term this can become a serious
issue that can be difficult to overcome. Without adequate financing we cannot operate and complete our exploration on the Gold
Creek Property. However, this risk is faced by all exploration companies and it is not unique to us.
Results
of Operations
Three
Months Ended January 31, 2016 compared to January 31, 2015
Revenues
We
did not have any revenues for the three months ended January 31, 2016 and 2015, respectively.
General
and Administrative Expenses
We recognized general and administrative expenses
in the amount of $31,706 and $10,931 for the three months ended January 31, 2016 and 2015, respectively. The increase is a result
of increased professional fees.
Net Loss
We incurred a net loss of $32,442 for the
three months ended January 31, 2016, as compared to $10,931 for the comparable period of 2015. The increase in the net loss was
primarily the result of professional fees.
Liquidity and Capital Resources
As of January 31, 2016, the Company had a
cash balance of $518 and an accumulated deficit of $(113,966). We do not have sufficient funds to operate for the next twelve
months. There can be no assurance that additional capital will be available to the Company.
Since
inception, the Company has funded its operations through the sale of equity securities and loans from our executive officers.
To
date, we have raised $53,155 via two private offerings, of 6,0000,000 (90,000,000 post-Forward Split) shares of common stock subscribed
for at $0.001 to our former officers and directors, for a total cash proceeds of $6,000; 2,430,000 (36,450,000 post-Forward Split)
shares of common stock were subscribed for by 34 non-affiliate shareholders at a price of $0.01 for a total cash proceeds of $24,300.
The Company registered the 2,430,000 (36,450,000 post-Forward Split) shares of common stock on a Form S-1 declared effective by
the SEC on March 10, 2015.
The
Company also received loans from our former executive officers and directors in the amount of $24,656. The loans were unsecured,
non-interest bearing and are due upon demand giving 30 days’ written notice to the borrower. On September 30, 2015, Maverick
assumed this debt pursuant to a Debt Assumption Agreement, dated September 30, 2015.
On
September 9, 2015, we sold Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate
of 5% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale. As of January 31, 2016 and October 31, 2015, accrued interest amounted to $579 and $175, respectively.
On
November 16, 2015, we sold Craigstone a promissory note in the principal amount of $20,000, bearing interest at the rate of 5%
per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale. As of January 31, 2016 accrued interest amounted to $333.
As
of January 31, 2016, we had no agreements, arrangements or understandings with any person or entity to obtain funds through bank
loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability
to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.
Subsequent
Event:
On
March 22, 2016, we sold Craigstone Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of
5% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or all of the outstanding
principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the
amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy
and sale.
Going
Concern Consideration
The Company incurred a net loss of $(32,442)
for the three months ended January 31, 2016. In addition, the Company had a stockholders’ deficiency of $(83,216) at January
31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
The
Company believes that it will need approximately $250,000 to fund its expenses and execute its business plan over the next twelve
months. There can be no assurance that additional capital will be available to us or available on terms favorable to us. If additional
funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing
stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other
equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights
senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable
terms, we may be unable to fund and develop our business.
Cash
and Cash Equivalents
The
following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of
the periods presented.
|
|
For
the Three Months Ended
January
31,
|
|
|
|
2016
|
|
|
2015
|
|
Net cash used in operating
activities
|
|
$
|
(20,406
|
)
|
|
$
|
(14,931
|
)
|
Net cash provided by financing activities
|
|
$
|
20,000
|
|
|
$
|
597
|
|
Net cash used in
operations was $20,406 for the three months ended January 31, 2016 compared to $14,931 for the three months ended January 31,
2015. This increase was primarily attributable to increased losses which were partially offset by an increase in accounts payable.
New cash flows provided
by financing activities for the three months ended January 31, 2016 were $20,000 compared to $597 for the three months ended January
31, 2015. This increase was attributable to proceeds from the issuances of promissory notes.
Off-Balance
Sheet Arrangements
Our
liquidity is not dependent on the use of off-balance sheet financing arrangements (as that term is defined in Item 303(a) (4)
(ii) of Regulation S-K) and as of January 31, 2016, we had no such arrangements.
Recent
Accounting Pronouncements
Recent
accounting pronouncements issued by FASB (including the Emerging Issues Task Force), the AICPA and the SEC, did not or are not
believed by the Company management, to have a material impact on the Company’s present or future financial statements.
In
June 2014, the FASB issued ASU 2014-10, “Development Stage Entities”. The amendments in this update remove the definition
of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between
development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements
for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder
equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development
stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development
stage entity that in prior years it had been in the development stage. The amendments in this update are applied retrospectively.
The Company elected early adoption of ASU 2014-10. The adoption of ASU 2014-10 removed the development stage entity financial
reporting requirements from the Company. The company elected early adoption of ASU 2014-10.
No
other accounting pronouncements issued by FASB (including the Emerging Issues Task Force), the AICPA and the SEC, did not or are
not believed by the Company management, to have a material impact on the Company’s present or future financial statements.