Item 2.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
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FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) contains forward-looking
statements that involve known and unknown risks, significant uncertainties and
other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed, or implied, by those
forward-looking statements. You can identify forward-looking statements by the
use of the words may, will, should, could, expects, plans, anticipates,
believes, estimates, predicts, intends, potential, proposed, or continue or the
negative of those terms. These statements are only predictions. In evaluating
these statements, you should consider various factors which may cause our actual
results to differ materially from any forward-looking statements. Although we
believe that the exceptions reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Therefore, actual results may differ materially and adversely
from those expressed in any forward-looking statements. We undertake no
obligation to revise or update publicly any forward-looking statements for any
reason.
Liquidity and Capital Resources
Since inception we have raised capital through private
placements of common stock aggregating $30,000 to our shareholders.
Our capital commitments for the coming 12 months consist of
administrative expenses, expenses associated with the completion of our planned
exploration program and costs of distribution of the securities being registered
in this Prospectus. Including this exploration work and costs of this offering,
we estimate that we will have to incur the following expenses during the next 12
months:
Description
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Estimated
Completion Date
(1)
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Estimated
Expenses
($)
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License Renewal Fee
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1,600
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Legal and accounting fees and expenses
(2)
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12 months
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20,000
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General and administrative
expenses
(4)
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12 months
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1,500
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Exploration expenses
(3)
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12 months
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17,000
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Geological Mapping
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12 Months
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5,000
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Geophysical
Surveying
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12 Months
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3,000
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Geochemical
Surveying and Surface
Sampling
(includes
sample collection, assaying, and testing)
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12 months
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9,000
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Transfer Agent
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12 months
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1,500
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Total
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41,600
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(1)
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Budget Items are listed in order of priority.
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(2)
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Includes $2,500 legal fees and $17,500 for accounting and
auditing.
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(3)
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For Phase I and Phase II of the recommended exploration
program.
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(4)
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Represents printing and marketing expenses and
miscellaneous costs in the aggregate of $1,500 related to this offering
are included here.
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Since our initial share issuances, we have not raised
additional cash, forcing us to rely in the future upon cash advances from our
directors to meet current and future liabilities over the next few months. Based
on our cash on hand of approximately $4,418 as at June 30, 2018, we will be
required to raise approximately $37,182 to execute our current plan of
operation. We have no commitment from anyone to contribute funds to the Company.
If we are unable to raise sufficient funds to execute our plan of operation, we
intend to scale back our operations commensurately with the funds available to
us. In that regard, we will prioritize expenditures to (in
order of priority): (i) maintain our mineral exploration license ($1,600); (ii)
conduct our planned exploration activities ($17,000). Based upon the amount of
cash we have on hand and our priorities for expenditures, we do not have enough
cash to commence any exploration of our Gold Claim, including Phase I of the
exploration activities. We will need to raise additional capital, either through
a private placement of our securities or through loans from our President, in
order to fund the planned exploration costs to our property. To date, we have
not received any financing commitments to commit to our mineral property, and
there is no guarantee that we will be successful in so doing.
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We have no plant or significant equipment to sell, nor are we
going to buy any plant or significant equipment during the next 12 months. We
will not buy any equipment unless we locate a body of ore and determine that it
is economical to extract the ore from the land. We may attempt to interest other
companies to undertake exploration work on our Gold Claim through joint venture
arrangement or even the sale of part of our Gold Claim. Neither of these avenues
has been pursued as of the date hereof. Our geologist has recommended an
exploration program for our Gold Claim. However, even if the results of this
work suggest further exploration work is warranted, we do not presently have the
requisite funds and so will be unable to complete anything beyond the
exploration work on Phase I recommended in the Report until we raise more money
or find a joint venture partner to complete the exploration work. If we cannot
find a joint venture partner and do not raise more money, we will be unable to
complete any work beyond the exploration program recommended by our geologist.
If we are unable to finance additional exploration activities, we do not have
alternative operational plans. We do not intend to hire any employees at this
time. All of the work on our Gold Claim will be conducted by Mr. Cortez. He will
be responsible for supervision, surveying, exploration, and excavation and will
be capable of evaluating the information derived from the exploration and
excavation including advising our company on the economic feasibility of
removing any mineralized material we may discover.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon
which to base an evaluation of our performance as an exploration corporation. We
are an exploration stage company and have not generated any revenues from our
exploration activities. We cannot guarantee we will be successful in our
exploration activities. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of our properties, and possible cost overruns
due to price and cost increases in services.
To become profitable and competitive, we must invest in the
exploration of our property before we start production of any minerals that we
may find. Therefore, we must obtain equity or debt financing to provide the
capital required to fully implement both phases of our exploration program. We
have no assurance that financing will be available to us on acceptable terms. If
financing is not available on satisfactory terms, we may be unable to commence,
continue, develop or expand our exploration activities. Even if available,
equity financing could result in additional dilution to existing shareholder.
Results of Operations
Revenues
From our inception on July 26, 2013 (date of inception) to June
30, 2018, we did not generate any revenues. As a mineral pre-exploration
company, we anticipate that we will incur substantial losses for the foreseeable
future and do not believe we will be able generate revenues during the next 12
months.
Expenses
Three months ended June 30, 2018 and 2017
During the three months ended June 30, 2018, we incurred total
expenses of $17,808 compared to $11,130 during the three months ended June 30,
2017. The increase in operating expense was due to an increase of $9,386 for
general and administrative expense due to costs incurred for the Company to
obtain DTC eligibility status during the current period, offset by a decrease of
$2,708 in professional fees as the Company had lower legal fees compared to
prior year.
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Net Loss
During the three months ended June 30, 2018, we incurred a net
loss of $17,808 compared to a net loss of $11,130 for the three months ended
June 30, 2017. For the three months ended June 30, 2018 and 2017, the Company
incurred a loss per share of $nil.
Our Planned Exploration Program
We must conduct exploration to determine what, if any, amounts
of minerals exist on our Gold Claim and if such minerals can be economically
extracted and profitably processed.
Our planned exploration program is designed to efficiently
explore and evaluate our property.
Our anticipated exploration costs for Phase I and Phase II work
on our Gold Claim are approximately $17,000. We will have to raise additional
funds within the next 12 months in order to satisfy our ongoing cash
requirements and finance work on the Palayan Gold Claim. If we are unable to
raise additional funds within the next 12 months, we will need to delay further
exploration work on the Palayan Gold Claim.
Liquidity and Capital Resources
At June 30, 2018, we had cash and total assets of $4,418
compared with cash and total assets of $1,918 at March 31, 2018. The increase in
cash and total assets was due to an increase in cash as the Company received
$17,500 of funding from the President and Director of the Company for day-to-day
operations.
At June 30, 2018, we had liabilities of $138,808 compared to
liabilities of $118,500 at March 31, 2018. The increase in liabilities is due to
additional funding of $17,500 received from our President and Director during
the current year, and $2,808 increase in accounts payable and accrued
liabilities for unpaid professional fees incurred.
During the three months ended June 30, 2018, we did not have
any equity or capital transactions.
Cash Flows
Cash from Operating Activities
During the three months ended June 30, 2018, we used cash of
$15,000 for operating activities compared to $5,506 during the three months
ended June 30, 2017. The increase in cash used for operating activities is due
to costs incurred for DTC eligibility for $9,500.
Cash from Investing Activities
During the three months ended June 30, 2018 and 2017, we did
not have any investing activities.
Cash from Financing Activities
During the three months ended June 30, 2018, we received
$17,500 from our President and Director as compared to $nil during the three
months ended June 30, 2017. The amounts owed to our President and Director is
unsecured, non-interest bearing, and due on demand.
Trends
We are in the pre-exploration stage, have not generated any
revenue and have no prospects of generating any revenue in the foreseeable
future. We are unaware of any known trends, events or uncertainties that have
had, or are reasonably likely to have, a material impact on our business or
income, either in the long term of short term.
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Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to our stockholders.
Inflation
The effect of inflation on our revenues and operating results
has not been significant.
Critical Accounting Policies
Our financial statements are presented in United States dollars
and are prepared using the accrual method of accounting which conforms to US
GAAP.
We have elected to use the extended transition period for
complying with new or revised accounting standards under Section 102(b)(1) of
the JOBS Act. This election allows us to delay the adoption of new or revised
accounting standards that have different effective dates for public and private
companies until those standards apply to private companies. As a result of this
election, our financial statements may not be comparable to companies that
comply with public company effective dates.
The financial statements as of and for the three months ended June 30,
2018 included herein, which have not been audited pursuant to the rules and
regulations of the Securities and Exchange Commission, reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
financial position, results of operations and cash flows for the interim periods
on a basis consistent with the annual audited statements. All such adjustments
are of a normal recurring nature. The results of operations for interim periods
are not necessarily indicative of the results that may be expected for any other
interim period or for a full year. Certain information, accounting policies and
footnote disclosures normally included in financial statements prepared in
conformity with accounting principles generally accepted in the United States of
America have been omitted pursuant to such rules and regulations, although we
believe that the disclosures are adequate to make the information presented not
misleading.
Going Concern
The Companys financial statements have been prepared on a
going concern basis, which implies that the Company will continue to realize its
assets and discharge its liabilities in the normal course of business. The
Company has generated no revenues to date, and has an accumulated deficit of
$164,390. The continuation of the Company as a going concern is dependent upon
the continued financial support from its shareholders, the ability to raise
equity or debt financing, and the attainment of profitable operations from the
Company's future business. These factors raise substantial doubt regarding the
Companys ability to continue as a going concern. These financial statements do
not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
The Companys plan of action over the next twelve months is to
raise capital financing to conduct exploration and drilling on its mineral
property claims held in Nueva Ecija, Philippines as well as exploring for new
mineral property claims.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make certain 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 periods presented. We are required
to make judgments and estimates about the effect of matters that are inherently
uncertain. Although, we believe our judgments and estimates are appropriate,
actual future results may be different; if different assumptions or conditions
were to prevail, the results could be materially different from our reported
results.
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Mineral Properties
Mineral property acquisition costs are capitalized in
accordance with Codification topic 930 Extractive Activities - Mining. Mineral
property exploration costs are expensed as incurred. When it has been determined
that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such
property are capitalized. To date our company has not established any reserves
on its mineral properties.
Long-Lived Assets
Long-Lived assets, such as property and equipment, mineral
properties, and purchased intangibles with finite lives (subject to
amortization), are evaluated for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable in accordance with Codification topic 360 Property, Plant, and
Equipment. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life.
Recoverability of assets is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash flows expected
to be generated by an asset. If the carrying amount of an asset exceeds its
estimated future cash flows, an impairment charge is recognized as the amount by
which the carrying amount exceeds the estimated fair value of the asset. The
estimated fair value is determined using a discounted cash flow analysis. Any
impairment in value is recognized as an expense in the period when the
impairment occurs.
Recent Accounting Pronouncements
We review new accounting standards as issued. Although some of
these accounting standards issued or effective after the end of our previous
fiscal year may be applicable to us, we have not identified any standards that
we believe merit further discussion. We believe that none of the new standards
will have a significant impact on our financial position, future operations or
cash flows.