Item 1.
|
Financial Statements
|
Palayan Resources Inc.
|
September 30, 2018
|
(unaudited)
|
Palayan Resources Inc.
|
Condensed Balance Sheets
|
(Expressed in U.S. dollars)
|
|
|
September 30,
|
|
|
March 31,
|
|
|
|
2018
|
|
|
2018
|
|
|
|
$
|
|
|
$
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash
|
|
2,111
|
|
|
1,918
|
|
Total Assets
|
|
2,111
|
|
|
1,918
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
(DEFICIT)
|
|
|
|
|
|
|
Accounts payable
and accrued liabilities
|
|
4,675
|
|
|
1,500
|
|
Due to related party
|
|
137,500
|
|
|
117,000
|
|
Total Liabilities
|
|
142,175
|
|
|
118,500
|
|
Stockholders Equity (Deficit)
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
Authorized: 75,000,000
common shares, with par value $0.001 Issued and outstanding: 30,000,000
common shares
|
|
30,000
|
|
|
30,000
|
|
Accumulated Deficit
|
|
(170,064
|
)
|
|
(146,582
|
)
|
Total Stockholders Equity (Deficit)
|
|
(140,064
|
)
|
|
(116,582
|
)
|
Total Liabilities and Stockholders Equity (Deficit)
|
|
2,111
|
|
|
1,918
|
|
(The accompanying notes are an integral part of these condensed
financial statements)
F-1
Palayan Resources Inc.
|
Condensed Statements of Operations
|
(Expressed in U.S. dollars)
|
(unaudited)
|
|
|
For the
|
|
|
For the
|
|
|
For the
|
|
|
For the
|
|
|
|
three months
|
|
|
three months
|
|
|
six months
|
|
|
six months
|
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
2,114
|
|
|
2,084
|
|
|
12,989
|
|
|
3,573
|
|
Professional fees
|
|
3,560
|
|
|
3,000
|
|
|
10,493
|
|
|
12,641
|
|
Total Operating Expenses
|
|
5,674
|
|
|
5,084
|
|
|
23,482
|
|
|
16,214
|
|
Net
Loss
|
|
(5,674
|
)
|
|
(5,084
|
)
|
|
(23,482
|
)
|
|
(16,214
|
)
|
Net Loss Per Share Basic and Diluted
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
Weighted Average Shares Outstanding
|
|
30,000,000
|
|
|
30,000,000
|
|
|
30,000,000
|
|
|
30,000,000
|
|
(The accompanying notes are an integral part of these condensed
financial statements)
F-2
Palayan Resources Inc.
|
Condensed Statements of Cash Flows
|
(Expressed in U.S. dollars)
|
(unaudited)
|
|
|
For the
|
|
|
For the
|
|
|
|
six months
|
|
|
six months
|
|
|
|
ended
|
|
|
ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
$
|
|
|
$
|
|
Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
(23,482
|
)
|
|
(16,214
|
)
|
Changes in operating assets
and liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
3,175
|
|
|
-
|
|
Net Cash Used In Operating Activities
|
|
(20,307
|
)
|
|
(16,214
|
)
|
Financing Activities
|
|
|
|
|
|
|
Proceeds from related party loan
|
|
20,500
|
|
|
10,000
|
|
Net
Cash Provided By Financing Activities
|
|
20,500
|
|
|
10,000
|
|
Increase (Decrease) in Cash
|
|
193
|
|
|
(6,214
|
)
|
Cash
Beginning of Period
|
|
1,918
|
|
|
8,276
|
|
Cash End of Period
|
|
2,111
|
|
|
2,062
|
|
(The accompanying notes are an integral part of these condensed
financial statements)
F-3
Palayan Resources Inc.
|
Notes to the Condensed Financial Statements
|
(Expressed in U.S. dollars)
|
(unaudited)
|
1.
|
Nature of Operations and Continuance of
Business
|
Palayan Resources Inc. (the Company)
was incorporated in the State of Nevada on July 26, 2013 and is a mineral
exploration and production company engaged in the exploration, acquisition, and
development of mineral properties. The Company holds a claim in the Palayan Gold
Mine in Nueva Ecija, Philippines and is in the process of exploring these
claims, as well as raising additional capital for future acquisitions.
Going Concern
These 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. As of September 30, 2018, the Company has generated no revenues to
date, and has an accumulated deficit of $170,064. 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.
2.
|
Summary of Significant Accounting
Policies
|
These financial statements and related
notes are presented in accordance with accounting principles generally accepted
in the United States (US GAAP), and are expressed in US dollars. The Companys
fiscal year-end is March 31.
The preparation of financial
statements in conformity with generally accepted accounting principles in the
United States 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. The Company
regularly evaluates estimates and assumptions related to the recoverability of
mineral properties, and deferred income tax asset valuation allowances. The
Company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and the accrual of costs and
expenses that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the
Companys estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be affected.
|
c)
|
Interim Condensed Financial
Statements
|
These interim condensed unaudited
financial statements have been prepared on the same basis as the annual
financial statements and in the opinion of management, reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
Companys financial position, results of operations and cash flows for the
periods shown. The results of operations for such periods are not necessarily
indicative of the results expected for a full year or for any future period.
|
d)
|
Basic and Diluted Net Loss per
Share
|
The Company computes net income (loss)
per share in accordance with ASC 260,
Earnings per Share
. ASC 260
requires presentation of both basic and diluted earnings per share (EPS) on
the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. As of September 30, 2018 and
March 31, 2018, the Company had no potentially dilutive shares.
F-4
Palayan Resources Inc.
|
Notes to the Condensed Financial Statements
|
(Expressed in U.S. dollars)
|
(unaudited)
|
2.
|
Summary of Significant Accounting Policies
(continued)
|
|
e)
|
Recent Accounting Pronouncements
|
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.
3.
|
Related Party Transactions
|
As at September 30, 2018, the Company
owed $137,500 (March 31, 2018 - $117,000) to the President and Director of the
Company. The amount owing is unsecured, non-interest bearing, and due on demand.
During the period ended September 30, 2018, the Company received $20,500 (2017 -
$10,000) from the President and Director of the Company.
We have evaluated subsequent events
through to the date of issuance of the financial statements, and did not have
any material recognizable subsequent events after September 30, 2018.
F-5
Item 2.
|
Management's Discussion and Analysis of
Financial Condition and Results of Operations
|
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 $30,000 to our shareholders.
Our capital commitments for the coming 12 months consist of
administrative expenses, expenses associated with the completion of our planned
exploration program and costs of distribution of the securities being registered
in this Prospectus. Including this exploration work and costs of this offering,
we estimate that we will have to incur the following expenses during the next 12
months:
Description
|
Estimated
Completion Date
(1)
|
Estimated
Expenses
($)
|
License Renewal Fee
|
|
1,600
|
Legal and accounting fees and
expenses
(2)
|
12 months
|
20,000
|
General and administrative
expenses
(4)
|
12 months
|
1,500
|
Exploration
expenses
(3)
|
12 months
|
17,000
|
Geological Mapping
|
12 Months
|
5,000
|
Geophysical Surveying
|
12 Months
|
3,000
|
Geochemical
Surveying and Surface Sampling (includes sample collection, assaying, and
testing)
|
12 months
|
9,000
|
Transfer Agent
|
12 months
|
1,500
|
|
|
|
Total
|
|
41,600
|
(1)
|
Budget Items are listed in order of priority.
|
(2)
|
Includes $2,500 legal fees and $17,500 for accounting and
auditing.
|
(3)
|
For Phase I and Phase II of the recommended exploration
program.
|
(4)
|
Represents printing and marketing expenses and
miscellaneous costs in the aggregate of $1,500 related to this offering
are included here.
|
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 $2,111 as at September 30, 2018, we will be
required to raise approximately $39,489 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.
6
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
September 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 September 30, 2018 and 2017
During the three months ended September 30, 2018, we incurred
total expenses of $5,674 compared to $5,084 during the three months ended
September 30, 2017. The increase in operating expense was due to an increase of
$30 for general and administrative expense and $560 for professional fees.
7
Six months ended September 30, 2018 and 2017
During the six months ended September 30, 2018, we incurred
total expenses of $23,482 compared to $16,214 during the six months ended
September 30, 2017. The increase in operating expense was due to an increase of
$9,416 for general and administrative expense for costs incurred for DTC
eligibility status offset by a decrease of $2,148 in professional fees due to
lower legal costs as the Company had minimal operations during fiscal 2018.
Net Loss
During the six months ended September 30, 2018, we incurred a
net loss of $23,482 compared to a net loss of $16,214 for the six months ended
September 30, 2017. For the six months ended September 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 September 30, 2018, we had cash and total assets of $2,111
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
$20,500 of funding from the President and Director of the Company for day-to-day
operations.
At September 30, 2018, we had liabilities of $142,175 compared
to liabilities of $118,500 at March 31, 2018. The increase in liabilities is due
to additional funding of $20,500 received from our President and Director during
the current year, and $3,175 increase in accounts payable and accrued
liabilities for unpaid professional fees incurred.
During the six months ended September 30, 2018, we did not have
any equity or capital transactions.
Cash Flows
Cash from Operating Activities
During the six months ended September 30, 2018, we used cash of
$20,307 for operating activities compared to $16,214 during the six months ended
September 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 six months ended September 30, 2018 and 2017, we did
not have any investing activities.
Cash from Financing Activities
During the six months ended September 30, 2018, we received
$20,500 from our President and Director as compared to $10,000 during the six
months ended September 30, 2017. The amounts owed to our President and Director
is unsecured, non-interest bearing, and due on demand.
8
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.
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 and six months
ended September 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
$170,064. 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.
9
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.