NOTES
TO THE FINANCIAL STATEMENTS
JUNE
30, 2013
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES
Nature
of Business
Queensridge
Mining Resources, Inc. (“Queensridge” or the “Company”) was incorporated in Nevada on January 29, 2010.
Queensridge is an exploration stage company and has not yet realized any revenues from its planned operations. Queensridge is
currently in the process of acquiring certain mining claims.
Exploration
Stage Company
The
accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to exploration
stage companies. An exploration stage company is one in which planned principal operations have not commenced, or, if its operations
have commenced, there have been no significant revenues there from.
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States of America and are presented in US dollars.
Accounting
Basis
The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has adopted a June 30 fiscal year end.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At June 30, 2013
and 2012 the Company had cash balances totaling $2,089 and $1,774, respectively.
Fair
Value of Financial Instruments
The
Company’s financial instruments consist of cash and cash equivalents, accrued expenses, accrued interest – related
party, shareholder loans and notes payable to a related party. The carrying amount of these financial instruments approximates
fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed
in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest
and penalties on income taxes as interest expense or penalties expense. As of June 30, 2013, there have been no interest or penalties
incurred on income taxes.
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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN
EXPLORATION STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
JUNE
30, 2013
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Dividends
The
Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.
Basic
Income (Loss) Per Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted
average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt
or equity. There are no such common stock equivalents outstanding as of June 30, 2013 or 2012.
Revenue
Recognition
The
Company is in the development stage and has yet to realize revenues from operations. Once the Company has commenced
operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive
evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion
of stated terms and conditions, and collection of any related receivable is probable.
Stock-Based
Compensation
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718,
Compensation
– Stock Compensation
which requires all share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is
charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. There
has been no stock-based compensation issued to employees.
The
Company follows ASC Topic 505-50, formerly EITF 96-18, “
Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services
,” for stock options and warrants issued to
consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as
compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the
estimated fair market value of the option or warrant, whichever can be more clearly determined. There has been no
stock-based compensation issued to non-employees.
Mineral
Properties
Costs
of exploration and the costs of carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property
acquisition costs are capitalized including licenses and lease payments. Although the Company has taken steps to verify title
to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may
be subject to prior agreements or transfers and title may be affected by undetected defects.
Impairment
losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets’ carrying amount.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN
EXPLORATION STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
JUNE
30, 2013
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Recent
Accounting Pronouncements
The
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flows.
NOTE
2 – MINERAL PROPERTIES
During
the period ended June 30, 2010, the Company electronically staked and recorded a 100% interest in a block of mining claims located
in northern Newfoundland, Canada known as the Cutwell Harbour property for $3,000. The mineral properties were found to be unproven
and the entire balance of $3,000 was impaired as of June 30, 2010.
Exploration
costs totaled $0 and $0 for the periods ended June 30, 2013 and 2012, respectively.
NOTE
3 – SHAREHOLDER LOANS
The
Company has received advances from a shareholder to help fund operations. The balance of the shareholder loans was $12,590 and
$12,590 as of June 30, 2013 and 2012, respectively. The loans are unsecured, non-interest bearing and have no specific terms of
repayment.
NOTE
4 – NOTES PAYABLE – RELATED PARTY
The
Company amended two $10,000 loans from a related party during the years ended June 30, 2013 and 2012. The notes bear interest
at 5% per annum and are now due on April 24, 2015 and October 4, 2015. The Company received four new loans from a related party
during the years ended June 30, 2013 and 2012. The notes bear interest at 5% and consist of the following:
|
Note
Amount
|
Issue
Date
|
Maturity
Date
|
PKS
Trust
|
$ 10,000
|
4/24/11
|
4/24/15
|
PKS
Trust
|
$ 10,000
|
10/4/11
|
10/4/15
|
PKS
Trust
|
$ 1,985
|
8/14/12
|
8/14/14
|
PKS
Trust
|
$ 3,500
|
8/29/12
|
8/29/14
|
PKS
Trust
|
$ 1,000
|
3/19/13
|
3/19/15
|
PKS
Trust
|
$ 3,500
|
5/13/13
|
5/13/15
|
Total
notes payable
|
$ 29,985
|
|
|
Interest
expense of $1,269 and $875 was recorded for the years ended June 30, 2013 and 2012, respectively.
Maturities as of June 30,
|
|
Total
|
|
2014
|
|
|
|
—
|
|
|
2015
|
|
|
|
19,985
|
|
|
2016
|
|
|
|
10,000
|
|
|
2017
|
|
|
|
—
|
|
|
2018
|
|
|
|
—
|
|
|
Total
notes payable
|
|
|
$
|
29,985
|
|
QUEENSRIDGE
MINING RESOURCES, INC.
(AN
EXPLORATION STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
JUNE
30, 2013
NOTE
5 – ACCRUED EXPENSES
Accrued
expenses consisted of the following at June 30:
|
|
2013
|
|
2012
|
Accrued accounting fees
|
|
$
|
10,500
|
|
|
$
|
6,750
|
|
Accrued legal fees
|
|
|
94,045
|
|
|
|
60,345
|
|
Accrued transfer agent fees
|
|
|
785
|
|
|
|
—
|
|
Total accrued expenses
|
|
$
|
105,330
|
|
|
$
|
67,095
|
|
NOTE
6 – COMMON STOCK
On
February 8, 2010, the Company issued 3,100,000 founder shares at $0.001 (par value) for cash totaling $3,100.
On
March 29, 2010, the Company issued 3,250,000 shares at $0.005 for cash totaling $16,250.
On
May 29, 2010, the Company issued 77,800 shares at $0.25 for cash totaling $19,450.
The
Company had 6,427,800 shares of common stock issued and outstanding as of June 30, 2013 and 2012.
The
Company has not issued any stock options or warrants as of June 30, 2013.
NOTE
7 – INCOME TAXES
From
inception through the year ended June 30, 2013, the Company has incurred net losses and, therefore, has no tax liability. The
net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward
is approximately $186,900 at June 30, 2013, and will expire beginning in the year 2030.
The provision
for Federal income tax consists of the following as of June 30:
|
|
2013
|
|
2012
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
Current operations
|
|
$
|
16,719
|
|
|
$
|
12,853
|
|
Less: valuation allowance
|
|
|
(16,719
|
)
|
|
|
(12,853
|
)
|
Net provision for Federal income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
The
cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows at
June 30:
|
|
2013
|
|
2012
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
Net operating loss carryover
|
|
$
|
50,688
|
|
|
$
|
46,822
|
|
Valuation allowance
|
|
|
(50,688
|
)
|
|
|
(46,822
|
)
|
Net deferred
tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
QUEENSRIDGE
MINING RESOURCES, INC.
(AN
EXPLORATION STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
JUNE
30, 2013
NOTE
7 – INCOME TAXES (CONTINUED)
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax
reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may
be limited as to use in future years.
NOTE
8 – COMMITMENTS
Operating
Lease
The
Company’s office lease expired in 2012. An officer currently provides office facilities to the Company free of charge. Rent
expense for the fiscal years ended June 30, 2013 and 2012 totaled $0 and $3,720, respectively.
NOTE
9 – LIQUIDITY AND GOING CONCERN
The
Company has negative working capital, has incurred losses since inception, and has not yet received revenues from sales of products
or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
The
ability of Queensridge to continue as a going concern is dependent upon the Company generating cash from the sale of its common
stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its
equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts.
NOTE
10 – SUBSEQUENT EVENTS
In
accordance with ASC 855-10, the Company’s management has analyzed its operations through the date on which the financial
statements were issued, and has determined it does not have any material subsequent events to disclose.