UNITED STATES | |
SECURITIES AND EXCHANGE COMMISSION | |
Washington, D.C. 20549 | |
FORM
| |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission
file number |
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code.)
(
(Telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | o | Accelerated Filer | o |
o | Smaller Reporting Company | ||
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Indicate the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: at November 14, 2022,
1
TABLE OF CONTENTS
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
LODE-STAR MINING INC.
INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
3
LODE-STAR MINING INC.
BALANCE SHEETS
(Unaudited)
SEPTEMBER 30 | DECEMBER 31 | |||||||
2022 | 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | $ | ||||||
Prepaid fees | ||||||||
Total current assets | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND STOCKHOLDERS DEFICIENCY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | $ | ||||||
Due to related parties and accrued interest | ||||||||
Total current liabilities | ||||||||
STOCKHOLDERS DEFICIENCY | ||||||||
Capital Stock Authorized: | voting common shares with a par value of $ per share preferred shares with a par value of $ per share; Issued: common shares and preferred shares at September 30, 2022 common shares and preferred shares at December 31, 2021||||||||
Shares to be issued – | Series A convertible preferred shares||||||||
Additional Paid-In Capital | ||||||||
Accumulated Deficit | ( | ) | ( | ) | ||||
Total stockholders deficiency | ( | ) | ( | ) | ||||
Total liabilities and stockholders deficiency | $ | $ |
The accompanying notes are an integral part of these unaudited interim financial statements.
4
LODE-STAR MINING INC.
STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||||||
SEPTEMBER 30 | SEPTEMBER 30 | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||
Operating Expenses | ||||||||||||||||
Consulting services | ||||||||||||||||
Corporate support services | ||||||||||||||||
Exploration and evaluation | ||||||||||||||||
Mineral option fees | ||||||||||||||||
Office, foreign exchange and sundry | ||||||||||||||||
Professional fees | ||||||||||||||||
Transfer and filing fees | ||||||||||||||||
Total operating expenses | ||||||||||||||||
Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Expenses | ||||||||||||||||
Rescinded Sapir transaction | ||||||||||||||||
Interest, bank and finance charges | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net Income (Loss) and Comprehensive Income (Loss) For The Period | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
Basic And Diluted Net Loss Per Common Share | $ | $ | ( | ) | $ | $ | ( | |||||||||
Weighted Average Number of Common Shares Outstanding – Basic and Diluted |
The accompanying notes are an integral part of these unaudited interim financial statements.
5
LODE-STAR MINING INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED | ||||||||
SEPTEMBER 30 | ||||||||
2022 | 2021 | |||||||
Operating Activities | ||||||||
Net income (loss) for the period | $ | $ | ( | ) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Foreign exchange loss | ||||||||
Rescinded Sapir Transaction | ( | ) | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid fees | ||||||||
Accounts payable and accrued liabilities | ||||||||
Due to related parties | - | 75,000 | ||||||
Accrued interest payable | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
Financing Activity | ||||||||
Proceeds from loans payable – related party | ||||||||
Net cash provided by financing activity | ||||||||
Net Decrease In Cash | ( | ) | ( | ) | ||||
Cash, Beginning of Period | ||||||||
Cash, End of Period | $ | $ | ||||||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | $ | ||||||
Income taxes | $ | $ | ||||||
Non-cash Financing Activities | ||||||||
Expenses paid by related parties on behalf of the Company | $ | $ | ||||||
Reinstated debt | ||||||||
Shares issued to shareholders to settle debt |
The accompanying notes are an integral part of these unaudited interim financial statements.
6
LODE-STAR MINING INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIENCY
NUMBER OF COMMON SHARES | PAR VALUE | SHARES TO BE ISSUED | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | TOTAL | |||||||||||||||||||
Balance, January 1, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Rescinded Sapir Transaction | - | ( | ) | ( | ) | |||||||||||||||||||
Reinstated debt | - | ( | ) | ( | ) | |||||||||||||||||||
Shares issued to shareholder to settle debt | ||||||||||||||||||||||||
Net income for the period | - | |||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
NUMBER OF COMMON SHARES | PAR VALUE | SHARES TO BE ISSUED | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | TOTAL | |||||||||||||||||||
Balance, January 1, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Shares issued on cashless exercise of options | ( | ) | ||||||||||||||||||||||
Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Net income for the period | - | ( | ) | ( | ) | |||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) |
The accompanying notes are an integral part of these unaudited interim financial statements.
7
LODE-STAR MINING INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS |
Organization
Lode-Star Mining Inc. (the Company) was incorporated in the State of Nevada, U.S.A., on December 9, 2004. The Companys principal executive offices are in Reno, Nevada. The Company was originally formed to acquire exploration stage natural resource properties.
On January 14, 2022, the Company formally returned its 20% undivided interest in the Goldfield Bonanza Project to Lode Star Gold, Inc., the optionor of that property (LSG), pursuant to a settlement and termination agreement (the Settlement Agreement).
On December 28, 2021, the Company acquired from Sapir Pharmaceuticals, Inc., a Delaware corporation (Sapir), all of the assets used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule for further pharmaceutical development. On June 6, 2022, the Company and Sapir agreed to rescind the acquisition due to circumstances beyond either partys control. In connection with the rescission, the Company reinstated $2,246,146 in debt owed to LSG that was previously forgiven under the Settlement Agreement in order to facilitate the Sapir transaction.
On June 21, 2022 the Company, LSG and certain related party creditors agreed to convert an aggregate of $2,601,207 in debt owed to those parties into 70,302,906 shares of the Companys common stock at a price of $0.037 per share.
At present, the Company has no current business project and no cash generating operations. Management is actively seeking business opportunities.
Going Concern
The
accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern. The future
of the Company is dependent upon its ability to establish a business and to obtain new financing to execute its business plan. As shown
in the accompanying financial statements, the Company has had no revenue and has incurred accumulated losses of $
Basis of Presentation
The unaudited interim financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Companys financial position and the results of its operations for the periods presented. These financial statements should be read in conjunction with the Companys financial statements and notes thereto included in the Companys report on Form 10-K for the year ended December 31, 2021. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosures, which would substantially duplicate the disclosures contained in the Companys financial statements for the fiscal year ended December 31, 2021, have been omitted. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of results for the entire year ending December 31, 2022.
8
LODE-STAR MINING INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. All dollar amounts are in U.S. dollars unless otherwise noted. The financial statements have, in managements opinion, been properly prepared within reasonable limits of materiality.
The Company has implemented all applicable new accounting pronouncements that are in effect. Those 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. | PHARMACEUTICAL DEVELOPMENT PROJECT |
On December 28, 2021, the Company entered into an asset purchase agreement with Sapir (the Purchase Agreement), pursuant to which the Company acquired all of the assets of Sapir used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule for further pharmaceutical development (the Assets). The consideration to be paid by the Company for the Assets was shares of Series A Convertible Preferred Stock (the Preferred Stock) nominally valued at $1.00 per share. Each share of Preferred Stock entitled Sapir to 450 votes per share and was convertible into 450 shares of the Companys common stock.
The
Company recorded the transaction as an asset acquisition as management concluded that all of the gross value received was related to
the Assets. The fair value of the assets acquired was estimated to be $
On June 6, 2022, the Company and Sapir entered into an agreement to rescind the acquisition due to circumstances beyond either partys control. As a result, the Company recognized a recovery of $2,186,917 during the nine months ended September 30, 2022 (2021 - $Nil) representing the reversal the fair value of the Preferred Stock that was to be issued to Sapir in accordance with the Purchase Agreement.
4. | CAPITAL STOCK |
Capitalization
The authorized capital of the Company is 500,000,000 shares of capital stock, divided into shares of common stock with a par value of $ per share, and shares of preferred stock with a par value of $ per share. The Company reserved 10,000,000 shares of common stock for issuance under its 2016 Omnibus Equity Incentive Plan. The Company has issued common shares and no preferred shares. During period ended September 30, 2022, the Company issued shares of common stock pursuant to debt conversion agreements with LSG and certain related party creditors in the aggregate amount of $ .
Options
Options Outstanding | Weighted Average Life Remaining (Years) | Intrinsic Value | ||||||||||
Balance December 31, 2021 | 0.20 | $ | ||||||||||
Expired | ( | ) | ||||||||||
Balance September 30, 2022 | - | $ |
On February 22, 2022, all 9,950,000 options that were previously outstanding expired.
9
LODE-STAR MINING INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
5. | RELATED PARTY TRANSACTIONS AND AMOUNTS DUE |
During the period ended September 30, 2022, the Company terminated its mineral option agreement with LSG and entered in the Settlement Agreement, with the result that the Company returned its 20% undivided interest in and to the Goldfield Bonanza Project to LSG, the Companys majority shareholder. In exchange, LSG agreed to forgive all the amounts owing by the Company to LSG under the option agreement, which included principal and interest amounts totaling $2,246,146.
During the period ended September 30, 2022, as a result of the rescission agreement with Sapir, the Company entered a debt reinstatement agreement with LSG whereby $2,246,146 of debt was reinstated by the Company to be subsequently settled via the issuance of common stock. The resulting loss from the reinstatement of debt was recognized within stockholders deficiency.
During the period ended September 2022, the Company had the following transactions with related parties:
i) | During the period ended September 30, 2022, the Company received $25,764 in bridge loan vendor financing and $59,315 in bridge loan direct financing. The loans had no specific terms of repayment and were non-interest bearing; |
ii) | During
the period ended September 30, 2022, the Company incurred $ |
iii) | On June 21 , 2022, the Company converted $2,322,487 in bridge loan vendor financing, bridge loan direct financing and reinstated debt owed to LSG into 62,769,918 shares of common stock with a fair value of $2,322,487; |
iv) | On June 8, 2022, the Company converted $42,942 in debt owed to the controlling shareholder of LSG into 1,160,583 shares of common stock with a fair value of $42,942; and |
v) | On June 8, 2022, the Company converted $235,779 in past due compensation owed to the Companys CEO and President into 6,372,405 shares of common stock with a fair value of $235,779. |
At September 30, 2022, the Company had the following amounts due to related parties:
i) | $ |
ii) | $7,000 (December 31, 2021 - $Nil) in bridge loan direct financing; with no specific terms of repayment, due to LSG, the Companys majority shareholder with no accrued interest payable; |
iii) | $Nil
(December 31, 2021 - $ |
iv) | $Nil
(December 31, 2021: $ |
At September 30, 2022, total interest accrued on the above related party loans was $Nil (December 31, 2021 - $3,584).
During the period ended September 30, 2022, the Company incurred $Nil (2021 - $75,000) in mineral option fees payable to LSG.
During
the period ended September 30, 2022, there was a $
At
September 30, 2022, $Nil (December 31, 2021 - $
10
LODE-STAR MINING INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
6. | FINANCIAL INSTRUMENTS |
ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include:
■ | Level 1 – defined as observable inputs such as quoted prices in active markets; |
■ | Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
■ | Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
The Companys financial instruments consist of cash, accounts payable and accrued liabilities, and due to related parties. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Pursuant to ASC 820 and 825, the fair value of cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. Accounts payable and accrued liabilities and amounts due to related parties are measured using Level 2 inputs as there are no quoted prices in active markets for identical instruments. The carrying values of cash, accounts payable and accrued liabilities, and amounts due to related parties approximate their fair values due to the immediate or short-term maturity of these financial instruments.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this quarterly report. In addition to historical financial information, the following discussion includes certain forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
11
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this quarterly report. In addition to historical financial information, the following discussion includes certain forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
New Business
On December 28, 2021, we entered into an asset purchase agreement (the Purchase Agreement) with Sapir Pharmaceuticals, Inc., a Delaware corporation (Sapir), pursuant to which we purchased certain assets from Sapir used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule (the Business) in exchange for 1,000,000 shares of newly-designated Series A preferred stock (the Preferred Stock). The closing of the acquisition occurred simultaneous with the execution and delivery of the Purchase Agreement.
At the closing, the parties also executed and delivered a royalty agreement (the Royalty Agreement) pursuant to which we agreed to pay Sapir a royalty equal to 5% of the gross revenues realized from licenses or products generated or derived from the Business.
Due to circumstances beyond the control of the parties, we were unable to develop the Business to the extent contemplated by (i) the Purchase Agreement and the Royalty Agreement (together, the Sapir Agreements) and (ii) discussions that occurred between us and Sapir following the closing of the Purchase Agreement. As a result, on June 6, 2022, we entered into a rescission agreement with Sapir (the Rescission Agreement) in order to rescind the Purchase Agreement and the Royalty Agreement and restore both us and Sapir to the respective positions we occupied immediately in advance of the execution and delivery of the Sapir Agreements.
As of the date of the Rescission Agreement, we had not completed the issuance of the Preferred Stock to Sapir or completed any payments to Sapir under the Royalty Agreement.
In connection with the Sapir transaction, on January 14, 2022, we entered into a settlement and termination agreement (the Settlement Agreement) with Lode Star Gold, Inc., a private Nevada corporation and our former controlling shareholder (LSG), in order to terminate the mineral option agreement between the parties dated October 4, 2014, as amended on October 31, 2019 (together, the Option Agreement). The Settlement Agreement provided for the immediate termination of the Option Agreement (with the exception of certain standard provisions that survived according to their terms); the forgiveness by LSG of all amounts owing by us to LSG thereunder, which includes approximately $2.224 million in accrued, unpaid penalty and other payments (collectively, the Debt); and the return to LSG of our 20% undivided interest in and to the mineral property that was the subject of the Option Agreement.
On June 8, 2022, and in connection with the rescission of the Sapir Agreements, we entered into a debt reinstatement agreement (the Reinstatement Agreement) with LSG pursuant to which we agreed to reinstate the Debt. Also on June 8, 2022, we entered into debt conversion agreements with three related parties, including LSG, pursuant to which the creditors converted an aggregate of $2,601,207 in accrued, unpaid debt into 70,302,906 shares of our common stock at a price of $0.037 per share.
At present, the Company has no has no current business project and is actively seeking business opportunities.
Funding
At present, we have no sustainable financing in place other than remedial expenses still being advanced by LSG.
Personnel
We have no employees. Our President and CEO, Mark Walmesley, receives no compensation for his services. We expect to continue to use outside consultants, advisors, attorneys and accountants as necessary.
Our former CFO and Corporate Secretary, Samuel Sternheim, resigned effective September 6, 2022. Mark Walmesley has taken over his role as CFO, Secretary and Treasurer.
12
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) |
Going Concern
There is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our expenses. This is because we have not generated any revenues to-date and we cannot currently estimate the timing of any possible future revenues. Our only source of cash at this time is from loans.
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements for the period ended September 30, 2022 which are included above in Part I, Item 1.
Three Months Ended September 30 | Change | ||||||||||||||
2022 | 2021 | Amount | Percentage | ||||||||||||
$ | $ | $ | |||||||||||||
Revenue | - | - | - | - | |||||||||||
Operating Expenses | 10,505 | 76,548 | (66,043 | ) | (86%) | ||||||||||
Operating Loss | (10,505 | ) | (76,548 | ) | (66,043 | ) | (86%) | ||||||||
Other Income (Expense) | (1,664 | ) | (25,341 | ) | (23,677 | ) | (93%) | ||||||||
(12,169 | ) | (101,889 | ) | (89,720 | ) | (88%) | |||||||||
Nine Months Ended September 30 | Change | ||||||||||||||
2022 | 2021 | Amount | Percentage | ||||||||||||
$ | $ | $ | |||||||||||||
Revenue | - | - | - | - | |||||||||||
Operating Expenses | 143,398 | 263,466 | 120,068 | (45%) | |||||||||||
Operating Loss | (143,398 | ) | (263,466 | ) | (120,068 | ) | (45%) | ||||||||
Other Income (Expense) | 2,184,446 | (72,348 | ) | 2,256,794 | 3019% | ||||||||||
2,041,048 | (355,814 | ) | 2,396,862 | 674% |
Revenues
We had no operating revenues during the three month and nine month periods ended September 30, 2022 and 2021. We had a net loss of $12,169 during the current quarter and recorded net income of $2,041,048 for the nine month period ended September 30, 2022, which was entirely attributable to the rescission of the Sapir transaction as described above.
Expenses
Notable year over year differences in expenses for the third quarter in 2022 compared to 2021 are as follows:
Nine Months Ended September 30 | Increase/(Decrease) | |||||||||||||||
2022 | 2021 | Amount | Percentage | |||||||||||||
$ | $ | $ | ||||||||||||||
Consulting services | 58,321 | 93,883 | (35,562 | ) | (38 | %) | ||||||||||
Exploration and evaluation | - | 28,443 | (28,443 | ) | (100 | %) | ||||||||||
Mineral option fees | - | 75,000 | (75,000 | ) | (100 | %) | ||||||||||
Professional fees | 52,719 | 35,715 | 17,004 | 48 | % | |||||||||||
Interest, bank and finance charges | 2,471 | 72,348 | (69,877 | ) | (97 | %) |
Consulting fees decreased during the nine month period ended September 30, 2022 as Mark Walmesley no longer provided strategic consulting services during the three months ended September 30, 2022 ($25,000 per quarter in previous quarters).
Exploration and evaluation expense and mineral option fees were reduced to $Nil in the nine month period ended September 30, 2022 due to the Company terminating its mineral property option and no longer spending on mining efforts.
13
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) |
Interest, bank and finance charges in the nine month period ended September 30, 2022 decreased as the Company settled various interest bearing loans during the period.
Professional fees in the nine month period ended September 30, 2022 included legal, audit and bookkeeping were increased as the Company paid its OTC Markets annual fee and continued to restructure itself following the rescinding of the Sapir transaction.
Liquidity and Capital Resources
At September 30, 2022, the Companys total assets were $4,484 and its total liabilities were $20,878. The Companys working capital deficiency at September 30, 2022 was $16,394. For December 31, 2021 the Company had a working capital deficiency of $225,586. The Company has no current business project and no cash generating operations. Management is actively seeking business opportunities. Our primary source of funding is from loans advanced to us from our largest shareholder, LSG, and other related parties.
Cash Flows
Nine Months Ended September 30 | Increase/(Decrease) | |||||||||||||||
2022 | 2021 | Amount | Percentage | |||||||||||||
$ | $ | $ | ||||||||||||||
Cash Flows Provided By (Used In): | ||||||||||||||||
Operating Activities | (61,112 | ) | (56,353 | ) | (4,759 | ) | (8 | %) | ||||||||
Financing Activities | 59,315 | 55,000 | 4,315 | 8 | % | |||||||||||
Net increase (decrease) in cash | (1,797 | ) | (1,353 | ) | (444 | ) | (33 | %) |
We have yet to generate any revenues from our business operation and our ability to generate adequate amounts of cash to meet our needs is entirely dependent on the issuance of shares or loans, which have been our principal sources of working capital so far. For the foreseeable future, we will have to continue to rely on those sources for funding. We have no assurance that we can successfully engage in any further private sales of our securities or that we can obtain any additional loans.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not required.
ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the companys management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective, due to the size and nature of the existing business operation. Given the size of our current operation and existing personnel, the opportunity to implement disclosure control procedures is limited. Until the organization can increase sufficiently in size to warrant an increase in personnel required to effectively execute and monitor formal disclosure control procedures, those formal procedures will not be implemented. Given the current size of the organization, there are not significant levels of supervision, review, independent directors or a formal audit committee.
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Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS. |
We are not a party to any pending legal proceeding which management believes is likely to result in a material liability and no such action has been threatened against us, or, to the best of our knowledge, is contemplated.
ITEM 1A. RISK FACTORS.
Not required.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Other than as previously disclosed in Current Reports on Form 8-K, we had no unregistered sales of securities during the nine months ended September 30, 2022.
Other than as disclosed in previous reports filed with the SEC, we have not issued any equity securities that were not registered under the Securities Act within the past three years.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
Not applicable.
ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
ITEM 5. | OTHER INFORMATION. |
None.
ITEM 6. | EXHIBITS. |
The following documents are included herein:
Exhibit No. | Document Description |
31.1 | Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive and Chief Financial Officer. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 14 day of November 2022.
Lode-Star Mining Inc. | |||
BY | Mark Walmesley | ||
Mark Walmesley | |||
President, Principal Executive Officer, Treasurer, Principal Financial Officer, and Principal Accounting Officer | |||
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature | Title | Date |
/s/ Mark Walmesley |
Director, President, Chief Executive Officer and Chief Financial Officer |
November 14, 2022 |
Mark Walmesley |
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