-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WfMatoJO0C4vWAypKJPWBGKr0cNrlBTOg9mLnsMPe0FHI1H12qgWzlHIvowGYlge SQd4menxg6IkJIdiwCCXxA== 0001303681-08-000004.txt : 20080111 0001303681-08-000004.hdr.sgml : 20080111 20080110180033 ACCESSION NUMBER: 0001303681-08-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20071130 FILED AS OF DATE: 20080111 DATE AS OF CHANGE: 20080110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Kingston Mines Ltd. CENTRAL INDEX KEY: 0001343011 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 980471111 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-52781 FILM NUMBER: 08524471 BUSINESS ADDRESS: STREET 1: 106-1990 S.E. KENT AVE. CITY: VANCOUVER STATE: A1 ZIP: V5P 4X5 BUSINESS PHONE: 604-642-9561 MAIL ADDRESS: STREET 1: 106-1990 S.E. KENT AVE. CITY: VANCOUVER STATE: A1 ZIP: V5P 4X5 10QSB 1 km_10qsb073007.txt QUARTERLY REPORT ON FORM 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2007 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file # 000-52781 KINGSTON MINES LTD. (Exact Name of Registrant as Specified in its Charter) NEVADA (State or other jurisdiction of incorporation or organization) 98-0471111 (I.R.S. Employer Identification number) 1000-888 3RD STREET SW, CALGARY AB T2P 5C5 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (403) 716-1910 Securities registered under Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.0001 PAR VALUE Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] As of November 30, 2007, the Issuer had 9,761,950 shares of its Common Stock outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
KINGSTON MINES LTD. (An exploration stage company) Balance Sheets November 30, 2007 (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) - ---------------------------------------------------------------------------------------------------------- November 30 August 31 2007 2007 - ---------------------------------------------------------------------------------------------------------- (audited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 120,925 $ 142,608 Prepaid expenses 36 2,194 - ---------------------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS $ 120,961 $ 144,802 - ---------------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 120,961 $ 144,802 ========================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities 10,594 212 Convertible debenture - Related Party (current) - 15,000 - ---------------------------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 10,594 15,212 STOCKHOLDERS' EQUITY SHARE CAPITAL Authorized: 50,000,000 preferred shares at a par value of $0.0001 per share Issued and outstanding: Nil 100,000,000 common shares with a par value of $0.0001 per share Issued and outstanding: 9,761,950 common shares 576 576 (August 31, 2006: 8,000,000 common shares) ADDITIONAL PAID-IN CAPITAL 177,044 176,932 (DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (67,253) (47,918) - ---------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 110,367 129,590 - ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 120,961 $ 144,802 ==========================================================================================================
The accompanying notes are an integral part of these financial statements.
KINGSTON MINES LTD. (An exploration stage company) Statements of Stockholders' Equity For the period from June 16, 2005 (inception) to November 30, 2007 (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) - ------------------------------------------------------------------------------------------------------------------------ Deficit accumulated Total Additional during stockholders' Preferred Stock Common Stock paid-in exploration equity Shares Amount Shares Amount capital stage (deficiency) - ------------------------------------------------------------------------------------------------------------------------ Issuance of common stock for cash July 5, 2005 ($0.00005 per share) - $ - 8,000,000 $ 400 $ - $ - $ 400 Imputed interest from a shareholder - - - - 13 - 13 Loss and comprehensive loss for the period - - - - - (6,313) (6,313) - ------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2005 - - 8,000,000 $ 400 $ 13 $ (6,313) $ (5,900) - ------------------------------------------------------------------------------------------------------------------------ Imputed interest from a shareholder - - - - 450 - 450 Loss and comprehensive loss for the year - - - - - (19,370) (19,370) - ------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2006 - $ - 8,000,000 $ 400 $ 463 $ (25,683) $ (24,820) - ------------------------------------------------------------------------------------------------------------------------ Issuance of common stock for cash July 5, 2005 ($0.10 per share) - $ - 1,761,950 $ 176 $ 176,019 $ - $ 176,195 Imputed interest from a shareholder - - - - 450 - 450 Loss and comprehensive loss for the period - - - - - (22,235) (22,235) - ------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2007 - - 9,761,950 $ 576 $ 176,932 $ (47,918) $ 129,590 - ------------------------------------------------------------------------------------------------------------------------ Imputed interest from a shareholder - - - - 112 - 112 Loss and comprehensive loss for the period - - - - - (19,335) (19,335) - ------------------------------------------------------------------------------------------------------------------------ Balance, November 30, 2007 - - 9,761,950 $ 576 $ 177,044 $ (67,253) $ 110,367 ========================================================================================================================
The accompanying notes are an integral part of these financial statements
KINGSTON MINES LTD. (A exploration stage company) Statements of Operations (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) - -------------------------------------------------------------------------------------------------- Cumulative from June 16, 2005 Three months ended (inception) to November 30 November 30, 2007 2007 2006 - -------------------------------------------------------------------------------------------------- EXPENSES Accounting and audit $ 23,652 $ 5,539 $ 5,056 Legal fees 3,323 - - Bank charges 252 12 29 Filing fees 6,815 4,818 - Interest 1,298 112 112 Consulting fees 2,803 - - Office expenses 3,235 2,158 197 Transfer agent 5,129 375 - Resource property acquisition and exploration costs 20,746 6,321 5,710 - -------------------------------------------------------------------------------------------------- LOSS FROM OPERATIONS 67,253 19,335 11,104 - -------------------------------------------------------------------------------------------------- NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $(67,253) $ (19,335) $ (11,104) - -------------------------------------------------------------------------------------------------- BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00) ================================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - - basic and diluted - 9,761,950 8,000,000 ==================================================================================================
The accompanying notes are an integral part of these financial statements
KINGSTON MINES LTD. (An exploration stage company) Statements of Cash Flows (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) - --------------------------------------------------------------------------------------------------------- Cumulative from June 16, 2005 Three months ended (inception) to November 30 November 30, 2007 2007 2006 - --------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net (Loss) for the period $ (67,253) $ (19,335) $ (11,104) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: - - imputed interest 1,025 112 112 Changes in operating assets and liabilities - - (increase) decrease in prepaid expenses (36) 2,158 - - - accounts payable and accrued liabilities 10,594 10,382 5,605 - --------------------------------------------------------------------------------------------------------- NET CASH USED IN OPERATING ACTIVITIES (55,670) (6,683) (5,387) - --------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Increase in promissory note - Related Party - - - Increase (decrease) in convertible debenture - Related Party - (15,000) - Proceeds from issuance of common stock 176,595 - - - --------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 176,595 (15,000) - - --------------------------------------------------------------------------------------------------------- INCREASE IN CASH AND CASH EQUIVALENTS 120,925 (21,683) (5,387) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 142,608 6,804 - --------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 120,925 $ 120,925 $ 1,417 =========================================================================================================
The accompanying notes are an integral part of these financial statements NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Kingston Mines Ltd. (hereinafter "the Company") was incorporated in the State of Nevada, U.S.A., on June 16, 2005. The Company's fiscal year end is August 31. The Company has been in the exploration stage since its formation and has not yet realized any revenues from its operations. It is primarily engaged in the acquisition and exploration of mining properties. Upon location of a commercially minable reserve, the Company expects to actively prepare the site for its extraction and enter a development stage. In 2005, the Company acquired a mineral interest in a property located near the southern boundary of the Town of Merritt in British Columbia, Canada and has not yet determined whether this property contains reserves that are economically recoverable. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred accumulated losses of $67,253 since inception and has no source of revenue. The future of the Company is dependent upon its ability to obtain financing and upon future acquisition, exploration and development of profitable operations from its mineral properties. These factors create doubt as to the ability of the Company to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing to fund the ongoing development of the Company's business. On November 30, 2005, the board of directors approved a 2 for 1 forward stock split of our issued and outstanding shares of common stock. These Financial Statements of Kingston Mines Ltd. have been restated to reflect the 2 for 1 forward stock split. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America. 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 that have been made using careful judgment. The financial statements have, in management's opinion been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: Accounting Method The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at November 30, 2007, there were no cash equivalents. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. As of November 30, 2007, the Company had $nil (August 31, 2007: $48,358) in a bank beyond insured limits. Foreign Currency Transactions The Company is located and operating outside of the United States of America. It maintains its accounting records in U.S. Dollars as follows: At the transaction date each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are remeasured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. Fair Value of Financial Instruments The Company's financial instruments as defined by Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," include cash and cash equivalents, accounts payable and accrued liabilities, promissory note and convertible debenture. Fair values were assumed to approximate carrying value for these financial instruments, except where noted. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company is operating outside the United States of America and has significant exposure to foreign currency risk due to the fluctuation of currency in which the Company operates and U.S. dollars. Mineral Property Payments and Exploration Costs The Company expenses all costs related to the acquisition, maintenance and exploration of mineral claims in which it has secured exploration rights prior to establishment of proven and probable reserves. 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. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. To date, the Company has not established the commercial feasibility of its exploration prospects; therefore, all costs are being expensed. Long-lived assets impairment Long-term assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets retirement obligations The Company has adopted SFAS No 143, Accounting for Assets Retirement Obligations which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. SFAS No. 143 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at November 30, 2007, the Company does not have any asset retirement obligations. Costs associated with environmental remediation obligations will be accrued when it is probable that such costs will be incurred and they can be reasonably estimated. Stock-Based Compensation The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. SFAS No. 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. The Company did not grant any stock options during the period ended November 30, 2007. Comprehensive Income The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity (Deficiency). Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has no elements of "other comprehensive income" for the period ended November 30, 2007. Income Taxes The Company has adopted Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Basic and Diluted Loss Per Share In accordance with SFAS No. 128 - "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if the potential common shares had been issued and if the additional common shares were dilutive. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New Accounting Pronouncements In June 2006, FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109", which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company does not expect the adoption of FIN 48 to have a material effect on its financial condition or results of operations. In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Where applicable, SFAS No. 157 simplifies and codifies related guidance within GAAP and does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier adoption is encouraged. The Company does not expect the adoption of SFAS No. 157 to have a material effect on its financial condition or results of operations. In September 2006, the SEC announced Staff Accounting Bulletin No. 108 ("SAB 108"). SAB 108 addresses how to quantify financial statement errors that arose in prior periods for purposes of assessing their materiality in the current period. It requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality. It clarifies that immaterial financial statement errors in a prior SEC filing can be corrected in subsequent filings without the need to amend the prior filing. In addition, SAB 108 provides transitional relief for correcting errors that would have been considered immaterial before its issuance. The Company does not expect the adoption of SAB 108 to have a material effect on its financial condition or results of operations. In February 2007, the FASB issued SFAS No. 159, "The fair value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115". This statements objective is to improve financial reporting by providing the Company with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This statement is expected to expand the use of fair value measurement, which is consistent with the FASB's long-term measurement objective for accounting for financial instruments. The adoption of SFAS 159 did not have an impact on the Company's financial statements. The Company presently comments on significant accounting policies (including fair value of financial instruments) in Note 2 to the financial statements. NOTE 3 - MINERAL PROPERTY INTEREST On August 30, 2005 the Company acquired a 100% interest in a mineral claim from its principal shareholder and a director of the Company, known as the "Sugarloaf Property" located near the southern boundary of the Town of Merritt in British Columbia, Canada, for consideration of $4,297 being the cost to the principal shareholder, by issuance of a promissory note. The Company expensed the entire amount. On November 21, 2005, the Company acquired a 100% interest in four claims that are contiguous with the Company's other mineral claim and are located near the southern boundary of the Town of Merritt in British Columbia, Canada. The total cost of acquisition of these claims was $463. The Company expensed entire amount. NOTE 4 - CONVERTIBLE DEBENTURE On August 22, 2005, the Company issued a convertible debenture to its principal shareholder and a director in the amount of $15,000. The convertible debenture is unsecured, non-interest bearing, due December 31, 2007 and convertible at the option of the holder at a price of $0.25 per share at any time. The Company charged imputed interest at 3.0% per annum and recorded a total of $112 to the additional paid-in capital for the period from inception to November 30, 2007. The Company repaid the debenture in full in cash on November 29, 2007. The Company did not incur beneficial conversion charges because the conversion price is greater than the fair value of the equity of the Company. NOTE 5 - PREFERRED AND COMMON STOCK The Company has 50,000,000 shares of preferred stock authorized and none issued. The Company has 100,000,000 shares of common stock authorized, of which 9,761,950 shares are issued and outstanding. All shares of common stock are non-assessable and non-cumulative, with no preemptive rights. The offering period for the Company's initial public offering expired on March 13, 2007. During the offering period, the Company sold a total 1,761,950 common shares at $0.10 per share for cash proceeds of $176,195. NOTE 6 - RELATED PARTY TRANSACTIONS See Note 3 and 4. NOTE 7 - SEGMENT INFORMATION The Company currently conducts all of its operations in Canada ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS Our business plan is to proceed with the exploration of the Sugarloaf Property to determine whether there are commercially exploitable reserves of valuable minerals. We intend to proceed with the exploration program recommended by Barry J. Price, P. Geo. Phase I of our exploration program will consist of prospecting and mapping, analyzing rock geochemistry, auger sampling, trenching by backhoe, and induced polarization surveys. Phase II will consist of core sampling by diamond drilling up to five holes to a depth of 200 meters. We anticipate that Phase I will cost approximately $72,500 while Phase II will cost approximately $127,500. To date, we have not commenced exploration on the Sugarloaf Property. We expect that Phase I of our exploration program will be concluded by June 30, 2008. During Phase I we will retain a consulting geologist to review all past exploration data relating to the Sugarloaf Property and plot relevant information on a map. This is known as geological mapping. Based on this mapping, the geologist will choose property areas that are most likely to host economic mineralization. He will then conduct a sampling program focusing on these property areas by gathering rock and soil samples from the identified areas that appear to contain mineralization. The samples will be sent to a laboratory for mineral analysis. By the middle of July, 2008 we should receive the results of the sample analysis and be able to determine which property areas, if any, contain significant mineralization. As part of Phase I, our consulting geologist will also conduct an induced polarization (IP) survey of the property areas from which the mineralized samples were taken. This involves injecting electrical current into the ground, using a generator and transmitter, and measuring the decay of the induced currents when the current is turned off. IP surveying is the tool of choice for locating copper deposits. We plan to commence Phase II of the exploration program in August 2008. Phase II will take approximately three months to complete and will consist of using heavy equipment to drill up to five holes to a depth of 200 meters. Drilling locations will be determined by analyzing the results of the Phase I sampling program and IP surveys. Cylinders of rock will be removed from the drill holes and sent to a laboratory for mineral analysis. Results will indicate the presence of any minerals below the property surface. Should a follow-up exploration program be undertaken, it would likely commence in May 2009, after reviewing the results of Phase II. We do not have any verbal or written agreement regarding the retention of any qualified engineer or geologist for our exploration program. Mr. Barry J. Price, the author of the geology report on the Sugarloaf Property, has indicated that he would be prepared to oversee the exploration program, but we have not discussed any terms of such an arrangement. The proceeds from the sale of the securities from our initial public offering are sufficient for us to complete Phase I of our exploration program as well as anticipated consulting fees, professional fees and administrative expenses for the next 12 months. We will require additional funding to complete Phase II. We will also require additional financing to complete any follow-up exploration work. We do not intend to pursue additional funding until we have obtained the results of Phase I of our exploration program. We anticipate that any additional funding that we require will be in the form of equity financing from the sale of our common stock. There is no assurance, however, that we will be able to raise sufficient funding from the sale of our common stock. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing. If we are unable to secure additional funding, we will cease or suspend operations. We have no plans, arrangements or contingencies in place in the event that we cease operations. Our officers will only be devoting approximately six hours per week of their time to our business. We do not foresee this limited involvement as negatively impacting our company over the next 12 months because all exploratory work is being performed by an outside consultant. If, however, the demands of our business require more time of our officers, such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, they are prepared to adjust their timetables to devote more time to our business. They may, however, not be able to devote sufficient time to the management of our business, as and when needed. We believe that the only equipment we will need to start exploration on the Sugarloaf Property will be a backhoe. We will lease the backhoe from an equipment rental company or hire an independent contractor who owns a backhoe to dig the trenches we refer to in this annual report. We do not have plans to purchase any significant equipment or to hire any employees during the next 12 months and until we have proven reserves. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES. We are a mineral resource exploration stage company that has not begun operations. Our capital has been obtained via issuance of common stock and shareholder loans. On September 12, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-133232) effective. Our offering commenced on September 12, 2006, and expired on March 13, 2007. We sold a total of 1,761,950 common shares during the offering for gross proceeds of $176,195. As of November 30, 2007, we had total assets of $120,961 comprised of $120,925 in cash and $36 in prepaid expense. This is a decrease from $144,802 in total assets as of August 31, 2007. The decrease was primarily attributable to debt repayment and renewal of our mineral exploration licenses. As of November 30, 2007, our total liabilities decreased to $10,594 from $15,212 as of August 31, 2007. The decrease was due to the repayment of a convertible debenture owing to a director. Current liabilities are comprised entirely of accounts payable and accrued liabilities, which increased by $10,382 from August 31, 2007. We have not generated revenue since the date of inception. We presently have sufficient working capital to satisfy our cash requirements for the next 12 months of operations. We do not intend to purchase or sell any significant equipment during the next twelve months. We do not anticipate hiring any employees over the next 12 months. RESULTS OF OPERATIONS We posted an operating loss of $19,335 for the period ended November 30, 2007, due primarily to renewal of our mineral exploration license, accounting fees and filing fees. This was an increase from the operating loss of $11,104 for the period ended November 30, 2006. ITEM 3. CONTROLS AND PROCEDURES As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures as of the end of the period covered by this quarterly report, being November 30, 2007. This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer. Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective. There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any material legal proceedings and to its knowledge, no such proceedings are threatened or contemplated. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS At present, our common stock is quoted on the NASD over-the-counter bulletin board under the trading symbol KGMI. As of November 30, 2007, there were 76 owners of record of our common stock. DIVIDEND POLICY Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available therefor in our sole discretion; however, to date no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future. USE OF PROCEEDS FROM REGISTERED SECURITIES On September 12, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-130922) effective. Our offering commenced on the effective date and terminated on May 13, 2007. As of May 31, 2007, we have sold 1,761,950 shares of our common stock for gross proceeds of $176,195. We budgeted $25,000 from the proceeds of our offering for offering expenses. Of this amount, we paid a total of $9,665 for accounting fees. All other offering expenses were paid from the proceeds of a non-interest bearing loan of $15,000 from a director advanced prior to the commencement of our offering. We used the remainder of the amount budgeted for offering expenses ($15,335) to repay the director's loan in full, with the surplus ($335) being used for working capital. After paying offering expenses and repaying the director's loan, net proceeds from our offering that were available for operations was $151,530. As of November 30, 2007, we spent $3,487 on office expenses, $26,975 for professional fees, $11,944 on filing and transfer agent fees, and $20,746 on claim acquisition and maintenance. Professional fees significantly exceeded our budgeted amount of $10,000 due to higher than expected accounting costs. Claim maintenance fees also exceeded budgeted amounts due to fluctuations in currency exchange rates. We budgeted $6,323 from the proceeds of our offering for the repayment of a debt owing to a director. This debt was repaid from the proceeds of the director's loan. The proceeds that would otherwise have been allocated for debt repayment have been used to pay for professional fees. ITEM 3. DEFAULT UPON SENIOR NOTES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS EXHIBIT DESCRIPTION 31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.1 Officers' Certification SIGNATURES In accordance with the requirements of the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. KINGSTON MINES LTD. By: /s/ Thomas Mills Thomas Mills President, Treasurer, Secretary and a director (Chief Executive Officer) (Principal Financial Officer and Principal Accounting Officer) Date: January 9, 2008 EX-31.1 2 km_10qsb073007ex311.txt CERTIFICATION EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas Mills, President, Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer of Kingston Mines Ltd., certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Kingston Mines Ltd.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: January 9, 2008 By:/s/ Thomas Mills Thomas Mills President, Treasurer, Secretary and a director (Chief Executive Officer) (Principal Financial Officer and Principal Accounting Officer) EX-32.1 3 km_10qsb073007ex321.txt CERTIFICATION EXHIBIT 32.1 CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of Kingston Mines Ltd. on Form 10-QSB for the quarter ended November 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Thomas Mills, President, Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: January 9, 2008 By:/s/ Thomas Mills Thomas Mills President, Treasurer, Secretary and a director (Chief Executive Officer) (Principal Financial Officer and Principal Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----