0001477932-16-008721.txt : 20160219 0001477932-16-008721.hdr.sgml : 20160219 20160219143146 ACCESSION NUMBER: 0001477932-16-008721 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 55 CONFORMED PERIOD OF REPORT: 20150930 FILED AS OF DATE: 20160219 DATE AS OF CHANGE: 20160219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Silverstar Resources, Inc. CENTRAL INDEX KEY: 0001385329 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 980425627 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-140299 FILM NUMBER: 161441394 BUSINESS ADDRESS: STREET 1: 1440 NW 1ST COURT CITY: BOCA RATON STATE: FL ZIP: 33432 BUSINESS PHONE: 561-757-3585 MAIL ADDRESS: STREET 1: 1440 NW 1ST COURT CITY: BOCA RATON STATE: FL ZIP: 33432 FORMER COMPANY: FORMER CONFORMED NAME: SILVERSTAR MINING CORP. DATE OF NAME CHANGE: 20080305 FORMER COMPANY: FORMER CONFORMED NAME: Rose Explorations Inc. DATE OF NAME CHANGE: 20070105 10-K 1 slvm_10k.htm FORM 10-K slvm_10k.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2015

 

OR

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

 

SEC File No. 333-140299

 

SILVERSTAR RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

98-0425627

(State or other jurisdiction of incorporation or organization)

(IRS I.D.)

 

1440 NW 1st Court, Boca Raton FL.

33432

 (Address of principal executive offices)

(Zip Code)

 

Issuer's telephone number: (561) 939-2493.

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

 (Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o      No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o      No x

 

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 past 90 days. Yes x      No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes o      No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K . o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer 

o

Accelerated filer 

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes o     No x

 

The number of shares outstanding of the Company's $.001 Par Value Common Stock as of February 19, 2016 was 3,436,840. The aggregate number of shares of the voting stock held by non-affiliates on February 19, 2016 was 984,524 with a market value of $226,441. For the purposes of the foregoing calculation only, all directors and executive officers of the registrant have been deemed affiliates.

 

DOCUMENTS INCORPORATED BY REFERENCE: None.

 

We have 3,436,840 shares of common stock outstanding as of February 19, 2016.

 

 

 

TABLE OF CONTENTS

  

PART I

Item 1. 

Description of Business

4

Item 2. 

Description of Property

12

Item 3. 

Legal Proceedings

16

Item 4. 

Submission of Matters to a Vote of Security Holders

16

Item 5. 

Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

17

Item 6.

Selected Consolidated Financial Data

18

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operation

19

Item 7A. 

Quantitative and Qualitative Disclosures About Market Risk

23

Item 8. 

Financial Statements

24

Item 9. 

Changes In and Disagreements With Accountants on Accounting and Financial Disclosures

37

Item 9A. 

Controls and Procedures

37

Item 9B. 

Other Information

37

Item 10. 

Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act

38

Item 11. 

Executive Compensation

40

Item 12. 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

41

Item 13. 

Certain Relationships and Related Transactions, and Director Independence.

43

Item 14. 

Principal Accountant Fees and Services

43

Item 15. 

Exhibits

44

 

 
2
 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

 

This Annual Report on Form 10-K, the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission, or SEC, and public announcements that we have previously made or may subsequently make include, may include, incorporate by reference or may incorporate by reference certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to enjoy the benefits of that act. Unless the context is otherwise, the forward-looking statements included or incorporated by reference in this Form 10-K and those reports, statements, information and announcements address activities, events or developments that Silverstar Resources, Inc. (hereinafter referred to as "we," "us," "our," "our Company" or "SR") expects or anticipates, will or may occur in the future. Any statements in this document about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "will continue," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," and similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties, which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document. All forward-looking statements concerning economic conditions, rates of growth, rates of income or values as may be included in this document are based on information available to us on the dates noted, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results may differ materially from those in such forward-looking statements due to fluctuations in interest rates, inflation, government regulations, economic conditions and competitive product and pricing pressures in the geographic and business areas in which we conduct operations, including our plans, objectives, expectations and intentions and other factors discussed elsewhere in this Report.

 

Certain risk factors could materially and adversely affect our business, financial conditions and results of operations and cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, and you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The risks and uncertainties we currently face are not the only ones we face. New factors emerge from time to time, and it is not possible for us to predict which will arise. There may be additional risks not presently known to us or that we currently believe are immaterial to our business. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, you may lose all or part of your investment.

 

The industry and market data contained in this report are based either on our management's own estimates or, where indicated, independent industry publications, reports by governmental agencies or market research firms or other published independent sources and, in each case, are believed by our management to be reasonable estimates. However, industry and market data is subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. We have not independently verified market and industry data from third-party sources. In addition, consumption patterns and customer preferences can and do change. As a result, you should be aware that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data, may not be verifiable or reliable.

 

 
3
 

 

PART I

 

Item 1. Description of Business

 

Overview

 

The address of our principal executive office is located at 1440 NW 1st Court, Boca Raton, FL 33432. Our telephone number is (561) 939-2493. Our company was incorporated in the State of Nevada on December 5, 2003 under the name Computer Maid, Inc. Our company was inactive until February 2006, when we changed our name to Rose Explorations Inc. and became engaged in the exploration of mining properties.

 

On March 4, 2008, our company completed a merger with our wholly-owned subsidiary, SilverStar Resources, Inc., which was incorporated solely to effect the name change of our company to SilverStar Resources, Inc.

 

On March 4, 2008, we affected a 3 for 1 forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 225,000,000 shares of common stock with a par value of $0.001.

 

On April 13, 2011, we incorporated a wholly owned subsidiary, Silverstar Mining (Canada) Inc., under the federal laws of Canada. The subsidiary's main purpose is to hold title to mineral property rights situated in Canada as the laws of that country require that only local entities can hold title to mineral property rights situated within its borders.

 

Effective September 26, 2011, we affected a reverse split our common stock on a 1,000 for 1 basis. As a result of the foregoing, we reduced the number of authorized shares of our common stock from 225,000,000 to 225,000.

 

On February 29, 2012, we filed a Certificate of Amendment to our company's Articles of Incorporation with the Nevada Secretary of State increasing the number of authorized shares from 225,000 to 225,000,000 shares of common stock $0.001 par value.

 

On July 22, 2013 we entered into settlement agreements with four debt holders of our company pursuant to which we restructured outstanding demand loans payable in the aggregate amount of $175,028 (inclusive of accrued interest) as convertible debentures.

 

On February 15, 2013, we closed a Share Exchange Agreement pursuant to which we intended to acquire a wholly owned subsidiary, Arriba Resources Inc. However, effective November 13, 2013 our Board of Directors approved the cancellation and reversal of the Share Exchange Agreement due to a failure of consideration on the part of the seller. As a result of the cancellation and reversal of the Share Exchange Agreement, 2,139,926 shares of our common stock and warrants to acquire 2,078,477 shares of our common stock which were previously authorized (but not issued from treasury) have been cancelled with immediate effect. Consequently, the change of control announced in our current report on Form 8-K filed on May 21, 2013 has been reversed.

 

As a result of the cancellation and reversal of the Share Exchange Agreement with Arriba, the consolidated financial statements of our Company for the quarterly periods ended March 31, 2013 (filed with the SEC on August 14, 2013) and June 30, 2013 (filed with the SEC on May 20, 2013) may no longer be relied upon owing to their inclusion of the financial information of Arriba. We informed our independent accountants of the cancellation and reversal of the Share Exchange Agreement and intend to file amendments to our Quarterly Reports on Form 10-Q for the periods ended March 31 and June 30, 2013 to reflect our financial condition without consolidation of the financial information of Arriba. The financial statements contained in this current report accurately reflect the deconsolidation of the financial information of Arriba.

 

On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition, the amendment set the authorized shares of common stock at 225,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001.

 

On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties

 

 
4
 

 

Current Operational Activities

 

Mineral Exploration

 

On May 16, 2011, we entered into an Agreement of Purchase and Sale with Jaime Mayo to acquire a 100% in three 3 mineral claims known as the Abhau Lake Property (constituting approximately 1,006 hectares) located in the Caribou Mining District near the city of Quesnel, in east-central British Columbia, Canada. In consideration of the property, we paid $10,000 cash as a deposit and issued 2,000 (now 2,000,000 post-split) common shares upon closing. The claims are subject to a 2% NSR (Net Smelter Royalty). We have an option to purchase 1% of the NSR for $1 million and an additional 0.5% of the NSR $500,000.

 

On February 7, 2012 we paid Terracad Geoscience Services $4,040 to re-stake the claims, which had expired, in the name of SilverStar Resources, Inc.

 

On June 12, 2012 we paid Terracad Geoscience Services $10,000 as a pre-payment against an estimated $15,000 charge to prepare the National Instrument 43-101 compliant technical report for the Quesnel property. The work was completed and we received final invoicing for the work on October 1, 2012 in the amount of $15,533 which was recorded as Investment in Mineral Property.

  

On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000.

 

The Company has determined that the asset does not fit the future plans of the Company. Under the guidelines of ASC 360 Newly Acquired Asset Classified as Held for Sale, the Company is actively seeking to dispose of the asset through a sale. As part of the treatment of the asset for sale the Company under ASC 205 Discontinued Operations has treated the expenses related with its acquisition of $3,942 as discontinued operations expense.  During the year ended September 30, 2015, the Company determined that this asset had become impaired and took a charge to earnings of $80,000 which is also reflected in discontinued operations.

  

Market, Customers and Distribution Methods

 

Although there can be no assurance, large and well capitalized markets are readily available for energy throughout the world. A very sophisticated futures market for the pricing and delivery of future production also exists. The price for energy is affected by a number of global factors, including economic strength and resultant demand for minerals for production, fluctuating supplies, mining activities and production by others in the industry, and new and or reduced uses for subject minerals.

 

The mining industry is subject to a number of factors, including intense industry competition, high susceptibility to economic conditions (such as price of minerals, foreign currency exchange rates, and capital and operating costs), and political conditions (which could affect such things as import and export regulations, foreign ownership restrictions). Furthermore, the mining activities are subject to all hazards incidental to mineral exploration, development and production, as well as risk of damage from earthquakes, any of which could result in work stoppages, damage to or loss of property and equipment and possible environmental damage. Hazards such as unusual or unexpected geological formations and other conditions are also involved in mineral exploration and development.

 

Competition

 

We compete with other energy resource exploration companies for financing and for the acquisition of new properties. Many of the resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of properties of merit, on exploration of their properties and on development of their properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of properties. This competition could result in competitors having l properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to achieve the financing necessary for us to conduct further exploration of our mineral properties.

 

Intellectual Property

 

We currently do not hold any intellectual property or operate a website.

 

 
5
 

 

Government Regulations

 

Canada

 

Any mineral properties that we may have will be subject to various Federal and Provincial laws and regulations in Canada which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We will be required to obtain those licenses, permits or other authorizations currently required to conduct exploration and other programs. There are no current orders or directions relating to us or the Newfoundland Property with respect to the foregoing laws and regulations. Such compliance may include feasibility studies on the surface impact of our proposed operations, costs associated with minimizing surface impact, water treatment and protection, reclamation activities, including rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife and permits or bonds as may be required to ensure our compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide to not proceed with exploration, development, or mining operations on any of our mineral properties. We are not presently aware of any specific material environmental constraints affecting our property that would preclude the economic development or operation of property in Canada.

 

Environmental Regulations

 

We are not aware of any material violations of environmental permits, licenses or approvals that have been issued with respect to our operations. We expect to comply with all applicable laws, rules and regulations relating to our business, and at this time, we do not anticipate incurring any material capital expenditures to comply with any environmental regulations or other requirements.

 

While our intended projects and business activities do not currently violate any laws, any regulatory changes that impose additional restrictions or requirements on us or on our potential customers could adversely affect us by increasing our operating costs or decreasing demand for our products or services, which could have a material adverse effect on our results of operations.

 

Subsidiaries

 

We have one wholly-owned subsidiary, Silverstar Mining Canada, Inc., a company incorporated under the federal laws of Canada.

 

Research and Development Expenditures

 

We incurred $0 and $29,893 in mineral property and exploration expenditures during the fiscal years ended September 30, 2015 and 2014, respectively.

 

Employees

 

As of September 30, 2015, we had no employees. Our directors and officers provided their services to our company on a consulting basis and without formal employment agreements.

 

ITEM 1A: RISK FACTORS

 

There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock could decline and shareholders could lose all or part of their investment.

 

Risks Related to our Business Operations

 

We have not generated revenues from operations. We have a history of losses and losses are likely to continue in the future.

 

We have incurred significant losses in the past and we will likely continue to incur losses in the future unless our drilling program proves successful. Even if drilling program is successful, there can be no assurance that we will be able to commercially exploit these resources, generate further revenues or generate sufficient revenues to operate profitably.

 

We may not be able to generate revenue sufficient to maintain operations.

 

We have incurred significant losses since inception and there can be no assurance that we will be able to reverse this trend. Even if we are able to successfully identify commercially exploitable gold and silver reserves, there is no assurance that we will have sufficient financing to exploit these reserves, generate revenues or find a willing buyer for the properties.

 

 
6
 

 

Exploration for economic deposits of gold and silver is speculative.

 

Our business is very speculative since there is generally no way to recover any of the funds expended on exploration unless the existence of commercially exploitable reserves are established and our company can exploit those reserves by either commencing drilling operations, selling or leasing its interest in the property, or entering into a joint venture with a larger company that can further develop the property. Unless we can establish and exploit reserves before our funds are exhausted, we will have to discontinue operations, which could make our stock valueless.

 

The gold and silver industry is highly competitive and the success and future growth of our business depend upon our ability to remain competitive in identifying and developing properties with sufficient reserves for economic exploitation.

 

The gold and silver industry is highly competitive and fragmented with limited barriers to entry, especially at the exploratory stages. We compete in national, regional and local markets with large multi-national corporations and against start-up operators hoping to identify a gold or silver property. Some of our competitors have significantly greater financial resources than we do. This puts us at a competitive disadvantage if we choose to further exploit drilling opportunities.

 

The oil and gas industry is highly competitive and the success and future growth of our business depend upon our ability to remain competitive in identifying and developing properties with sufficient reserves for economic exploitation.

 

The oil and gas industry is highly competitive and fragmented with limited barriers to entry, especially at the exploratory stages. We compete in national, regional and local markets with large multi-national corporations and against start-up operators hoping to identify an oil or gas property. Some of our competitors have significantly greater financial resources than we do. This puts us at a competitive disadvantage if we choose to further exploit drilling opportunities.

 

Our management has no experience in energy operations.

 

Our current management has never been involved in the exploration business. As such, there is substantial doubt whether management has the expertise to effectively run our business and implement our business plan. As such, we will have to retain additional officers or board members who have experience in the mining sector. Alternatively, we will have to rely on consultants or other third party suppliers. Reliance on outside consultants will require the expenditure of significant sums of money which we do not have. As such, the successful launch of an exploratory drilling program remains in doubt.

 

We will require additional financing to continue our operations.

 

We will require significant working capital to undertake our exploration program. There can be no assurance that we will be able to secure additional funding to meet our objectives or if we are able to identify funding sources, that the funding will be available on terms acceptable to our company. Should this occur, we will have to significantly reduce our drilling and mining programs.

 

We may not identify proven reserves to develop any of our properties and our estimates may be inaccurate.

 

There is no certainty that any expenditures made in our exploration program will result in discoveries of commercially recoverable quantities of gold, silver, oil or natural gas. Most exploration projects do not result in the discovery of commercially extractable deposits of gold, silver, oil and gas and no assurance can be given that any particular level of recovery will in fact be realized or that any identified leasehold interest will ever qualify as a commercially developed. Estimates of reserves, deposits and production costs can also be affected by such factors as environmental regulations and requirements, weather, unexpected or unknown results when we re-enter a well, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. Material changes in estimated reserves, exploration and mining costs may affect the economic viability of any project.

 

We have no proven reserves.

 

Our leasehold interests are without known bodies (reserves) of commercial gold or silver gas and oil. Development of these properties will follow only upon obtaining satisfactory exploration results. The long-term profitability of our company's operations will be in part directly related to the cost and success of its exploration and mining programs. Mining for gold and silver and other base metals as well as oil and gas is a highly speculative business involving a high degree of risk. Few properties which are explored are ultimately developed into producing mines and or wells. There is no assurance that our exploration program will result in any discoveries of commercial quantities of gold or silver, oil and gas. There is also no assurance that, even if commercial quantities of gold or silver are discovered, a mine can be brought into commercial production. Production/discovery of gold and silver, oil and gas is dependent upon a number of factors, not the least of which is the technical skill of the exploration personnel involved. The commercial viability of a mine is also dependent upon a number of factors, many of which are beyond our company's control, such as worldwide economy, the price of gold and silver, the price of oil and gas, government regulations, including regulations relating to royalties, allowable production and environmental protection.

 

 
7
 

 

During our operations we may experience certain unanticipated conditions may arise or unexpected or unusual events may occur, including fires, floods, or earthquakes. It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or for other reasons. Should such liabilities arise, they may reduce or eliminate any future profitability and may result in a decline in the value of the securities of our company.

 

We have no history as a company engaged in the mining business.

 

We have no history of earnings or cash flow from mining activities. If we identify proven reserves and are able to proceed to production, commercial viability will be affected by factors that are beyond our control such as the particular attributes of the deposit, the fluctuation in the prices of gold and silver, the cost of construction and operating a mining operation, the availability of economic sources for energy, government regulations including regulations relating to prices, royalties, restrictions on production, quotas on exploration, as the costs of protection of the environment.

 

Our estimates of resources are subject to uncertainty.

 

Estimates of resources are subject to considerable uncertainty. Such estimates are arrived at using standard acceptable geological techniques, and are based on the interpretations of geological data obtained from drill holes and other sampling techniques. Engineers use feasibility studies to derive estimates of cash operating costs based on anticipated tonnage and grades of ore to be mined and processed, the predicted configuration of the ore bodies, expected recovery rates of metal from ore, comparable facility and operating costs and other factors. Actual cash operating costs and economic returns on projects may differ significantly from the original estimates, primarily due to fluctuations in the current prices of metal commodities extracted from the deposits, changes in fuel costs, labor rates, changes in permit requirements, and unforeseen variations in the characteristics of the ore body. Due to the presence of these factors, there is no assurance that any geological reports will accurately reflect actual quantities of gold or silver that can be economically processed and mined by us.

 

We face many operating hazards.

 

The development and operation of a mining property involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. These risks include, among other things, ground fall, flooding, environmental hazards and the discharge of toxic chemicals, explosions and other accidents. Such occurrences may result in work stoppages, delays in production, increased production costs, damage to or destruction of mines and other producing facilities, injury or loss of life, damage to property, environmental damage and possible legal liability for such damages.

 

We will be subject to compliance with government regulation that may increase the anticipated cost of those operations.

 

There are significant governmental regulations that materially restrict mineral property operations. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land, in order to comply with these regulations. Permits and regulations will control all aspects of our exploration program. Examples of regulatory requirements include:

 

(a)

Water discharge will have to meet drinking water standards;

 

(b)

Dust generation will have to be minimal or otherwise re-mediated;

 

(c)

Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation;

 

(d)

An assessment of all material to be left on the surface will need to be environmentally benign;

 

(e)

Ground water will have to be monitored for any potential contaminants;

 

(f)

The socio-economic impact of our operation of the Property will have to be evaluated and, if deemed negative, will have to be re-mediated; and

 

(g)

There may have to be an impact report of the work on the local fauna and flora, including a study of potentially endangered species.

 

 
8
 

 

We do not maintain liability insurance.

 

We do not maintain liability insurance. As such, if we are found liable for any action, whether intentional or unintentional, we will be required to satisfy the liability with our own funds. Currently we have nominal assets and any monetary award would likely result in the close of our operations. Even assuming a significant increase in our assets and we secure liability insurance, the amount of the coverage may be insufficient to cover to insure against any award. Since our company may not be able, or may elect not to insure, this may result in a material adverse change in our company's financial position. The nature of these risks is such that liabilities may exceed policy limits, in which event our company would incur substantial uninsured losses.

 

Environmental and Occupational Regulations will impact our operations.

 

We are subject to various federal, provincial, and local international laws and regulations concerning occupational safety and health as well as the discharge of materials into, and the protection of, the environment. Environmental laws and regulations relate to, among other things:

 

·

assessing the environmental impact of our exploration and mining activities;

·

the generation, storage, transportation and disposal of waste materials;

·

the emission of certain gases into the atmosphere;

·

the monitoring, abandonment, reclamation and remediation of our mining claims, including sites of former operations; and

·

the development of emergency response and contingency plans.

 

The costs of environmental protection and safety and health compliance are significant. Compliance with environmental, safety and health initiatives can be costly. There is no assurance that we will be able to comply with these regulations. If we cannot comply with these regulations, we will be forced to cease all operations in which case you will lose your entire investment. We cannot predict with any reasonable degree of certainty our future exposure concerning such matters.

 

Public policy, which includes laws, rules and regulations, can change.

 

Our operations are generally subject to federal and provincial rules and regulations. In addition, we are also subject to the laws and regulations of local governments. Pursuant to public policy changes, numerous government departments and agencies have issued extensive rules and regulations binding on the mining industry and its individual members, some of which carry substantial penalties for failure to comply. Changes in such public policy have affected, and at times in the future could affect, our operations. Political developments can restrict production levels, enact price controls, change environmental protection requirements, and increase taxes, royalties and other amounts payable to governments or governmental agencies. Existing laws and regulations can also require us to incur substantial costs to maintain regulatory compliance. Our operating and other compliance costs could increase further if existing laws and regulations are revised or reinterpreted or if new laws and regulations become applicable to our operations. Although we are unable to predict changes to existing laws and regulations, such changes could significantly impact our profitability, financial condition and liquidity, particularly changes related to hydraulic fracturing, income taxes and climate change as discussed below.

 

Drilling operations are hazardous, raise environmental concerns and raise insurance risks.

 

Drilling operations are by their nature subject to a variety of risks, such as, flooding, environmental hazards, the discharge of toxic chemicals and other hazards. Such occurrences may delay development or production, increase production costs or result in a liability. We may not be able to insure fully or at all against such risks, due to political or other reasons, or we may decide not to take out insurance against such risks as a result of high premiums or other reasons. We intend to conduct our business in a way that safeguards public health and the environment and in compliance with applicable laws and regulations. Environmental hazards may exist on properties in which we hold an interest which are unknown to us and may have been caused by prior owners. Changes to drilling and mining laws and regulations could require additional capital expenditures and increase operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain operations uneconomic.

 

 
9
 

 

If we are unable to obtain all of our required governmental permits, our operations could be negatively impacted.

 

Our future operations, including exploration and development activities, required permits from various governmental authorities. Such operations are and will be governed by laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to acquire all required licenses or permits or to maintain continued operations at our properties.

 

We are subject to numerous environmental and other regulatory requirements.

 

All phases of drilling and exploration operations are subject to governmental regulation including environmental regulation. Environmental legislation is becoming stricter, with increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and heightened responsibility for companies and their officers, directors and employees. There can be no assurance that possible future changes in environmental regulation will not adversely affect our operations. As well, environmental hazards may exist on a property in which we hold an interest that was caused by previous or existing owners or operators of the properties and of which our company is not aware at present.

 

Government approvals and permits are required to be maintained in connection with our drilling and exploration activities. We will require permits for our operations and there is no assurance that delays will not occur in connection with obtaining all necessary renewals of such permits for the existing operations or additional permits for any possible future changes to our company's operations, including any proposed capital improvement programs. Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in drilling operations may be required to compensate those suffering loss or damage by reason of our activities and may be liable for civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws, regulations and permitting requirements, or more stringent application of existing laws, may have a material adverse impact on our company resulting in increased capital expenditures or production costs, reduced levels of production at producing properties or abandonment or delays in development of properties.

 

There is no assurance that there will not be title or boundary disputes.

 

Although we have investigated the right to explore and exploit our properties and obtained records from government offices, this should not be construed as a guarantee of title. Other parties may dispute the title to any of our properties or that any property may be subject to prior unregistered agreements and transfers. The title may be affected by undetected encumbrances or defects or governmental actions. Should this occur, we face significant delays, costs and the possible loss of any investments or commitment of capital.

 

Local infrastructure may impact our exploration activities and results of operations.

 

Our activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges and power and water supplies are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena sabotage or government or other interference in the maintenance or provision of such infrastructure could adversely affect the activities and profitability of our company.

 

Because of the speculative nature of exploring and/or mining for gold and silver, there is significant risk that our business will fail.

 

Gold and silver exploration is extremely risky. We cannot provide any assurances that our activities will result in commercially exploitable reserves of gold and silver. Exploration for gold and silver is a speculative venture necessarily involving substantial risk. Any expenditure that we make may not result in the discovery of commercially exploitable reserves.

 

The market for gold and silver is volatile. This will have a direct impact on our company's revenues (if any) and profits (if any) and will probably have an adverse effect on our ongoing operations.

 

The price of both gold and silver has fluctuated significantly over the past few years. This has contributed to the renewed interest in gold and silver exploration. However, in the event that the price of either gold or silver falls, the interest in exploratory ventures may decline and the value of our company's business could be adversely affected.

 

 
10
 

 

Because of the speculative nature of exploring and/or mining for oil and gas, there is significant risk that our business will fail.

 

Oil and Gas exploration is extremely risky. We cannot provide any assurances that our activities will result in commercially exploitable reserves of gold and silver. Exploration for oil and gas is a speculative venture necessarily involving substantial risk. Any expenditure that we make may not result in the discovery of commercially exploitable reserves.

 

The market for oil and gas is volatile. This will have a direct impact on our company's revenues (if any) and profits (if any) and will probably have an adverse effect on our ongoing operations.

 

The price of both oil and gas has fluctuated significantly over the past few years. This has contributed to the renewed interest in oil and gas exploration. However, in the event that the price of either gold or silver falls, the interest in exploratory ventures may decline and the value of our company's business could be adversely affected.

 

We are in competition with companies that are larger, more established and better capitalized than we are.

 

Many of our potential competitors have:

 

·

greater financial and technical resources;

·

longer operating histories and greater experience.

 

We may be exposed to potential risks relating to our internal control over financial reporting and our ability to have those controls remediated timely.

 

Pursuant to rules of the SEC implemented pursuant to Section 404 of the Sarbanes-Oxley Act, the independent registered public accounting firm auditing a public company's financial statements must attest to and report on the operating effectiveness of that public company's internal control over financial reporting.

 

Pursuant to Section 404 of the Sarbanes-Oxley Act, as amended by SEC Release 33-8934 on June 26, 2008, we are required to include in our annual reports our assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal years. Furthermore, our independent registered public accounting firm will be required to report separately on whether it believes that we have maintained, in all material respects, effective internal control over financial reporting. We have not yet completed any assessment of the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of our management's time as a result of performing the system and process evaluation, testing and remediation required in order to comply with our management certification and auditor attestation requirements.

 

In the event we identify control deficiencies that we cannot remedy in a timely manner, or if we are unable to receive an unqualified attestation report from our independent registered public accounting firm with respect to our internal control over financial reporting, investors and others may lose confidence in the reliability of our financial statements, and the trading price of our common stock, if a market ever develops, and our ability to obtain any necessary financing could suffer.

 

Our officers have limited experience in managing a public company.

 

Our officers have limited experience in managing a public company, and we do not have any employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our operations, we may identify other deficiencies that we may not be able to remedy in time to satisfy the requirements imposed by the Sarbanes-Oxley Act for compliance with that Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such requirements are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market for our common stock develops, could drop significantly.

 

Our officers do not have employment agreements with us and could cease working for us at any time, causing us to cease our operations.

 

Our officers do not have employment agreements (written or verbal) with us. In the absence of such employment agreements with restrictive covenants on the part of our officers, our officers could leave us at any time or commence working for a competitive business. Furthermore, applicable law under which we operate may cast substantial doubt on the enforceability of any restrictive covenants that we may obtain from our officers in the future. Accordingly, the continued services of our officers cannot be assured. If our officers were to cease working for us, we may have to cease operations.

 

 
11
 

 

Risks Related to Our Common Stock

 

Trading on the OTC Bulletin Board may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

 

Our common stock is quoted on the OTC Bulletin Board service of the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like Amex.

 

The Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

 

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority, which we refer to as FINRA, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for shares of our common stock.

 

ITEM 1B: UNSOLVED STAFF COMMENTS

 

As a "smaller reporting company", we are not required to provide the information required by this Item.

 

Additional Information

 

We are a public company and file annual, quarterly and special reports and other information with the SEC. We are not required to, and do not intend to, deliver an annual report to security holders. You may read and copy any document we file at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our filings are also available, at no charge, to the public at http://www.sec.gov.

 

Item 2. Description of Property

 

Our executive offices are located at 1440 NW 1st Court, Boca Raton FL 33432. These are virtual offices rented for $115 per month on a month to month basis.

 

Mineral Properties

 

We currently hold property in the Caribou Mining District in east-central British Columbia or approximately 65 km northeast of Quesnel, British Columbia, Canada. We have one mining claims in British Columbia, Canada. Subject to securing additional financing, our goal is to explore these mining claims to determine if there are indicated or proven reserves of either gold, silver or base metals.

 

 
12
 

 

Ahbau Lake Property, Caribou Mining District, British Columbia

 

On May 16, 2011, our wholly owned subsidiary, Silverstar Mining Canada, Inc., entered into an agreement of purchase and sale with Jaime Mayo to acquire 100% of the Ahbau Lake Property, Caribou Mining Division, Quesnel District, British Columbia ("AHB Claims") located in British Columbia, Canada. The AHB Claims consist of 3 claims (approximately 1,006 ha).

 

Our company paid $10,000 cash as a deposit and issued 2,000,000 common shares upon closing and is subject to a 2% net smelter royalty. Our company has an option to purchase 1% of the net smelter royalty for $1 million and an additional 0.5% of the NSR $500,000.

 

On February 7, 2012, our company paid Terracad Geoscience Services $4,040 to re-stake the claims, which had expired, in the name of SilverStar Resources, Inc.

 

As of September 30, 2013, the Company paid Terracad Geoscience Services $15,533 to prepare the National Instrument 43-101 compliant technical report for the Quesnel property, Central British Columbia, Canada. As of September 30, 2013 the Company has recorded $29,893 as investment in the mineral property.

 

The mineral claims are located in the Caribou Mining District in east-central British Columbia.

 

Technical Report

 

We received a technical report dated July 20, 2012, written by Erik A. Ostensoe, P. Geo., with respect to the AHB Claims. Pursuant to the technical report Mr. Ostensoe recommended two phases of work for the AHB Claims. The goal for Phase 1 is to conduct geological reconnaissance and prospecting of the entire property, including testing by panning and taking pan concentrate samples from all streams, and MMI-type (mobile metal ion) soil geochemical samples from a grid of sample lines. Phase 2 will comprise improved access, detailed MMI sampling and other work in selected areas that were identified in Phase 1 as having anomalous geochemical responses. Upon completion of Phase 2 work, it will be possible to determine if further work on the AHB Claims are warranted.

 

 

 
13
 

 

 

Property Location and Access

 

There is a growing infrastructure in the region as more of its resources are being exploited by various sized peers and competitors in the area.

 

The SMCI mineral tenures are located within 65 km northeast of Quesnel, British Columbia, in an area that in part has been logged and re-planted. Access is by forestry road to the vicinity of the Willow River: the tenures lie both east and west of that river. The bridge across Willow River is located approximately 1250 metres upstream from the south boundary and a logging branch road follows the east side of Willow River. The total area is 1006 hectares.

 

The Silverstar claim is approximately 7 to 15 kilometers away from Barkerville. To the south of our property is Tiex, Inc. (TIX.V), nearby is Hawthorne Gold Corp. (HGC.V), Rogers Gold Corp., Barker Minerals, Ltd. (BML.V), next to our property is Touchdown Resources (TDW.V), and the west side of our property is currently occupied by Richfield Ventures Corp. (RCV.V).

 

We have conducted feasibility studies on the mining claims and definitive results are still not available; however, contiguous and other properties in the immediate vicinity indicate deposits of gold, silver and copper.

 

 
14
 

 

Geology and Mineralization

 

Soils present on the SMCI property are mostly residual soils developed over clay-rich glacial-fluvial deposits that were deposited in the waning stages of Quaternary glaciations. Such deposits are inherently inhomogeneous and include materials that have been transporteden masseby glacier and stream movement, with periodic episodes of ice ponding during which fine rock flour and silt particles accumulated in quiescent lakes and ponds. During and following de-glaciation, large water flows coupled with post-glacial elastic crustal rebounding modified the landscape to create terrain that approximates that of today. Despite research and various terrain studies, traditional geochemical survey methods have been mostly unsuccessful in relating geochemical analyses to mineral deposits. Multimode interference ("MMI") techniques, initially developed to help explore in areas of deep chemical weathering, were modified to be applicable to many different soil types and have proven successful in recognizing metallic mineralization beneath glacial gravels, sands, and lake clays, as well as wet and sandy organic rich soils. There are many fully licensed laboratories that offer MMI analytical methods, including proprietary extractants specifically designed to treat a variety of multi-element packages. The MMI extractant has the broadest application and is well suited to reconnaissance and early-stage sampling that can be conducted on the SMCI property.

 

The Ahbau Lake area has been included in several programs of geologic investigation by several different public agencies, specifically the Geological Survey of Canada, the Geological Survey branch of the provincial government, and Geoscience BC. Their programs have been directed to the entire Central British Columbia area or, more particularly, to the Nechako Basin with overlap into nearby terrains. The initiatives have been directed to provision of background data in areas of drift cover that may mask structures and formations that have the potential to host valuable deposits of metals (and also, of oil and natural gas). The most potent technical tools include airborne geophysical surveys, including magnetic, electromagnetic, gravity surveys, and geochemical surveys, including Regional Geochemical Surveys that collect and analyze waters, stream sediments and, on occasion, soils.

 

The AHB Claims are prospective for deposits of both bedrock and placer gold that may be similar to those that comprise the Barkerville "Caribou" gold district. The geologic model includes quartz veins and quartz vein stockworks in deformed sedimentary formations that have been subjected to lower greenschist facies metamorphism. The initial source of gold may have been as disseminations in the host rocks with subsequent mobilization by tectonic events into quartz veins.

 

An estimated 1 million grams of placer gold, in the period 1864 to 1874, is estimated to have been recovered from workings located on Ahbau Creek, about two to ten km southwest of the AHB Claims (source: government reports quoted in the Cyprus Anvil property data files). Other placer mining operations, in the mid-1900s, were located between Ahbau and Lodi Lakes, but there appear to be no records of the amount of gold that was recovered. The gold recovered by placer miners is almost certainly derived from nearby bedrock sources but might also have been concentrated by reworking of the extensive deposits of glacially transported materials that may have been carried relatively long distances by the ice sheets.

 

 
15
 

 

There is no history of drilling on the land that we have identified. An immediate neighbor, Touchdown Resources, has recently finished a sampling program on their property contiguous to our company's property.

 

 

 

Climate

 

The general Quesnel area of central British Columbia experiences warm summers with occasional thunderstorms and moderately cold winters. Snow accumulations seldom exceed one metre at lower elevations and two metres at higher levels. Mineral exploration field work can be conducted from May through October; drilling operations can be conducted year-round.

 

Item 3. Legal Proceedings

 

We are not a party to any material legal proceedings nor are we aware of any circumstance that may reasonably lead any third party to initiate material legal proceedings against us.

 

Item 4. Mine Safety Disclosures

 

None

 

 
16
 

 

PART II

 

Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

 

Our shares of common stock are currently trading on the Over the Counter Market under the Symbol "SLVM". Our shares of common stock were initially approved for quotation on the OTC Bulletin Board on October 18, 2007 under the name "Rose Explorations Inc." under the symbol, "ROEX". On March 4, 2008, we changed our name to "SilverStar Resources, Inc." upon completion of our merger with our wholly owned subsidiary, "SilverStar Resources, Inc.". On January 23, 2015, we changed our name to Silverstar Resources, Inc.

 

Trading History

 

Our common stock is quoted on the Over-The-Counter Market under the symbol "SLVM"

 

Bid Information*

 

Financial Quarter Ended

 

High Bid

 

 

Low Bid

 

September 30, 2015

 

$6.00

 

 

 

2.25

 

June 30, 2015

 

$6.00

 

 

 

2.25

 

March 31, 2015

 

$1.50

 

 

 

.25

 

December 31, 2014

 

$2.40

 

 

 

1.75

 

September 30, 2014

 

$3.95

 

 

$1.75

 

June 30, 2014

 

$3.00

 

 

$1.75

 

March 31, 2014

 

$4.00

 

 

$2.50

 

December 31, 2013

 

$2.55

 

 

$2.10

 

________________

*

The quotation do not reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

 

Holders

 

As of February 17, 2016, there were approximately 98 holders of record of our common stock. As of such date, 3,436,840 common shares were issued and outstanding.

 

Our transfer agent is Transfer On Line, Inc. Their mailing address is 512 SE Salmon Street, Portland, OR, 97214 and their telephone number is (503)-227-2950.

 

Equity Compensation Plans

 

We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.

 

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

 

We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended September 30, 2015.

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

On January 9, 2013 the Company issued 4,950 common shares to a note holder that was entitled to this amount of shares based on the terms pursuant to a note payable of $30,000. The Company was obligated to issue an additional 250 common shares to satisfy the terms of the note.

 

On March 28, 2013 warrants to purchase 16,000 common shares were exercised by related parties yielding proceeds of $56,000 in cash received

 

On April 2, 2013 warrants to purchase 1,000 common shares were exercised by related parties yielding proceeds of $3,500 in cash received. The shares were classified as "shares to be issued" in 2013 and issued on March 26, 2014

 

On June 20, 2013 warrants to purchase 3,571 common shares were exercised by related parties yielding proceeds of $12,500 in cash received. The shares were classified as "shares to be issued" in 2013 and issued on March 26, 2014

 

 
17
 

 

On July 17 2013 the Company received $70,000 in a private transaction to purchase 9,333 shares of common stock of the Company. The shares were classified as "shares to be issued" in 2013 and issued on March 26, 2014

 

On September 10, 2013 warrants to purchase 429 common shares were exercised by related parties yielding proceeds of $1,500 in cash received. The shares were classified as '"shares to be issued" in 2013 and issued on March 26, 2014

 

On December 23, 2013 the Company issued 2,483,334 shares of common stock with a value of $34,523 for debt.

 

On March 19, 2014 the Company issued 34,287 shares of common stock with a value of $60,002 for debt.

 

On March 26, 2014 the Company issued 14,333 shares of common stock with a value of $87,501 which was offset against the liability "shares to be issued "of $88,125. The difference of $624 was offset against interest expense.

 

On November 18, 2014 the Company issued 3,000 shares with a value of $12,165 to one individual for accounts payable.

 

On January 15, 2015 the Company issued 40,000 shares of common stock to an officer with a value of $240,000 for services.

 

On January 15, 2015 the Company issued 2,000 shares to an individual with a value of $12,000 for services.

 

On January 15, 2015 the Company issued 800,000 shares of common stock to two entities for the conversion of convertible debt with a value of $10,000.

 

All of the above noted securities were issued without a prospectus pursuant to Regulation S under the Securities Act. Our reliance upon Rule 903 of Regulation S was based on the fact that the sales of the securities were completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. Each investor was not a U.S. person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a U.S. person.

 

Dividends

 

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant.

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

 

 

we would not be able to pay our debts as they become due in the usual course of business; or

 

 

our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our articles of incorporation.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

None

 

Item 6. Selected Consolidated Financial Data

 

Not required.

 

 
18
 

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.

 

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

 

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

 

Overview

  

The address of our principal executive office is located at 1440 NW 1st Court, Boca Raton FL 33432. Our telephone number is (561) 939-2493. Our company was incorporated in the State of Nevada on December 5, 2003 under the name Computer Maid, Inc. Our company was inactive until February 2006, when we changed our name to Rose Explorations Inc. and became engaged in the exploration of mining properties.

 

On March 4, 2008, our company completed a merger with our wholly-owned subsidiary, SilverStar Resources, Inc., which was incorporated solely to effect the name change of our company to SilverStar Resources, Inc.

 

On March 4, 2008, we affected a 3 for 1 forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 225,000,000 shares of common stock with a par value of $0.001.

 

On April 13, 2011, we incorporated a wholly owned subsidiary, Silverstar Mining (Canada) Inc., under the federal laws of Canada. The subsidiary's main purpose is to hold title to mineral property rights situated in Canada as the laws of that country require that only local entities can hold title to mineral property rights situated within its borders.

 

Effective September 26, 2011, we affected a reverse split our common stock on a 1,000 for 1 basis. As a result of the foregoing, we reduced the number of authorized shares of our common stock from 225,000,000 to 225,000.

 

On February 29, 2012, we filed a Certificate of Amendment to our company's Articles of Incorporation with the Nevada Secretary of State increasing the number of authorized shares from 225,000 to 225,000,000 shares of common stock $0.001 par value.

 

On July 22, 2013 we entered into settlement agreements with four debt holders of our company pursuant to which we restructured outstanding demand loans payable in the aggregate amount of $175,028 (inclusive of accrued interest) as convertible debentures.

 

On February 15, 2013, we closed a Share Exchange Agreement pursuant to which we intended to acquire a wholly owned subsidiary, Arriba Resources Inc. However, effective November 13, 2013 our Board of Directors approved the cancellation and reversal of the Share Exchange Agreement due to a failure of consideration on the part of the seller. As a result of the cancellation and reversal of the Share Exchange Agreement, 2,139,926 shares of our common stock and warrants to acquire 2,078,477 shares of our common stock which were previously authorized (but not issued from treasury) have been cancelled with immediate effect. Consequently, the change of control announced in our current report on Form 8-K filed on May 21, 2013 has been reversed.

 

 
19
 

 

As a result of the cancellation and reversal of the Share Exchange Agreement with Arriba, the consolidated financial statements of our Company for the quarterly periods ended March 31, 2013 (filed with the SEC on August 14, 2013) and June 30, 2013 (filed with the SEC on May 20, 2013) may no longer be relied upon owing to their inclusion of the financial information of Arriba. We informed our independent accountants of the cancellation and reversal of the Share Exchange Agreement and intend to file amendments to our Quarterly Reports on Form 10-Q for the periods ended March 31 and June 30, 2013 to reflect our financial condition without consolidation of the financial information of Arriba. The financial statements contained in this current report accurately reflect the deconsolidation of the financial information of Arriba.

 

On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition, the amendment set the authorized shares of common stock at 225,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001.

 

On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties

 

Results of Operations

 

OVERVIEW

 

The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended September 30, 2015 and September 30, 2014 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 10 of this annual report.

 

Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Results of Operations

 

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the year ended September 30, 2015, which are included herein.

 

Expenses

 

Operating expenses for the year ended September 30, 2015 were $344,232, representing an increase of $53,485 from the $290,747 in expenses incurred during fiscal 2014. The increase was primarily a result of an overall increase in our business operations and corresponding increases in filing fees, insurance, legal and accounting, and office expense.

 

Revenue, Net Income and Loss

 

We have had no revenues for the years ended September 30, 2015 and September 30, 2014.

 

Our net loss for the year ended September 30, 2015 was $4,759,074 compared to a net loss of $314,491 during the year ended September 30, 2014. The increase in the net loss was primarily due to an increase in the derivative liability an increase in the interest expense and an increase in the loss on settlement of accounts payable.

 

Our operations to date have been financed by the sale of our common stock and third party loans. Our two largest expenses to date have been legal and accounting fees of $85,947 and mine expense of $111,882. Most of our legal and accounting expenses have been incurred in connection with our regulatory filings with the SEC and in connection with ongoing corporate activities.

 

We do not anticipate generating revenues in the foreseeable future, and any revenues that we generate may not be sufficient to cover our operating expenses. If we do not succeed in raising additional capital, we may have to cease operations and you may lose your entire investment.

 

 
20
 

 

Liquidity and Capital Resources

 

At September 30, 2015 we had cash of $209 as compared to $24 in cash at September 30, 2014. Our accounts payable and accrued expenses at September 30, 2015 were $114,521 and $118,768 as of September 30, 2014. On September 30, 2015 we had convertible debentures of $18,912 outstanding, convertible debentures outstanding due to related parties of $224,896 outstanding, note payables of $141,989, advances to related parties of $55,746 and a derivative liability of $4,152,164. Compared to our outstanding convertible debentures of $28,912, convertible debentures due to related party of $75,754, note payable of $81,989, and advances of 130,508 as of September 30, 2014. Our total liabilities were $4,708,228 on September 30, 2015 as compared to $435,931 as at September 30, 2014. We have a working capital deficit of $4,708,019 as of September 30, 2015 as compared to our working capital deficit of $435,907 as of September 30, 2014.

 

We have no revenues to satisfy our ongoing liabilities. Our auditors have issued a going concern opinion. Unless we secure equity or debt financing, of which there can be no assurance, or identify an acquisition candidate, we will not be able to continue any operations.

 

Working Capital

 

Our total current assets as of September 30, 2015 was cash of $209 as compared to total current assets of $24 as of September 30, 2014. The increase in current assets was an increase in prepaid expenses and cash.

 

Our total current liabilities as of September 30, 2015 were $4,708,228 as compared to total current liabilities of $435,931 as of September 30, 2014. The increase in current liabilities was primarily attributed to an increase in share issuance liability accounts payable and accrued liabilities, convertible debentures, and derivative liabilities.

 

Cash Flows

 

Operating Activities

 

Cash used in operating activities was $48,445 for the fiscal year ended September 30, 2015 compared to cash used in operating activities of $209,926 for the fiscal year ended September 30, 2014. The decrease in cash used in operating activities was primarily due to an increase in stock based compensation, the loss in faire value of the derivative liability, the amortization of beneficial conversion feature, impairment of asset and the cease demand loans payable, related party loans, accounts payable and accrued liabilities, offset by the share issuance liabilities and write down in mineral property rights.

 

Investing Activities

 

Cash used in investing activities was $20,000 for the fiscal year ended September 30, 2015 compared to cash used in investing activities of $0 for the fiscal year ended September 30, 2014.

 

Financing Activities

 

Net Cash provided by Financing Activities for the fiscal year ended September 30, 2015 was $68,630 compared to $204,082 in the year ended September 30, 2014. The decrease was primarily due to $68,630 in proceeds in advances from related parties, compared to $123,853 for the year ended September 30, 2014, proceeds of $0 received in 2015 compared to $81,989 in 2014 and no repayment of credit card advances compared to $1,760 for the previous year. .

 

 
21
 

 

Income & Operation Taxes

 

We are subject to income taxes in the U.S.

 

We paid no income taxes in USA for the fiscal year end ended September 30, 2015 due to the net operation loss in the USA.

 

Net Loss

 

We incurred net losses of $4,759,074 and $ 314,491 for the fiscal year end ended September 30, 2015 and 2014, respectively.

 

Cash Requirements

 

We will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for investors to obtain returns on their investments in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our budgeted expenses.

 

Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:

 

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us. If we

 

Going Concern

 

The financial statements accompanying this report have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As at September 30, 2015, our company has accumulated losses of $6,992,731. We do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.

 

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above in their report on the financial statements for the year ended September 30, 2015, MaloneBailey, LLP., our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

 

The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

 

 
22
 

 

Future Financings

 

We will require additional financing of $250,000 in order to enable us to proceed with our plan of operations, including approximately $200,000 over the next 12 months to pay for our ongoing expenses. These expenses include legal, accounting and audit fees as well as general and administrative expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.

 

We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

 

We presently do not have any arrangements for additional financing for the expansion of our exploration operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.

 

If we are unable to raise the funds that we require to execute our plan of operation, we intend to scale back our operations commensurately with the funds available to us.

 

Off-Balance Sheet Arrangements

 

We currently have no off-balance sheet arrangements.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 

Not required.

 

 
23
 

 

Item 8. Financial Statements

 

SILVERSTAR RESOURCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

 

Contents

 

 

 

Page

 

 

 

 

 

Report of Independent Registered Public Accounting Firm

 

 

25

 

 

 

 

 

 

Financial Statements:

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets as of September 30, 2015 and 2014

 

 

26

 

 

 

 

 

 

Consolidated Statements of Operations for the years ended September 30, 2015 and 2014

 

 

27

 

 

 

 

 

 

Consolidated Statement of Stockholders' Deficit for the years ended September 30, 2015 and 2014

 

 

28

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the years ended September 30, 2015 and 2014

 

 

29

 

 

 

 

 

 

Notes to Consolidated Financial Statements

 

 

30

 

 

 
24
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders' of

Silverstar Resources, Inc

Boca Raton, Florida

 

We have audited the accompanying consolidated balance sheets of Silverstar Resources, Inc. (the "Company") as of September 30, 2015 and 2014 and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company, as of September 30, 2015 and 2014 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered a net loss and a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

February 19, 2016

 

 
25
 

 

SILVERSTAR RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

ASSETS

 

 

 

 

 

 

 

 

Current assets -

 

 

 

 

 

 

Cash and cash equivalents

 

$209

 

 

$24

 

Total current assets

 

 

209

 

 

 

24

 

 

 

 

 

 

 

 

 

 

Total assets

 

$209

 

 

$24

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

Current liabilities -

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$114,521

 

 

$118,768

 

Convertible debentures, related parties

 

 

224,896

 

 

 

75,754

 

Convertible debentures

 

 

18,912

 

 

 

28,912

 

Note payable

 

 

141,989

 

 

 

81,989

 

Advances-related parties

 

 

55,746

 

 

 

130,508

 

Derivative liability

 

 

4,152,164

 

 

 

-

 

Total current liabilities

 

 

4,708,228

 

 

 

435,931

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

4,708,228

 

 

 

435,931

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Preferred Stock;$.001 value 5,000,000 shares authorized, none issued and outstanding

 

 

-

 

 

 

-

 

Common Stock; $.001 par value, 225,000,000 authorized 3,436,840 and 2,591,840 shares issued and outstanding

 

 

 3,437

 

 

 

 2,592

 

Additional-paid in capital

 

 

2,281,275

 

 

 

1,795,158

 

Accumulated deficit

 

 

(6,992,731)

 

 

(2,233,657)
Total stockholders' deficit

 

 

(4,708,019)

 

 

(435,907)
 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$209

 

 

$24

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
26
 

 

SILVERSTAR RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

For the years ended September 30,

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

General and administrative

 

$344,232

 

 

$178,865

 

Mine expense

 

 

-

 

 

 

111,882

 

Loss from operations

 

 

(344,232)

 

 

(290,747)
 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

 

Loss on derivative liability

 

 

(4,152,164)

 

 

-

 

Interest expense

 

 

(175,151)

 

 

(23,611)

Loss on settlement of accounts payable

 

 

(3,585)

 

 

(133)

Total other expenses

 

 

(4,330,900)

 

 

(23,744)
 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

 

(4,675,132)

 

 

(314,491)
 

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

 

(83,942)

 

 

-

 

 

 

 

 

 

 

 

 

 

Net loss

 

$(4,759,074)

 

$(314,491)
 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

 

 

 

 

 

 

 

Continuing operations

 

$(1.47)

 

 

(0.16)

Discontinued operations

 

 

(0.03)

 

 

-

 

 

 

$(1.49)

 

$(0.16)

Basic and diluted weighted average common shares outstanding

 

 

3,189,604

 

 

 

1,997,507

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
27
 

 

SILVERSTAR RESOURCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

For the Years Ended September 30, 2015 and 2014

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2013

 

 

59,786

 

 

$60

 

 

$1,615,664

 

 

$(1,919,166)

 

$(303,442)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for convertible debt

 

 

2,517,621

 

 

 

2,518

 

 

 

92,007

 

 

 

-

 

 

 

94,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for share issuance liability

 

 

14,433

 

 

 

14

 

 

 

87,487

 

 

 

-

 

 

 

87,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(314,491)

 

 

(314,491)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as September 30, 2014

 

 

2,591,840

 

 

 

2,592

 

 

 

1,795,158

 

 

 

(2,233,657)

 

 

(435,907)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issue for accounts payable

 

 

3,000

 

 

 

3

 

 

 

15,747

 

 

 

-

 

 

 

15,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issue for services

 

 

42,000

 

 

 

42

 

 

 

251,958

 

 

 

-

 

 

 

252,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for convertible debt

 

 

800,000

 

 

 

800

 

 

 

9,200

 

 

 

-

 

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value of beneficial conversion feature

 

 

-

 

 

 

-

 

 

 

149,212

 

 

 

-

 

 

 

149,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on settlement of accounts payable with related party

 

 

-

 

 

 

-

 

 

 

60,000

 

 

 

-

 

 

 

60,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,759,074)

 

 

(4,759,074)
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as September 30, 2015

 

 

3,436,840

 

 

$3,437

 

 

$2,281,275

 

 

$(6,992,731)

 

$(4,708,019)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
28
 

 

SILVERSTAR RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

  For the years ended September 30, 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(4,759,074)

 

$(314,491)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock based compensation

 

 

252,000

 

 

 

-

 

Write down of investment in mineral properties

 

 

-

 

 

 

29,893

 

Loss in fair value of derivative liability

 

 

4,152,164

 

 

 

-

 

Loss on settlement of accounts payable

 

 

3,585

 

 

 

133

 

Amortization of beneficial conversion feature

 

 

149,212

 

 

 

-

 

Impairment of asset

 

 

80,000

 

 

 

-

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expense

 

 

73,668

 

 

 

74,423

 

Prepaid expense

 

 

-

 

 

 

249

 

NET CASH USED IN OPERATING ACTIVITIES

 

 

(48,445)

 

 

(209,926)
 

 

 

 

 

 

 

 

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of mineral property

 

 

(20,000)

 

 

-

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

(20,000)

 

 

-

 

 

 

 

 

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from short term notes

 

 

500

 

 

 

-

 

Payments on short term notes

 

 

(500)

 

 

-

 

Proceeds from note payable

 

 

-

 

 

 

81,989

 

Proceeds from advances-related parties

 

 

68,630

 

 

 

123,853

 

Repayment of credit card-related parties

 

 

-

 

 

 

(1,760)

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

68,630

 

 

 

204,082

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

185

 

 

 

(5,844)

Cash, beginning of period

 

 

24

 

 

 

5,868

 

Cash, end of period

 

$209

 

 

$24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOWS INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

$-

 

 

$-

 

Income taxes paid

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL NON CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Discount due to beneficial conversion feature

 

$149,212

 

 

$-

 

Reclassification of advances, related party to convertible debenture, related party

 

$149,212

 

 

$-

 

Reclassification of notes payable, related party to convertible debenture, related party

 

$75,754

 

 

$-

 

Reclassification of accrued interest, related party to advances, related party

 

$5,748

 

 

$-

 

Note payable for purchase of mineral property

 

$60,000

 

 

$-

 

Common stock issued for conversion of convertible debentures

 

$10,000

 

 

$94,525

 

Common stock issued for settlement of accounts payable

 

$12,165

 

 

$-

 

Accounts payable settled with former related party

 

$60,000

 

 

$-

 

Common stock issued for share issuance liability

 

$-

 

 

$87,501

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
29
 

 

SILVERSTAR RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

 

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

Silverstar Resources, Inc (formally Silverstar Mining Corp) (the "Company") was incorporated under the laws of the State of Nevada on December 5, 2003. On March 4, 2008, the Company completed a merger with its wholly-owned subsidiary, Silverstar Resources Corp., which was incorporated by the Company solely to effect the name change of the Company to Silverstar Resources Corp. The Company was incorporated for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Nevada.

 

On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition the amendment set the authorized shares of common stock at 225,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001. All share and per share numbers have been retroactively restated to reflect this stock split.

 

On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

 

Presentation

 

The Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to exploration stage.

 

Principles of Consolidation

 

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

 

Oil and Gas Revenue

 

Revenues are recognized when hydrocarbons have been delivered, the customer has taken title and collection is reasonably assured.

 

 
30
 

 

Mineral Property Costs

 

Mineral property acquisition costs are initially capitalized as tangible assets when purchased. At the end of each fiscal quarter end, the Company assesses the carrying costs for impairment. If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

 

Mineral Property Exploration Costs are expensed as incurred

 

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

 

As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.

 

Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, 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.

 

Property and Equipment

 

Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

 

Related Parties

 

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Foreign Currency Translation

 

The Company's functional and reporting currency is in U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830 Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

 

Impairment of Long-Lived Assets

 

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value.

 

 
31
 

 

Basic and Diluted Net Income (Loss) Per Share

 

Basic and diluted net income (loss) per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net income per share is the same due to net losses during both periods.

 

Income Taxes

 

Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Reclassifications

 

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net loss or stockholders' deficit.

 

Recently Issued Accounting Pronouncements

 

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on their financial position, results of operations or cash flows.

 

NOTE 3 - GOING CONCERN

 

As shown in the accompanying financial statements, the Company has an accumulated deficit of $6,992,731 as of September 30, 2015 and incurred a net loss of $4,759,074 for the year ended September 30, 2015. Unless the Company is able to attain profitability and increases in stockholders' equity, these conditions raise substantial doubt as to the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company continues to review its expense structure in an attempt to reduce operating costs. The Company's expenses are planned to decrease, which would result in an improvement to its results of operations.

 

NOTE 4 - MINERAL PROPERTY INVESTMENT

 

The Company holds a mineral property license which it carried as an asset valued at $29,893 as of September 30, 2013. The value was the amount the Company paid to maintain the license on the property. The Company determined that the amounts paid to hold the license should be treated as expense and thus expensed the $29,893 during the year ended September 30, 2014.

 

NOTE 5 - ASSET HELD FOR SALE

 

On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000. The Company has determined that the asset does not fit the future plans of the Company. Under the guidelines of ASC 360 Newly Acquired Asset Classified as Held for Sale, the Company is actively seeking to dispose of the asset through a sale. As part of the treatment of the asset for sale the Company under ASC 205 Discontinued Operations has treated the expenses related with its acquisition of $3,942 as discontinued operations expense. During the year ended September 30, 2015, the Company determined that this assets had become impaired and took a charge to earnings of $80,000 which is also reflected in discontinued operations.

 

 
32
 

 

NOTE 6 - CONVERTIBLE DEBENTURES - RELATED PARTIES

 

On January 15, 2015 the Company amended the convertible debenture with the principal of $75,754 of a related party so that the debenture became anti-dilutive with a conversion price set at $0.35 regardless of any forward or reverse splits in the Company's common stock.

 

On February 23, 2015 a shareholder holding a debenture with a principal balance of $75,754 and other advances to the Company of $149,212 of which $24,398 was borrowed during September 30, 2015 and $124,814 was the outstanding balance at September 30, 2014 made demand for payment of the total amounts owed including interest. The Company was not able to pay the outstanding balances. The Company and shareholder came to an agreement that the shareholder could convert his $75,754 convertible note payable and interest at $0.15 and the advances of $149,212 plus further advances up to $150,000 at a 15% discount to the closing price as of date of the agreement or $0.15 per share. The shareholder agreed to advance an additional $50,000 to the Company to acquire assets for the Company. The $50,000 is not convertible and is accounted for as advances due to related party see Note 9.

 

The change is terms of the $75,754 convertible note created derivative liability and required the Company to record fair value at the inception of the derivative and for each subsequent reporting period. The fair value of the embedded derivatives at inception was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 281.67%, (3) weighted average risk-free interest rate of 0.025%, (4) expected life of 2.52 year, and (5) estimated fair value of the Company's common stock is $6.00. The initial fair value of the embedded debt derivative was $1,610,091with the fair value calculated as of September 30, 2015 was $4,152,164. As of September 30, 2015 the change in fair value was measured with derivative liability loss of $4,152,164.

 

The addition of a conversion feature for the advances of $149,212 created a beneficial conversion feature as of September 30, 2015 of $149,212. Due to the advances having no terms and being due on demand, this amount was expensed as interest expense.

 

As of September 30, 2015 and 2014 the amount due under the convertible debentures to related party was $224,896 and $75,754 respectively.

 

NOTE 7 - CONVERTIBLE DEBENTURES

 

On December 23, 2013 the Company converted $34,523 of convertible debt and interest into 2,483,334 shares of common stock.

 

On March 19, 2014 the Company converted $60,002 of convertible debt and interest into 34,287 shares of common stock.

 

On January 15, 2015, the Company converted $10,000 of convertible debt and interest into 800,000 shares of common stock. The interest due of $5,748 on the date of the conversion was paid on behalf of the Company and recorded as advances due to related party.

 

As of September 30, 2015 and 2014 the amount of convertible debt outstanding was $18,912 and $28,912, respectively.

 

NOTE 8 - NOTES PAYABLE

 

On June 2, 2014 the Company issued a long term note payable for $81,989 to an entity for advances on work completed on the Company's Ahbau Lake mining property in British Columbia, Canada. The note is unsecured, and bears interest at 10% per year and matures in one year at which time all principal and interest is due and payable. As of September 30, 2015 and 2014 the outstanding balance of was $81,989 and $81,989, respectively.

 

On April 2, 2015 the Company issued a $60,000 one year note bearing interest of 9% as part of the acquisition of the working interest in the Alberta oil and gas property. As of September 30, 2015 the outstanding balance of was $60,000.

 

 
33
 

 

NOTE 9 - ADVANCES - RELATED PARTIES

 

During the year ended September 30, 2015 an officer and director and a related party shareholder of the Company advanced $68,630 in cash, paid $5,748 for interest on behalf of the Company and came to an agreement that $24,398 would be convertible and borrowed $123,853 during the year ended September 30, 2014 to the Company by paying certain Company expenses or to pay its expenses. During the year ended September 30, 2015, $149,212 of the total advances was converted into a convertible debenture. As of September 30, 2015 and 2014 the total amount due to the related parties under these advances were $55,746 and $130,508, respectively.

 

The advances are unsecured, do not have a term and carry no interest rate.

 

NOTE 10 - DERIVATIVE INSTRUMENTS

 

During the year ended September 30, 2015 the Company changed the conversion features on a convertible instrument that require liability classification under ASC 815. These instruments are measured at fair value at the end of each reporting period. (See Note 6).

 

As defined in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

 

·

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities

 

 

 

 

·

Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

 

 

 

 

·

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

 

 
34
 

 

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as September 30, 2015 and 2014:

 

Recurring Fair Value Measures

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities at September 30, 2015

 

$-

 

 

$-

 

 

$4,152,164

 

 

$4,152,164

 

Derivative liabilities at September 30, 2014

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

The below table represents the change in the fair value of the derivative liabilities during the year ended September 30, 2015:

 

Fair value of derivatives, September 30, 2014

 

$-

 

Derivative day one measurement- loss due to derivative

 

 

1,610,091

 

Change in fair value of derivative liability- loss

 

 

2,542,073

 

Fair value of derivatives, September 30, 2015

 

$4,152,164

 

 

NOTE 11 - EQUITY

 

On December 23, 2013 the Company issued 2,483,334 shares of common stock with a value of $34,523 for debt.

 

On March 19, 2014 the Company issued 34,287 shares of common stock with a value of $60,002 for debt.

 

On March 26, 2014 the Company issued 14,433 shares of common stock with a value of $87,501 which was offset against the liability "shares to be issued" of $88,125. The difference of $624 was offset against interest expense.

 

On November 18, 2014 the Company issued 3,000 shares with a value of $15,750 to one individual for the settlement of $12,165 of accounts payable .The Company computed the fair value of the stock issued for the debt and recorded a loss on settlement of accounts payable of $3,585

 

On January 15, 2015 the Company issued 40,000 shares of common stock to an officer with a value of $240,000 for service.

 

On January 15, 2015 the Company issued 2,000 shares to an individual with a value of $12,000 for service.

 

On January 19, 2015, the Company the Company issued 800,000 shares of common stock with a value of $10,000 for debt.

 

During the year ended September 30, 2015, the Company settled certain accounts payable due to a former related party for $60,000 less that the amount of the debt. Since this gain was related to a settlement with a related party at the time of settlement, the gain has been recorded directly to additional paid in capital.

 

NOTE 12 - INCOME TAXES

 

The Company has losses carried forward for income tax purposes through September 30, 2015. There are no current or deferred tax expenses for the years ended September 30, 2015 and 2014 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

 

 
35
 

 

The provision for refundable federal income tax consists of the following:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Deferred income tax asset attributed to:

 

 

 

 

 

 

Current operations

 

$68,718

 

 

$106,927

 

Less: Change in valuation allowance

 

 

(68,718)

 

 

(106,927)

Net refundable amount

 

$-

 

 

$-

 

 

The composition of the Company's deferred tax assets as at September 30 are as follows:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Income tax operating loss carryforward

 

$2,435,770

 

 

$2,233,657

 

 

 

 

 

 

 

 

 

 

Statutory federal income tax rate

 

 

34%

 

 

34%

Effective income rate

 

 

0%

 

 

0%
 

 

 

 

 

 

 

 

 

Deferred tax assets

 

$828,162

 

 

$759,443

 

Less: Valuation allowance

 

 

(828,162)

 

 

(759,443)

Net deferred income tax asset

 

$-

 

 

$-

 

 

The potential income tax benefit of these losses has been offset by a full valuation allowance.

 

As of September 30, 2015, the Company has an unused net operating loss carry-forward balance of $2,435,770 that is available to offset future taxable income. This unused net operating loss carry-forward balance expires between 2025 and 2034.

 

The issuance of 2,532,054 shares of common stock during the year ended September 30, 2014 affected a change in control of the Company. Due to the change in control, the tax loss carryforward may only be used on a formula basis under IRS section 382 which will affect the benefit the Company can gain from the tax loss.

 

NOTE 13 - DISCONTINUED OPERATIONS

 

On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000. The Company has determined that the asset does not fit the future plans of the Company. The Company is actively seeking to dispose of the asset through a sale. The Company is treating the disposition of this property as a discontinued operation. At September 30, 2015, the Company determined that this asset was fully impaired and took a charge to earnings of $80,000. In addition, the Company has treated the expenses related with its acquisition of $3,942 as discontinued operations expense.

 

NOTE 14 - COMMITMENTS AND CONTINGENCIES

 

On January 9, 2014 the Company entered into a release and compensation agreement with a former director and officer of the Company. Under the terms of the agreement the Company was to pay by March 31, 2014 $18,050 of account payable due to the former officer and director plus issue 5,000 shares of common stock to the individual. In return the former officer and director was to complete the filing of the Company 10-K for year-end September 30, 2014, resign at that time as an officer and director, assist in the filing of the December 31, 2014 10-Q and return to the Company all the books and records in his possession.

 

Subsequent to his resignation the former officer and director did not return any of the Company's property as agreed plus the December 31, 2013 10-Q required refiling due to misstatement of information. The Company's position is that the former officer and director is in breach of contract. Because the contract was breached, the Company's board of directors did not authorize the issuance of the shares.

 

During the year ended September 30, 2015, the Company settled certain accounts payable due to a former related party for $60,000 less that the amount of the debt. Since this gain was related to a settlement with a related party at the time of settlement, the gain has been recorded directly to additional paid in capital.

 

NOTE 15 - SUBSEQUENT EVENTS

 

On December 29, 2015 the Company issued a $17,500 note bearing interest of 6% to a non-related party in exchange for $17,500 of cash for the purpose of working capital.

  

 
36
 

 

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures

 

None

 

Item 9A. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The Company's Chief Executive Officer/ Chief Financial Officer has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2015. Based upon such evaluation, the Chief Executive Officer/Chief Financial Officer has concluded that, as of September 30, 2015, the Company's disclosure controls and procedures were not effective. This conclusion by the Company's Chief Executive Officer/Chief Financial Officer does not relate to reporting periods after September 30, 2015.

 

Management's Report on Internal Control over Financial Reporting

 

Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2015 based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we will be implementing further internal controls as we become operative so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Based on its evaluation as of September 30, 2015, our management concluded that our internal controls over financial reporting were not effective as of September 30, 2015 due to the material weaknesses set forth below. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weaknesses relates to the following:

 

1. Accounting and Finance Personnel Weaknesses - Our current accounting staff is relatively small and we do not have the required infrastructure of meeting the higher demands of being a U.S. public company. This material weakness also relates to a lack of personnel with expertise in preparing financial statements in accordance with U.S. GAAP, in addition to the small size of the staff.

 

This weakness also is due to our CEO and CFO being the same person.

 

2. Lack of Internal Audit Function - We lack sufficient resources to perform the internal audit function. This weakness also is due to our CEO and CFO being the same person.

 

In order to mitigate these material weaknesses to the fullest extent possible, all work of the CFO is reviewed by a Director of the Company. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it will be immediately implemented. The Company continues to study the implementation of additional internal controls over accounting and financial reporting. 

 

This Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for "smaller reporting companies" under theDodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

 

Changes in Internal Control Over Financial Reporting

 

We have not made any changes in our internal controls over financial reporting that occurred during the period covered by this Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..

 

Item 9B. Other Information

 

None.

 

 
37
 

 

PART III

 

Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act

 

Directors and Officers

 

The following individuals serve as the directors and executive officers of our company as of the date of this annual report. All directors of our company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.

 

Name

Position Held with Our Company

Age

Date First Elected or Appointed

Jared Robinson

Chief Executive Officer, and Director

44

March 3, 2013

Joseph Graham

Secretary and Director

32

August, 11, 2013

 

Business Experience

 

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person's principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

 

Jared Robinson - President and Director

 

Jared Robinson has acted as a director of our company's board of Directors since March 3, 2013 and as Chairman since August 11, 2013. Mr. Robinson has more than 15 years of management experience and substantial financial experience gained from creating and operating two successful start-ups from conception through sale. In September of 2010 Mr. Robinson sold Navicus, a company that he founded in 2001 to Pinkerton C and I. Mr. Robinson served as President and was integral in all aspects of the company's success, from securing key accounts, overseeing all the financials, vendor relationships, and managing the 30 plus employees. Prior to Navicus, Mr. Robinson served as COO of Greene's Pharmacy. Greene's was founded in 1996 and sold in 2000. Greene's was an institutional pharmacy that sold pre-packaged prescriptions to the Assisted Living Facility community in South Florida. Mr. Robinson secured key accounts, managed the operations, and oversaw all of the financials. Most recently, Mr. Robinson served as COO of Clean Beach Technologies. Clean Beach Technologies was a company formed with technology approved by British Petroleum to remediate oil from the beach sand following the Deep Water Horizon Oil spill in the Gulf Coast. After running the company for a year and securing contracts with the municipalities in the Gulf Coast, the company eventually sold its technology. Mr. Robinson is currently an active member of MSHA (Mine Safety and Health Administration).

 

Joseph Graham - Secretary and Director

 

Joseph Graham was appointed as secretary and director of our company on August 11, 2013. Joseph Graham is an attorney at law admitted to the Bar in the States of New York and New Jersey. Mr. Graham has a diverse skill set through his various jobs in the legal field. In 2008 Mr. Graham worked in the U.S. EPA Office of Enforcement and Compliance Assurance, Air Enforcement Division. In 2009 he worked with the Community Health Law Project, a project that prosecuted civil rights cases on behalf of the handicapped and indigent. In 2010 Mr. Graham worked for the Honorable Michael J. Yavinsky in the New York Criminal Court System where he reviewed party motion submissions, researched legal issues for pending motion hearings and decisions, and helped create a sentencing chart as a reference for all New York City Criminal Court Judges. In 2011 to 2012, Mr. Graham worked with Fred Alger Management where he received his training on SEC law and worked with general counsel of the mutual fund complex and was responsible for various regulatory filings with the SEC, reviewed all agreements, acted as a liaison with sales and marketing departments regarding their responsibilities under securities law, and provided guidance to portfolio managers and analysts regarding investment restrictions. Mr. Graham currently practices with the Community Health Law Project, advising and representing clients on a range of family, consumer, and housing law matters. Mr. Graham graduated from Pace University School of Law in 2010 and received his Bachelor of Arts from Montclair State University and was a magna cum laude in 2007.

 

Family Relationships

 

There are no family relationships among any of our directors, executive officers and proposed directors or executive officers.

 

 
38
 

 

Committees of the Board

 

All proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the state of Nevada and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

 

Our audit committee consists of our entire board of directors.

 

Our company currently does not have nominating, compensation committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our directors.

 

Our company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The directors believe that, given the early stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. Our directors assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

 

Audit Committee and Audit Committee Financial Expert

 

Our board of directors has determined that none of the members of our audit committee qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

 

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors.

 

Code of Ethics

 

We adopted a Code of Ethics applicable to all of our directors, officers, employees and consultants, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics is attached as an exhibit to our annual report on Form 10-KSB filed on December 29, 2008. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

 

We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests may be sent in writing to: SilverStar Resources, Inc., 1489 West Warm Springs Road, Ste. 110, Henderson, Nevada 89014.

 

 
39
 

  

ITEM 11: EXECUTIVE COMPENSATION.

 

The following tables sets for the compensation for all officers and directors during the past three years:

 

DIRECTORS and OFFICERS - COMPENSATION

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position

 

 

Year

 

   

Salary
($)

 

 

   

Bonus
($)

 

 

   

Stock
Awards
($)

 

 

   

Option Awards
($)

 

 

   

Non- Equity Incentive Plan Compensation
($)

 

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)

 

 

   

All Other Compensation
($)

 

 

   

Total
($)

 

Guy Martin(1)

 

2014

 

 

28,050

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

28,050

 

Former Chief

 

2013

 

 

10,000

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

17,300(6)

 

 

27,300

 

Executive Officer, Former Chief

 

2012

 

 

 

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

Financial Officer and Former
Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph Graham(2)

 

2015

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Secretary and

 

2014

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Director

 

2013

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jared Robinson(3)

 

2015

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Chairman,

 

2014

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Director, Former Chief Financial Officer

 

2013

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sean Carrick(4)

 

2014

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Former Chief

 

2013

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Executive Officer and Former Director

 

2012

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Neil Kleinman(5)

 

2014

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Former Chief

 

2013

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

Executive Officer and Director

 

2012

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lowell Holden(7)

 

2015

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

47,500

 

 

47,500

 

Former Chief Financial

 

2014

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

30,000

 

 

 

30,000

 

Officer

 

2013

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

 

 

--

 

_________________ 

(1)

Guy Martin was appointed as our chief financial officer and director on August 13, 2013. Mr. Martin was subsequently appointed as our chief executive officer on November 13, 2013. Mr. Martin resigned in February, 2014. Constitutes consulting fees paid to a corporation controlled by Mr. Martin for accounting services during the period prior to his appointment as an officer of the Company.

(2)

Joseph Graham has been our secretary and director since August 11, 2013.

(3)

Jared Robinson was appointed as our Chief Financial Officer and Director on March 3, 2013. Mr. Robinson resigned as Chief Financial Officer and was appointed Chairman of our Board of Directors on August 13, 2013

(4)

Sean Carrick acted as our chief executive officer and director from August 11, 2013 until his resignation on November 13, 2013.

(5)

Neil Kleinman acted as our chief executive officer and director from October, 2010 until his resignation on August 11, 2013.

(7)

Lowell Holden acted as our Chief Financial Officer and a Director from February 1, 2011 until his resignation on September 13, 2015. Mr. Holden accrued $ 66,000 consulting fees of which $11,500 was paid to his consulting Company Mayday Management, Inc. in October, 2014 and 47,500 was consulting services for the fiscal year 2015. In September 2015, the Company paid $6,000 to settle $66,000 in amounts due to Lowell Holden. The Company recognized $60,000 as additional paid in capital, since on the date of the settlement he was considered to be a related party.

 

 
40
 

 

Narrative Disclosure to Summary Compensation Table

 

There are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or its subsidiaries, any change in control, or a change in the person's responsibilities following a change in control of our company.

 

Stock Option Plan

 

Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.

 

Stock Options/SAR Grants

 

During our fiscal year ended September 30, 2014 there were no options granted to our named officers or directors.

 

Outstanding Equity Awards at Fiscal Year End

 

No equity awards were outstanding as of the year ended September 30, 2015.

 

Compensation of Directors

 

We reimburse our directors for expenses incurred in connection with attending board meetings. We have not paid any director's fees or other cash compensation for services rendered as a director since our inception to September 30, 2015.

 

We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.

 

We have determined that none of our directors are independent directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.

 

Pension, Retirement or Similar Benefit Plans

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table sets forth, as of December 31, 2014 certain information concerning the beneficial ownership of our common stock, by (i) each person known by us to own beneficially five per cent (5%) or more of the outstanding shares of each class, (ii) each of our directors and executive officers, and (iii) all of our executive officers and directors as a group.

 

 
41
 

 

The number of shares beneficially owned by each 5% stockholder, director or executive officer is determined under the rules of the Securities and Exchange Commission, or SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares that the individual or entity has the right to acquire within 60 days after October 31, 2013 through the exercise of any stock option, warrant or other right, or the conversion of any security. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

 

Address of Beneficial Owner

 

Amount and Nature of Beneficial Ownership (1)

 

 

Percentage
of Class

 

 

 

 

 

 

 

 

Joseph Graham(4)

1489 West Warm Springs Road

Suite 110

Henderson, NV 89014

 

 

30,000

 

 

 

.87%
 

 

 

 

 

 

 

 

 

Jared Robinson(5)

1489 West Warm Springs Road

Suite 110

Henderson, NV 89014

 

 

50,000

 

 

 

1.45%
 

 

 

 

 

 

 

 

 

Petra Corporation

1489 West Warm Springs Road

Suite 110

Henderson, NV 89014

 

 

470,000

 

 

 

13.68%
 

 

 

 

 

 

 

 

 

Lilia Mishal

1489 West Warm Springs Road

Suite 110

Henderson, NV 89014

 

 

581,316

 

 

 

16.91%
 

 

 

 

 

 

 

 

 

Jaime Mayo

1489 West Warm Springs Road

Suite 110

Henderson, NV 89014

 

 

1,001,000

 

 

 

29.13%
 

 

 

 

 

 

 

 

 

Directors and Executive officers as a Group

 

 

80,000

 

 

 

2.32%

 

We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

 

 
42
 

 

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Except as described below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party during the past two years, or in any proposed transaction to which our company is proposed to be a party:

 

A.

any director or officer;

 

B.

any proposed nominee for election as a director;

 

C.

any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or

 

D.

any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary.

 

Director Independence

 

We currently act with two directors, consisting Joseph Graham and Jared Robinson. We do not have a standing audit, compensation or nominating committee, but our entire board of director's acts in such capacities. We believe that our members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development

 

Item 14. Principal Accountant Fees and Services

 

MaloneBailey LLP was our independent auditors for the fiscal years ended September 30, 2015 and 2014.

 

The following table shows the fees paid or accrued by us for the audit and other services provided by our auditor for fiscal 2015 and 2014.

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Audit Fees

 

$17,500

 

 

$3,000

 

Audit-Related Fees

 

 

 

 

 

 

 

 

Tax Fees

 

 

 

 

 

 

 

 

All Other Fees

 

 

 

 

 

 

 

 

Total

 

$17,500

 

 

$3,000

 

 

 

As defined by the SEC, (i) "audit fees" are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) "audit-related fees" are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "audit fees;" (iii) "tax fees" are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) "all other fees" are fees for products and services provided by our principal accountant, other than the services reported under "audit fees," "audit-related fees," and "tax fees."

 

 
43
 

 

Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditors in order to ensure that they do not impair the auditors' independence. The SEC's rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee's responsibility for administration of the engagement of the independent auditors. Until such time as we have an Audit Committee in place, the Board of Directors will pre-approve the audit and non-audit services performed by the independent auditors.

 

Consistent with the SEC's rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent auditors to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting.

 

Item 15. Exhibits

 

Exhibit No.

Document Description

31.1

CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1 *

CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

 

 

 

101

 

XBRL INTERACTIVE DATA FILES

_______________ 

*

This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

 
44
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

SILVERSTAR RESOURCES, INC.

(Registrant)

Dated: February 19, 2016

By:

/s/ Jared Robinson

Jared Robinson, Chief Executive Officer

 

Pursuant to the requirements of the Securities 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.

 

Dated: February 19, 2016

By:

/s/ Jared Robinson

Jared Robinson, Chief Executive Officer and Director

Dated: February 19, 2016

By:

/s/ Joseph Graham

Joseph Graham, Secretary and Director

 

 
45
 

 

EXHIBIT INDEX

 

Exhibit No.

Document Description

31.1

CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1 *

CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

 

 

 

101

 

XBRL INTERACTIVE DATA FILES

_________________

*

This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general language in any filings.


 

46 


EX-31.1 2 slvm_ex311.htm CERTIFICATION slvm_ex311.htm

EXHIBIT 31.1

 

CERTIFICATION

 

I, Jared Robinson, certify that:

 

1.

I have reviewed this report on Form 10-K of SilverStar Resources, Inc.;

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 registrant as of, and for, the periods presented in this report;

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant'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

d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

 

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 registrant'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 registrant's internal control over financial reporting.

 

 

SilverStar Resources, Inc.

Dated: February 19, 2016

By:

/s/ Jared Robinson

Jared Robinson

Chief Executive Officer

 

EX-32.1 3 slvm_ex321.htm CERTIFICATION slvm_ex321.htm

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies that the Annual Report on Form 10-K for the year ended September 30, 2015 of SilverStar Resources, Inc. (the "Company") fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

SilverStar Resources, Inc.

Dated: February 19, 2016

By:

/s/ Jared Robinson

Jared Robinson

Chief Executive Officer/Chief Financial Officer

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Silver Star Resources, Inc. and will be retained by SilverStar Resources, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-101.INS 4 slvm-20150930.xml XBRL INSTANCE DOCUMENT 0001385329 2014-10-01 2015-09-30 0001385329 2014-09-30 0001385329 2015-09-30 0001385329 2013-10-01 2014-09-30 0001385329 2016-02-19 0001385329 us-gaap:CommonStockMember 2013-10-01 2014-09-30 0001385329 us-gaap:CommonStockMember 2014-10-01 2015-09-30 0001385329 us-gaap:CommonStockMember 2013-09-30 0001385329 us-gaap:CommonStockMember 2014-09-30 0001385329 us-gaap:CommonStockMember 2015-09-30 0001385329 us-gaap:AdditionalPaidInCapitalMember 2013-10-01 2014-09-30 0001385329 us-gaap:AdditionalPaidInCapitalMember 2014-10-01 2015-09-30 0001385329 us-gaap:AdditionalPaidInCapitalMember 2013-09-30 0001385329 us-gaap:AdditionalPaidInCapitalMember 2014-09-30 0001385329 us-gaap:AdditionalPaidInCapitalMember 2015-09-30 0001385329 us-gaap:RetainedEarningsMember 2013-10-01 2014-09-30 0001385329 us-gaap:RetainedEarningsMember 2014-10-01 2015-09-30 0001385329 us-gaap:RetainedEarningsMember 2013-09-30 0001385329 us-gaap:RetainedEarningsMember 2014-09-30 0001385329 us-gaap:RetainedEarningsMember 2015-09-30 0001385329 2013-09-30 0001385329 SLVM:AhbauLakeMiningPropertyMember 2015-09-30 0001385329 SLVM:AhbauLakeMiningPropertyMember 2014-09-30 0001385329 SLVM:AlbertaOilAndGasPropertyMember 2015-09-30 0001385329 us-gaap:FairValueInputsLevel1Member 2015-09-30 0001385329 us-gaap:FairValueInputsLevel2Member 2015-09-30 0001385329 us-gaap:FairValueInputsLevel3Member 2015-09-30 0001385329 us-gaap:FairValueInputsLevel1Member 2014-09-30 0001385329 us-gaap:FairValueInputsLevel2Member 2014-09-30 0001385329 us-gaap:FairValueInputsLevel3Member 2014-09-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure SILVERSTAR RESOURCES, INC. 0001385329 2015-09-30 false --09-30 FY 2015 10-K Smaller Reporting Company 0.001 0.001 225000000 225000000 2591840 3436840 2591840 3436840 24 209 5868 130508 55746 24 209 24 209 435931 4708228 28912 18912 118768 114521 81989 141989 435931 4708228 24 209 -2233657 -6992731 1795158 2281275 2592 3437 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On June 2, 2014 the Company issued a long term note payable for $81,989 to an entity for advances on work completed on the Company's Ahbau Lake mining property in British Columbia, Canada. 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As of September 30, 2015 the outstanding balance of was $60,000.</font></p> No No Yes 68630 123853 3436840 226441 <p style="margin: 0pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Silverstar Resources, Inc (formally Silverstar Mining Corp) (the &#34;Company&#34;) was incorporated under the laws of the State of Nevada on December 5, 2003. On March 4, 2008, the Company completed a merger with its wholly-owned subsidiary, Silverstar Resources Corp., which was incorporated by the Company solely to effect the name change of the Company to Silverstar Resources Corp. The Company was incorporated for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Nevada.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition the amendment set the authorized shares of common stock at 225,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001. All share and per share numbers have been retroactively restated to reflect this stock split.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties.</font></p> <p style="margin: 0pt; text-align: justify"></p> <p style="margin: 0pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Use of Estimates</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. 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Document and Entity Information - USD ($)
12 Months Ended
Sep. 30, 2015
Feb. 19, 2016
Document And Entity Information    
Entity Registrant Name SILVERSTAR RESOURCES, INC.  
Entity Central Index Key 0001385329  
Document Type 10-K  
Document Period End Date Sep. 30, 2015  
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Entity a Well-known Seasoned Issuer No  
Entity a Voluntary Filer No  
Entity's Reporting Status Current Yes  
Entity Filer Category Smaller Reporting Company  
Entity Public Float   $ 226,441
Entity Common Stock, Shares Outstanding   3,436,840
Document Fiscal Period Focus FY  
Document Fiscal Year Focus 2015  

XML 14 R2.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONSOLIDATED BALANCE SHEETS - USD ($)
Sep. 30, 2015
Sep. 30, 2014
Current Assets:    
Cash and cash equivalents $ 209 $ 24
Total current assets 209 24
Total Assets 209 24
Current Liabilities:    
Accounts payable and accrued expenses 114,521 118,768
Convertible debentures, related parties 224,896 75,754
Convertible debentures 18,912 28,912
Note payable 141,989 81,989
Advances - related parties 55,746 $ 130,508
Derivative liability 4,152,164
Total current liabilities 4,708,228 $ 435,931
Total liabilities $ 4,708,228 $ 435,931
Stockholders' deficit:    
Preferred Stock; $.001 value 5,000,000 shares authorized, none issued and outstanding
Common Stock; $.001 par value, 225,000,000 authorized 3,436,840 and 2,591,840 shares issued and outstanding $ 3,437 $ 2,592
Additional paid-in capital 2,281,275 1,795,158
Accumulated deficit (6,992,731) (2,233,657)
Total stockholders' deficit (4,708,019) (435,907)
Total Liabilities and Stockholders' (Deficit) $ 209 $ 24
XML 15 R3.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2015
Sep. 30, 2014
Stockholders' Equity (Deficit)    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 225,000,000 225,000,000
Common stock, shares issued 3,436,840 2,591,840
Common stock, shares outstanding 3,436,840 2,591,840
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Operating Expenses:    
General and administrative $ 344,232 $ 178,865
Mine expense 111,882
Loss from operations $ (344,232) $ (290,747)
Other expenses:    
Loss on derivative liability (4,152,164)
Interest expense (175,151) $ (23,611)
Loss on settlement of accounts payable (3,585) (133)
Total other expenses (4,330,900) (23,744)
Net loss from continuing operations (4,675,132) $ (314,491)
Net loss from discontinued operations (83,942)
Net loss $ (4,759,074) $ (314,491)
Basic and diluted loss per common share    
Continuing operations $ (1.47) $ (0.16)
Discontinued operations (0.03)
Earnings per share basic and diluted $ (1.49) $ (0.16)
Basic and diluted weighted average common shares outstanding 3,189,604 1,997,507
XML 17 R5.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($)
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Total
Beginning Balance, Shares at Sep. 30, 2013 59,786      
Beginning Balance, Amount at Sep. 30, 2013 $ 60 $ 1,615,664 $ (1,919,166) $ (303,442)
Common stock issued for convertible debt, Shares 2,517,621      
Common stock issued for convertible debt, Amount $ 2,518 92,007 94,525
Common stock issued for share issuance liability, Shares 14,433      
Common stock issued for share issuance liability, Amount $ 14 $ 87,487 87,501
Net loss $ (314,491) (314,491)
Ending Balance, Shares at Sep. 30, 2014 2,591,840      
Ending Balance, Amount at Sep. 30, 2014 $ 2,592 $ 1,795,158 $ (2,233,657) (435,907)
Common stock issued for convertible debt, Shares 800,000      
Common stock issued for convertible debt, Amount $ 800 9,200 10,000
Common shares issued for accounts payable, Shares 3,000      
Common shares issued for accounts payable, Amount $ 3 15,747 15,750
Common stock issue for services , Shares 42,000      
Common stock issue for services , Amount $ 42 251,958 252,000
Value of beneficial conversion feature 149,212 149,212
Gain on settlement of accounts payable with related party $ 60,000 60,000
Net loss $ (4,759,074) (4,759,074)
Ending Balance, Shares at Sep. 30, 2015 3,436,840      
Ending Balance, Amount at Sep. 30, 2015 $ 3,437 $ 2,281,275 $ (6,992,731) $ (4,708,019)
XML 18 R6.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities    
Net loss $ (4,759,074) $ (314,491)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Stock based compensation $ 252,000
Write down of investment in mineral properties $ 29,893
Loss in fair value of derivative liability $ 4,152,164
Loss on settlement of accounts payable 3,585 $ 133
Amortization of beneficial conversion feature 149,212
Impairment of asset 80,000
Changes in operating assets and liabilities    
Accounts payable and accrued expense $ 73,668 $ 74,423
Prepaid expense 249
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (48,445) $ (209,926)
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of mineral property (20,000)
NET CASH USED IN INVESTING ACTIVITIES (20,000)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from short term notes 500
Payments on short term notes $ (500)
Proceeds from note payable $ 81,989
Proceeds from advances- related parity $ 68,630 123,853
Repayment of credit card - related party (1,760)
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 68,630 204,082
Net increase (decrease) in cash 185 (5,844)
Cash, beginning of period 24 5,868
Cash, end of period $ 209 $ 24
SUPPLEMENTAL CASH FLOWS INFORMATION    
Interest paid
Income taxes paid
SUPPLEMENTAL NON CASH INVESTING AND FINANCING ACTIVITIES:    
Discount due to beneficial conversion feature $ 149,212
Reclassification of advances, related party to convertible debenture, related party 149,212
Reclassification of notes payable, related party to convertible debenture, related party 75,754
Reclassification of accrued interest, related party to advances, related party 5,748
Note payable for purchase of mineral property 60,000
Common stock issued for conversion of convertible debentures 10,000 $ 94,525
Common stock issued for settlement of accounts payable 12,165
Accounts payable settled with former related party $ 60,000
Common stock issued for share issuance liability $ 87,501
XML 19 R7.htm IDEA: XBRL DOCUMENT v3.3.1.900
ORGANIZATION AND BASIS OF PRESENTATION
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Silverstar Resources, Inc (formally Silverstar Mining Corp) (the "Company") was incorporated under the laws of the State of Nevada on December 5, 2003. On March 4, 2008, the Company completed a merger with its wholly-owned subsidiary, Silverstar Resources Corp., which was incorporated by the Company solely to effect the name change of the Company to Silverstar Resources Corp. The Company was incorporated for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Nevada.

 

On January 23, 2015 the board of directors with the consent of a majority of its shareholders approved amended articles of incorporation to include a change of name to Silverstar Resources, Inc. and a reverse split of its common stock resulting in shareholders receiving one share for every five shares (5 to 1) they hold as of record of that date. In addition the amendment set the authorized shares of common stock at 225,000,000 and preferred stock at 5,000,000 shares both at a par value of $0.001. All share and per share numbers have been retroactively restated to reflect this stock split.

 

On March 10, 2015 the Company formed 1030029 Ltd, an Alberta numbered company as a wholly owned subsidiary to meet the requirements of holding working interest of Alberta producing oil and gas properties.

XML 20 R8.htm IDEA: XBRL DOCUMENT v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

 

Presentation

 

The Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to exploration stage.

 

Principles of Consolidation

 

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

 

Oil and Gas Revenue

 

Revenues are recognized when hydrocarbons have been delivered, the customer has taken title and collection is reasonably assured.

 

Mineral Property Costs

 

Mineral property acquisition costs are initially capitalized as tangible assets when purchased. At the end of each fiscal quarter end, the Company assesses the carrying costs for impairment. If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

 

Mineral Property Exploration Costs are expensed as incurred

 

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

 

As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.

 

Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, 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.

 

Property and Equipment

 

Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

 

Related Parties

 

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Foreign Currency Translation

 

The Company's functional and reporting currency is in U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830 Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

 

Impairment of Long-Lived Assets

 

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value.

 

Basic and Diluted Net Income (Loss) Per Share

 

Basic and diluted net income (loss) per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net income per share is the same due to net losses during both periods.

 

Income Taxes

 

Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Reclassifications

 

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net loss or stockholders' deficit.

 

Recently Issued Accounting Pronouncements

 

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on their financial position, results of operations or cash flows.

XML 21 R9.htm IDEA: XBRL DOCUMENT v3.3.1.900
GOING CONCERN
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 3 - GOING CONCERN

As shown in the accompanying financial statements, the Company has an accumulated deficit of $6,992,731 as of September 30, 2015 and incurred a net loss of $4,759,074 for the year ended September 30, 2015. Unless the Company is able to attain profitability and increases in stockholders' equity, these conditions raise substantial doubt as to the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company continues to review its expense structure in an attempt to reduce operating costs. The Company's expenses are planned to decrease, which would result in an improvement to its results of operations.

XML 22 R10.htm IDEA: XBRL DOCUMENT v3.3.1.900
MINERAL PROPERTY INVESTMENT
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 4 - MINERAL PROPERTY INVESTMENT

The Company holds a mineral property license which it carried as an asset valued at $29,893 as of September 30, 2013. The value was the amount the Company paid to maintain the license on the property. The Company determined that the amounts paid to hold the license should be treated as expense and thus expensed the $29,893 during the year ended September 30, 2014.

XML 23 R11.htm IDEA: XBRL DOCUMENT v3.3.1.900
ASSET HELD FOR SALE
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 5 - ASSET HELD FOR SALE

On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000. The Company has determined that the asset does not fit the future plans of the Company. Under the guidelines of ASC 360 Newly Acquired Asset Classified as Held for Sale, the Company is actively seeking to dispose of the asset through a sale. As part of the treatment of the asset for sale the Company under ASC 205 Discontinued Operations has treated the expenses related with its acquisition of $3,942 as discontinued operations expense. During the year ended September 30, 2015, the Company determined that this assets had become impaired and took a charge to earnings of $80,000 which is also reflected in discontinued operations.

 

XML 24 R12.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONVERTIBLE DEBENTURES - RELATED PARTIES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 6 - CONVERTIBLE DEBENTURES - RELATED PARTIES

On January 15, 2015 the Company amended the convertible debenture with the principal of $75,754 of a related party so that the debenture became anti-dilutive with a conversion price set at $0.35 regardless of any forward or reverse splits in the Company's common stock.

 

On February 23, 2015 a shareholder holding a debenture with a principal balance of $75,754 and other advances to the Company of $149,212 of which $24,398 was borrowed during September 30, 2015 and $124,814 was the outstanding balance at September 30, 2014 made demand for payment of the total amounts owed including interest. The Company was not able to pay the outstanding balances. The Company and shareholder came to an agreement that the shareholder could convert his $75,754 convertible note payable and interest at $0.15 and the advances of $149,212 plus further advances up to $150,000 at a 15% discount to the closing price as of date of the agreement or $0.15 per share. The shareholder agreed to advance an additional $50,000 to the Company to acquire assets for the Company. The $50,000 is not convertible and is accounted for as advances due to related party see Note 9.

 

The change is terms of the $75,754 convertible note created derivative liability and required the Company to record fair value at the inception of the derivative and for each subsequent reporting period. The fair value of the embedded derivatives at inception was determined using the Black Scholes based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 281.67%, (3) weighted average risk-free interest rate of 0.025%, (4) expected life of 2.52 year, and (5) estimated fair value of the Company's common stock is $6.00. The initial fair value of the embedded debt derivative was $1,610,091with the fair value calculated as of September 30, 2015 was $4,152,164. As of September 30, 2015 the change in fair value was measured with derivative liability loss of $4,152,164.

 

The addition of a conversion feature for the advances of $149,212 created a beneficial conversion feature as of September 30, 2015 of $149,212. Due to the advances having no terms and being due on demand, this amount was expensed as interest expense.

 

As of September 30, 2015 and 2014 the amount due under the convertible debentures to related party was $224,896 and $75,754 respectively.

XML 25 R13.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONVERTIBLE DEBENTURES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 7 - CONVERTIBLE DEBENTURES

On December 23, 2013 the Company converted $34,523 of convertible debt and interest into 2,483,334 shares of common stock.

 

On March 19, 2014 the Company converted $60,002 of convertible debt and interest into 34,287 shares of common stock.

 

On January 15, 2015, the Company converted $10,000 of convertible debt and interest into 800,000 shares of common stock. The interest due of $5,748 on the date of the conversion was paid on behalf of the Company and recorded as advances due to related party.

 

As of September 30, 2015 and 2014 the amount of convertible debt outstanding was $18,912 and $28,912, respectively.

XML 26 R14.htm IDEA: XBRL DOCUMENT v3.3.1.900
NOTES PAYABLE
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 8 - NOTES PAYABLE

On June 2, 2014 the Company issued a long term note payable for $81,989 to an entity for advances on work completed on the Company's Ahbau Lake mining property in British Columbia, Canada. The note is unsecured, and bears interest at 10% per year and matures in one year at which time all principal and interest is due and payable. As of September 30, 2015 and 2014 the outstanding balance of was $81,989 and $81,989, respectively.

 

On April 2, 2015 the Company issued a $60,000 one year note bearing interest of 9% as part of the acquisition of the working interest in the Alberta oil and gas property. As of September 30, 2015 the outstanding balance of was $60,000.

XML 27 R15.htm IDEA: XBRL DOCUMENT v3.3.1.900
ADVANCES - RELATED PARTIES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 9 - ADVANCES - RELATED PARTIES

During the year ended September 30, 2015 an officer and director and a related party shareholder of the Company advanced $68,630 in cash, paid $5,748 for interest on behalf of the Company and came to an agreement that $24,398 would be convertible and borrowed $123,853 during the year ended September 30, 2014 to the Company by paying certain Company expenses or to pay its expenses. During the year ended September 30, 2015, $149,212 of the total advances was converted into a convertible debenture. As of September 30, 2015 and 2014 the total amount due to the related parties under these advances were $55,746 and $130,508, respectively.

 

The advances are unsecured, do not have a term and carry no interest rate.

XML 28 R16.htm IDEA: XBRL DOCUMENT v3.3.1.900
DERIVATIVE INSTRUMENTS
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
Note 10 - DERIVATIVE INSTRUMENTS

During the year ended September 30, 2015 the Company changed the conversion features on a convertible instrument that require liability classification under ASC 815. These instruments are measured at fair value at the end of each reporting period. (See Note 6).

 

As defined in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

  · Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities
     
  · Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
     
  · Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

  

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as September 30, 2015 and 2014:

 

Recurring Fair Value Measures   Level 1     Level 2     Level 3     Total  
                         
Derivative liabilities at September 30, 2015   $ -     $ -     $ 4,152,164     $ 4,152,164  
Derivative liabilities at September 30, 2014   $ -     $ -     $ -     $ -  

 

The below table represents the change in the fair value of the derivative liabilities during the year ended September 30, 2015:

 

Fair value of derivatives, September 30, 2014   $ -  
Derivative day one measurement- loss due to derivative     1,610,091  
Change in fair value of derivative liability- loss     2,542,073  
Fair value of derivatives, September 30, 2015   $ 4,152,164  

XML 29 R17.htm IDEA: XBRL DOCUMENT v3.3.1.900
EQUITY
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 11 - EQUITY

On December 23, 2013 the Company issued 2,483,334 shares of common stock with a value of $34,523 for debt.

 

On March 19, 2014 the Company issued 34,287 shares of common stock with a value of $60,002 for debt.

 

On March 26, 2014 the Company issued 14,433 shares of common stock with a value of $87,501 which was offset against the liability "shares to be issued" of $88,125. The difference of $624 was offset against interest expense.

 

On November 18, 2014 the Company issued 3,000 shares with a value of $15,750 to one individual for the settlement of $12,165 of accounts payable .The Company computed the fair value of the stock issued for the debt and recorded a loss on settlement of accounts payable of $3,585

 

On January 15, 2015 the Company issued 40,000 shares of common stock to an officer with a value of $240,000 for service.

 

On January 15, 2015 the Company issued 2,000 shares to an individual with a value of $12,000 for service.

 

On January 19, 2015, the Company the Company issued 800,000 shares of common stock with a value of $10,000 for debt.

 

During the year ended September 30, 2015, the Company settled certain accounts payable due to a former related party for $60,000 less that the amount of the debt. Since this gain was related to a settlement with a related party at the time of settlement, the gain has been recorded directly to additional paid in capital.

XML 30 R18.htm IDEA: XBRL DOCUMENT v3.3.1.900
INCOME TAXES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 12 - INCOME TAXES

The Company has losses carried forward for income tax purposes through September 30, 2015. There are no current or deferred tax expenses for the years ended September 30, 2015 and 2014 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

 

The provision for refundable federal income tax consists of the following:

 

    2015     2014  
             
Deferred income tax asset attributed to:            
Current operations   $ 68,718     $ 106,927  
Less: Change in valuation allowance     (68,718 )     (106,927 )
Net refundable amount   $ -     $ -  

 

The composition of the Company's deferred tax assets as at September 30 are as follows:

 

    2015     2014  
             
Income tax operating loss carryforward   $ 2,435,770     $ 2,233,657  
                 
Statutory federal income tax rate     34 %     34 %
Effective income rate     0 %     0 %
                 
Deferred tax assets   $ 828,162     $ 759,443  
Less: Valuation allowance     (828,162 )     (759,443 )
Net deferred income tax asset   $ -     $ -  

 

The potential income tax benefit of these losses has been offset by a full valuation allowance.

 

As of September 30, 2015, the Company has an unused net operating loss carry-forward balance of $2,435,770 that is available to offset future taxable income. This unused net operating loss carry-forward balance expires between 2025 and 2034.

 

The issuance of 2,532,054 shares of common stock during the year ended September 30, 2014 affected a change in control of the Company. Due to the change in control, the tax loss carryforward may only be used on a formula basis under IRS section 382 which will affect the benefit the Company can gain from the tax loss.

XML 31 R19.htm IDEA: XBRL DOCUMENT v3.3.1.900
DISCONTINUED OPERATIONS
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 13 - DISCONTINUED OPERATIONS

On April 14, 2015 the Company acquired the working interest of two producing oil and gas properties in Alberta Canada for US $80,000. The Company has determined that the asset does not fit the future plans of the Company. The Company is actively seeking to dispose of the asset through a sale. The Company is treating the disposition of this property as a discontinued operation. At September 30, 2015, the Company determined that this asset was fully impaired and took a charge to earnings of $80,000. In addition, the Company has treated the expenses related with its acquisition of $3,942 as discontinued operations expense.

XML 32 R20.htm IDEA: XBRL DOCUMENT v3.3.1.900
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
Note 14 - COMMITMENTS AND CONTINGENCIES

On January 9, 2014 the Company entered into a release and compensation agreement with a former director and officer of the Company. Under the terms of the agreement the Company was to pay by March 31, 2014 $18,050 of account payable due to the former officer and director plus issue 5,000 shares of common stock to the individual. In return the former officer and director was to complete the filing of the Company 10-K for year-end September 30, 2014, resign at that time as an officer and director, assist in the filing of the December 31, 2014 10-Q and return to the Company all the books and records in his possession.

 

Subsequent to his resignation the former officer and director did not return any of the Company's property as agreed plus the December 31, 2013 10-Q required refiling due to misstatement of information. The Company's position is that the former officer and director is in breach of contract. Because the contract was breached, the Company's board of directors did not authorize the issuance of the shares.

 

During the year ended September 30, 2015, the Company settled certain accounts payable due to a former related party for $60,000 less that the amount of the debt. Since this gain was related to a settlement with a related party at the time of settlement, the gain has been recorded directly to additional paid in capital.

XML 33 R21.htm IDEA: XBRL DOCUMENT v3.3.1.900
SUBSEQUENT EVENT
12 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 15 - SUBSEQUENT EVENT

On December 29, 2015 the Company issued a $17,500 note bearing interest of 6% to a non-related party in exchange for $17,500 of cash for the purpose of working capital.

XML 34 R22.htm IDEA: XBRL DOCUMENT v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Sep. 30, 2015
Summary Of Significant Accounting Policies Policies  
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

Presentation

The Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to exploration stage.

Principles of Consolidation

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Oil and Gas Revenue

Revenues are recognized when hydrocarbons have been delivered, the customer has taken title and collection is reasonably assured.

Mineral property costs

Mineral property acquisition costs are initially capitalized as tangible assets when purchased. At the end of each fiscal quarter end, the Company assesses the carrying costs for impairment. If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

 

Mineral Property Exploration Costs are expensed as incurred

 

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

 

As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.

 

Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, 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.

Property and equipment

Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Foreign currency translation

The Company's functional and reporting currency is in U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830 Foreign Currency Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Impairment of long-lived assets

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value.

Basic and diluted net income per share

Basic and diluted net income (loss) per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net income per share is the same due to net losses during both periods.

Income Taxes

Income taxes are provided in accordance with ASC Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net loss or stockholders' deficit.

Recently Issued Accounting Pronouncements

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on their financial position, results of operations or cash flows.

XML 35 R23.htm IDEA: XBRL DOCUMENT v3.3.1.900
DERIVATIVE INSTRUMENTS (Tables)
12 Months Ended
Sep. 30, 2015
Derivative Instruments Tables  
Financial assets and liabilities that were accounted for at fair value

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as September 30, 2015 and 2014:

 

Recurring Fair Value Measures   Level 1     Level 2     Level 3     Total  
                         
Derivative liabilities at September 30, 2015   $ -     $ -     $ 4,152,164     $ 4,152,164  
Derivative liabilities at September 30, 2014   $ -     $ -     $ -     $ -  

Change in the fair value of the derivative liabilities

The below table represents the change in the fair value of the derivative liabilities during the year ended September 30, 2015:

 

Fair value of derivatives, September 30, 2014   $ -  
Derivative day one measurement- loss due to derivative     1,610,091  
Change in fair value of derivative liability- loss     2,542,073  
Fair value of derivatives, September 30, 2015   $ 4,152,164  

XML 36 R24.htm IDEA: XBRL DOCUMENT v3.3.1.900
INCOME TAXES (Tables)
12 Months Ended
Sep. 30, 2015
Income Taxes Tables  
Provision for refundable federal income tax

The provision for refundable federal income tax consists of the following:

 

    2015     2014  
             
Deferred income tax asset attributed to:            
Current operations   $ 68,718     $ 106,927  
Less: Change in valuation allowance     (68,718 )     (106,927 )
Net refundable amount   $ -     $ -  

Composition of the Company's deferred tax assets

The composition of the Company's deferred tax assets as at September 30 are as follows:

 

    2015     2014  
             
Income tax operating loss carryforward   $ 2,435,770     $ 2,233,657  
                 
Statutory federal income tax rate     34 %     34 %
Effective income rate     0 %     0 %
                 
Deferred tax assets   $ 828,162     $ 759,443  
Less: Valuation allowance     (828,162 )     (759,443 )
Net deferred income tax asset   $ -     $ -  

XML 37 R25.htm IDEA: XBRL DOCUMENT v3.3.1.900
GOING CONCERN (Details Narrative) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Going Concern Details Narrative    
Accumulated deficit $ 6,992,731 $ 2,233,657
Net loss for the period $ 4,759,074 $ 314,491
XML 38 R26.htm IDEA: XBRL DOCUMENT v3.3.1.900
MINERAL PROPERTY INVESTMENT (Details Narrative) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Mineral Property Investment Details Narrative      
Investment in mineral property     $ 29,893
Write down of investment in mineral properties $ 29,893  
XML 39 R27.htm IDEA: XBRL DOCUMENT v3.3.1.900
ASSET HELD FOR SALE (Details Narrative)
12 Months Ended
Sep. 30, 2015
USD ($)
Discontinued Operations and Disposal Groups [Abstract]  
Impairment charge from discontinued operation $ 80,000
XML 40 R28.htm IDEA: XBRL DOCUMENT v3.3.1.900
- CONVERTIBLE DEBENTURES - RELATED PARTIES (Details Narrative) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Convertible Debentures - Related Parties Details Narrative    
Convertible debentures $ 224,896 $ 75,754
Outstanding convertible debt pluss interest   $ 124,814
Borrowing amount from other advance 24,398  
Initial fair value of the embedded debt derivative 1,610,091  
Fair value of the embedded debt derivative 4,152,164  
Derivative liability loss 4,152,164  
Beneficial conversion amount $ 149,212  
XML 41 R29.htm IDEA: XBRL DOCUMENT v3.3.1.900
CONVERTIBLE DEBENTURES (Details Narrative) - USD ($)
Sep. 30, 2015
Sep. 30, 2014
Convertible Debentures Details Narrative    
Convertible debt outstanding $ 18,912 $ 28,912
XML 42 R30.htm IDEA: XBRL DOCUMENT v3.3.1.900
NOTES PAYABLE (Details Narrative) - USD ($)
Sep. 30, 2015
Sep. 30, 2014
Note payable $ 141,989 $ 81,989
Ahbau Lake mining property [Member}    
Outstanding balance of principal 81,989 $ 81,989
Alberta oil and gas property [Member}    
Outstanding balance of principal $ 60,000  
XML 43 R31.htm IDEA: XBRL DOCUMENT v3.3.1.900
DERIVATIVE INSTRUMENTS (Details) - USD ($)
Sep. 30, 2015
Sep. 30, 2014
Derivative liabilities $ 4,152,164
Level 1 [Member]    
Derivative liabilities
Level 2 [Member]    
Derivative liabilities
Level 3 [Member]    
Derivative liabilities $ 4,152,164
XML 44 R32.htm IDEA: XBRL DOCUMENT v3.3.1.900
DERIVATIVE INSTRUMENTS (Details 1)
12 Months Ended
Sep. 30, 2015
USD ($)
Derivative Instruments Details 1  
Fair value of derivatives, Beginning
Derivative day one measurement- loss due to derivative $ 1,610,091
Change in fair value of derivative liability- loss 2,542,073
Fair value of derivatives, Ending $ 4,152,164
XML 45 R33.htm IDEA: XBRL DOCUMENT v3.3.1.900
EQUITY (Details Narrative)
12 Months Ended
Sep. 30, 2015
USD ($)
Equity Details Narrative  
Accounts payable due to a former related party $ 60,000
XML 46 R34.htm IDEA: XBRL DOCUMENT v3.3.1.900
INCOME TAXES (Details) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Deferred tax asset attributable to:    
Current operations $ 68,718 $ 106,927
Less: Change in valuation allowance $ (68,718) $ (106,927)
Net refundable amount
XML 47 R35.htm IDEA: XBRL DOCUMENT v3.3.1.900
INCOME TAXES (Details1) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Income Taxes Details1    
Income tax operating loss carry-forward $ 2,435,770 $ 2,233,657
Statutory federal income tax rate 34.00% 34.00%
Effective income tax rate 0.00% 0.00%
Deferred tax assets $ 828,162 $ 759,443
Less: Valuation allowance $ (828,162) $ (759,443)
Net deferred tax asset
XML 48 R36.htm IDEA: XBRL DOCUMENT v3.3.1.900
INCOME TAXES (Details Narrative) - USD ($)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Income Taxes Details Narrative    
Net operating loss carry-forward $ 2,435,770 $ 2,233,657
Net operating loss carry forwards, expiration period expires between 2025 and 2034.  
XML 49 R37.htm IDEA: XBRL DOCUMENT v3.3.1.900
DISCONTINUED OPERATIONS (Details Narrative)
12 Months Ended
Sep. 30, 2015
USD ($)
Discontinued Operations Details Narrative  
Fully impaired charge to earnings $ 80,000
Acquisition cost $ 3,942
XML 50 R38.htm IDEA: XBRL DOCUMENT v3.3.1.900
COMMITMENTS AND CONTINGENCIES (Details Narrative)
12 Months Ended
Sep. 30, 2015
USD ($)
Commitments And Contingencies Details Narrative  
Gain on settlement of accounts payable with related party $ 60,000
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