UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURUTIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2017
Commission file number 333-152805
Lake Forest Minerals, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Nevada
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26-2862618
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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711 S. Carson Street, Suite 4
Carson City, NV 89701
(Address of Principal Executive Offices including Zip Code)
(206)203-4100
(Telephone Number)
Resident Agents of Nevada, Inc.
711 S. Carson Street, Suite 4
Carson City, NV 89701
(775) 882 4641
(Name, Address and Telephone Number of Agent for Service)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☐
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 ☐ No ☐
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 ☒ No ☐
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 ☒ No ☐
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. ☐
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):
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
(Do not check if a smaller reporting company)
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Smaller reporting company ☒
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of September 11, 2017, the registrant had 11,000,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market had been established as of September 11, 2017.
LAKE FOREST MINERALS, INC.
TABLE OF CONTENTS
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Page No.
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Part I
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Item 1.
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Business
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3
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Item 1A.
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Risk Factors
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6
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Item 1B.
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Unresolved Staff Comments
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8
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Item 2.
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Properties
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8
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Item 3.
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Legal Proceedings
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8
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Item 4.
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Mine Safety Disclosures
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8
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Part II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases of Equity Securities
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8
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Item 6.
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Selected Financial Data
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10
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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10
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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12
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Item 8.
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Financial Statements
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13
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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22
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Item 9A(T).
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Controls and Procedures
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22
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Item 9B.
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Other Information
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23
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Part III
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Item 10.
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Director, Executive Officer and Corporate Governance
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24
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Item 11.
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Executive Compensation
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25
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management
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26
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Item 13.
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Certain Relationships, Related Transactions, and Director Independence
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26
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Item 14.
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Principal Accounting Fees and Services
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26
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Part IV
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Item 15.
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Exhibits
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27
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Signatures
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28
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2
Part I
Item 1. Business
You should read the following summary together with the more detailed business information and the financial statements and related notes that appear elsewhere in this annual report. In this annual report, unless the context otherwise denotes, references to “we”, “us”, “our”, “the Company”, “Lake Forest” and “Lake Forest Minerals” are to Lake Forest Minerals Inc.
Lake Forest Minerals was incorporated in the State of Nevada on June 23, 2008. We are a development stage company with no revenues or operating history.
We have sold $42,000 in equity securities since inception, $12,000 from the sale of 8,000,000 shares of stock to our officer and director and $30,000 from the sale of 3,000,000 shares registered pursuant to our S-1 Registration Statement which became effective on August 18, 2008. The offering was completed on September 11, 2008.
Our financial statements from inception through the year ended June 30, 2017 report a net loss of $146,645. AMC Auditing, LLC, our independent auditor, has issued an audit opinion for Lake Forest Minerals which includes a statement expressing substantial doubt as to our ability to continue as a going concern.
Effective June 26, 2008, the Company entered into a Mineral Property Option Agreement with T.L. Sadlier-Brown, whereby the Company obtained an option to acquire the VIN Mineral Claim located in the Princeton Mining Division of British Columbia.
Under the terms of the Agreement, the Company paid $2,500 by June 30, 2008, paid a further $5,000 by August 15, 2009 and in order to maintain the option was required to pay an additional $7,500 by June 30, 2010. Upon completion of the required payments the Company would have owned an undivided 100% interest in the VIN Mineral Claim subject to a 2% net smelter returns royalty reserved in favour of the Optionor.
Prior to completing the payments required under the Agreement, the Company had the right to conduct exploration and development activities on the property at its sole discretion and, having provided notice to the vendor, had the option to terminate the Agreement and relieve itself from any obligations thereunder.
On February 22, 2010 the Company provided notice to Mr. Sadlier-Brown, and terminated the Option Agreement and relieved itself from any obligations thereunder.
Our plan is to seek, investigate, and consummate a merger or other business combination, purchase of assets or other strategic transaction (i.e. a merger) with a corporation, partnership, limited liability company or other operating business entity (a “Merger Target”) desiring the perceived advantages of becoming a publicly reporting and publicly held corporation. We have no operating business, and conduct minimal operations necessary to meet regulatory requirements. Our ability to commence any operations is contingent upon obtaining adequate financial resources. We are currently considered a “shell” company inasmuch as we are not generating revenues, do not own an operating business, and have no specific plan other than to engage in a merger or acquisition transaction with a yet-to-be identified operating company or business. We have no employees and no material assets.
We currently have no definitive agreements or understandings with any prospective business combination candidates and there are no assurances that we will find a suitable business with which to combine. The implementation of our business objectives is wholly contingent upon a business combination and/or the successful sale of our securities. We intend to utilize the proceeds of any offering, any sales of equity securities or debt securities, bank and other borrowings or a combination of those sources to effect a business combination with a target business which we believe has significant growth potential. While we may, under certain circumstances, seek to effect business combinations with more than one target business, unless additional financing is obtained, we will not have sufficient proceeds remaining after an initial business combination to undertake additional business combinations.
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A common reason for a target company to enter into a merger with a shell company is the desire to establish a public trading market for its shares. Such a company would hope to avoid the perceived adverse consequences of undertaking a public offering itself, such as the time delays and significant expenses incurred to comply with the various federal and state securities law that regulate initial public offerings.
As a result of our limited resources, unless and until additional financing is obtained we expect to have sufficient proceeds to effect only a single business combination. Accordingly, the prospects for our success will be entirely dependent upon the future performance of a single business. Unlike certain entities that have the resources to consummate several business combinations or entities operating in multiple industries or multiple segments of a single industry, we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. A target business may be dependent upon the development or market acceptance of a single or limited number of products, processes or services, in which case there will be an even higher risk that the target business will not prove to be commercially viable.
Our officer is only required to devote a small portion of his time to our affairs on a part-time or as-needed basis. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of which will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.
We do not expect our present management to play any managerial role for us following a business combination. Although we intend to scrutinize closely the management of a prospective target business in connection with our evaluation of a business combination with a target business, our assessment of management may be incorrect.
In evaluating a prospective target business, we will consider several factors, including the following:
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experience and skill of management and availability of additional personnel of the target business;
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costs associated with effecting the business combination;
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equity interest retained by our stockholders in the merged entity;
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growth potential of the target business;
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capital requirements of the target business;
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capital available to the target business;
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stage of development of the target business;
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proprietary features and degree of intellectual property or other protection of the target business;
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the financial statements of the target business; and
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the regulatory environment in which the target business operates.
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The foregoing criteria are not intended to be exhaustive and any evaluation relating to the merits of a particular target business will be based, to the extent relevant, on the above factors, as well as other considerations we deem relevant. In connection with our evaluation of a prospective target business, we anticipate that we will conduct a due diligence review which will encompass, among other things, meeting with incumbent management as well as a review of financial, legal and other information.
The time and costs required to select and evaluate a target business (including conducting a due diligence review) and to structure and consummate the business combination (including negotiating and documenting relevant agreements and preparing requisite documents for filing pursuant to applicable corporate and securities laws) cannot be determined at this time. Our president intends to devote only a very small portion of his time to our affairs, and, accordingly, the consummation of a business combination may require a longer time than if he devoted his full
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time to our affairs. However, he will devote such time as he deems reasonably necessary to carry out our business and affairs. The amount of time devoted to our business and affairs may vary significantly depending upon, among other things, whether we have identified a target business or are engaged in active negotiation of a business combination.
We anticipate that various prospective target businesses will be brought to our attention from various sources, including securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community, including, possibly, the executive officers and our affiliates.
Various impediments to a business combination may arise, such as appraisal rights afforded the stockholders of a target business under the laws of its state of organization. This may prove to be deterrent to a particular combination.
Bankruptcy or Similar Proceedings
There has been no bankruptcy, receivership or similar proceeding.
Reorganizations, Purchase or Sale of Assets
There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.
Patents, Trademarks, Franchises, Royalty Agreements or Labor Contracts
We have no current plans for any registrations such as patents, trademarks, copyrights, franchises, concessions, royalty agreements or labor contracts. We will assess the need for any copyright, trademark or patent applications on an ongoing basis.
Need for Government Approval of Products or Services
We are not required to apply for or have any government approval for our products or services.
Research and Development Costs during the Last Two Years
We have not expended funds for research and development costs since inception.
Employees and Employment Agreements
Our only employee is our sole officer, Jeffrey Taylor. Mr. Taylor currently devotes 10 hours per week to company matters and he will continue to devote as much time as the board of directors determines is necessary to manage the affairs of the company. There are no formal employment agreements between the company and our current employee.
Reports to Securities Holders
We provide an annual report that includes audited financial information to our shareholders. We make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act. We are subject to disclosure filing requirements, including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically.
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Item 1A. Risk Factors
You should carefully consider the following known risks and uncertainties in addition to other information in this report in evaluating our company. Our business, operating results and financial condition could be seriously harmed due to any of the following known risks. The risks described below are not the only ones facing our company. Additional risks not presently known to us may also impair our business operations.
WE HAVE NO RECENT OPERATING HISTORY OR BASIS FOR EVALUATING PROSPECTS.
We currently have no operating business or plans to develop one. We are seeking to enter into a merger or business combination with another operating company. To date, our efforts have been limited to meeting our regulatory filing requirements and searching for a merger target.
WE HAVE LIMITED RESOURCES AND NO REVENUES FROM OPERATIONS, AND WILL NEED ADDITIONAL FINANCING IN ORDER TO EXECUTE ANY BUSINESS PLAN.
We have limited resources, no revenues from operations to date and our cash on hand may not be sufficient to satisfy our cash requirements during the next twelve months. In addition, we will not achieve any revenues (other than insignificant investment income) until, at the earliest, the consummation of a merger and we cannot ascertain our capital requirements until such time. There can be no assurance that determinations ultimately made by us will permit us to achieve our business objectives.
WE WILL BE ABLE TO EFFECT AT MOST ONE MERGER, AND THUS MAY NOT HAVE A DIVERSIFIED BUSINESS.
Our resources are limited and we will most likely have the ability to effect only a single merger. This probable lack of diversification will subject us to numerous economic, competitive and regulatory developments, any or all of which may have a material adverse impact upon the particular industry in which we may operate subsequent to the consummation of a merger. We will become dependent upon the development or market acceptance of a single or limited number of products, processes or services.
WE DEPEND SUBSTANTIALLY UPON OUR PRESIDENT, WHOSE EXPERIENCE IS LIMITED, TO MAKE ALL MANAGEMENT DECISIONS.
Our ability to effect a merger will be dependent upon the efforts of our president, Jeffrey Taylor. Notwithstanding the importance of Mr. Taylor, we have not entered into any employment agreement or other understanding with Mr. Taylor concerning compensation or obtained any “key man” life insurance on any of his life. The loss of the services of Mr. Taylor will have a material adverse effect on achieving our business objectives and success. We will rely upon the expertise of Mr. Taylor and do not anticipate that we will hire additional personnel.
THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.
We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.
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FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND ATTRACT A SUITABLE ACQUISITION.
The nature of our operations is highly speculative. The success of our plan of operation will depend to a great extent on the operations, financial condition and management of the identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories, we cannot assure you that we will be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.
WE HAVE NO AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION.
We have no definitive agreement with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested in a company with active business operations.
MANAGEMENT WILL CHANGE UPON THE CONSUMMATION OF A MERGER.
After the closing of a merger or business combination, it is likely our current management will not retain any control or managerial responsibilities. Upon such event, Mr. Taylor intends to resign from his positions with us.
CURRENT STOCKHOLDERS WILL BE IMMEDIATELY AND SUBSTANTIALLY DILUTED UPON A MERGER OR BUSINESS COMBINATION.
Our Articles of Incorporation authorized the issuance of 75,000,000 shares of Common Stock. A total of 11,000,000 shares of the Company’s common stock have been issued. To the extent that additional shares of Common Stock are authorized and issued in connection with a merger or business combination, our stockholders could experience significant dilution of their respective ownership interests. Furthermore, the issuance of a substantial number of shares of Common Stock may adversely affect prevailing market prices, if any, for the Common Stock and could impair our ability to raise additional capital through the sale of equity securities.
CONTROL BY EXISTING STOCKHOLDER.
Mr. Taylor beneficially owns 72% of the outstanding shares of our Common Stock. As a result, this stockholder is able to exercise control over matters requiring stockholder approval, including the election of directors, and the approval of mergers, consolidations and sales of all or substantially all of our assets.
OUR COMMON STOCK IS A “PENNY STOCK” WHICH MAY RESTRICT THE ABILITY OF STOCKHOLDERS TO SELL OUR COMMON STOCK IN THE SECONDARY MARKET.
The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price, as defined, of less than $5.00 per share, or an exercise price of less than $5.00 per share, subject to certain exceptions, including an exception of an equity security that is quoted on a national securities exchange. Our Common Stock is not now quoted on a national exchange but is traded on FINRA’s OTC Bulletin Board (“OTCBB”). Thus, they are subject to rules that impose additional sales practice requirements on broker-dealers who sell these securities. For example, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transactions prior to the purchase. Additionally, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered underwriter, and current quotations for the securities, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The “penny stock” rules, may restrict the ability of our stockholders to sell our Common Stock and warrants in the secondary market.
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LIQUIDITY IS LIMITED, AND WE MAY BE UNABLE TO OBTAIN LISTING OF OUR COMMON STOCK ON A MORE LIQUID MARKET.
Our Common Stock is quoted on the OTC Bulletin Board (“OTCBB”), which provides significantly less liquidity than a securities exchange (such as the American or New York Stock Exchange) or an automated quotation system (such as the Nasdaq Global Market or Capital Market). There is uncertainty that we will ever be accepted for a listing on an automated quotation system or national securities exchange.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We do not currently own any property. The company’s corporate documents are stored at the home of our president for no charge. The telephone number is (206)203-4100. The mailing address for the company is 711 S. Carson Street, Suite 4, Carson City, NV 89701. This is the address of our resident agent in Nevada. Due to the company’s limited capital resources and the nature of its business we determined this was the best arrangement for the company. Management believes the current arrangement is sufficient for its needs at this time.
We currently have no investment policies as they pertain to real estate, real estate interests or real estate mortgages.
Item 3. Legal Proceedings
We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.
Item 4. Mine Safety Disclosures
None.
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our shares are quoted on the Over-the-Counter Electronic Bulletin Board (OTCBB) under the symbol “LAKF”. The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter securities. The OTCBB is not an issuer listing service, market or exchange. Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB issuers must remain current in their filings with the SEC or applicable regulatory authority. Securities quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time. We cannot guarantee that we will continue to have the funds required to remain in compliance with our reporting obligations.
There has been no active trading of our securities, and, therefore, no high and low bid pricing. As of the date of this report Lake Forest Minerals had 21 shareholders of record. We have paid no cash dividends and have no outstanding options.
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Penny Stock Rules
The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
A purchaser is purchasing penny stock which limits the ability to sell the stock. Our shares constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which:
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contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading;
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contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended;
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contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" price for the penny stock and the significance of the spread between the bid and ask price;
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contains a toll-free telephone number for inquiries on disciplinary actions;
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defines significant terms in the disclosure document or in the conduct of trading penny stocks; and
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contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;
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The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:
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the bid and offer quotations for the penny stock;
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the compensation of the broker-dealer and its salesperson in the transaction;
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the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
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monthly account statements showing the market value of each penny stock held in the customer's account.
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In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
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Reports
We are subject to certain filing requirements and will furnish annual financial reports to our stockholders, certified by our independent accountant, and will furnish un-audited quarterly financial reports in our quarterly reports filed electronically with the SEC. All reports and information filed by us can be found at the SEC website, www.sec.gov.
Transfer Agent
The company has retained Pacific Stock Transfer Company, 6725 Via Austi Pkwy #300, Las Vegas, NV 89119 as transfer agent.
Item 6. Selected Financial Data
Not required.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
We are still in our development stage and have not generated any revenue.
We incurred operating expenses of $18,877 and $15,312 for the years ended June 30, 2017 and 2016, respectively. For the year ended June 30, 2017 these expenses consisted of $6,423 in general operating expenses and $12,454 in professional fees incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. For the year ended June 30, 2016 these expenses consisted of $5,452 in general operating expenses and $9,860 in professional fees incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports.
Our net loss from inception (June 23, 2008) through June 30, 2017 was $146,645.
Our auditors expressed their doubt about our ability to continue as a going concern unless we are able to generate profitable operations.
Liquidity and Capital Resources
Our cash in the bank at June 30, 2017 was $1,212 with $105,857 in current liabilities. We have sold $42,000 in equity securities since inception, $12,000 from the sale of 8,000,000 shares of stock to our officer and director and $30,000 from the sale of 3,000,000 shares registered pursuant to our S-1 Registration Statement which became effective on August 18, 2008. The offering was completed on September 11, 2008.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Summary of Significant Accounting Policies
YEAR END - The Company's fiscal year end is June 30.
USE OF ESTIMATES - The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.
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INCOME TAXES - The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:
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June 30, 2017
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June 30, 2016
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Income tax expense at statutory rate
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$
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7,362
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$
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5,972
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Common stock issued for services
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--
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--
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Valuation allowance
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(7,362
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)
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(5,972
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)
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Income tax expense per books
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$
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--
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$
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--
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||||
Net deferred tax assets consist of the following components as of:
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June 30, 2017
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June 30, 2016
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|||||||
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NOL carryover
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$
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57,192
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$
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49,830
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Valuation allowance
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(57,192
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)
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(49,830
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)
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Net deferred tax asset
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$
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--
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$
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--
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||||
REVENUE RECOGNITION - The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.
NET LOSS PER COMMON SHARE - Basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the period from June 23, 2008 (Date of Inception) through June 30, 2017 the Company had no potentially dilutive securities.
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and has not granted any stock options. Accordingly no stock-based compensation has been recorded to date.
CASH AND CASH EQUIVALENTS – For purposes of Statements of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
ADVERTISING COSTS - The Company's policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expenses as of June 30, 2017.
LONG-LIVED ASSETS - The carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
MINERAL PROPERTY COSTS - The Company has been in the exploration stage since its inception on June 23, 2008 and has not yet realized any revenues from its planned operations, being the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of
11
establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
RECENT ACCOUNTING PRONOUNCEMENTS – From June 30, 2017 through the filing date of these financial statements, the FASB (Financial Accounting Standards Board) issued various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. Management has determined that these recent accounting pronouncements will have no impact on the financial statements of Lake Forest Minerals Inc.
Plan of Operation
Our plan is to seek, investigate, and consummate a merger or other business combination, purchase of assets or other strategic transaction (i.e. a merger) with a corporation, partnership, limited liability company or other operating business entity (a “Merger Target”) desiring the perceived advantages of becoming a publicly reporting and publicly held corporation. We have no operating business, and conduct minimal operations necessary to meet regulatory requirements. Our ability to commence any operations is contingent upon obtaining adequate financial resources.
We are not currently engaged in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury.
During the next twelve months we anticipate incurring costs related to:
| (i) |
filing of Exchange Act reports, and
|
| (ii) |
costs relating to identifying and consummating a transaction with a Merger Target.
|
We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Jeffrey Taylor is our president, secretary and our chief financial officer. Mr. Taylor is only required to devote a small portion of his time to our affairs on a part-time or as-needed basis. No regular compensation has, in the past, nor is anticipated in the future, to be paid to any officer or director in their capacities as such. We do not anticipate hiring any full-time employees as long as we are seeking and evaluating business opportunities.
At June 30, 2017, we had cash on hand of $1,212. Since we have no revenue or plans to generate any revenue, if our expenses exceed our cash currently on hand we will be dependent upon loans to fund losses incurred in excess of our cash.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not required.
12
Item 8. Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Lake Forest Minerals, Inc.
We have audited the accompanying balance sheets of Lake Forest Minerals, Inc. as of June 30, 2017 and June 30, 2016 and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two year period ended June 30, 2017. Lake Forest Minerals, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the 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 audit included 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Lake Forest Minerals, Inc. as of June 30, 2017 and June 30, 2016, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has no revenues, has negative working capital at June 30, 2017, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ AMC Auditing
AMC Auditing
Las Vegas, Nevada
September 18, 2017
13
LAKE FOREST MINERALS INC.
Balance Sheets
(Expressed in U.S. Dollars)
|
Audited as of
|
Audited as of
|
|||||||
|
June 30,
|
June 30,
|
|||||||
|
2017
|
2016
|
|||||||
|
A S S E T S
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
$
|
1,212
|
$
|
146
|
||||
|
Total Current Assets
|
1,212
|
146
|
||||||
|
Total Assets
|
$
|
1,212
|
$
|
146
|
||||
|
L I A B I L I T I E S
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
$
|
8,857
|
$
|
5,914
|
||||
|
Due to related party
|
97,000
|
80,000
|
||||||
|
Total Current Liabilities
|
105,857
|
85,914
|
||||||
|
S T O C K H O L D E R S ' E Q U I T Y
|
||||||||
|
Share Capital
|
||||||||
|
10,000,000 authorized preferred shares, par value $0.001
|
||||||||
|
nil issued and outstanding
|
||||||||
|
75,000,000 authorized shares, par value $0.001
|
||||||||
|
11,000,000 shares issued and outstanding
|
11,000
|
11,000
|
||||||
|
Additional Paid-in-Capital
|
31,000
|
31,000
|
||||||
|
Deficit
|
(146,645
|
)
|
(127,768
|
)
|
||||
|
Total Stockholders' Equity (Deficit)
|
(104,645
|
)
|
(85,768
|
)
|
||||
|
Total Liabilities and Stockholders' Equity
|
$
|
1,212
|
$
|
146
|
||||
The accompanying notes are an integral part of these financial statements.
14
LAKE FOREST MINERALS INC.
Statements of Operations
(Expressed in U.S. Dollars)
|
For the Year
|
For the Year
|
|||||||
|
Ended
|
Ended
|
|||||||
|
June 30, 2017
|
June 30, 2016
|
|||||||
|
Revenues:
|
||||||||
|
Revenues
|
$
|
-
|
$
|
-
|
||||
|
Total Revenues
|
-
|
-
|
||||||
|
Expenses:
|
||||||||
|
Operating Expenses
|
||||||||
|
General and Administrative
|
6,423
|
5,452
|
||||||
|
Professional Fees
|
12,454
|
9,860
|
||||||
|
Total Expenses
|
18,877
|
15,312
|
||||||
|
Loss from Operations
|
(18,877
|
)
|
(15,312
|
)
|
||||
|
Provision for Income Taxes:
|
||||||||
|
Income Tax Benefit
|
-
|
-
|
||||||
|
Net Loss
|
$
|
(18,877
|
)
|
$
|
(15,312
|
)
|
||
|
Basic and Diluted Earnings (Loss) Per Common Share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
|
Weighted Average number of Common Shares used in per share calculations
|
11,000,000
|
11,000,000
|
||||||
The accompanying notes are an integral part of these financial statements.
15
LAKE FOREST MINERALS INC.
Statements of Stockholders' Equity
June 30, 2017
(Expressed in U.S. Dollars)
|
|
$0.001
|
Paid-In
|
Accumulated
|
Stockholders'
|
||||||||||||||||
|
Shares
|
Par Value
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
|
Balance, June 30, 2015
|
11,000,000
|
$ |
11,000
|
$ |
31,000
|
$ |
(112,456
|
)
|
$ |
(70,456
|
)
|
|||||||||
|
Net Loss for the Period
|
-
|
-
|
-
|
(15,312
|
)
|
(15,312
|
)
|
|||||||||||||
|
Balance, June 30, 2016
|
11,000,000
|
11,000
|
31,000
|
(127,768
|
)
|
(85,768
|
)
|
|||||||||||||
|
Net Loss for the Period
|
(18,877
|
)
|
(18,877
|
)
|
||||||||||||||||
|
Balance, June 30, 2017
|
11,000,000
|
$ |
11,000
|
$ |
31,000
|
$ |
(146,645
|
)
|
$ |
(104,645
|
)
|
|||||||||
The accompanying notes are an integral part of these financial statements.
16
LAKE FOREST MINERALS INC.
Statements of Cash Flows
(Expressed in U.S. Dollars)
|
For the Year
|
For the Year
|
|||||||
|
Ended
|
Ended
|
|||||||
| June 30, 2017 | June 30, 2016 | |||||||
|
Cash Flows from Operating Activities:
|
||||||||
|
Net Loss
|
$
|
(18,877
|
)
|
$
|
(15,312
|
)
|
||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Accounts payable
|
2,943
|
(346
|
)
|
|||||
|
-
|
||||||||
|
Net Cash Provided by (Used in) Operating Activities
|
(15,934
|
)
|
(15,658
|
)
|
||||
|
Cash Flows from Investing Activities:
|
||||||||
|
Mineral property option payment
|
-
|
-
|
||||||
|
Net Cash (Used in) Investing Activities
|
-
|
-
|
||||||
|
Cash Flows from Financing Activities:
|
||||||||
|
Common Stock issued for cash
|
-
|
-
|
||||||
|
Due to related party
|
17,000
|
15,000
|
||||||
|
Net Cash Provided by Financing Activities
|
17,000
|
15,000
|
||||||
|
Net Increase (Decrease) in Cash
|
1,066
|
(658
|
)
|
|||||
|
Cash Balance, Beginning of Period
|
146
|
804
|
||||||
|
Cash Balance, End of Period
|
$
|
1,212
|
$
|
146
|
||||
The accompanying notes are an integral part of these financial statements.
17
LAKE FOREST MINERALS INC.
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS AND HISTORY - Lake Forest Minerals Inc., a Nevada corporation, (hereinafter referred to as the "Company" or "Lake Forest Minerals") was incorporated in the State of Nevada on June 23, 2008. The Company was formed to engage in the acquisition, exploration and development of natural resource properties of merit. During the initial period ending June 30, 2008, the Company entered into an option agreement to acquire certain mineral claims located in British Columbia (refer to Note 3).
On February 22, 2010 the Company provided notice to the Optionor, and terminated the Option Agreement and relieved itself from any obligations thereunder.
The Company’s operations have been limited to general administrative operations, initial property staking and investigation, and is considered an Exploration Stage Company in accordance with ASC 915.
Since February 22, 2010, our purpose has been to serve as a vehicle to acquire an operating business and we are currently considered a “shell” company inasmuch as we are not generating revenues, do not own an operating business, and have no specific plan other than to engage in a merger or acquisition transaction with a yet-to-be identified operating company or business. We have no employees and no material assets.
MANAGEMENT OF COMPANY - The Company filed its articles of incorporation with the Nevada Secretary of State on June 23, 2008. The initial list of officers filed with the Nevada Secretary of State on June 23, 2008, indicates the sole director Jeffrey Taylor as the President, Secretary, and Treasurer.
YEAR END - The Company's fiscal year end is June 30.
USE OF ESTIMATES - The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.
18
LAKE FOREST MINERALS INC.
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES - The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:
|
June 30, 2017
|
June 30, 2016
|
|||||||
|
Income tax expense at statutory rate
|
$
|
7,362
|
$
|
5,972
|
||||
|
Common stock issued for services
|
--
|
--
|
||||||
|
Valuation allowance
|
(7,362
|
)
|
(5,972
|
)
|
||||
|
Income tax expense per books
|
$
|
--
|
$
|
--
|
||||
Net deferred tax assets consist of the following components as of:
|
June 30, 2017
|
June 30, 2016
|
|||||||
|
NOL carryover
|
$
|
57,192
|
$
|
49,830
|
||||
|
Valuation allowance
|
(57,192
|
)
|
(49,830
|
)
|
||||
|
Net deferred tax asset
|
$
|
--
|
$
|
--
|
||||
REVENUE RECOGNITION - The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.
NET LOSS PER COMMON SHARE - Basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the period from June 23, 2008 (Date of Inception) through June 30, 2017 the Company had no potentially dilutive securities.
19
LAKE FOREST MINERALS INC.
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and has not granted any stock options. Accordingly no stock-based compensation has been recorded to date.
CASH AND CASH EQUIVALENTS – For purposes of Statements of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
ADVERTISING COSTS - The Company's policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expenses as of June 30, 2017.
LONG-LIVED ASSETS - The carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
MINERAL PROPERTY COSTS - The Company has been in the exploration stage since its inception on June 23, 2008 and has not yet realized any revenues from its planned operations, being the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
RECENT ACCOUNTING PRONOUNCEMENTS – From June 30, 2017 through the filing date of these financial statements, the FASB (Financial Accounting Standards Board) issued various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. Management has determined that these recent accounting pronouncements will have no impact on the financial statements of Lake Forest Minerals Inc.
2. PROPERTY AND EQUIPMENT
As of June 30, 2017, the Company does not own any property and/or equipment.
20
LAKE FOREST MINERALS INC.
Notes to the Financial Statements
3. STOCKHOLDER'S EQUITY
The Company has 75,000,000 common shares and 10,000,000 preferred shares authorized with a par value of $0.001 per share.
The Company has not issued any preferred shares since inception through June 30, 2017.
A total of 11,000,000 shares of the Company’s common stock have been issued as of June 30, 2017, 8,000,000 of these shares were issued to the sole director of the Company pursuant to a stock subscription agreement at $0.0015 per share for total proceeds of $12,000 on June 26, 2008. The remaining 3,000,000 shares of the Company’s issued and outstanding common stock were issued at a price of $0.01 per share for gross proceeds of $30,000.
4. RELATED PARTY TRANSACTIONS
Jeffrey Taylor, the sole officer and director of the Company was not paid for any underwriting services that he performed on behalf of the Company with respect to the Company's S-1 prospectus offering, filed August 6, 2008.
To June 30, 2017, Jeffrey Taylor loaned the Company $97,000 for operating expenses, the loan bears no interest and has no specific terms of payment.
5. GOING CONCERN
The Company has incurred net losses of approximately $146,645 for the period from June 23, 2008 (Date of Inception) through June 30, 2017 and has commenced limited operations, raising substantial doubt about the Company's ability to continue as a going concern. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company's plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
6. SUBSEQUENT EVENTS
The Company’s management has reviewed all material subsequent events through the filing date of these financial statements in accordance with ASC 855-10, and has determined that there are no material subsequent events to report.
21
Item 9. Changes in and Disagreements with Accountants on Financial Disclosure
None.
Item 9A(T). Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer (our president), we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.
Management's Annual Report on Internal Control Over Financial Reporting
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) under the Exchange Act, for the company.
Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our president, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of June 30, 2017, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of evaluation date and identified the following material weaknesses:
Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.
Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.
Lack of Audit Committee & Outside Directors on the Company’s Board of Directors: We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
22
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future.
Management, including our president, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
23
PART III
Item 10. Director, Executive Officer and Corporate Governance
The officer and director of Lake Forest Minerals, whose one year terms will expire 6/30/18, or at such a time as his successor(s) shall be elected and qualified is as follows:
|
Name & Address
|
Age
|
Position
|
Date First Elected
|
Term Expires
|
||||
|
Jeffrey Taylor
|
49
|
President, Secretary,
|
6/24/08
|
6/30/17
|
||||
|
711 S. Carson Street
|
Treasurer, CFO, CEO
|
|||||||
|
Suite 4
|
& Director
|
|||||||
|
Carson City, NV 89701
|
|
The foregoing person is a promoter of Lake Forest Minerals Inc., as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933. Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
Jeffrey Taylor currently devotes 10 hours per week to company matters, in the future he intends to devote as much time as the board of directors deems necessary to manage the affairs of the company.
No executive officer or director of the corporation has been the subject of any order, judgment, or decree of any court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring, suspending or otherwise limiting him or her from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
No executive officer or director of the corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.
Background Information
Jeffrey Taylor has been the President, Secretary, Treasurer and a Director of Lake Forest Minerals since June 24, 2008.
From 1995 to present Mr. Taylor has been the owner and operator of Stump Grinding Northwest, a privately held company located in Washington State.
From 1993 to 1995 he worked as a loan officer for Home Lending Associates and Eagle Mortgage in Bellevue, Washington.
From 1990 to 1992 he worked as an Urban Forester for Puget Power, a utility company in Washington State.
Mr. Taylor earned a Bachelor of Science Degree in Forest Management from The University of Washington in 1989.
Code of Ethics
We do not currently have a code of ethics, because we have only limited business operations and one officer and director, we believe a code of ethics would have limited utility. We intend to adopt such a code of ethics as our business operations expand and we have more directors, officers and employees.
24
Item 11. Executive Compensation
Our current officer receives no compensation. The current Board of Directors is comprised of Jeffrey Taylor.
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
|
|||||||||||||||||||||||||
| Jeffrey Taylor, | 2017 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
| President, | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
|
CFO & CEO
|
2015 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
|
Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units or
Other Rights
That Have
Not Vested
|
|||||||||||||||||||||||||||
|
Jeffrey Taylor,
|
|
0
|
|
0
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
||||||||||||||||||||||||
| CEO & CFO | ||||||||||||||||||||||||||||||||||||
DIRECTOR COMPENSATION
|
Name
|
Fees Earned
or Paid
in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan
Compensation
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
|||||||||||||||||||||
|
Jeffrey Taylor,
|
|
0
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|||||||||||||||||||
|
Director
|
||||||||||||||||||||||||||||
25
There are no current employment agreements between the company and its executive officer.
In June 2008 Jeffrey Taylor purchased 8,000,000 shares of our common stock at $0.0015 per share. The terms of these stock issuances were as fair to the company, in the opinion of the board of directors, as could have been made with an unaffiliated third party.
Mr. Taylor currently devotes approximately 10 hours per week to manage the affairs of the company. He has agreed to work with no remuneration until such time as the company receives sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of the compensation will be.
For the year ended June 30, 2017 Jeffrey Taylor loaned the company $17,000 for operating expenses. The loan balance at June 30, 2017 was $97,000; the loan bears no interest and has no specific terms of repayment.
There are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the company or any of its subsidiaries, if any.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information on the ownership of Lake Forest Minerals voting securities by officers, directors and major shareholders as well as those who own beneficially more than five percent of our common stock as of the date of this annual report:
|
Name of
|
No. of
|
Percentage
|
||||||
|
Beneficial Owner(1)
|
Shares
|
of Ownership
|
||||||
|
Jeffrey Taylor
|
|
8,000,000
|
72
|
%
|
||||
|
711 S. Carson Street
|
||||||||
|
Suite 4
|
||||||||
|
Carson City, NV 89701
|
||||||||
|
All Officers and
|
||||||||
|
Directors as a Group
|
8,000,000
|
72
|
%
|
|||||
|
(1)
|
The person named may be deemed to be a "parent" and "promoter" of the Company, within the meaning of such terms under the Securities Act of 1933, as amended.
|
Item 13. Certain Relationships and Related Transactions, and Director Independence
In June 2008 Mr. Taylor purchased 8,000,000 shares of our common stock at $0.0015 per share. All of such shares are “restricted” securities, as that term is defined by the Securities Act of 1933, as amended, and are held by the officer and director of the Company. (See "Principal Stockholders".)
For the year ended June 30, 2017 Jeffrey Taylor loaned the company $17,000 for operating expenses. The loan balance at June 30, 2017 was $97,000; the loan bears no interest and has no specific terms of repayment.
There are no independent directors currently serving on the Board of Directors.
Item 14. Principal Accounting Fees and Services
The total fees charged to the company for audit services were $9,750 for tax services were $Nil and for other services were $Nil during the year ended June 30, 2017.
The total fees charged to the company for audit services were $9,000, for tax services were $Nil and for other services were $Nil during the year ended June 30, 2016.
26
Item 15. Exhibits
|
Exhibit
|
Description
|
Method of Filing
|
||
|
Articles of Incorporation
|
Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on August 6, 2008.
|
|||
|
Bylaws
|
Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on August 6, 2008.
|
|||
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed electronically herewith
|
|||
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Filed electronically herewith
|
|||
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Filed electronically herewith
|
|||
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T
|
Filed electronically herewith
|
27
Signatures
In accordance with the requirements of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
/s/ Jeffrey Taylor
|
September 18, 2017
|
|
|
Jeffrey Taylor, President & Director
|
Date
|
|
|
(Principal Executive Officer, Principal Financial Officer,
|
||
|
Principal Accounting Officer)
|
28