Organization, Consolidation and Presentation of Financial Statements

12 Months Ended

Jun. 30, 2011

Organization, Consolidation and Presentation of Financial Statements:

Organization, Consolidation and Presentation of Financial Statements Disclosure

Note 1 — The Company and a Summary of Significant Accounting Policies

The Company

Verilink Corporation (“we”, “our” or the “Company”), a Delaware Corporation, was incorporated in 1982. Prior to ceasing operations in June 2006, we developed, manufactured, and marketed integrated access devices, Optical Ethernet access products, wireless access devices, and bandwidth aggregation solutions for network service providers, enterprise customers, and original equipment manufacturer partners. Our integrated network access and customer premises/located equipment products were used by network service providers.

On April 9, 2006, we filed bankruptcy.  On June 15, 2006, we sold substantially all of our assets for $5,250,000, the assumption of certain liabilities and the payment of certain other costs. In January 2007, the Court approved our reorganization plan, which included (i) the sale of the Verilink shell to an outside investor group, and (ii) the creation of a Liquidating Trust responsible for payments to creditors. Following the sale of substantially all assets, we ceased operations.

On January 31, 2007, the Court approved the Second Amended Plan. Under the Plan, if the Business Combination occurs within six (6) months of the Effective Date, the Company will receive a discharge of its debts under Section 1141 of the Bankruptcy Code. On January 17, 2008, the Court issued the Order Granting Motion of Liquidating Trustee to Extend Certain Deadlines Established in the Debtors’ Plan of Reorganization, which ordered the Business Combination deadline extended to February 13, 2009

On February 10, 2009, the Company entered into an Option Agreement to acquire certain oil and gas leases on approximately 3,912 acres located in Phillips County, Colorado from Osage Land Company, an Oklahoma corporation,.  The primary term of the leases is for a five year period that expires in 2012.  is to receive $80.00 per net mineral acre on or before July 10, 2009 as extended to March 31, 2010, or about $313,000.  Due to lack of funding, we have not engaged in any operations related to the Option Agreement. 

In February, 2009, we emerged from bankruptcy as an exploration stage company.

Basis of presentation

Our fiscal year end is June 30.

As of February 13, 2009, the Company became an exploration stage company and has not yet realized any revenue from its operations. It is primarily engaged in acquisition, exploration and development of its mining properties located in Phillips County, Colorado. The Company has not yet determined whether these properties contain mineral reserves that are economically recoverable. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurances that current exploration programs will result in profitable mining operations.

Management estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basic and Diluted Net Income (loss) per share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during a period. The Company has 5,000,000 warrants outstanding as of June 30, 2011. These warrants were excluded from the computation of diluted loss per share as their effect would be anti-dilutive.

Recent Accounting Pronouncements

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