NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES
Nature of Business
Queensridge Mining Resources, Inc. (“Queensridge”
or the “Company”) was incorporated in Nevada on January 29, 2010. Queensridge is an exploration stage company and has
not yet realized any revenues from its planned operations. Queensridge is currently in the process of acquiring certain mining
claims.
Exploration Stage Company
The accompanying financial statements have
been prepared in accordance with generally accepted accounting principles related to exploration stage companies. An exploration
stage company is one in which planned principal operations have not commenced, or, if its operations have commenced, there have
been no significant revenues there from.
Basis of Presentation
The accompanying unaudited interim financial
statements have been prepared by Queensridge Mining Resources, Inc. (“Queensridge” and the “Company”) pursuant
to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures
normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United
States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments
and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments
consist of normal recurring adjustments. These interim financial statements should be read in conjunction with the audited
financial statements of the Company for the fiscal year ended June 30, 2013. The results of operations for the six months
ended December 31, 2013 are not indicative of the results that may be expected for the full year.
Accounting Basis
The Company uses the accrual basis of accounting
and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company
has adopted a June 30 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with maturities of three months or less to be cash equivalents. At December 31, 2013 and June 30, 2013 the Company had cash balances
totaling $15 and $2,089, respectively.
Fair Value of Financial Instruments
The Company’s financial instruments consist
of cash and cash equivalents, accrued expenses, accrued interest – related party, shareholder loans and notes payable to
a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or
interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the
differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted
tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence,
are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of December 31, 2013, there have been no interest or penalties incurred on income taxes.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN EXPLORATION STAGE
COMPANY)
NOTES TO THE FINANCIAL
STATEMENTS
DECEMBER 31, 2013
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements
and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Dividends
The Company has not adopted any policy regarding
payment of dividends. No dividends have been paid during the periods shown.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated
by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of December 31, 2013 or 2012.
Revenue Recognition
The Company is in the development stage and
has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when
delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has
been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection
of any related receivable is probable.
Stock-Based Compensation
The Company accounts for employee stock-based
compensation in accordance with the guidance of FASB ASC Topic 718,
Compensation – Stock Compensation
which requires
all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements
based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and
additional paid-in capital over the period during which services are rendered. There has been no stock-based compensation issued
to employees.
The Company follows ASC Topic 505-50, formerly
EITF 96-18, “
Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction
with Selling Goods and Services
,” for stock options and warrants issued to consultants and other non-employees. In
accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company
are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. There has been no stock-based compensation issued to non-employees.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN EXPLORATION STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Mineral Properties
Costs of exploration and the costs of carrying
and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs are capitalized including
licenses and lease payments. Although the Company has taken steps to verify title to mineral properties in which it has an interest,
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.
Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets’ carrying amount.
Recent Accounting Pronouncements
The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial
position or cash flows.
NOTE 2 – MINERAL PROPERTIES
During the period ended June 30, 2010, the
Company electronically staked and recorded a 100% interest in a block of mining claims located in northern Newfoundland, Canada
known as the Cutwell Harbour property for $3,000. The mineral properties were found to be unproven and the entire balance of $3,000
was impaired as of June 30, 2010.
Exploration costs totaled $0 and $0 for the
periods ended December 31, 2013 and 2012, respectively.
NOTE 3 – SHAREHOLDER LOANS
The Company has received advances from a shareholder
to help fund operations. The balance of the shareholder loans was $12,590 and $12,590 as of December 31, 2013 and June 30, 2013,
respectively. The loans are unsecured, non-interest bearing and have no specific terms of repayment.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN EXPLORATION STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 – NOTES PAYABLE – RELATED PARTY
The Company amended two $10,000 loans from
a related party during the years ended June 30, 2013, 2013 and 2012. The notes bear interest at 5% per annum and are now due on
April 24, 2015 and October 4, 2015. The notes bear interest at 5% and consist of the following:
|
|
Note Amount
|
|
Issue Date
|
|
Maturity Date
|
PKS Trust
|
|
$
|
10,000
|
|
|
|
4/24/11
|
|
|
4/24/15
|
PKS Trust
|
|
$
|
10,000
|
|
|
|
10/4/11
|
|
|
10/4/15
|
PKS Trust
|
|
$
|
1,985
|
|
|
|
8/14/12
|
|
|
8/14/14
|
PKS Trust
|
|
$
|
3,500
|
|
|
|
8/29/12
|
|
|
8/29/14
|
PKS Trust
|
|
$
|
1,000
|
|
|
|
3/19/13
|
|
|
3/19/15
|
PKS Trust
|
|
$
|
3,500
|
|
|
|
5/13/13
|
|
|
5/13/15
|
PKS Trust
|
|
$
|
5,700
|
|
|
|
08/22/13
|
|
|
8/22/15
|
PKS Trust
|
|
$
|
4,000
|
|
|
|
09/25/13
|
|
|
9/25/15
|
PKS Trust
|
|
$
|
3,000
|
|
|
|
11/18/13
|
|
|
11/18/15
|
Total notes payable
|
|
$
|
42,685
|
|
|
|
|
|
|
|
During the period ended December 31, 2013,
the Company repaid $303 of the principal amounts of the loans payable.
Interest expense of $917 and $597 was recorded
for the six month periods ended December 31, 2013 and 2012, respectively.
Maturities as of June 30,
|
|
Total
|
|
2014
|
|
|
|
—
|
|
|
2015
|
|
|
|
29,382
|
|
|
2016
|
|
|
|
13,000
|
|
|
2017
|
|
|
|
—
|
|
|
2018
|
|
|
|
—
|
|
|
Total notes payable
|
|
|
$
|
42,382
|
|
NOTE 5 – ACCRUED EXPENSES
Accrued expenses consisted of the following
at December 31 and June 30, 2013:
|
December 31, 2013
|
|
June 30, 2013
|
Accrued accounting fees
|
$
|
2,650
|
|
|
$
|
10,500
|
|
Accrued legal fees
|
|
93,381
|
|
|
|
94,045
|
|
Accrued transfer agent fees
|
|
|
|
|
|
785
|
|
Total accrued expenses
|
$
|
96,031
|
|
|
$
|
105,330
|
|
QUEENSRIDGE
MINING RESOURCES, INC.
(AN EXPLORATION STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 – COMMON STOCK
On February 8, 2010, the Company issued 3,100,000
founder shares at $0.001 (par value) for cash totaling $3,100.
On March 29, 2010, the Company issued 3,250,000
shares at $0.005 for cash totaling $16,250.
On May 29, 2010, the Company issued 77,800
shares at $0.25 for cash totaling $19,450.
The Company had 6,427,800 shares of common
stock issued and outstanding as of December 31, 2013 and 2012.
The Company has not issued any stock options
or warrants as of December 31, 2013.
NOTE 7 – INCOME TAXES
From inception through the year ended December
31, 2013, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the
loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $192,974 at December
31, 2013, and will expire beginning in the year 2030.
The provision for Federal income tax consists of the following for
the six months ended December 31:
|
2013
|
|
2012
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
Current operations
|
$
|
2,070
|
|
|
$
|
2,467
|
|
Less: valuation allowance
|
|
(2,070
|
)
|
|
|
(2,467
|
)
|
Net provision for Federal income tax
|
$
|
—
|
|
|
$
|
—
|
|
The cumulative tax effect at the expected
rate of 34% of significant items comprising our net deferred tax amount is as follows :
|
December 31, 2013
|
|
June 30, 2013
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
Net operating loss carryover
|
$
|
52,758
|
|
|
$
|
50,688
|
|
Valuation allowance
|
|
(52,758
|
)
|
|
|
(50,688
|
)
|
Net deferred tax asset
|
$
|
—
|
|
|
$
|
—
|
|
Due to the
change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited
as to use in future years.
QUEENSRIDGE
MINING RESOURCES, INC.
(AN EXPLORATION STAGE
COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 8 – COMMITMENTS
Operating Lease
The Company’s office lease expired in
2012. An officer currently provides office facilities to the Company free of charge. Rent expense for the fiscal periods ended
December 31, 2013 and 2012 totaled $0 and $1,860, respectively.
NOTE 9 – LIQUIDITY AND GOING CONCERN
The Company has negative working capital, has
incurred losses since inception, and has not yet received revenues from sales of products or services. These factors create substantial
doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment
that might be necessary if the Company is unable to continue as a going concern.
The ability of Queensridge to continue as a
going concern is dependent upon the Company generating cash from the sale of its common stock and/or obtaining debt financing and
attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing
to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these
efforts.
NOTE 10 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company’s
management has analyzed its operations through the date on which the financial statements were issued, and has determined it does
not have any material subsequent events to disclose.