NOTES TO THE FINANCIAL STATEMENTS
September 30, 2015
NOTE 1 –NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated in the State of Nevada as a for-profit Company on September 21, 2010 and established as fiscal year end of September 30. We are a shell company with no current business plan.
In March 2013, the Company approved a name change to Meta Gold, Inc. In October 2014, the Company approved a name change to Silverton Energy, Inc.
The Company is subject to significant risk relating to its operations and securities. Among the biggest risks is that the Company will be unable to generate revenue, or borrow funds, or sell equity to cover its expenses. If the Company is unable cover its expenses it will eventually be forced to cease operations.
NOTE 2 – GOING CONCERN
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has a working capital deficit of $328,961 and net loss from operations since inception of $435,351. The Company does not have a source of revenue sufficient to cover its operation costs giving substantial doubt for it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company is funding its initial operations by way of issuing Founder’s shares.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s activities are subject to significant risks and uncertainties, including the ability to raise additional funds, if the Company does not locate a source of revenue to cover operating expenses.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates
Income Taxes
The Company follows the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measure using the enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stakeholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Recent Accounting Pronouncements
Pronouncements between September 30, 2015 and the date of this filing are not expected to have a significant impact on our operations, financial position, or cash flow, nor does the Company expects the adoption of recently issued, but not yet effective, accounting pronouncements to have a significant impact on our results of operations, financial position or cash flows.
NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short term maturity of the instruments.
NOTE 5 - LOAN RECEIVABLE - RELATED PARTY LOANS
The Company loaned $46,081 to a shareholder owened company. $10,000 is due on December 1, 2016. The interest is 5% per annum. The company accrued interest of $817 as of September 30, 2015. $36,081 is a demand note without interest.
NOTE 6 - LOAN PAYABLE - RELATED PARTY LOANS
The Company has received $26,154 as a loan from related parties (shareholder and shareholder owened company) as of September 30, 2015 ($18,654 as of September 30, 2014). The loan is due on demand and without interest.
NOTE 7 – RELATED PARTY TRANSACTION
The Company entered into a consulting agreement with Dr. Thomas Sawyer, president and director of the Company, on December 1, 2013 for the amount of $15,000 per month. As of June 30, 2015, $90,000 of the outstanding amount was converted into Additional Paid In Capital and $15,000 is outstanding as of September 30, 2015. The Company has also accrued outstanding expenses of $18,550 in relation to office rent and expenses, travel, accommodation and related expenses which remains outstanding.
NOTE 8 – LOAN PAYABLE
The Company entered into loan agreement with Future Gen Holding Ltd. on January 9, 2014. The balance outstanding as at September 30, 2015 is $275,000 ($210,000 as at September 30, 2014). The interest is 5% per annum on the loan. The Company accrued interest of $17,667 as of September 30, 2015.
NOTE 9 – CAPITAL STOCK
On October 1, 2010 the Company issued 852,500,000 Founder’s shares at $0.000012 per share for net funds to the Company of $11,000.
During March and April, 2012, the Company issued 20,925,000 common shares for $0.000258 per share, for cash of $5,400
In March 2013 the Company increased its Authorized common shares to 250,000,000 shares at $0.001 per share.
In March 2013, the Company declared a 155:1 forward split and on the same day redeemed 821,000,125 common shares for $10.
In October 2014, the company increased authorized share capital from 250,000,000 shares of common stock to 500,000,000 shares of common stock. In October4 2014, the majority shareholder and the Board of Director approved a reverse stock split two to one.
NOTE 10 – INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of September 30, 2014 and 2013 are as follows:
All the tax payer's tax returns are open for inspection by governmental bodies.
|
|
September 30,
2015
|
|
|
September 30,
2014
|
|
Net operating loss carry forward
|
|
|
435,351
|
|
|
|
296,637
|
|
Effective tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Deferred tax assets
|
|
|
152,373
|
|
|
|
103,823
|
|
Less: Valuation allowance
|
|
|
(152,373
|
)
|
|
|
(103,823
|
)
|
Net deferred tax asset
|
|
|
0
|
|
|
|
0
|
|
The net federal operating loss carry forward will expire between 2032 and 2035. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
NOTE 11 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no events to disclose.
ITEM 9:
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
This Item is not applicable to us.
ITEM 9A: