LODE-STAR MINING INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this quarterly report. In addition to historical financial information, the following discussion includes certain forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. Except as required by applicable law, including the securities laws ofthe United States , we do not intend to update any of the forward-looking statements to conform these statements to actual results. New Business OnDecember 28, 2021 , we entered into an asset purchase agreement (the "Purchase Agreement") withSapir Pharmaceuticals, Inc. , aDelaware corporation ("Sapir"), pursuant to which we purchased certain assets from Sapir used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule (the "Business") in exchange for 1,000,000 shares of newly-designated Series A preferred stock (the "Preferred Stock"). The closing of the acquisition occurred simultaneous with the execution and delivery of the Purchase Agreement. At the closing, the parties also executed and delivered a royalty agreement (the "Royalty Agreement") pursuant to which we agreed to pay Sapir a royalty equal to 5% of the gross revenues realized from licenses or products generated or derived from the Business. Due to circumstances beyond the control of the parties, we were unable to develop the Business to the extent contemplated by (i) the Purchase Agreement and the Royalty Agreement (together, the "Sapir Agreements") and (ii) discussions that occurred between us and Sapir following the closing of the Purchase Agreement. As a result, onJune 6, 2022 , we entered into a rescission agreement with Sapir (the "Rescission Agreement") in order to rescind the Purchase Agreement and the Royalty Agreement and restore both us and Sapir to the respective positions we occupied immediately in advance of the execution and delivery of the Sapir Agreements.
As of the date of the Rescission Agreement, we had not completed the issuance of the Preferred Stock to Sapir or completed any payments to Sapir under the Royalty Agreement.
In connection with the Sapir transaction, onJanuary 14, 2022 , we entered into a settlement and termination agreement (the "Settlement Agreement") withLode Star Gold, Inc. , a privateNevada corporation and our former controlling shareholder ("LSG"), in order to terminate the mineral option agreement between the parties datedOctober 4, 2014 , as amended onOctober 31, 2019 (together, the "Option Agreement"). The Settlement Agreement provided for the immediate termination of the Option Agreement (with the exception of certain standard provisions that survived according to their terms); the forgiveness by LSG of all amounts owing by us to LSG thereunder, which includes approximately$2.224 million in accrued, unpaid penalty and other payments (collectively, the "Debt"); and the return to LSG of our 20% undivided interest in and to the mineral property that was the subject of the Option Agreement. OnJune 8, 2022 , and in connection with the rescission of the Sapir Agreements, we entered into a debt reinstatement agreement (the "Reinstatement Agreement") with LSG pursuant to which we agreed to reinstate the Debt. Also onJune 8, 2022 , we entered into debt conversion agreements with three related parties, including LSG, pursuant to which the creditors converted an aggregate of$2,601,207.55 in accrued, unpaid debt into 70,302,906 shares of our common stock at a price of$0.037 per share. Funding
At present we have no sustainable financing in place other than remedial expenses still being advanced by LSG.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
Personnel
We have no employees. Apart from quarterly consulting fees, our President and
CEO, Mark Walmesley , receives no compensation for his services. We expect to
continue to use outside consultants, advisors, attorneys and accountants as
necessary.
Our CFO and Corporate Secretary,
Going Concern
There is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our expenses. This is because we have not generated any revenues to-date and we cannot currently estimate the timing of any possible future revenues. Our only source of cash at this time is from loans. Results of Operations
The following summary of our results of operations should be read in conjunction
with our financial statements for the period ended
Three Months Ended June 30 Change
2022 2021 Amount Percentage
$ $ $
Revenue - - - -
Operating Expenses 99,546 82,788 16,758 20 %
Operating Loss (99,546 ) (82,788 ) (16,758 ) 20 %
Other Income (Expense) 2,186,682 (24,257 ) 2,210,939 9,115 %
2,087,136 (107,045 ) 2,194,181 2,050 %
Six Months Ended June 30 Change
2022 2021 Amount Percentage
$ $ $
Revenue - - - -
Operating Expenses 132,893 186,918 54,025 (29 %)
Operating Loss (132,893 ) (186,918 ) (16,758 ) (29 %)
Other Income (Expense) 2,186, 110 (47,007 ) 2,233,117 4,750 %
2,053,217 (233,925 ) 2,194,181 938 %
Revenues
We had no operating revenues during the three-month and six-month periods
Expenses
Notable year over year differences in expenses for the second quarter in 2022 compared to 2021 are as follows:
Three Months Ended June 30 Increase/(Decrease)
2022 2021 Amount Percentage
$ $ $
Consulting services 52,074 31,187 20,867 67 %
Exploration and evaluation - 13,158 (13,158 ) (100 %)
Mineral option fees - 25,012 (25,012 ) (100 %)
Professional fees 45,164 7,953 37,211 468 %Interest, bank and finance charges 235 24,257
(24,022 ) (99 %)
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
Consulting services expense was higher during the second quarter of 2022 primarily due a late recorded invoice from the previous quarter.
Exploration and evaluation expense and mineral option fees were reduced to $Nil in the first quarter of 2022 due to the Company terminating its mineral property option and no longer spending on mining efforts. Professional fees in the second quarter of 2022 included legal and bookkeeping were increased as the Company paid its OTC Markets annual fee and continued to restructure itself following the rescinding of the Sapir Pharmaceutical transaction.
Interest, bank and finance charges were lower primarily due to the write down in loans from LSG and other related parties.
Notable year over year differences in expenses for the six month period ended
Six Months Ended June 30 Increase/(Decrease)
2022 2021 Amount Percentage
$ $ $
Exploration and evaluation - 20,689 (20,689 ) (100 %)
Mineral option fees - 49,988 (49,988 ) (100 %)
Professional fees 52,254 7,953 44,301 557 %
Consulting services expense was higher during the second quarter of 2022 primarily due a late recorded invoice from the previous quarter.
Exploration and evaluation expense and mineral option fees were reduced to $Nil in the six month period endedJune 30, 2022 due to the Company terminating its mineral property option and no longer spending on mining efforts. Professional fees in the six month period endedJune 30, 2022 included legal and bookkeeping were increased as the Company paid its OTC Markets annual fee and continued to restructure itself following the rescinding of the Sapir Pharmaceutical transaction.
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