LODE-STAR MINING INC. Funding
All of our ongoing operations, sinceOctober 4, 2014 , have been funded by monies advanced to us by LSG our largest shareholder and one other related party, LSG's primary shareholder. Given the termination of our Mineral Property Option Agreement with LSG, we do not anticipate that those two related party sources will continue to provide any significant future funding.
We do not currently have enough funds to carry out our entire plan of operations, so we intend to meet the balance of our cash requirements for the next 12 months through a combination of debt financing and equity financing through private placements.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
There is no assurance that we will be successful in completing any such financings.
If we are unsuccessful in obtaining sufficient funds through our capital raising efforts, we may review other financing options, although we cannot provide any assurance that any such options will be available to us or on terms reasonably acceptable to us. Further, if we are unable to secure any additional financing then we plan to reduce the amount that we spend on our operations, including our management-related consulting fees and other general expenses, so as not to exceed the capital resources available to us. Regardless, our current cash reserves and working capital will not be sufficient for us to sustain our business for the next 12 months, even if we decide to scale back our operations. Going Concern
Our auditors have issued a going concern opinion. This means that 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 for cash currently is loans or investments by others in our common stock. Intellectual Property
We do not have any intellectual property.
Personnel We have no employees. Our president and CEO, our COO and our Corporate Secretary received no compensation in the years endedDecember 31, 2022 and 2021 for their services, other than$100,000 in consulting fees incurred for 2021 and$50,000 for 2022 to another company controlled by our CEO. We expect to continue to use outside consultants, advisors, attorneys and accountants as necessary. See Item 10 for information regarding our officers and directors. Results of Operations The following comments on our results of operations should be read in conjunction with our audited financial statements for the year endedDecember 31, 2022 which are included with this Report. See the "Cautionary Note Regarding Forward Looking Statements" above for a discussion of forward-looking statements and the significance of such statements in the context of this Report. We recorded net income of$2,030,931 for the year endedDecember 31, 2022 , have an accumulated deficit of$4,263,323 and have had no operating revenues. The possibility and timing of revenue being generated from our business is uncertain.
Revenues, Expenses and Net Loss
Years Ended December 31 Increase/(Decrease)
2022 2021 Amount Percentage
Revenue $ - $ - $ - -Operating Expenses 155,518 309,324 153,806
50 %
Operating Loss (155,518 ) (309,324 ) (153,806 ) 50 %
Other 2,186,449 (2,259,850 ) (4,446,299 ) 197 %Net Income (Loss)$ 2,030,931 $ (2,569,174 ) $ (4,600,105 )
179 % The most significant driver of the year over year change in net income is the$2,186,917 benefit attributed to the reversal of in-process research and development ("IPR&D") from Sapir upon rescission of the Sapir Agreements. The IPR&D was expensed in the prior year upon entering into the Sapir Agreements. Working Capital Deficiency December 31 Increase/(Decrease) 2022 2021 Amount Percentage Current Assets$ 886 $ 6,281 $ 5,395 86 % Current Liabilities 27,396 231,867 204,471 88 % Working Capital (Deficiency)$ (26,510 ) $ (225,586 ) $ (199,076 ) 88 % The most significant driver of the year over year change our working capital deficiency is the$204,470 decrease in accounts payable and accrued liabilities following settlement of certain related party balances with common shares.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Cash Flows
December 31 Increase/(Decrease)
2022 2021 Amount Percentage
Cash Flows Provided By (Used In):
Operating Activities $ (102,018 ) $ (75,575 ) $ 26,443 -35 %
Financing Activities 96,896 68,939 (27,957 ) -41 %
Net increase (decrease) in cash $ (5,122 ) $ (6,636 ) $ (1,514 ) 23 %
As of the date of this report, we have yet to generate any revenues from our
business operations. Our principal sources of working capital have been related
party loans and funds received as subscriptions for our common stock. We have no
assurance that we can successfully engage in any private sales of our securities
or that we can obtain any additional loans.
Off-Balance Sheet Arrangements
We have no 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 are material to investors. Commitments
We do not have any commitments as of
Critical Accounting Policies Our critical accounting policies are mainly those subject to significant judgments and uncertainties which could potentially result in materially different results under different conditions and assumptions. We believe the following critical accounting policies reflect our most significant estimates, judgments and assumptions used in the preparation of our financial statements:
Use of Estimates and Assumptions
The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant areas requiring management's estimates and assumptions are determining the fair value of transactions involving related parties and common stock. Actual results may differ from the estimates. Foreign Currency Accounting
Our functional currency is the
? monetary items at the exchange rate prevailing at the balance sheet date;
? non-monetary items at the historical exchange rate; and
? revenue and expense items at the rate in effect of the date of transactions.
Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations.
Income Taxes We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
Reclamation Liabilities and Asset Retirement Obligations
We have no asset retirement obligations, including environmental rehabilitation expenditures, which relate to an existing condition caused by past operations.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)
Acquired in-process research and development ("IPR&D") income (expense) includes
the initial costs of IPR&D projects, acquired directly in a transaction other
than a business combination, that do not have an alternative future use and is
expensed on acquisition. Following the rescission of the Sapir Agreements, the
expensed IPR&D was reversed through the income statement.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by theFinancial Accounting Standards Board , ("FASB") or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial statements upon adoption.
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