Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2013 | 23-May-14 | |
Document and Entity Information: | ' | ' |
Entity Registrant Name | 'MINERALRITE Corp | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-13 | ' |
Amendment Flag | 'true | ' |
Amendment Description | 'This Amendment #1 to our Quarterly Report only furnishes the XBRL presentation not filed with the previous 10Q filed on June 03, 2013. No other changes, revisions, or updates were made to the original amended filing. | ' |
Entity Central Index Key | '0001096296 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 54,459,900 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Statement_of_Financial_Positio
Statement of Financial Position (USD $) | Mar. 31, 2013 | Dec. 31, 2012 |
Balance Sheets | ' | ' |
Cash and Cash Equivalents, at Carrying Value | $26,498 | $9,330 |
Accounts Receivable, Net, Current | 24,295 | 31,019 |
Inventory, Net | 131,339 | ' |
Prepaid Expense, Current | 966,666 | 143,000 |
Assets, Current | 1,148,798 | 183,349 |
Property, Plant and Equipment, Gross | 97,750 | ' |
Furniture and Fixtures | 8,701 | 1,851 |
Less: Accumulated Depreciation | -244,600 | -232,933 |
OilAndGasPropertyFullCostMethodNet | 527,798 | 534,798 |
Prepaid Services Long Term | 1,736,577 | 262,054 |
Finite-Lived Intangible Assets, Net | 886,877 | ' |
Website Development, Net | 8,445 | 9,879 |
Deferred Offering Cost | 19,415 | 19,415 |
Assets, Noncurrent | 3,040,963 | 595,064 |
Assets | 4,189,761 | 778,413 |
Accounts Payable, Current | 245,786 | 203,621 |
Accrued Payroll | 2,772 | ' |
Customer Deposits | 59,950 | ' |
DueToRelatedPartiesCurrent | 576,211 | 392,546 |
Other Liabilities, Current | 8,921 | 11,982 |
Liabilities, Current | 893,640 | 608,149 |
Other Liabilities, Noncurrent | 12,111 | 11,994 |
Liabilities | 905,751 | 620,143 |
Common Stock, Value, Issued | 53,560 | 44,560 |
Additional Paid in Capital, Common Stock | 9,736,879 | 6,395,877 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | -6,490,220 | -6,266,031 |
Retained Earnings (Accumulated Deficit) | -16,209 | -16,136 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 3,284,010 | 158,270 |
Liabilities and Equity | $4,189,761 | $778,413 |
Statement_of_Financial_Positio1
Statement of Financial Position - Parenthetical (USD $) | Mar. 31, 2013 | Dec. 31, 2012 |
Balance Sheets | ' | ' |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 53,559,900 | 44,559,900 |
Common Stock, Shares Outstanding | 53,559,900 | 44,559,900 |
Statement_of_Income
Statement of Income (USD $) | 3 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2012 | |
Income Statement | ' | ' |
Net Revenue from oil and gas activity | $48,539 | $110,647 |
Net revenue from mining equipment manufacturing activities | 27,316 | ' |
Revenues | 75,855 | 110,647 |
Cost of Goods Sold | 58,604 | 92,450 |
Cost of Revenue | 58,604 | 92,450 |
Gross Profit | 17,251 | 18,197 |
RelatedPartyCosts | 47,618 | 45,000 |
Lease And Rental Expense | 4,740 | 3,986 |
Professional Fees | 38,471 | 122,603 |
General and Administrative Expense | 150,579 | 4,932 |
Operating Expenses | 241,408 | 176,521 |
Operating Income (Loss) | -224,157 | -158,324 |
Other Nonoperating Income (Expense) | 572 | ' |
Nonoperating Income (Expense) | 572 | ' |
Interest Expense | 604 | 12,475 |
Interest and Debt Expense | 604 | 12,475 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | -224,189 | -170,799 |
Net Income (Loss) Attributable to Parent | -224,189 | -170,799 |
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationAdjustmentNetOfTaxPortionAttributableToParent | 73 | 7,000 |
OtherComprehensiveIncomeLossNetOfTax | ($224,116) | ($163,799) |
Earnings Per Share, Basic | $0 | ($0.15) |
Weighted Average Number of Shares Outstanding, Basic | 49,504,344 | 1,059,825 |
Earnings Per Share, Diluted | $0 | ($0.15) |
Weighted Average Number of Shares Outstanding, Diluted | 49,504,344 | 1,059,825 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2012 | |
Statement of Cash Flows | ' | ' |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | ($224,189) | ($170,799) |
Amortization | 1,289 | ' |
Depreciation | 1,618 | ' |
Depletion | 10,048 | 19,207 |
Offering Costs | ' | 98,357 |
Stock Based Compensation | 158,809 | ' |
Increase (Decrease) in Receivables | 8,558 | -3,210 |
IncreaseDecreaseInBillingInExcessOfCostOfEarnings | -14,360 | ' |
Increase (Decrease) in Inventories | -21,220 | ' |
Increase (Decrease) in Prepaid Expense and Other Assets | ' | -3,000 |
Increase (Decrease) in Accrued Liabilities | 417 | 12,475 |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | 28,920 | -811 |
IncreaseDecreaseInRoyaltiesPayable | -3,061 | 911 |
Increase Decrease In Due To Related Parties | -22,152 | 37,000 |
IncreaseDecreaseInOtherOperatingAssets | 117 | ' |
Net Cash Provided by (Used in) Operating Activities | -75,206 | -9,870 |
Payments to Acquire Property, Plant, and Equipment | ' | 47 |
Net Cash Provided by (Used in) Investing Activities | ' | 47 |
Cash received in acquisition of Goldfield International, Inc. | 127,056 | ' |
Advances from unrelated third parties | 25,400 | ' |
Payment of accrued distribution due former shareholder | -60,000 | ' |
Net Cash Provided by (Used in) Financing Activities | 92,456 | ' |
ForeignCurrencyTransactionGainLossRealized | -82 | 27 |
Cash and Cash Equivalents, Period Increase (Decrease) | 17,168 | -9,796 |
Cash and Cash Equivalents, at Carrying Value | 9,330 | 42,890 |
Cash and Cash Equivalents, at Carrying Value | $26,498 | $33,094 |
Note_1_Organization_and_Basis_
Note 1 - Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2013 | |
Notes | ' |
Note 1 - Organization and Basis of Presentation | ' |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | |
Organization, History and Business | |
MineralRite Corporation (“the Company”) was incorporated in Nevada on October 22, 1996 under its original name PSM Corp. The Company changed its emphasis to the exploration and development of natural resources and on November 23, 2005 changed its name to Royal Quantum Group, Inc. On October 18, 2012, the Company again changed its name from Royal Quantum Group, Inc. to MineralRite Corporation. On August 31, 2012, the Company declared a 50-for-1 reverse stock split of its common stock. All references in the accompanying financials to the number of shares outstanding and per-share amounts have been restated to reflect this stock split. | |
On March 1, 2013, the Company acquired 100% of the total shares outstanding of Goldfield International, Inc. (“Goldfield”) in exchange for issuing 2,000,000 shares of its common stock. The acquisition was based on the fair value of the shares issued amounting to $900,000. The accompanying unaudited condensed financial statements include the accounts and balances of the Company and also of Goldfield since the date of its acquisition. Goldfield is in the business of manufacturing gold mining equipment. | |
Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position of the Company as of March 31, 2013, and the results of its operations and cash flows for the three months ended March 31, 2013 and 2012. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”). The Company believes that the disclosures in the unaudited condensed consolidated financial statements are adequate to make the information presented not misleading. However, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Commission on April 16, 2013. | |
Going Concern | |
The Company’s unaudited consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has a working capital deficit, which history and circumstance raise substantial doubt as to the Company’s ability to continue as a going concern. For the three months ended March 31, 2013, the Company had a net loss of $(224,189) and accumulated deficit of $6,490,220. The Company has raised sufficient funds through the private sale of participating units to acquire working interests in nine oil and gas wells. Six of the wells are currently producing as of March 31, 2013. Total gross revenue generated from these six wells during the three months ended March 31, 2013 amounted to $48,539. In addition, the Company on March 1, 2013 acquired Goldfield International, Inc. which had net sales for the month of March 2013 of $27,316 and gross profit during the month of $12,535. The net revenue generated from current operations is not sufficient to pay Company debts currently due or to fund future operations. The Company is seeking to raise additional funds; however, there is no assurance that the necessary funds will be raised or even if the funds are raised, that the funds received will be to sufficient to fund future operations until such time that the Company’s operations become profitable. Until such time as funding is obtained and/or positive results from operations materialize, doubt about the Company’s ability to continue as a going concern may remain. | |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2013 | |
Notes | ' |
Note 2 - Summary of Significant Accounting Policies | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Reclassification | |
Certain reclassifications have been made to conform the 2012 amounts to the 2013 classifications for comparative purposes. | |
Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of MineralRite Corporation and its wholly-owned subsidiary, Goldfield International, Inc. (acquired on March 1, 2013. See Note 3). Intercompany transactions and balances have been eliminated in consolidation. | |
Cash and Cash Equivalents | |
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Accounts Receivable | |
Accounts receivable are reported at the customer’s outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. | |
Allowance for Doubtful Accounts | |
An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. Management has determined that as of March 31, 2013, no allowances were required. | |
Revenue Recognition | |
Oil and gas production revenues are recognized at the point of sale. Sales of mining equipment are recognized at the time the product is shipped and title passes to the customer. | |
Oil and Gas Properties | |
The Company uses the full-cost method of accounting under which all costs incurred in the acquisition, exploration and development of oil and natural gas reserves, including costs related to unsuccessful wells and estimated future site restoration and abandonment, are capitalized until such time as the aggregate of such costs net of accumulated depletion and oil and natural gas related deferred income taxes, on a country-by-country basis, equals the sum of 1) the discounted present value (at 10%), using prices as of the end of each reporting period on a constant basis, of the Company’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum consultants, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed unless subsequent market price changes eliminate or reduce the indicated write-down in accordance with U.S. SEC Staff Accounting Bulletin (“SAB”) Topic 12D. Depletion is computed using the units-of-production method whereby capitalized costs, net of estimated salvage values, plus estimated future costs to develop proved reserves and satisfy asset retirement obligations, are amortized over the total estimated proved reserves on a country-by-country basis. Investments in major development projects are not depleted until either proved reserves are associated with the projects or impairment has been determined. | |
Property and Equipment | |
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided over the five-year estimated useful life of the assets computed on the straight-line method. | |
Gains and losses resulting from sales and dispositions of property and equipment are included in current operations. Maintenance and repairs are charged to operations as incurred. Depreciation expense for the three months ended March 31, 2013 and 2012 amounted $1,618 and $0, respectively. | |
Foreign Currency Translation | |
The Company's primary functional currency is the U.S. dollar. For foreign operations whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the year and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit. | |
Concentrations of Credit Risk | |
The Company’s revenue is dependent upon the successful efforts of the respective well’s operator. Currently production from the Company’s six wells is sold to one customer. | |
Loss per Share of Common Stock | |
The Company reports earnings (loss) per share in accordance with Accounting Standards Codification “ASC” Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of March 31, 2013 that have been excluded from the computation of diluted net loss per share consist of Unit holders’ options to convert their respective oil revenue interests into a total 10,900 (post-split) shares of the Company’s common stock. Potential common shares as of March 31, 2012 that have been excluded from the computation of diluted net loss per share consist of (a) warrants to purchase 22,720 (post-split) shares of the Company’s common stock and (b) Unit holders’ options to convert their respective oil revenue interests into a total 31,040 (post-split) shares of the Company’s common stock. | |
Asset Retirement Obligations | |
The Surface Mining Control and Reclamation Act of 1977 and similar state statutes require mine properties to be restored in accordance with specified standards. Accounting Standards Codification (“ASC”) Topic 410-20 requires recognition of an asset retirement obligation (“ARO”) for eventual reclamation of disturbed acreage remaining after mining has been completed. The Company records its reclamation obligations on a permit-by-permit basis using requirements as determined by the Office of Surface Mining of the U.S. Department of the Interior (“OSM”). The liability is calculated based upon the reclamation activities remaining after removal ceases, assuming that reclamation activities have been contemporaneous within state and federal guidelines during mining. A liability is recorded for the estimated future cost that a third party would incur to perform the required reclamation and mine closure discounted at the Company’s credit-adjusted risk-free rate. A corresponding increase in the asset carrying value of mineral rights is also recorded. The ARO asset is amortized on the units-of-production method over the proven and probable reserves associated with that permit. | |
Long-Lived Assets | |
The Company accounts for its long-lived assets in accordance with ASC No. 360, “Property, Plant and Equipment.” ASC No. 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. As of March 31, 2013, the Company does not believe there has been any impairment of its long-lived assets. | |
Fair Value of Financial Instruments | |
Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures,” the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of March 31, 2013. The Company’s financial instruments consist of cash, accounts receivables, payables, and other obligations. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instrument. | |
Income Taxes | |
The Company accounts for its income taxes under the provisions of ASC No. 740 “Income Taxes.” The method of accounting for income taxes under ASC No. 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. | |
Recent Accounting Pronouncements | |
The Company’s management has evaluated all recent accounting pronouncements since the last audit through the issuance date of these financial statements. In the Company’s opinion, none of the recent accounting pronouncements will have a material effect on the financial statements. | |
Note_3_Acquisition_of_Goldfiel
Note 3 - Acquisition of Goldfield International, Inc. | 3 Months Ended | ||||
Mar. 31, 2013 | |||||
Notes | ' | ||||
Note 3 - Acquisition of Goldfield International, Inc. | ' | ||||
NOTE 3 – ACQUISITION OF GOLDFIELD INTERNATIONAL, INC. | |||||
On March 1, 2013, the Company acquired the outstanding stock of Goldfield International, Inc., a manufacturer of gold mining equipment and parts located in Lindon, Utah. The acquisition of Goldfield diversifies our product lines and creates a second source of revenue for the Company. The acquisition was a stock purchase and therefore encompasses all of Goldfield’s business operations. | |||||
In exchange for Goldfield’s outstanding stock, the Company issued 2,000,000 shares of its common stock. The Company valued the acquisition at the fair value of the shares it issued amounting to $900,000. | |||||
In addition, the Company entered into separate agreement to acquire the personal goodwill of the seller for $100,000 payable in three installments of $33,000 due April 1, 2013, $33,000 due May 1, 2013 and $34,000 due June 1, 2013. Interest accrues on any payment that is not paid within 10 days of its respective due date. As of May 30, 2013, no payments have been paid under this agreement. | |||||
We valued the assets acquired and liabilities assumed as follows: | |||||
Current assets (including cash) | $ | 226,809 | |||
Property and equipment | 104,600 | ||||
Intangibles and goodwill | 886,877 | ||||
Current liabilities, including | |||||
above indicating $100,000 debt | (318,286 | ) | |||
Total purchase price | $ | 900,000 | |||
Management is still in the process of determining the intangibles acquired and their respective fair values. | |||||
Note_4_Investment_in_Oil_Gas_P
Note 4 - Investment in Oil & Gas Property | 3 Months Ended |
Mar. 31, 2013 | |
Notes | ' |
Note 4 - Investment in Oil & Gas Property | ' |
NOTE 4 - INVESTMENT IN OIL & GAS PROPERTY | |
In March 2011, the Company acquired an 8% working interest (6.4% NRI) in the Haggard #5-17 well located in Noble County, Oklahoma, USA. The Company capitalized $35,844 in development of this well. The well’s production commenced in 2011 and is still currently producing. A royalty consisting of 60% of the net revenue received from the production of the well will be distributed proportionally to the well’s investors. | |
In April and May 2011, the Company raised a total of $95,000 towards its share of the drilling and completion of the Bond #4 well through the issuance of 38 units. The Company has a 20% NRI in the Bond #4 well and each of the 38 units was priced at $2,500 per unit totaling $95,000 cash and consisted of 5,000 restricted common shares, a pro rata share of 60% of the net revenue generated from the production of the well, and warrants to purchase 10,000 shares of the Company’s common stock at $0.25 per share with an expiration date of October 2012. Each unit holder was granted the option to surrender their pro rata interest in the revenue from the well back to the company in exchange for 5,000 restricted common shares per unit surrendered. This option is exercisable for a period of 36 months from the date the investor receives the first revenue check. Of the $95,000 received, the Company allocated $20,936 towards the value of the investors’ 60% interest in the Company’s share of the well’s net revenue and credited this amount against the $93,332 it has currently paid and capitalized towards the drilling cost of the well. A consulting fee in connection with the offering was paid through the issuance of 3.4 units. The capitalized cost of the well was further reduced by the consultant’s allocated share in the well’s net revenue by $1,873. In November 2011, the Company received a refund of $7,771 from the well operator of costs related to this well, which reduced the capitalized cost allocated to this well. Total capitalized costs related to this well are $49,752. | |
In August 2011, the Company raised a total of $65,000 towards its share of the drilling and completion of the Chuck #1 well through the issuance of 26 units. The Company has a 20% NRI in the Chuck #1 well and each of the 26 units was priced at $2,500 per unit totaling $65,000 cash and consisted of 5,000 restricted common shares, a pro rata share of 60% of the net revenue generated from the production of the well, and warrants to purchase 10,000 shares of the Company’s common stock at $0.25 per share with an expiration date of February 2013. Each unit holder was granted the option to surrender their pro rata interest in the revenue from the well back to the company in exchange for 5,000 restricted common shares per unit surrendered. This option is exercisable for a period of 36 months from the date of acceptance of the Subscription Agreement. Of the $65,000 received, the Company allocated $15,394 towards the value of the investors’ 60% interest in the Company’s share of the well’s net revenue and credited this amount against the $59,015 it has currently paid and capitalized towards the drilling cost of the well. A consulting fee in connection with the offering was paid through the issuance of 2.6 units. The capitalized cost of the well was further reduced by the consultant’s allocated share in the well’s net revenue by $1,539. As of the date of this report, the Chuck #1 well is not in production. Total capitalized costs related to this well are $42,779. | |
As of March 31, 2013, the Company’s accrued asset retirement obligation totaled $12,111. Accretion of the obligation charged to cost of oil and gas activities for the three months ended March 31, 2013 amounted to $117. Depletion expense is also included in the cost of oil and gas activities as reflected in the accompanying statements of operations. Depletion expense for the three months ended March 31, 2013 and 2012 amounted to $10,048 and $19,207, respectively. | |
Note_5_Prepaid_Services
Note 5 - Prepaid Services | 3 Months Ended | ||||
Mar. 31, 2013 | |||||
Notes | ' | ||||
Note 5 - Prepaid Services | ' | ||||
NOTE 5 – PREPAID SERVICES | |||||
On February 4, 2013, the Company issued a total of 7,000,000 (post-split) shares of its common stock to five individuals and five entities in exchange for consulting services, valued at $2,450,000. The $2,450,000 is being charged to operations over the three-year term of the respective agreement. As indicated in Note 7, Mr. Guy Peckham, the Company’s president, received 2,000,000 of the 7,000,000 shares issued. The 2,000,000 shares were valued at $700,000. | |||||
On October 30, 2012, the Company issued a total of 33,000,000 (post-split) shares of its common stock of to five individuals and five entities in exchange for consulting services, valued at $429,000. The $429,000 is being charged to operations over the three-year term of the respective agreement. As indicated in Note 7, Mr. Guy Peckham, the Company’s president, received 11,500,000 of the 33,000,000 shares issued. The 11,500,000 shares were valued at $149,500. | |||||
Consulting fees charged to operations during the three months ended March 31, 2013 and 2012 relating to these two transactions amounted to $158,809 and $0, respectively. The unamortized balance at March 31, 2013 was $2,696,243. Amortization expense over the remaining terms of the respective consulting agreement is as follows: | |||||
March 31, | |||||
2014 | $ | 959,666 | |||
2015 | 959,666 | ||||
2016 | 776,911 | ||||
$ | 2,696,243 | ||||
Note_6_Segment_Reporting
Note 6 - Segment Reporting | 3 Months Ended | ||||||||||||
Mar. 31, 2013 | |||||||||||||
Notes | ' | ||||||||||||
Note 6 - Segment Reporting | ' | ||||||||||||
NOTE 6 – SEGMENT REPORTING | |||||||||||||
The Company’s operations are classified into two reportable segments that provide different products. Separate management of each segment is required because each business unit is subject to different marketing, production, and technology. | |||||||||||||
Revenues | Segment operating earnings | Depreciation depletion | |||||||||||
and amortization | |||||||||||||
Oil and gas | $ | 48,539 | $ | 4,716 | $ | 10,165 | |||||||
Manufacturing * | 27,888 | 13,107 | 1,459 | ||||||||||
$ | 76,427 | $ | 17,823 | $ | 11,624 | ||||||||
* | Consist of only one month ended March 31, 2013 | ||||||||||||
Segment operating earnings reflect revenues net of operating costs and depreciation, depletion, and amortization and are reconciled to loss from operations before income taxes as follows: | |||||||||||||
Three months | Three months | ||||||||||||
ended | ended | ||||||||||||
31-Mar-13 | March 31, 2012 ** | ||||||||||||
Segment operating earnings | $ | 17,823 | |||||||||||
General and administrative expenses | (241,408 | ) | |||||||||||
Operating loss | (223,585 | ) | |||||||||||
Interest expense | (604 | ) | |||||||||||
Net loss before income taxes | $ | (224,189 | ) | ||||||||||
** | Total activity during the three months ended March 31, 2012 pertain to oil and gas. | ||||||||||||
Identifiable assets by industry segment are as follows: | |||||||||||||
Oil and gas | $ | 316,161 | |||||||||||
Manufacturing | 236,121 | ||||||||||||
Other | 3,637,479 | ||||||||||||
$ | 4,189,761 | ||||||||||||
Note_7_Related_Party_Transacti
Note 7 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2013 | |
Notes | ' |
Note 7 - Related Party Transactions | ' |
NOTE 7 - RELATED PARTY TRANSACTIONS | |
The Company has entered into a month-to-month lease agreement with Trio Gold for an office in Calgary, Alberta, Canada. Trio Gold’s President is the father of Ron Ruskowsky, the former President and CEO of the Company. This lease can be canceled on one month’s written notice. The lease agreement was amended in February 2011 which increased rental payments from approximately $450 to $1,300 per month plus applicable taxes. For the three months ended March 31, 2013 and 2012, rent expense amounted to $3,940 and $3,986, respectively. | |
The Company’s manufacturing facilities are being leased from the former sole shareholder of Goldfield on a month-to-month basis at $7,000 per month. | |
In October 2012, Mr. Guy Peckham, the Company’s President, personally assumed $200,000 of the obligation the Company’s owes Santeo Financial for unpaid management fees. The $200,000 debt was not forgiven and the Company’s records indicate the $200,000 debt as being owed to Mr. Peckham as of March 31, 2013. The $200,000 is non-interest bearing, unsecured, and due on demand. Mr. Ruskowsky, the Company’s former president, provided services through a consulting agreement that the Company had with Santeo Financial Corp (“Santeo”). Mr. Ruskowsky owns a controlling interest in Santeo. | |
Under the terms of a consulting agreement, the Company was required to pay Santeo $15,000 per month. The $15,000 monthly fee was accrued by the Company and was reduced by amounts actually paid. The consulting agreement terminated in August 2012. In October 2012, the balance owed to Santeo amounted to $397,193, of which $200,000 was personally assumed by Mr. Guy Peckham. The balance owed to Santeo as of the termination date, net of the assumed $200,000, amounted $197,193, which is being paid in monthly installments of $8,500. The remaining balance is fully due and payable on July 31, 2013. The balance owed at March 31, 2013 amounts to $141,693. Santeo consulting fees expensed for the three months ended March 31, 2013 and 2012 amounted to $0 and $45,000 respectively. | |
On October, 30 2012, the Company issued Mr. Guy Peckham, the Company’s current president 11,500,000 shares of its common stock for services. The 11,500,000 shares were valued at $149,500, which is being charged to operations over the three year term of the underlying agreement. | |
On February 4, 2013, the Company issued Mr. Guy Peckham, the Company’s current president 2,000,000 shares of its common stock for services. The 2,000,000 shares were valued at $700,000, which is being charged to operations over the three year term of the underlying agreement. | |
As of March 31, 2013, the Company owed Roger Janssen, an officer and director of the Company, $1,345 for services previously performed. | |
During the three months ended March 31, 2013, Mr. Guy Peckham has advanced the Company a total of $25,400. The advances are due on demand and bear interest at annual rate of 8% per annum. Interest accrued during the three month period and charged to operations totaled $417. | |
As of March 31, 2013, certain shareholders have advanced the Company a total of $19,845 that is payable on demand and is non-interest bearing. | |
In connection with the acquisition of Goldfield, the Company entered into a consulting agreement with the former shareholder of Goldfield, whereby commencing May 1, 2013, the Company will pay him a consulting fee of $5,000 per month over the 30-month term of the agreement. | |
As discussed in Note 3, the Company entered into an agreement to acquire the personal goodwill of the former shareholder of Goldfield for $100,000 payable in three installments of $33,000 due April 1, 2013, $33,000 due May 1, 2013 and $34,000 due June 1, 2013. Interest accrues on any payment that is not paid within 10 days of its respective due date. As of May 30, 2013, no payments have been paid under this agreement | |
Note_8_Income_Taxes
Note 8 - Income Taxes | 3 Months Ended | ||||||||
Mar. 31, 2013 | |||||||||
Notes | ' | ||||||||
Note 8 - Income Taxes | ' | ||||||||
NOTE 8 - INCOME TAXES | |||||||||
Deferred income tax assets and liabilities are computed for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. | |||||||||
The effective tax rate on the net loss before income taxes differs from the U.S. statutory rate as follows: | |||||||||
March 31, | |||||||||
2013 | 2012 | ||||||||
Current expense - Benefit | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Total current expense (benefit) | - | - | |||||||
Deferred Benefit | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Total deferred benefit | - | - | |||||||
U.S statutory rate | 34 | % | $ | 34 | % | ||||
Less valuation allowance | -34 | % | -34 | % | |||||
Effective tax rate | 0 | % | 0 | % | |||||
The significant components of deferred tax assets and liabilities are as follows: | |||||||||
Deferred tax assets | |||||||||
Stock based compensation | 182,755 | - | |||||||
Net operating losses | 157,384 | 1,360,950 | |||||||
340,139 | 1,360,950 | ||||||||
Less valuation allowance | (340,139 | ) | (1,360,950 | ) | |||||
Deferred tax asset - net valuation allowance | $ | -- | $ | -- | |||||
The net change in the valuation allowance for 2013 was $(136,920). | |||||||||
The Company’s net operating loss for income tax reporting purposes was significantly impacted by the change in control which occurred on October 30, 2012. The Company has a net operating loss carryover at March 31, 2013 of approximately $157,000 that is available to offset future income for income tax reporting purposes, which will expire in various years through 2033, if not previously utilized. | |||||||||
The Company adopted the provisions of ASC 740-10-50, formerly FIN 48, “Accounting for Uncertainty in Income Taxes.” The Company had no material unrecognized income tax assets or liabilities for the three months ended March 31, 2013 and 2012. | |||||||||
The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the years ended December 31, 2012 and 2011, there were no income taxes, or related interest and penalty items in the income statement, or liability on the balance sheet. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal or state income tax examination by tax authorities for years before 2009. The Company is not currently involved in any income tax examinations. | |||||||||
Note_9_Common_Stock_and_Warran
Note 9 - Common Stock and Warrants | 3 Months Ended | ||||||||
Mar. 31, 2013 | |||||||||
Notes | ' | ||||||||
Note 9 - Common Stock and Warrants | ' | ||||||||
NOTE 9 - COMMON STOCK AND WARRANTS | |||||||||
For the three months ended March 31, 2013 | |||||||||
As indicated in Note 1, the Company declared a 50-for-1 reverse stock split of its common stock on August 31, 2012. All references in the accompanying financials to the number of shares outstanding and per-share amounts have been restated to reflect this stock split. | |||||||||
As discussed in Note 5 the Company issued on February 4, 2013 a total of 7,000,000 (post-split) shares of its common stock of to five individuals and five entities in exchange for consulting services, valued at $2,450,000. The $2,450,000 is being charged to operations over the three-year term of the respective agreement. As indicated in Note 5, Mr. Guy Peckham, the Company’s president, received 2,000,000 of the 7,000,000 shares issued. The 2,000,000 shares were valued at $700,000. | |||||||||
As discussed more fully in Note 3, the Company on March 1, 2013 issued 2,000,000 shares of its common stock in exchange all of the outstanding shares of Goldfield International, Inc. The 2,000,000 shares were valued at $900,000. | |||||||||
For the three months ended March 31, 2012 | |||||||||
The Company did not issue any common shares during the three months ended March 31, 2012. | |||||||||
Options | |||||||||
On November 20, 2012, the Company adopted its 2012 Stock Incentive Plan (the “Plan”). Under the Plan, the Company reserved 5,000,000 shares of its common stock to be issued to employees, directors, consultants and advisors. The exercise price under the Plan is $0.001 per share. As of March 31, 2013, the Company issued 2,500,000 common shares through the Plan. | |||||||||
The following table sets forth common share purchase warrants (post-split) outstanding as of March 31, 2013: | |||||||||
Warrants | Weighted Average Exercise Price | ||||||||
Outstanding | |||||||||
Balance, December 31, 2012 | 5,720 | $ | 12.5 | ||||||
Warrants granted | - | - | |||||||
Warrants expired | (5,720 | ) | $ | (12.50 | ) | ||||
Balance, March 31, 2013 | - | $ | - | ||||||
Note_11_Subsequent_Events
Note 11 - Subsequent Events | 3 Months Ended |
Mar. 31, 2013 | |
Notes | ' |
Note 11 - Subsequent Events | ' |
NOTE 11 – SUBSEQUENT EVENTS | |
On April 17, 2013, the Company received $100,000 in the form of a loan evidenced by a promissory note. The loan is assessed interest at a rate of 12% per annum. The $100,000 principal and accrued interest are fully due and payable on April 17, 2014. Any portion of the balance of accrued interest and principal can be prepaid at any time prior to maturity. The lender also has the right prior to maturity to convert any all or any portion of accrued interest or principal into common shares of the Company at rate equal to the lessor of either $0.20 per share or a 20% discount to the 30 day volume weighted average price of the Company’s common shares. | |
In consideration for the above loan the Company agreed to pay the lender the greater of $50,000 or 5% of the net profits received by the Company under its anticipated joint venture with CSI Import and Export SA. The additional consideration is also due on maturity. | |
On April 24, 2013, the Company entered into a joint venture agreement with CSI Export and Import to mine copper ore on leased acreage in Chiapas, Mexico. For $100,000, the Company acquired a 50% interest in the joint venture which has a 25% participation interest in the production and sale of the indicated copper ore. | |
The Company sold a total of 900,000 shares of its common stock on various dates through May 23, 2013 in exchange for $45,000. | |
Note_1_Organization_and_Basis_1
Note 1 - Organization and Basis of Presentation: Organization, History and Business (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Organization, History and Business | ' |
Organization, History and Business | |
MineralRite Corporation (“the Company”) was incorporated in Nevada on October 22, 1996 under its original name PSM Corp. The Company changed its emphasis to the exploration and development of natural resources and on November 23, 2005 changed its name to Royal Quantum Group, Inc. On October 18, 2012, the Company again changed its name from Royal Quantum Group, Inc. to MineralRite Corporation. On August 31, 2012, the Company declared a 50-for-1 reverse stock split of its common stock. All references in the accompanying financials to the number of shares outstanding and per-share amounts have been restated to reflect this stock split. | |
On March 1, 2013, the Company acquired 100% of the total shares outstanding of Goldfield International, Inc. (“Goldfield”) in exchange for issuing 2,000,000 shares of its common stock. The acquisition was based on the fair value of the shares issued amounting to $900,000. The accompanying unaudited condensed financial statements include the accounts and balances of the Company and also of Goldfield since the date of its acquisition. Goldfield is in the business of manufacturing gold mining equipment. | |
Note_1_Organization_and_Basis_2
Note 1 - Organization and Basis of Presentation: Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position of the Company as of March 31, 2013, and the results of its operations and cash flows for the three months ended March 31, 2013 and 2012. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”). The Company believes that the disclosures in the unaudited condensed consolidated financial statements are adequate to make the information presented not misleading. However, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Commission on April 16, 2013. | |
Note_1_Organization_and_Basis_3
Note 1 - Organization and Basis of Presentation: Going Concern (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Going Concern | ' |
Going Concern | |
The Company’s unaudited consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has a working capital deficit, which history and circumstance raise substantial doubt as to the Company’s ability to continue as a going concern. For the three months ended March 31, 2013, the Company had a net loss of $(224,189) and accumulated deficit of $6,490,220. The Company has raised sufficient funds through the private sale of participating units to acquire working interests in nine oil and gas wells. Six of the wells are currently producing as of March 31, 2013. Total gross revenue generated from these six wells during the three months ended March 31, 2013 amounted to $48,539. In addition, the Company on March 1, 2013 acquired Goldfield International, Inc. which had net sales for the month of March 2013 of $27,316 and gross profit during the month of $12,535. The net revenue generated from current operations is not sufficient to pay Company debts currently due or to fund future operations. The Company is seeking to raise additional funds; however, there is no assurance that the necessary funds will be raised or even if the funds are raised, that the funds received will be to sufficient to fund future operations until such time that the Company’s operations become profitable. Until such time as funding is obtained and/or positive results from operations materialize, doubt about the Company’s ability to continue as a going concern may remain. | |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies: Reclassification (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Reclassification | ' |
Reclassification | |
Certain reclassifications have been made to conform the 2012 amounts to the 2013 classifications for comparative purposes. | |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying consolidated financial statements include the accounts of MineralRite Corporation and its wholly-owned subsidiary, Goldfield International, Inc. (acquired on March 1, 2013. See Note 3). Intercompany transactions and balances have been eliminated in consolidation. | |
Note_2_Summary_of_Significant_3
Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. | |
Note_2_Summary_of_Significant_4
Note 2 - Summary of Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
Note_2_Summary_of_Significant_5
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivable are reported at the customer’s outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. | |
Note_2_Summary_of_Significant_6
Note 2 - Summary of Significant Accounting Policies: Allowance For Doubtful Accounts (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Allowance For Doubtful Accounts | ' |
Allowance for Doubtful Accounts | |
An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. Management has determined that as of March 31, 2013, no allowances were required. | |
Note_2_Summary_of_Significant_7
Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Revenue Recognition | ' |
Revenue Recognition | |
Oil and gas production revenues are recognized at the point of sale. Sales of mining equipment are recognized at the time the product is shipped and title passes to the customer. | |
Note_2_Summary_of_Significant_8
Note 2 - Summary of Significant Accounting Policies: Oil and Gas Properties (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Oil and Gas Properties | ' |
Oil and Gas Properties | |
The Company uses the full-cost method of accounting under which all costs incurred in the acquisition, exploration and development of oil and natural gas reserves, including costs related to unsuccessful wells and estimated future site restoration and abandonment, are capitalized until such time as the aggregate of such costs net of accumulated depletion and oil and natural gas related deferred income taxes, on a country-by-country basis, equals the sum of 1) the discounted present value (at 10%), using prices as of the end of each reporting period on a constant basis, of the Company’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum consultants, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed unless subsequent market price changes eliminate or reduce the indicated write-down in accordance with U.S. SEC Staff Accounting Bulletin (“SAB”) Topic 12D. Depletion is computed using the units-of-production method whereby capitalized costs, net of estimated salvage values, plus estimated future costs to develop proved reserves and satisfy asset retirement obligations, are amortized over the total estimated proved reserves on a country-by-country basis. Investments in major development projects are not depleted until either proved reserves are associated with the projects or impairment has been determined. | |
Note_2_Summary_of_Significant_9
Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided over the five-year estimated useful life of the assets computed on the straight-line method. | |
Gains and losses resulting from sales and dispositions of property and equipment are included in current operations. Maintenance and repairs are charged to operations as incurred. Depreciation expense for the three months ended March 31, 2013 and 2012 amounted $1,618 and $0, respectively. | |
Recovered_Sheet1
Note 2 - Summary of Significant Accounting Policies: Foreign Currency Translation (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Foreign Currency Translation | ' |
Foreign Currency Translation | |
The Company's primary functional currency is the U.S. dollar. For foreign operations whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the year and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit. | |
Recovered_Sheet2
Note 2 - Summary of Significant Accounting Policies: Concentrations of Credit Risk (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Concentrations of Credit Risk | ' |
Concentrations of Credit Risk | |
The Company’s revenue is dependent upon the successful efforts of the respective well’s operator. Currently production from the Company’s six wells is sold to one customer. | |
Recovered_Sheet3
Note 2 - Summary of Significant Accounting Policies: Loss Per Share of Common Stock (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Loss Per Share of Common Stock | ' |
Loss per Share of Common Stock | |
The Company reports earnings (loss) per share in accordance with Accounting Standards Codification “ASC” Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of March 31, 2013 that have been excluded from the computation of diluted net loss per share consist of Unit holders’ options to convert their respective oil revenue interests into a total 10,900 (post-split) shares of the Company’s common stock. Potential common shares as of March 31, 2012 that have been excluded from the computation of diluted net loss per share consist of (a) warrants to purchase 22,720 (post-split) shares of the Company’s common stock and (b) Unit holders’ options to convert their respective oil revenue interests into a total 31,040 (post-split) shares of the Company’s common stock. | |
Recovered_Sheet4
Note 2 - Summary of Significant Accounting Policies: Asset Retirement Obligations (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Asset Retirement Obligations | ' |
Asset Retirement Obligations | |
The Surface Mining Control and Reclamation Act of 1977 and similar state statutes require mine properties to be restored in accordance with specified standards. Accounting Standards Codification (“ASC”) Topic 410-20 requires recognition of an asset retirement obligation (“ARO”) for eventual reclamation of disturbed acreage remaining after mining has been completed. The Company records its reclamation obligations on a permit-by-permit basis using requirements as determined by the Office of Surface Mining of the U.S. Department of the Interior (“OSM”). The liability is calculated based upon the reclamation activities remaining after removal ceases, assuming that reclamation activities have been contemporaneous within state and federal guidelines during mining. A liability is recorded for the estimated future cost that a third party would incur to perform the required reclamation and mine closure discounted at the Company’s credit-adjusted risk-free rate. A corresponding increase in the asset carrying value of mineral rights is also recorded. The ARO asset is amortized on the units-of-production method over the proven and probable reserves associated with that permit. | |
Recovered_Sheet5
Note 2 - Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Long-lived Assets | ' |
Long-Lived Assets | |
The Company accounts for its long-lived assets in accordance with ASC No. 360, “Property, Plant and Equipment.” ASC No. 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. As of March 31, 2013, the Company does not believe there has been any impairment of its long-lived assets. | |
Recovered_Sheet6
Note 2 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures,” the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of March 31, 2013. The Company’s financial instruments consist of cash, accounts receivables, payables, and other obligations. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instrument. | |
Recovered_Sheet7
Note 2 - Summary of Significant Accounting Policies: Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Income Taxes | ' |
Income Taxes | |
The Company accounts for its income taxes under the provisions of ASC No. 740 “Income Taxes.” The method of accounting for income taxes under ASC No. 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. | |
Recovered_Sheet8
Note 2 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2013 | |
Policies | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
The Company’s management has evaluated all recent accounting pronouncements since the last audit through the issuance date of these financial statements. In the Company’s opinion, none of the recent accounting pronouncements will have a material effect on the financial statements. | |
Note_3_Acquisition_of_Goldfiel1
Note 3 - Acquisition of Goldfield International, Inc.: Long-term Purchase Commitment (Tables) | 3 Months Ended | ||||
Mar. 31, 2013 | |||||
Tables/Schedules | ' | ||||
Long-term Purchase Commitment | ' | ||||
Current assets (including cash) | $ | 226,809 | |||
Property and equipment | 104,600 | ||||
Intangibles and goodwill | 886,877 | ||||
Current liabilities, including | |||||
above indicating $100,000 debt | (318,286 | ) | |||
Total purchase price | $ | 900,000 |
Note_5_Prepaid_Services_Schedu
Note 5 - Prepaid Services: Schedule of Expected Amortization Expense (Tables) | 3 Months Ended | ||||
Mar. 31, 2013 | |||||
Tables/Schedules | ' | ||||
Schedule of Expected Amortization Expense | ' | ||||
March 31, | |||||
2014 | $ | 959,666 | |||
2015 | 959,666 | ||||
2016 | 776,911 | ||||
$ | 2,696,243 |
Note_6_Segment_Reporting_Sched
Note 6 - Segment Reporting: Schedule of Segment Reporting Information, by Segment (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2013 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||
Revenues | Segment operating earnings | Depreciation depletion | |||||||||||
and amortization | |||||||||||||
Oil and gas | $ | 48,539 | $ | 4,716 | $ | 10,165 | |||||||
Manufacturing * | 27,888 | 13,107 | 1,459 | ||||||||||
$ | 76,427 | $ | 17,823 | $ | 11,624 |
Note_8_Income_Taxes_Schedule_o
Note 8 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2013 | |||||||||
Tables/Schedules | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||
Deferred tax assets | |||||||||
Stock based compensation | 182,755 | - | |||||||
Net operating losses | 157,384 | 1,360,950 | |||||||
340,139 | 1,360,950 | ||||||||
Less valuation allowance | (340,139 | ) | (1,360,950 | ) | |||||
Deferred tax asset - net valuation allowance | $ | -- | $ | -- |
Note_9_Common_Stock_and_Warran1
Note 9 - Common Stock and Warrants: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2013 | |||||||||
Tables/Schedules | ' | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | ' | ||||||||
Warrants | Weighted Average Exercise Price | ||||||||
Outstanding | |||||||||
Balance, December 31, 2012 | 5,720 | $ | 12.5 | ||||||
Warrants granted | - | - | |||||||
Warrants expired | (5,720 | ) | $ | (12.50 | ) | ||||
Balance, March 31, 2013 | - | $ | - |
Note_1_Organization_and_Basis_4
Note 1 - Organization and Basis of Presentation: Going Concern (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2013 | Mar. 31, 2012 | |
Details | ' | ' |
Net Income (Loss) Attributable to Parent | ($224,189) | ($170,799) |
Development Stage Enterprise, Deficit Accumulated During Development Stage | $6,490,220 | ' |
Recovered_Sheet9
Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Details) (USD $) | 3 Months Ended |
Mar. 31, 2013 | |
Details | ' |
Depreciation | $1,618 |
Note_3_Acquisition_of_Goldfiel2
Note 3 - Acquisition of Goldfield International, Inc.: Long-term Purchase Commitment (Details) (USD $) | Mar. 31, 2013 |
Details | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | $226,809 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 104,600 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 886,877 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | -318,286 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $900,000 |
Note_5_Prepaid_Services_Schedu1
Note 5 - Prepaid Services: Schedule of Expected Amortization Expense (Details) (USD $) | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2013 |
Details | ' | ' | ' | ' |
Prepaid Expense | $776,911 | $959,666 | $959,666 | ' |
Preconfirmation, Prepaid and Other Current Assets | ' | ' | ' | $2,696,243 |