SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
February 10, 2005
(Date of Report)
November 17, 2004
(Date of Earliest Event Reported)
Desert Mining, Inc.
(Exact Name of Registrant as Specified in its Charter)
| | Nevada (State or other jurisdiction of incorporation) | 0-32123 Commission File Number | 87-0664962 (IRS Employer I.D. No.) |
4328 Hwy. 66, Longmont, CO 80504
(Address of Principal Executive Offices)
(970) 535-6213
(Registrant's Telephone Number)
Check the appropriate box below if the Form 8-K/A filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01. Financial Statements and Exhibits
(a)
The financial statements of 44 Mag Production, Inc. at November 30, 2004 and the related statement of operations, stockholders' equity, and cash flows for the period September 22, 2004 (date of inception) to November 30, 2004 are attached to this Form 8K/A.
(b)
The combined pro forma balance sheet and statements of operations for Desert Mining and 44 Mag at January 1, 2004 are attached to this Form 8K/A.
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DESERT MINING, INC.
Date: February 10, 2005
By:/s/Randall Anderson
Randall Anderson
Chief Executive Officer
MADSEN & ASSOCIATES, CPA’s INC.
684 East Vine St., Suite 3
Certified Public Accountants and Business Consultants
Murray, Utah 84107
Telephone 801-268-2632
Fax 801-262-3978
Board of Directors
44 Mag Production, Inc.
Longmont, Colorado
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheet of 44 Mag Production, Inc. (pre-exploration stage company) at November 30, 2004 and the related statement of operations, stockholders' equity, and cash flows for the period September 22, 2004 (date of inception) to November 30, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 44 Mag Production , Inc. at November 30, 2004 and the results of operations, and cash flows for the period September 22, 2004 (date of inception) to November 30, 2004, in conformity with accounting principles generally accepted in the United States of America.
/s/ Madsen & Associates, CPA’s Inc.
Salt Lake City, Utah,
January 31, 2005
44 MAG PRODUCTION, INC.
(Pre-Exploration Stage Company)
BALANCE SHEET
November 30, 2004
ASSETS
CURRENT ASSETS
Cash
$ 67,280
Total Current Assets
67,280
OIL & GAS LEASES - net of amortization
31,650
98,930
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$ 651
Accounts payable - affiliate
450
Total Current Liabilities
1,101
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized at $.001 par value;
none outstanding
-
Common stock
100,000,000 shares authorized at $0.001 par value;
2,500,000 shares issued and outstanding
2,500
Capital in excess of par value
99,500
Deficit accumulated during the pre-exploration stage
(4,171)
Total Stockholders' Equity
97,829
$98,930
The accompanying notes are an integral part of these financial statements.
44 MAG PRODUCTION , INC.
( Pre-Exploration Stage Company)
STATEMENT OF OPERATIONS
For the Period September 22, 2004 (date of inception)
to November 30, 2004
REVENUES
$ -
EXPENSES
Amortization
3,075
Administrative
1,096
NET LOSS
$ (4,171)
NET LOSS PER COMMON SHARE
Basic and diluted
$ -
AVERAGE OUTSTANDING SHARES
Basic (stated in 1,000's
2,225
The accompanying notes are an integral part of these financial statements.
44 MAG PRODUCTION , INC.
( Pre-Exploration Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period September 22, 2004 (date of inception)
to November 30, 2004
Capital in
Common Stock
Excess of
Accumulated
Shares
Amount
Par Value
Deficit
Balance September 22, 2004
-
$ -
$ -
$ -
Issuance of common stock for cash
at $.001 - founders stock -
October 4, 2004
1,950,000
1,950
50
-
Issuance of common stock for cash
at $.10 - September 29, 2004
500,000
500
49,500
-
Issuance of common stock for cash
at $1.00 - October 29, 2004
50,000
50
49,950
-
Net operating loss for the period
September 22, 2004
to November 30, 2004
-
-
-
(4,171)
_________
_______
________
________
Balance November 30, 2004
2,500,000
$2,500
$99,500
$(4,171)
The accompanying notes are an integral part of these financial statements.
44 MAG PRODUCTION, INC.
( Pre-Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the Period September 22, 2004 (date of inception)
to November 30, 2004
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss
$ (4,171)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Amortization
3,075
Changes in accounts payable
1,101
Net Change in Cash From Operations
5
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of oil and gas leases
(34,725)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common stock
102,000
Net Change in Cash
67,280
Cash at Beginning of Period
______-
Cash at End of Period
$ 67,280
The accompanying notes are an integral part of these financial statements.
44 MAG PRODUCTION, INC.
( Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENT
November 30, 2004
1.
ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on September 22, 2004 with authorized common stock of 100,000,000 shares at $.001 par value, and 10,000,000 preferred shares at $.001 par value. No preferred shares have been issued and the terms have not been established.
The Company is in the pre-exploration stage and is engaged in the activity of seeking developmental oil & gas properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
On November 30, 2004, the Company had a net operating loss carry forward of $4,171. The tax benefit of approximately $1,300 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has no operations. The net operating loss will expire starting in 2025.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any preferred share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.
44 MAG PRODUCTION, INC.
( Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2004
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Financial and Concentrations Risk
The Company does not have any concentration or related financial credit risk.
Capitalization of Oil Leases Costs
The Company uses the successful efforts cost method for recording its oil & gas leases, which provides for capitalizing the purchase price of the project, less any amortization recognized prior to the start of drilling activities, and the additional costs directly related to proving the properties and amortizing these amounts over the life of the reserve when operations begin or a shorter period if the property is shown to have an impairment in value or expensing the remaining balance if it is proven to be of no value.
Environmental Requirements
At the report date environmental requirements related to the oil & gas leases acquired are unknown and therefore an estimate of any future cost cannot be made.
Revenue Recognition
Revenue is recognized on the sale and delivery of a product or the completion of a service provided.
Advertising and Market Development
The company expenses advertising and market development costs as incurred.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
Financial Instruments
The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short term maturities.
44 MAG PRODUCTION, INC.
( Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2004
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
3. OIL & GAS LEASES
From inception the Company purchased 1,160 gross acres (net 826.67) of oil and gas leases from private individuals in Wyoming’s Powder River Basin. The terms of the leases vary from 19 months to 36 months. The initial payments and any costs to evaluate the leases are being amortized to expense over their terms or until drilling activities are started.
4. ACQUISITION OF ALL OUTSTANDING STOCK OF THE COMPANY BY DESERT MINING INC.
On November 16, 2004 Desert Mining, Inc. (parent) acquired of all of the outstanding stock of the Company ( subsidiary), by a stock for stock exchange in which the stockholders of the subsidiary received 2,500,000 common shares of the parent, representing 20% of the outstanding stock of the parent after the acquisition, which was reported as a purchase. For reporting purposes the assets and liabilities of the subsidiary are shown in the following combined balance sheet as if the acquisition had been completed on January 1, 2004. On the date of the exchange the fair value of the parent company stock issued was considered to be $300,000 and the fair value of the subsidiary stock received in exchange was $200,000, resulting in good will of $100,000.
.
Included in the following are the summarized, combined, pro-forma financial statements of the Desert Mining, Inc. (parent) and the 44 Mag Production, Inc. (subsidiary). The fiscal year of both companies is December 31.
All intercompany transactions have been eliminated.
DESERT MINING, INC. AND SUBSIDIARY
COMBINED PROFORMA BALANCE SHEETS
January 1, 2004
Desert
44 Mag
Mining
Production
Adjustments
Combined
ASSETS
CURRENT ASSETS
Cash
$266,844
$67,280
$ 334,124
Total Current Assets
266,844
67,280
334,124
OTHER ASSETS
Furniture & equipment – net
2,426
-
2,426
Oil & gas leases – net
583,607
31,650
100,000 (2)
715,257
Other
50,000
-
50,000
Stock of subsidiary
-
300,000 (1)
(300,000) (2)
-
Good will
-
-
100,000 (2)
100,000
$902,877
$98,930
$1,201,807
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable
$ 4,495
$1,101
$5,596
Total Current Liabilities
4,495
1,101
5,596
STOCKHOLDERS' EQUITY
Common stock
9,028
2,500
2,500 (1)
(2,500)(2)
11,528
Warrants
31,000
-
31,000
Capital in excess of par value
1,107,297
99,500
297,500 (1)
2,500 (2)
(100,000)(2)
(4,171)(2)
1,402,626
Deficit
(4,171)
4,171 (2)
(248,943)
______
(248,943)
898,382
97,829
1,196,211
$902,877
$98,930
$1,201,807
ADJUSTMENTS
1. To record issuance of 2,500,000 shares for all outstanding shares of 44 Mag Production, Inc.
2. Consolidation adjustments
DESERT MINING, INC. AND SUBSIDIARY
COMBINED PROFORMA STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2003
Desert
44 Mag
Mining
Production
Adjustments
Combined
REVENUES
$ -
$ -
$ -
EXPENSES
Depreciation and amortization
1,574
3,075
4,649
Administrative
219,731
1,096
220,827
NET PROFIT (LOSS)
$ (221,305)
$(4,171)
$ (225,476)