Dakota Territory Resource (DTRC) 10-Q 16 Feb 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2015	Feb. 08, 2016
Document and Entity Information
Entity Registrant Name	DAKOTA TERRITORY RESOURCE CORP
Entity Trading Symbol	dtrc
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Entity Central Index Key	1,182,737
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		56,716,787
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	2,016
Document Fiscal Period Focus	Q3

BALANCE SHEETS (Unaudited)

BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 2,129	$ 2,355
Note receivable from related party	12,500	0
Prepaid expenses and other current assets	17,200	0
Total current assets	31,829	2,355
Other assets	2,500	15,430
Mineral properties	199,566	191,566
TOTAL ASSETS	233,895	209,351
CURRENT LIABILITIES
Accounts payable and accrued liabilities	445,551	380,276
Accounts payable, related party	666,191	454,692
Line of credit	34,008	24,740
Notes payable	305,550	305,550
Note payable to related party	265,000	0
Convertible notes payable, net of discount of $0 and $0, respectively	200,000	100,000
Derivative liability	105,669	0
Total current liabilities	2,021,969	1,265,258
Note payable to related party	0	265,000
Total liabilities	$ 2,021,969	$ 1,530,258
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT
Preferred stock, par value $0.001; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2015 and March 31, 2015, respectively	$ 0	$ 0
Common stock, par value $0.001; 300,000,000 shares authorized, 53,738,216 shares issued and outstanding as of December 31, 2015 and March 31, 2015, respectively	53,738	53,738
Additional paid-in capital	1,606,578	1,580,078
Accumulated deficit	(3,448,390)	(2,954,723)
Total Shareholders' Deficit.	(1,788,074)	(1,320,907)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$ 233,895	$ 209,351

BALANCE SHEETS PARENTHETICALS

BALANCE SHEETS PARENTHETICALS - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Parentheticals
Discount on Convertible notes payable	$ 0	$ 0
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares Issued	53,738,216	53,738,216
Common Stock, Shares Outstanding	53,738,216	53,738,216

UNAUDITED STATEMENTS OF OPERATI

UNAUDITED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
OPERATING EXPENSES
Depreciation and amortization	$ 0	$ 0	$ 0	$ 333
Exploration costs	0	2,124	22,220	26,999
General and administrative expenses	93,491	178,770	337,376	656,121
Total operating expenses	93,491	180,894	359,596	683,453
LOSS FROM OPERATIONS	(93,491)	(180,894)	(359,596)	(683,453)
OTHER INCOME (EXPENSE)
Derivative income (expense)	58,300	0	(5,669)	0
Interest expense	(25,147)	(7,800)	(128,402)	(23,401)
Total other income (expense)	33,153	(7,800)	(134,071)	(23,401)
NET LOSS	$ (60,338)	$ (188,694)	$ (493,667)	$ (706,854)
Net loss per share: Basic and diluted net loss per share	$ 0	$ 0	$ (0.01)	$ (0.01)
Weighted average shares outstanding: Basic and diluted	53,738,216	53,458,266	53,738,216	53,205,867

UNAUDITED STATEMENTS OF CASH FL

UNAUDITED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Dec. 30, 2015	Dec. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (493,667)	$ (706,854)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	0	333
Shares issued for services	26,500	217,750
Derivative expense	5,669	0
Amortization of debt discount	100,000	0
Changes in current assets and current liabilities:
Prepaid expenses and other assets	(4,270)	(17,620)
Accounts payable & accrued liabilities	65,275	18,284
Accounts payable, related party	211,499	46,035
Net cash used in operating activities	(88,994)	(442,072)
Cash Flows From Investing Activities:
Issuance of note receivable to related party	(12,500)	0
Investment in mineral properties	(8,000)	(231)
Net cash used in investing activities	(20,500)	(231)
Cash Flows From Financing Activities:
Proceeds from the issuance of convertible note payable	100,000	0
Proceeds from (repayments of) line of credit	9,268	(2,848)
Net cash provided by (used in) financing activities	109,268	(2,848)
Net change in cash	(226)	(445,151)
Cash and Cash Equivalents, Beginning of Period	2,355	456,329
Cash and Cash Equivalents, End of Period	2,129	11,178
Supplemental Disclosure of Noncash Transactions
Interest paid	0	0
Taxes paid	0	0
Debt discount on convertible note	$ 100,000	$ 0

Basis of Presentation

Basis of Presentation	9 Months Ended
	Dec. 31, 2015
Basis of Presentation
Basis of Presentation	Note 1—Basis of Presentation The accompanying unaudited interim financial statements of Dakota Territory Resource Corp. (“we”, “us”, “our”, the “Company”, the “Corporation”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in our annual report on Form 10-K, for the year ended March 31, 2015 as filed with the SEC on July 13, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended March 31, 2015 as reported in our annual report on Form 10-K, have been omitted. The Company’s absence of revenues, recurring losses from operations, and its need for significant additional financing in order to fund its projected loss in 2016 raise substantial doubt about its ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Dec. 31, 2015
Related Party Transactions:
Related Party Transactions	Note 2—Related Party Transactions Effective October 1, 2005, we began paying a management consulting fee to Minera Teles Pires Inc., a company controlled by the President and director of the Company. The agreement provides a fixed fee of $10,000 per month of which $5,000 is paid and the other $5,000 deferred until financing is obtained by us. Additionally, the agreement provides for a payment of $1,500 per month for office rent and expenses. During the nine months ended December 31, 2015, we incurred approximately $103,500 in management fees and rent from Minera Teles Pires Inc. As of December 31, 2015, we owed Minera Teles Pires approximately $350,000 for management fees and out of pocket expenses. Effective February 24, 2012, we began paying consulting fees to Jerikodie, Inc., a company controlled by our Vice President and a director of the Company. The agreement provides a fixed fee of $9,000 per month plus approved expenses. During the nine months ended December 31, 2015, we incurred approximately $81,000 in consulting fees from Jerikodie, Inc. As of December 31, 2015, we owed Jerikodie, Inc. approximately $264,100 for consulting fees and out of pocket expenses. On March 19, 2013, the Company entered into an agreement with Wm Chris Mathers to compensate Mr. Mathers as the Company’s CFO and agreed to pay Mr. Mathers cash in the amount of $1,000 per month increasing to $2,000 per month on September 1, 2013 and to $3,000 per month on March 1, 2014. During the nine months ended December 31, 2015, we incurred $27,000 in compensation to Mr. Mathers. As of December 31, 2015, we owed Mr. Mathers $52,000 for consulting fees. On June 29, 2015, our President and CEO borrowed $12,500, at 0% interest, from the Company. The note was due in full 90 days from the date of issuance. Mr. Bachman has deferred all compensation due him since January 1, 2015.

Mineral Properties

Mineral Properties	9 Months Ended
	Dec. 31, 2015
Mineral Properties
Mineral Properties	Note 3 — Mineral Properties On September 26, 2012, the Company was re-organized with North Homestake Mining Company. With this re-organization, the Company acquired 84 unpatented lode mining claims covering approximately 1,600 acres known as the Blind Gold Property located in the Black Hills of South Dakota. On December 28, 2012, the Company acquired 57 unpatented lode mining claims covering approximately 853 acres known as the West False Bottom Creek and Paradise Gulch Claim Group, the City Creek Claims Group, and the Homestake Paleoplacer Claims Group, all located in the Black Hills of South Dakota. The West False Bottom Creek and Paradise Gulch Claims were contiguous to the Blind Gold Property and have been incorporated into the Blind Gold Property. The purchase price was 1,000,000 restricted common shares valued at $0.15 per share, or $150,000. On February 24, 2014 the Company acquired surface and mineral title to the 26.16 acres of the Squaw and Rubber Neck Lodes that comprise Mineral Survey 1706 in the Black Hills of South Dakota. Located immediately to the north and adjoining the Company’s Paleoplacer Property, Mineral Survey 1706 was explored by Homestake Mining Company in the late 1980’s. The Company is required to make annual lease payments of $8,000 for a period of 5 years, of which $8,000 was due upon execution of the agreement. The Company has an option to purchase the mineral property for $120,000. On March 3, 2014 , The Company plans to commence an exploratory program on these mineral properties as soon as financing can be arranged. December 31, March 31, 2015 2015 Capitalized costs $ 199,566 $ 191,566 Accumulated amortization - - Impairment - - Capitalized costs, net $ 199,566 $ 191,566

Notes Payable

Notes Payable	9 Months Ended
	Dec. 31, 2015
Notes Payable {1}
Notes Payable	Note 4—Notes Payable The following notes payable are unsecured and bear interest at 5% per annum. They are due on demand: Date Maturity Interest rate Principal Interest Total Nov 15, 2005 On demand 5% per annum $ 82,775 $ 42,101 $ 124,876 Dec 01, 2005 On demand 5% per annum $ 18,800 $ 9,515 $ 28,315 Jan 06, 2006 On demand 5% per annum $ 100,000 $ 50,048 $ 150,048 Jul 14, 2006 On demand 5% per annum $ 103,975 $ 48,965 $ 152,940 Total $ 305,550 $ 150,629 $ 456,179 Note Payable to Related Party We had 11 notes payable to our President pursuant to advances which had historically been made by the President. The notes were dated between March 2011 and August 2012, were unsecured, ranged in amount from $10,000 to $50,000, and bore interest at 12% per annum. These notes were re-structured and combined on March 27, 2013 into a single promissory note payable (the “New Note”). In conjunction with this restructuring, the President forgave accrued interest totalling $57,817 (recorded as an equity transaction). The New Note is unsecured, has a principal amount of $265,000, and bears interest at 4% per annum. We will apply 10% of the gross proceeds from any equity financing in an amount exceeding $0.5 million (whether one or more transactions) from and after the date hereof to prepay principal and accrued interest. All remaining unpaid principal and interest is due March 27, 2016.

Convertible Note Payable

Convertible Note Payable	9 Months Ended
	Dec. 31, 2015
Convertible Note Payable:
Convertible Notes Payable	Note 5—Convertible Notes Payable On August 14, 2008, we executed a 5% convertible note of $100,000 that was due August 13, 2010. The note is now due and payable, however the lender has to date made no request for payment. The note may be converted from time to time, all or any part of the principal plus any unpaid accrued interest ($37,486 as of December 31, 2015) thereof into common stock of the Company at a conversion price per share equal to the greater of i) the closing market price per share of the common stock on the trading day immediately preceding the date of conversion as quoted on the OTC-BB or such other exchange upon which the Company’s shares are then listed or traded, or ii) $200 per share ($20.00 per share after adjustment due to 1 for 200 reverse stock split; $200 per share after a further adjustment due to a 1 for 10 reverse stock split). The conversion price shall be subject to adjustments. The minimum amount to be converted is $10,000. As of December 31, 2015, this note is outstanding. On June 15, 2015, the Company executed a 5% convertible note of $100,000 that was due December 15, 2015. The note may be converted from time to time, all or any part of the principal plus any unpaid accrued interest thereof into common stock of the Company at a conversion price of the lowest bid price less fifty (50%) percent during previous 5 days trading before the conversion date. The Black-Scholes pricing model was used to estimate that fair value of the number of shares that the note could have been converted into at the note’s inception. At the time of the note’s inception it was estimated that the note could have been converted into 1,862,197 shares of common stock. Using the assumptions of a risk free interest rate of 1.1%, dividend yield of 0%, volatility of 234%, and an expected life of 6 months, we have determined these shares to have an approximate fair value of $162,000. The company also recorded a derivative liability since the note may be converted into shares at a variable rate equal to the bid price less fifty percent during the previous 5 days trading before the conversion date. The derivative liability recorded at the time of the note’s inception was approximately $162,500, derivative expense in the amount of approximately $62,500, and a debt discount in the amount of approximately $100,000. On December 31, 2015, a change in the fair value of derivative liability was recorded in the amount of approximately $56,900 and a reduction in the debt discount of $100,000. On January 15, 2016, the holder of the 5% convertible note in the amount of $100,000 exercised the option to convert the note into 2,928,571 shares of our common stock at a price of $0.035 per share.

Line of Credit

Line of Credit	9 Months Ended
	Dec. 31, 2015
Line of Credit
Line of Credit	Note 6—Line of Credit We executed a Line of Credit with Wells Fargo Bank in California. The Line of Credit allows us to borrow up to $47,500. The balance of this Line of Credit at December 31, 2015 was approximately $34,000.

Consulting Agreements

Consulting Agreements	9 Months Ended
	Dec. 31, 2015
Consulting Agreements:
Consulting Agreements	Note 7 – Consulting Agreements On June 3, 2015, the Company entered into a second one-year consulting agreement with Dr. Michael Terry, a former Homestake Geologic Researcher, to continue the research begun through the Company’s first consulting agreement with Dr. Terry entered into on January 31, 2014. The new one-year agreement provides for compensation of 100,000 restricted shares of fully-earned Company common stock upon execution of the agreement and cash consideration in the amount of $1,500 per month, plus approved expenses. We have determined these shares to have an approximate fair value of $9,000. As of the date of this filing, these shares have not been issued.

Common Stock

Common Stock	9 Months Ended
	Dec. 31, 2015
Common Stock:
Common Stock	Note 8—Common Stock Our authorized capital stock consists of 300,000,000 shares of common stock, with a par value of $0.001 per share, and 10,000,000 preferred shares with a par value of $0.001 per share. During the nine months ended December 31, 2015, we were authorized to issue 50,000 shares of our restricted common stock, at $0.35 per share, to a consultant for services valued at $17,500. On January 29, 2016, we issued the 50,000 shares of our common stock to the consultant. At December 31, 2015, the total issued and outstanding shares were 53,738,216.

Schedule of Minerals properties

Schedule of Minerals properties (Tables)	9 Months Ended
	Dec. 31, 2015
Schedule of Minerals properties:
Schedule of Capitalized Costs	The Company plans to commence an exploratory program on these mineral properties as soon as financing can be arranged. December 31, March 31, 2015 2015 Capitalized costs $ 199,566 $ 191,566 Accumulated amortization - - Impairment - - Capitalized costs, net $ 199,566 $ 191,566

Schedule of Notes Payable and M

Schedule of Notes Payable and Maturities of Debt (Tables)	9 Months Ended
	Dec. 31, 2015
Schedule of Notes Payable and Maturities of Debt
Schedule of Notes Payable and Maturities of Debt	The following notes payable are unsecured and bear interest at 5% per annum. They are due on demand: Date Maturity Interest rate Principal Interest Total Nov 15, 2005 On demand 5% per annum $ 82,775 $ 42,101 $ 124,876 Dec 01, 2005 On demand 5% per annum $ 18,800 $ 9,515 $ 28,315 Jan 06, 2006 On demand 5% per annum $ 100,000 $ 50,048 $ 150,048 Jul 14, 2006 On demand 5% per annum $ 103,975 $ 48,965 $ 152,940 Total $ 305,550 $ 150,629 $ 456,179

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	Dec. 31, 2015	Jun. 29, 2015	Mar. 01, 2014	Sep. 01, 2013	Mar. 19, 2013	Feb. 24, 2012	Oct. 01, 2005
Related Party Transactions Details
Fixed Consulting fee per month to Minera Teles Pires Inc.							$ 10,000
Payment of consulting fees							5,000
Balance of consulting fees deferred until financing is obtained							5,000
Payment per month for office rent and expenses							$ 1,500
Owed Minera Teles Pires for management fees and out of pocket expenses	$ 350,000
Payment of fixed consulting fees per month to Jerikodie, Inc						$ 9,000
Owed Jerikodie, Inc. for management fees and out of pocket expenses	264,100
Amount to be paid as compensation per month to Mr. Mathers as Company's CFO			$ 3,000	$ 2,000	$ 1,000
Amount owed to Mr. Mathers for consulting fees	$ 52,000
President and CEO borrowed		$ 12,500

Related Party Transactions - Du

Related Party Transactions - During the period (Details)	9 Months Ended
	Dec. 31, 2015USD ($)
Related Party Transactions - During the period Details
Incurred in management fees and rent from Minera Teles Pires Inc	$ 103,500
Incurred in consulting fees from Jerikodie, Inc	81,000
Incurred in compensation to Mr. Mathers	$ 27,000

Mineral Properties Reorganizati

Mineral Properties Reorganization (Details)	Mar. 03, 2014USD ($)	Feb. 24, 2014USD ($)	Dec. 28, 2012USD ($)$ / sharesshares	Sep. 26, 2012
Mineral Properties Reorganization Details
Unpatented lode mining claims			57	84
Area (in acres) located in the Black Hills of South Dakota			853	1,600
Common shares issued in lieu of mining claims | shares			1,000,000
Value per share of common shares issued in lieu of mining claims | $ / shares			$ 0.15
Value of shares issued			$ 150,000
Company acquired surface and mineral title of the Squaw and Rubber Neck Lodes in acres		26.16
The Company is required to make annual lease payments for a period of 5 years		$ 8,000
Amount due upon execution of the agreement		8,000
The Company has an option to purchase the mineral property		$ 120,000
Company completed the acquisition of approximately mineral acres in the Northern Black Hills	565.24
The acquisition increased our mineral interests in the Homestake District by nearly 3057 acres	23.00%
The purchase price of the mineral interests	$ 33,335
Purchased an additional mineral acres located immediately southwest	64.39

Exploratory program of mineral

Exploratory program of mineral properties (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2015
Exploratory program of mineral properties
Capitalized costs	$ 199,566	$ 191,566
Accumulated amortization	0	0
Impairment	0	0
Capitalized costs, net	$ 199,566	$ 191,566

Promissory Notes Payable unsecu

Promissory Notes Payable unsecured and due on demand (Details) - USD ($)	Dec. 31, 2015	Jul. 14, 2006	Jan. 06, 2006	Dec. 01, 2005	Nov. 15, 2005
Unsecured promissory notes payable on demand
Interest rate per annum on promissory notes	5.00%	5.00%	5.00%	5.00%	5.00%
Principal amount of promissory notes	$ 305,550	$ 103,975	$ 100,000	$ 18,800	$ 82,775
Interest amount on promissory notes	150,629	48,965	50,048	9,515	42,101
Total of promissory notes	$ 456,179	$ 152,940	$ 150,048	$ 28,315	$ 124,876

Notes Payable to Related Party

Notes Payable to Related Party (Details)	Dec. 31, 2015USD ($)
Notes Payable to Related Party
Notes payable to its President ranged in amount minimum	$ 10,000
Notes payable to its President ranged in amount maximum	$ 50,000
Interest rate per annum	12.00%
Accrued Interest forgiven by President	$ 57,817
New Note is unsecured, with a principal amount	$ 265,000
New Unsecured note Interest rate per annum	4.00%
Company will apply percent of the gross proceeds from any equity financing	10.00%
Equity financing exceeding amount (in million) on which 10% applied	0.5

Convertible Notes Payable (Deta

Convertible Notes Payable (Details) - USD ($)	Jan. 15, 2016	Dec. 31, 2015	Jun. 15, 2015	Aug. 14, 2008
Convertible Notes Payable Details
Percentage of interest on convertible note executed	5.00%		5.00%	5.00%
Amount of convertible note executed			$ 100,000	$ 100,000
Amount of the principal plus any unpaid accrued interest as of		$ 37,486
Conversion rate per share				$ 200
Conversion rate per share after 1 for 200 reverse stock split				20
Conversion rate per share after 1 for 10 reverse stock split				$ 200
Minimum amount to be converted				$ 10,000
Minimum amount to be converted outstanding		10,000
Note converted into shares of common stock			1,862,197
Fair value of the shares converted			$ 162,000
Derivative liability recorded			162,500
Debt discount recorded			$ 100,000
Change in fair value of derivative liability recorded		56,900
Reduction in debt discount		100,000
Derivative expenses approximately		$ 62,500
The holder of the 5% convertible note in the amount exercised	$ 100,000
The holder of the 5% convertible note exercised the option to convert note into shares	2,928,571
Common stock at a price per share	$ 0.035

Assumptions using the Black-Sch

Assumptions using the Black-Scholes pricing model (Details)	Jun. 15, 2015
Assumptions using the Black-Scholes pricing model
Risk free interest rate	1.10%
Dividend yield	0.00%
Volatility	234.00%
Expected life in months	6

Line Of Credit Note With Wells

Line Of Credit Note With Wells Fargo Bank (Details)	Dec. 31, 2015USD ($)
Line Of Credit Note With Wells Fargo Bank
Maximum allowed limit for the line of credit note with Wells Fargo Bank	$ 47,500
Balance of line of credit	$ 34,000

Consulting Agreements (Details)

Consulting Agreements (Details)	Jun. 03, 2015USD ($)shares
Consulting Agreements Details
Restricted shares of common stock issued to Dr. Terry as compensation upon execution of the agreement | shares	100,000
Cash consideration per month	$ 1,500
Fair value of the shares issued	$ 9,000

Capital stock transactions (Det

Capital stock transactions (Details) - USD ($)	9 Months Ended
	Dec. 31, 2015	Jan. 29, 2016
Capital stock transactions
Authorized common stock shares	300,000,000
Par value of common stock authorized shares	$ 0.001
Authorized preferred stock shares	10,000,000
Par value of preferred stock authorized shares	$ 0.001
Issued share restricted common stock	50,000
Issued share restricted common stock per share	$ 0.35
Shares of restricted common stock for services valued	$ 17,500
Total issued and outstanding shares	53,738,216
Common stock shares issued to consultant		50,000