Steele Oceanic (SELR) 10-Q 15 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document and Entity Information	'
Entity Registrant Name	'STEELE RESOURCES CORP
Document Type	'10-Q
Document Period End Date	31-Mar-14
Amendment Flag	'false
Entity Central Index Key	'0001404280
Current Fiscal Year End Date	'--12-31
Entity Common Stock, Shares Outstanding	104,086,147
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	'2014
Document Fiscal Period Focus	'Q1

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current assets	'	'
Cash	$9,843	$15,082
Total Current Assets	9,843	15,082
Total Assets	9,843	15,082
Current liabilities	'	'
Accounts payable and accrued liabilities	240,470	235,970
Accrued expenses	514,731	488,128
Derivatives liability	885,863	315,944
JV agreement refund payable	540,000	540,000
Notes payable - related parties	235,300	235,300
Notes payable	429,327	399,277
Convertible notes payable	331,630	331,630
Total Liabilities	3,177,321	2,546,249
COMMITMENTS AND CONTINGENCIES	'	'
Stockholders' deficit:	'	'
Preferred stock value	'	'
Common stock value	104,086	104,086
Additional paid-in capital	2,658,883	2,658,883
Accumulated deficit during exploration stage	5,930,447	5,294,136
Total Stockholders' Deficit	-3,167,478	-2,531,167
Total Liabilities and Stockholders' Deficit	$9,843	$15,082

CONSOLIDATED_BALANCE_SHEETS_PA

CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Balance Sheet	'	'
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	104,086,147	104,086,147
Common stock, shares outstanding	104,086,147	104,086,147

STATEMENTS_OF_OPERATIONS

STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		46 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Income Statement	'	'	'
Revenue	'	'	$531,126
Costs and operating expenses:	'	'	'
Lease operating expenses	'	'	342,025
General and administrative	40,214	'	2,197,774
Exploration expense	'	'	2,336,933
Total operating expenses	40,214	'	4,876,732
Operating loss	-40,214	'	-4,345,606
Other (income) expenses:	'	'	'
Gain on partial sale of Shooting Star LLC	'	'	-483,484
Changes in derivative value	569,919	576,550	1,202,364
Interest expense	26,178	61,333	865,961
Total other (income) expense	596,097	637,883	1,584,841
Loss before income taxes	-636,311	-637,883	-5,930,447
Provision for income taxes	'	'	'
Net income (loss)	($636,311)	($637,883)	($5,930,447)
Net income (loss) per share, basic and diluted	$0	($0.01)	'
Weighted average common shares outstanding, basic and diluted	104,086,147	78,718,558	'

STATEMENTS_OF_CASH_FLOWS

STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended	46 Months Ended
	Mar. 31, 2014	Mar. 31, 2014
CASH FROM OPERATING ACTIVITIES:	'	'
Net Income (Loss)	($636,311)	($5,930,447)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation	'	52,118
Gain on partial sale of Shooting Star LLC	'	-483,484
Stock-based compensation	'	581,888
Amortization of debt discount	'	763,614
Fixed assets issued for services	'	7,132
Shares issued for exploration costs	'	315,000
Share based compensation	'	145,659
Change in derivative liability	569,919	823,579
Changes in assets and liabilities:	'	'
Accounts payable accrued expenses	4,500	242,530
Accrued expenses	56,653	617,416
NET CASH USED IN OPERATING ACTIVITIES	-5,239	-2,864,995
Cash Flows From Investing Activities:	'	'
Purchase of fixed assets	'	37,965
Proceeds from disposal of assets	'	8,900
NET CASH USED IN INVESTING ACTIVITIES	'	-29,065
Cash Flows From Financing Activities:	'	'
Proceeds from issuance of common stock	'	633,500
Cash acquired in reverse merger	'	19,200
Proceeds from investor advances	'	103,649
Cash from joint venture funding partners	'	540,000
Cash from project funding partners	'	195,000
Payments to project funding partners	'	25,000
Cash from project funding partners - related party	'	50,000
Proceeds from notes payable	'	1,763,239
Repayments on notes payable	'	453,000
Proceeds from notes payable - related party	'	137,148
Repayments on notes payable - related party	'	59,833
NET CASH PROVIDED BY FINANCING ACTIVITIES	'	2,903,903
NET INCREASE (DECREASE) IN CASH	-5,239	9,843
CASH, BEGINNING	15,082	'
CASH, ENDING	9,843	9,843
SUPPLEMENTAL CASH FLOW INFORMATION	'	'
Cash paid for interest	'	9,471
Cash paid for income taxes	'	'
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INVESTING AND FINANCING ACTIVITIES	'	'
Transfer of property for services	0	7,132
Reclassification of Derivative to APIC	0	30,951
Correction of Par	0	18,194
Exchange of interest in Shooting Star LLC for note reduction and related accrued interest	0	-483,464
Common stock issued for conversion of debt	$0	$275,201

Nature_of_Operations_and_Basis

Nature of Operations and Basis of Presentation and Going Concern	3 Months Ended
	Mar. 31, 2014
Notes	'
Nature of Operations and Basis of Presentation and Going Concern	'
	NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION AND GOING CONCERN
	The unaudited interim consolidated financial statements of the Company included herein have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q under Article 8.03 of Regulation S-X. These statements do not include all of the information and notes to the financial statements required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K, as filed with Securities and Exchange Commission.
	Going Concern:
	The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern.  However, the Company has a working deficit and has generated only $531,126 in revenues since inception.  During the three months ended March 31, 2014, the Company incurred a net loss of $636,311 and as of March 31, 2014 has an accumulated deficit of $5,930,447.  Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.  In this regard, Management is planning to raise any necessary additional funds through loans or additional sales of its common stock.  There is no assurance that the Company will be successful in raising additional capital.
	The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing, achievement of profitable operations and/or the discovery, exploration, development and sale of mining reserves.  The Company cannot reasonably be expected to earn revenue in the exploration stage of operations.  Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all.  Should management fail to raise sufficient financing, the Company may curtail its operations.

Notes_Payable_Note

Notes Payable, Note	3 Months Ended
	Mar. 31, 2014
Notes	'
Notes Payable, Note	'
	NOTE 2 - NOTES PAYABLE
	The Company had the following notes payable outstanding as of March 31, 2014 and December 31, 2013:
		31-Mar-14			31-Dec-13
	McClelland Family Trust (N-1)	$	45,000		$	45,000
	Dated - January, 2011 (Related Party)
	Lease Purchase Agreement - A & P Lease (N-2)		50,000			50,000
	Dated - May, 2011
	D & D McClelland Note (N-3)		63,000			63,000
	Dated - January 19, 2012 (Related Party)
	Lease Purchase Agreement - A & P  Lease (N-4)		50,000			50,000
	Dated - April, 2011
	Related Party (N-5)		2,300			2,300
	Dated - January 27, 2012 (Related Party)
	Mike Myrick (N-6)		4,000			4,000
	Dated - March 23, 2012
	NPI Notes Payable (N-7)		200,000			200,000
	Dated August 1, 2011 ($125,000 is Related Party)
	S Norderhaug Note (N-8)		50,000			50,000
	Dated - June 24, 2010
	Small World Traders Secured Note (N-9)
	Dated - April 8, 2013		200,327			170,277
	Total Notes payable	$	664,627		$	634,577
	Less: discount applicable		--			--
	Less: current portion of long-term debt		664,627			634,577
	Long-term debt	$	--		$	--
	N-1  McClelland Family Trust: In January, 2011, the Company issued four promissory notes payable to two related party individuals for a total of $45,000. The notes bear simple interest at an annual rate of 8% per annum and were due May 15, 2011. This note is in default.
	N-2 A & P Lease Agreement: In May, 2011, the Company issued a note payable for $50,000 to one of the individuals from which we have the lease purchase agreement for as the A&P Lease, covering the balance of the initial lease payment due. The note bears 12% interest rate and was due May 31, 2011.   This note is in default.
	N-3  D & D McClelland Note:  In January 2012, the Company issued a promissory note to a related party and a relative to a related party for a total of $63,000. The note bears simple interest at an annual rate of 20% per annum and is due July 27, 2012. This note is in default.
	N-4 A & P Lease Note Payable:  In March, 2012, the Company issued a note payable for $50,000 to one of the individuals from which we have the lease purchase agreement for as the A&P Lease, covering the balance of the 2012 annual lease payment due. The note bears 12% interest rate and was due April 16, 2012.  This note is in default.
	N-5 Related Party Notes:  In September, 2011, the Company borrowed $1,300 and $1,000 from two individuals.  The Notes bear no interest and are due upon demand.
	N-6 Mike Myrick:  In March, 2012, the Company issued a note payable for $4,000 to one individual. The note bears interest at 20% per annum and was due May 31, 2012.  This note is in default.
	N- 7 NPI Notes:  In August, 2011, the Company secured a total of $200,000 in project financing from one individual and one related party. The principal and interest of, up to, 100% of the principal, was to be repaid from the processing of stockpiled ore at the Mineral Hill Gold Mine project, subject to the net profit (the "NPI") from the processed stockpile being adequate. At March 31, 2014, $125,000 of these notes payable were held by related parties.  This note is in default.
	N-8 S Norderhaug Note:  In June, 2010, the Company issued a note for $50,000 to one individual with an interest rate of 5%. The note was due December 21, 2011.   This note is in default.
	N-9 Small World Traders Secured Note:  On April 8, 2013, the Company issued a revolving line of credit for $200,000 with Small World Traders Secured Note with an interest rate of 8%. This note is secured by the following assets of the Company and a UCC1 was filed for all the Intellectual Property, Current or Previously Filed, Trademarks, Formulations, Research and Development Equipment, Manufacturing Equipment, Office Equipment, and all interests in Shooting Star Mining Company LLC.  The note is due December 31, 2013.  Small World Traders paid $200,327 of expenses on behalf of the Company.  On January 1, 2014 the Note was extended to April 15, 2014 subject to additional consideration.  The Company is negotiating the increase in this line of credit because it has exceed the $200,000 maximum line.
	Fair Value Measurements
	Assets and liabilities recorded at fair value in the consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure the fair value. Level inputs, as defined by ASC 820-10, are as follows:
	Level 1 - quoted in active markets for identical assets or liabilities.
	Level 2 - other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
	Level 3 - significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.
	For certain of the Company’s financial instruments, including cash, prepaid expenses, accounts payable and accrued expenses the carrying amounts approximate fair value due to their short maturities. The carrying amounts of the Company’s notes payable approximates fair value based on the prevailing interest rates
	The following table summarizes fair value measurements by level at December 31, 2013 and December 31, 2012 for assets and liabilities measured at fair value on a recurring basis.  These warrants and convertible notes are considered derivatives because the conversion prices are variable and the Company does not have enough authorized common stock to satisfy the convertible notes and warrants.
	at March 31, 2014
		Level 1	Level 2	Level 3	Total
	Derivative liability
	Conversion features			($848,763)	($848,763)
	Warrants liability			-371	-371
	Total Derivative liability			-885,863	-885,863
	at December 31, 2013
		Level 1	Level 2	Level 3	Total
	Derivative liability
	Conversion features			($315,573)	($315,573)
	Warrants liability			-371	-371
	Total Derivative liability			-315,944	-315,944
	Derivative liability for conversion features for the three months ended March 31, 2014 were valued using the Black-Scholes Option pricing model with the following assumptions: expected life of 0.1 to 1 year, risk free interest rate of 1%, dividend yield of 0, and expected volatility of 0.1%.
	The following is a reconciliation of the derivatives liability
	Value at December 31, 2013		$	315,944
	Change in value			569,919
	Value at March 31, 2014			885,863
	In accordance with ASC 815-10-35 the Company recognized loss of $569,919 in the change in derivative value for the three months ended March 31, 2014 and $576,550 for March 31, 2013.

Commitments_and_Contingencies_

Commitments and Contingencies, Note	3 Months Ended
	Mar. 31, 2014
Notes	'
Commitments and Contingencies, Note	'
	NOTE 3 - COMMITMENTS AND CONTINGENCIES
	On August 31, 2011, SRC and Innocent, Inc. negotiated a formal Termination of the Joint Venture Agreement (the “Termination Agreement”) of the Joint Venture Agreement established to fund the development of the Mineral Hill Project. Pursuant to the Termination Agreement SRC acknowledges its obligation to repay $540,000 paid to date by INCT to SRC under the terms of the JV Agreement. The Termination Agreement also allows SRC the option to assume the $540,000 owed to INCT note holders on terms negotiated between SRC and the note holders.
	From time to time, the Company is involved in legal matters in the ordinary course of business.  Except for the matter described below, the Company is not aware of any such matters.
	SRC was named in an amended complaint filed in District Court, Clark County Nevada, by Phyllis Wynn, individually and as the trustee for the Phyllis Wynn Family Trust.  The Complaint appears to name approximately 81 defendants including Steele Recording Corporation.  The Amended Complaint was filed September 23, 2009.  It alleges 17 causes of actions including breach of contract and fraud against various other defendants and fraudulent conveyance to SRC and its former President and CEO Marlon Steele.  The substance of the Complaint involves a real estate transaction not involving SRC.  We have been informed by Mr. Steele that he does not believe the Plaintiff will prevail as to her claims regarding SRC and has answered with affirmative defenses including but not limited to the defense that the injuries and damages complained of did not occur as the result of any action on the part of SRC but as the sole, direct and proximate result of actions by Plaintiff and third parties not otherwise related to SRC.  The litigation remains in the discovery stages. A former officer of SRC has agreed to indemnify the Company from any eventual costs or loss from this lawsuit.
	The Company became aware that a shareholder paid $57,000 of tenant improvements in an office that the Company never occupied.  The $57,000 was recorded as an accrued liability in anticipation of occupying the space in December 2010.  Subsequently the Company elected to not occupy the space eliminating the potential obligation to amortize the cost of the improvement over the course of the lease.  We have adjusted the $57,000 to Additional Paid in Capital.
	The Company does not have enough shares authorized to convert all the debt obligations currently owed.  The Company could need at least 400,000,000 common shares to satisfy the Asher Enterprises conversion and the Benison Convertible notes which could convert at $.0008.  It would exceed its authorized shares and the Company is assessing the next legal course of action to resolve this matter.

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2014
Notes	'
Subsequent Events	'
	NOTE 4 - SUBSEQUENT EVENTS
	On April 8, 2014 the Company granted 101,616,375 common stock for the conversion of debt totaling $81,295.

Notes_Payable_Note_Schedule_of

Notes Payable, Note: Schedule of notes payable (Tables)	3 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of notes payable	'
		31-Mar-14		31-Dec-13
	McClelland Family Trust (N-1)	$	45,000	$	45,000
	Dated - January, 2011 (Related Party)
	Lease Purchase Agreement - A & P Lease (N-2)		50,000		50,000
	Dated - May, 2011
	D & D McClelland Note (N-3)		63,000		63,000
	Dated - January 19, 2012 (Related Party)
	Lease Purchase Agreement - A & P  Lease (N-4)		50,000		50,000
	Dated - April, 2011
	Related Party (N-5)		2,300		2,300
	Dated - January 27, 2012 (Related Party)
	Mike Myrick (N-6)		4,000		4,000
	Dated - March 23, 2012
	NPI Notes Payable (N-7)		200,000		200,000
	Dated August 1, 2011 ($125,000 is Related Party)
	S Norderhaug Note (N-8)		50,000		50,000
	Dated - June 24, 2010
	Small World Traders Secured Note (N-9)
	Dated - April 8, 2013		200,327		170,277
	Total Notes payable	$	664,627	$	634,577
	Less: discount applicable		--		--
	Less: current portion of long-term debt		664,627		634,577
	Long-term debt	$	--	$	--

Notes_Payable_Note_Schedule_of1

Notes Payable, Note: Schedule of fair value assets and liabilities (Tables)	3 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of fair value assets and liabilities	'
	at March 31, 2014
		Level 1	Level 2	Level 3	Total
	Derivative liability
	Conversion features			($848,763)	($848,763)
	Warrants liability			-371	-371
	Total Derivative liability			-885,863	-885,863
	at December 31, 2013
		Level 1	Level 2	Level 3	Total
	Derivative liability
	Conversion features			($315,573)	($315,573)
	Warrants liability			-371	-371
	Total Derivative liability			-315,944	-315,944

Notes_Payable_Note_Reconciliat

Notes Payable, Note: Reconciliation of derivative liabilities (Tables)	3 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Reconciliation of derivative liabilities	'
	Value at December 31, 2013	$	315,944
	Change in value		569,919
	Value at March 31, 2014		885,863

Nature_of_Operations_and_Basis1

Nature of Operations and Basis of Presentation and Going Concern (Details) (USD $)	3 Months Ended	46 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Details	'	'	'
Revenues since inception	'	$531,126	'
Net loss incurred	636,311	'	'
Accumulated deficit	$5,930,447	$5,930,447	$5,294,136

Notes_Payable_Note_Schedule_of2

Notes Payable, Note: Schedule of notes payable (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Notes payable outstanding	$664,627	$634,577
N-1 McClelland Family Trust	'	'
Notes payable outstanding	45,000	45,000
N-2 A & P Lease Agreement	'	'
Notes payable outstanding	50,000	50,000
N-3 D & D McClelland Note	'	'
Notes payable outstanding	63,000	63,000
N-4 A & P Lease Note Payable	'	'
Notes payable outstanding	50,000	50,000
N-5 Related Party	'	'
Notes payable outstanding	2,300	2,300
N-6 Mike Myrick	'	'
Notes payable outstanding	4,000	4,000
N-7 NPI Notes	'	'
Notes payable outstanding	200,000	200,000
N-8 S Norderhaug Note	'	'
Notes payable outstanding	$50,000	$50,000

Notes_Payable_Note_Details

Notes Payable, Note (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Gain (loss) on derivative value	$569,919	$576,550
N-9 Small World Traders Secured Note	'	'
Expenses paid on behalf of the company	$200,327	'

Notes_Payable_Note_Schedule_of3

Notes Payable, Note: Schedule of fair value assets and liabilities (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Details	'	'
Conversion features (fair value)	$848,763	$315,573
Warrants liability (fair value)	371	371
Total derivatives liability (fair value)	$885,863	$315,944

Commitments_and_Contingencies_1

Commitments and Contingencies, Note (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Aug. 31, 2011
Details	'	'
Obligation carried as a liability	'	$540,000
Increase in additional paid-in capital	$57,000	'

Subsequent_Events_Details

Subsequent Events (Details) (USD $)	Apr. 08, 2014
Details	'
Common stock granted for the conversion of debt	101,616,375
Amount of debt being converted for stock	$81,295