Gold Hill Resources (GSAE) 10-Q 21 Mar 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Jan. 31, 2014	Mar. 20, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Gold Hill Resources, Inc.	'
Entity Central Index Key	'0001462013	'
Document Type	'10-Q	'
Document Period End Date	31-Jan-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--10-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	18,395,954
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

Condensed_Balance_Sheets

Condensed Balance Sheets (USD $)	Jan. 31, 2014	Oct. 31, 2013
Current assets	'	'
Cash and cash equivalents	$77,884	$86,728
Inventories, net (Note 2)	229,793	222,353
Total current assets	307,677	309,081
Equipment, net of accumulated depreciation (Note 3)	13,558	23,397
Total assets	321,235	332,478
Current liabilities	'	'
Accounts payable and accrued expenses (Note 4)	123,134	60,522
Accrued interest (Note 6)	8,659	7,393
Due to related parties (Note 5)	52,197	222,357
Notes payable (Note 6)	29,800	29,800
Convertible promissory notes, net of discount of $89,086 (Note 6)	16,414	'
Current portion of secured long-term debt (Note 6)	109,742	48,727
Total current liabilities	339,946	368,799
Secured long-term debt (Note 6)	173,560	187,560
Total liabilities	513,506	556,359
Stockholders' equity (Note 7)	'	'
Common stock, $ 0.001 par, 200,000,000 shares authorized; 18,395,954 and 31,705,954 shares issued and outstanding as of January 31, 2014 and October 31, 2013, respectively.	18,396	31,706
Additional paid-in capital	82,481	-46,758
Retained deficit	-293,148	-208,829
Total stockholders' deficit	-192,271	-223,881
Total liabilities and stockholders' deficit	$321,235	$332,478

Condensed_Balance_Sheets_Paren

Condensed Balance Sheets (Parenthetical) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Current liabilities	'	'
Convertible promissory notes, net of discount	$89,086	$89,086
Stockholders' equity (Note 7)	'	'
Common Stock, per value	$0.00	$0.00
Common Stock, authorized	200,000,000	200,000,000
Common Stock, issued	18,395,954	31,705,954
Common Stock, outstanding	18,395,954	31,705,954

Condensed_Statements_of_Operat

Condensed Statements of Operations (USD $)	3 Months Ended
	Jan. 31, 2014	Jan. 31, 2013
Condensed Statements Of Operations	'	'
Revenue	$475,512	$252,092
Cost of revenue	348,675	97,482
Gross profit	126,837	154,610
Operating expenses	'	'
Selling, general and administrative	243,700	151,319
Income (loss) from operations	-116,863	3,291
Other income (expense)	'	'
Other income	54,031	'
Interest expense	-19,644	-5,043
Interest expense - accretion of debt discount	-1,843	'
Total other income (expense)	32,544	-5,043
Loss before provision for income taxes	-84,319	-1,752
Provision for income taxes	'	'
Net loss	($84,319)	($1,752)
Net loss per common share - basic and diluted	$0	$0
Weighted average number of common shares outstanding - basic and diluted	26,885,680	29,732,000

Consolidated_Statement_of_Chan

Consolidated Statement of Changes in Stockholders' Equity (Deficit) (USD $)	Common Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit	Total
Begining balance at Oct. 31, 2012	$29,732	($21,732)	$52,950	$60,950
Begining balance, shares at Oct. 31, 2012	29,732,000	'	'	'
Shares issued to acquire Gold Hill Resources	1,584	-219,636	'	-218,052
Shares issued to acquire Gold Hill Resources, shares	1,583,954	'	'	160,000
Shares sold for cash	390	194,610	'	195,000
Shares sold for cash, shares	390,000	'	'	'
Net loss	'	'	-261,779	-261,779
Ending balance at Oct. 31, 2013	31,706	-46,758	-208,829	-223,881
Ending balance, shares at Oct. 31, 2013	31,705,954	'	'	'
Shares issued to acquire Gold Hill Resources, shares	'	'	'	25,000
Shares sold for cash	160	24,840	'	25,000
Shares sold for cash, shares	160,000	'	'	'
Return of common stock	-13,470	13,470	'	'
Return of common stock, shares	-13,470,000	'	'	'
Debt discount related to the beneficial conversion feature of convertible notes	'	90,929	'	90,929
Net loss	'	'	-84,319	-84,319
Ending balance at Jan. 31, 2014	$18,396	$82,481	($293,148)	($192,271)
Ending balance, shares at Jan. 31, 2014	18,395,954	'	'	'

Condensed_Statements_of_Cash_F

Condensed Statements of Cash Flows (USD $)	3 Months Ended
	Jan. 31, 2014	Jan. 31, 2013
Operating activities	'	'
Net loss	($84,319)	($1,752)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation	9,840	11,014
Accretion of debt discount	1,843	'
Changes in operating assets and liabilities:	'	'
Inventories	-7,440	2,294
Accounts payable and accrued liabilities	-92,123	10,202
Net cash used in operating activities	-172,199	21,758
Cash flows from investing activity :	'	'
Purchase of equipment	'	-350
Net cash used in investing activities	'	-350
Cash flows from financing activities	'	'
Proceeds from sale of common stock	25,000	'
Proceeds from convertible promissory notes	105,500	'
Proceeds from secured debt	61,001	'
Payment of secured debt	-13,986	-11,709
Due to related parties	-14,160	'
Net cash provided by financing activities	163,355	-11,709
Net change in cash and equivalents	-8,844	9,699
Cash and equivalents - beginning balance	86,728	129,240
Cash and equivalents - ending balance	77,884	138,939
Supplemental disclosures of cash flows information:	'	'
Cash paid for interest	12,778	'
Cash paid for taxes	'	'
Supplemental disclosure of non-cash transactions	'	'
Debt discount recorded for beneficial conversion feature	$90,929	'

Organization_Basis_of_Presenta

Organization, Basis of Presentation and Going Concern	3 Months Ended
	Jan. 31, 2014
Organization Basis Of Presentation And Going Concern	'
NOTE 1 - Organization, Basis of Presentation and Going Concern	'
	Organization
	Gold Hill Resources, Inc., a Nevada corporation, was incorporated on March 2, 2001. Prior to June 13, 2013, we were a public “shell” company.
	On June 13, 2013, Gold Hill Resources, Inc. closed a share exchange transaction (the "Merger") pursuant to which it (i) became the 100% parent of Accurate Locators, Inc., an Oregon corporation, and Imaging Locators, Inc., a Nevada Corporation, and wholly owned subsidiary of Accurate Locators, Inc. (Gold Hill Resources, Inc., Accurate Locators, Inc. and Imaging Locators, Inc. collectively the "Company", "we", "us", "Our"); and (ii) assumed the operations of Accurate Locators and Imaging Locators. Gold Hill Resources, Inc. was deemed the legal acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations of Accurate Locators, Inc. prior to the Merger are reflected in the financial statements and have been recorded at the historical cost basis of Accurate Locators, Inc.
	As a result of the Merger, we are solely engaged in Accurate Locators’ business. Accurate Locators has been a metal detector manufacturer and distributor since 1992 for dealers, treasure hunters, gold prospectors and utilities companies world-wide. The Company provides industry standard metal detectors for treasure hunting, gold prospecting and locating under-ground cable, pipe and utilities. The Company’s products are used by many sectors of the US Government and many mining type operations including the likes of Westinghouse, Bureau of Land Management, Bechtel, Graybar, US Army, Navy and Marines.
	Since 2004, Imaging Locators, Inc. operates a metal detecting store with a wide variety of instruments. The Company specializes in underground Surveyor Apparatus units, Ground Penetrating Radar, Pulse Induction Metal Detectors and Tunnel Locators.
	We are engaged in several research and development projects; we are evolving our current ground penetrating radar, induced polarization, pulse induction and other metal detection systems. We filed our first provisional patent on our blanket antenna technology on November 12, 2012. We also plan to file several additional patents in the next twelve months; which will further enhance and protect our intellectual property portfolio and greatly improve on our detection systems capabilities, thus positioning the Company to capture greater market share in the geophysics sector.
	In addition our core business of development, manufacturing and distribution of metal detection products and systems, and utilizing our evolving technology in metal detection products, we plan to identify potential acquisition and partnership opportunities within the precious metals mining sector.
	Basis of Presentation
	The unaudited, consolidated financial statements of the Company as of January 31, 2014, and for the three months ended January 31, 2014 and 2013, include the accounts of Gold Hill Resources, Inc. from the date of Merger, Accurate Locators, Inc. and Imaging Locators, Inc. All transactions and accounts between and among Gold Hill Resources, Inc., Accurate Locators, Inc. and Imaging Locators, Inc. have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting, accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended October 31, 2013, as filed with the Securities and Exchange Commission as part of the Company's Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year. The Company did not record an income tax provision during the periods presented due to net taxable losses.
	Going Concern
	The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. In the course of funding development and sales and marketing activities, the Company has sustained operating losses and has an accumulated deficit of $293,148 and $208,829 at January 31, 2014 and October 31, 2013, respectively. In addition, the Company has negative working capital of $32,269 and $59,718 at January 31, 2014 and October 31, 2013, respectively. We have funded operations through accumulated earnings, borrowings from related parties, and proceeds from debt and equity.
	We are in need of generating significant cash resources to achieve our future strategic plan. We anticipate that our existing cash on hand will not be sufficient to fund our business needs. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Inventories

Inventories	3 Months Ended
	Jan. 31, 2014
Inventories	'
Note 2 - Inventories	'
	Inventories include metal detectors for treasure hunting, gold and royal metal prospecting, forensic and military applications and also for locating under-ground utilities. Most inventory is finished goods. Inventories are valued at the lower of cost or market. Cost is determined using a weighted-average method. The reserves for obsolescence are maintained based on historical trends and specific identification, and therefore require management to make assumptions and to apply judgment about a number of factors, such as market conditions, the selling environment, historical results and current inventory trends. The reserve for obsolete inventory was $51,259 as of January 31, 2014 and October 31, 2013, respectively.

Property_and_Equipment

Property and Equipment	3 Months Ended
	Jan. 31, 2014
Property And Equipment	'
Note 3 - Property and Equipment	'
	Property and Equipment consisted of the following:
		31-Jan-14			31-Oct-13
	Machinery	$	49,788		$	49,788
	Vehicles		223,192			223,191
	Office equipment		31,143			31,143
	Leasehold improvements		4,247			4,247
	Land		5,500			5,500
			313,870			313,869
	Less accumulated depreciation		(300,312	)		(290,472	)
	Total	$	13,558		$	23,397
	For the three months ended January 31, 2014 and 2013, depreciation expense was $9,840 and $11,014, respectively.

Accounts_Payable_and_Accrued_E

Accounts Payable and Accrued Expenses	3 Months Ended
	Jan. 31, 2014
Accounts Payable And Accrued Expenses	'
Note 4 - Accounts Payable and Accrued Expenses	'
	Accounts payable and accrued expenses consisted of the following:
		31-Jan-14		31-Oct-13
	Accounts payable	$	54,814	$	5,340
	Credit card balances payable		45,410		39,120
	Other		22,911		16,062
	Total	$	123,134	$	60,522

Related_Parties

Related Parties	3 Months Ended
	Jan. 31, 2014
Related Parties	'
Note 5 - Related Parties	'
	Inventories include metal detectors for treasure hunting, gold and royal metal prospecting, forensic and military applications and also for locating under-ground utilities. Most inventory is finished goods. Inventories are valued at the lower of cost or market. Cost is determined using a weighted-average method. The reserves for obsolescence are maintained based on historical trends and specific identification, and therefore require management to make assumptions and to apply judgment about a number of factors, such as market conditions, the selling environment, historical results and current inventory trends. The reserve for obsolete inventory was $51,259 as of January 31, 2014 and October 31, 2013, respectively.

Debt

Debt	3 Months Ended
	Jan. 31, 2014
Debt	'
Note 6 - Debt	'
	The Company’s debt is summarized below:
		31-Jan-14			31-Oct-13
	Notes payable	$	29,800		$	29,800
	Convertible promissory notes		105,500			-
	CPN discount		(89,086	)		-
	Secured debt		283,302			236,287
	Accrued interest		8,659			7,393
	Total debt	$	338,175		$	273,480
	Notes Payable
	Notes payable consists of $29,800 due to Mr. Stoppenhagen and represents a pre Merger debt of Gold Hill Resources, Inc. The note bears interest at 7% interest per annum and has an accrued interest balance of $7,918 and $7,393 as of January 31, 2014 and October 31, 2013, respectively. The Company recognized interest expense of $525 during the three months ended January 31, 2014.
	Convertible Promissory Notes
	On December 30, 2013 and January 28, 2014 the Company received proceeds of $63,000 and $42,500, respectively in connection with issuing two identical convertible promissory notes ("CPN") to Asher Enterprises, Inc., ("Holder") a private corporation. The CPN's accrue interest of eight percent per annum and mature nine months from the date of issuance. The Holder may convert the CPN's beginning one hundred eighty days following the date of the each CPN. The conversion price of the Note is 61% multiplied by the average of the lowest three trading prices for the common stock during the ten trading day period ending on the latest trading day prior to the conversion date. The total intrinsic value of the beneficial conversion feature amounted to $90,929. The Company recorded a discount to the face amount of the CPNs' which is being accreted over the ten month term of each CPN using the effective interest method.
	During the three months ended January 31, 2014, the Company recognized $740 of interest expense related to the CPNs' and $1,843 of accretion related to the debt discount. The remaining debt discount of $89,086 will be amortized through October 31, 2014.
	Secured Debt
	Secured debt is summarized below:
		31-Jan-14			31-Oct-13
	Secured
	Fixed credit facility	$	17,617		$	21,729
	Direct Capital Corporation		56,389			-
	Term financings		118,029			119,749
	Converted to fixed credit facility from revolving facility		91,267			94,809
	Total Secured Debt		283,302			236,287
	Less: current portion of long-term debt		(109,742	)		(48,727	)
	Total debt, long-term portion	$	173,560		$	187,560
	The fixed, Direct Capital Corporation and converted from revolving credit facilities were secured by inventory, accounts receivable and equipment as of January 31, 2014 and October 31, 2013. The term financings were secured by vehicles.
	Our fixed credit facility has a maturity date due on November 1, 2014 with an annual interest rate of 7%.
	Our Direct Capital financing was entered into on December 31, 2013. The face amount of the debt is $61,001. The Company received net proceeds of $50,001 and recorded $11,000 of interest expense during the three months ended January 31, 2014. The Loan is being repaid at the rate of approximately $5,400 per month.
	Our term financings have maturity dates due from February 2014 to March 2028 with annual interest rates ranging from 5.9% to 6.25%.
	Our revolving credit facility of $91,267 as of January 31, 2014 was converted to a fixed credit facility on November 7, 2012 with an extended maturity date due on November 1, 2017.
	During the three months ended January 31, 2014, the Company incurred $18,379 of interest expense related to secured debt.

Stockholders_Deficit

Stockholders' (Deficit)	3 Months Ended
	Jan. 31, 2014
Stockholders Deficit	'
Note 7 - Stockholders' (Deficit)	'
	During the three months ended January 31, 2014, the Company recognized the following equity related activity:
	·	The Company received 13,470,000 shares of common stock from Mark Flanagan and Chas Radovich at no cost. The Company canceled the shares thereby reducing the total shares outstanding and recorded an decrease to common stock and increase to additional paid-in capital for the par value.
	·	From June 13, 2013 to October 15, 2013, the Company completed a private placement offering to certain institutional and accredited investors pursuant to which the Company sold an aggregate of 390,000 shares of the Company’s common stock resulting in gross proceeds of $195,000 to the Company.
	·	Pursuant a private placement offering to certain institutional and accredited investors, the Company issued 160,000 of shares of common stock for which $40,000 of funds were received prior to October 31, 2013 and $25,000 received during the quarter ended January 31, 2014.

Property_and_Equipment_Tables

Property and Equipment (Tables)	3 Months Ended
	Jan. 31, 2014
Property And Equipment Tables	'
Property and equipment	'
	Property and Equipment consisted of the following:
		31-Jan-14			31-Oct-13
	Machinery	$	49,788		$	49,788
	Vehicles		223,192			223,191
	Office equipment		31,143			31,143
	Leasehold improvements		4,247			4,247
	Land		5,500			5,500
			313,870			313,869
	Less accumulated depreciation		(300,312	)		(290,472	)
	Total	$	13,558		$	23,397

Accounts_Payable_and_Accrued_E1

Accounts Payable and Accrued Expenses (Tables)	3 Months Ended
	Jan. 31, 2014
Accounts Payable And Accrued Expenses Tables	'
Accounts payable and accrued expenses	'
	Accounts payable and accrued expenses consisted of the following:
		31-Jan-14		31-Oct-13
	Accounts payable	$	54,814	$	5,340
	Credit card balances payable		45,410		39,120
	Other		22,911		16,062
	Total	$	123,134	$	60,522

Debt_Tables

Debt (Tables)	3 Months Ended
	Jan. 31, 2014
Debt Tables	'
Schedule of Company's debt	'
	The Company’s debt is summarized below:
		31-Jan-14			31-Oct-13
	Notes payable	$	29,800		$	29,800
	Convertible promissory notes		105,500			-
	CPN discount		(89,086	)		-
	Secured debt		283,302			236,287
	Accrued interest		8,659			7,393
	Total debt	$	338,175		$	273,480
Schedule of secured debt	'
	Secured debt is summarized below:
		31-Jan-14			31-Oct-13
	Secured
	Fixed credit facility	$	17,617		$	21,729
	Direct Capital Corporation		56,389			-
	Term financings		118,029			119,749
	Converted to fixed credit facility from revolving facility		91,267			94,809
	Total Secured Debt		283,302			236,287
	Less: current portion of long-term debt		(109,742	)		(48,727	)
	Total debt, long-term portion	$	173,560		$	187,560

Organization_Basis_of_Presenta1

Organization, Basis of Presentation and Going Concern (Details Narrative) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Organization Basis Of Presentation And Going Concern Details Narrative	'	'
Accumulated deficit	$293,148	$208,829
Working capital	$32,269	$59,718

Inventories_Details_Narrative

Inventories (Details Narrative) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Inventories Details Narrative	'	'
Reserve for obsolete inventory	$51,259	$51,259

Property_and_Equipment_Details

Property and Equipment (Details) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Property And Equipment Details	'	'
Machinery	$49,788	$49,788
Vehicles	223,192	223,191
Office equipment	31,143	31,143
Leasehold improvements	4,247	4,247
Land	5,500	5,500
Property and Equipment, Gross	313,870	313,869
Less accumulated depreciation	-300,312	-290,472
Property and Equipment, net	$13,558	$23,397

Property_and_Equipment_Details1

Property and Equipment (Details Narrative) (USD $)	3 Months Ended
	Jan. 31, 2014	Jan. 31, 2013
Property And Equipment Details Narrative	'	'
Depreciation expense	$9,840	$11,014

Accounts_Payable_and_Accrued_E2

Accounts Payable and Accrued Expenses (Details) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Accounts Payable And Accrued Expenses Details	'	'
Accounts payable	$54,814	$5,340
Credit card balances payable	45,410	39,120
Other	22,911	16,062
Total	$123,134	$60,522

Related_Parties_Details_Narrat

Related Parties (Details Narrative) (USD $)	3 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Oct. 31, 2013
Related party liabilities	$52,197	'	$222,357
Rent expense	5,400	5,400	'
Mr. Good [Member]	'	'	'
Related party liabilities	52,197	'	66,357
Mr. Stoppenhagen [Member]	'	'	'
Related party liabilities	'	'	156,000
Accounts payable related party	29,600	'	'
Related party billed the company	32,038	'	'
Amount paid to related party	$158,438	'	'

Debt_Details

Debt (Details) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Debt Details	'	'
Notes payable	$29,800	$29,800
Convertible promissory notes	105,500	'
CPN discount	-89,086	'
Secured debt	283,302	236,287
Accrued interest	8,659	7,393
Total debt	$338,175	$273,480

Debt_Details_1

Debt (Details 1) (USD $)	Jan. 31, 2014	Oct. 31, 2013
Secured	'	'
Fixed credit facility	$17,617	$21,729
Direct Capital Corporation	56,389	'
Term financings	118,029	119,749
Converted to fixed credit facility from revolving facility	91,267	94,809
Total Secured Debt	283,302	236,287
Less: current portion of long-term debt	-109,742	-48,727
Total debt, long-term portion	$173,560	$187,560

Debt_Details_Narrative

Debt (Details Narrative) (USD $)	3 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Oct. 31, 2013
Debt Details Narrative	'	'	'
Interest rate on notes payable	7.00%	'	7.00%
Accrued interest on notes payable	$7,918	'	$7,393
Interest expense of notes payable	525	'	'
Interest expense related to CPN	740	'	'
Accretion related to the debt discount	1,843	'	'
Proceeds from debt	50,001	'	'
Interest expense related to direct capital financing	11,000	'	'
Revolving credit facility	91,267	'	94,809
Interest expense related to secured debt	$18,379	'	'

Stockholders_Deficit_Details_N

Stockholders' (Deficit) (Details Narrative) (USD $)	3 Months Ended		12 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Oct. 31, 2013
Stockholders Deficit Details Narrative	'	'	'
Share received from Mark Flanagan and Chas Radovich	13,470,000	'	'
Shares issued for cash	'	'	390,000
Proceeds from the issuance of stock	$25,000	'	$195,000
Shares issued and outstanding	'	'	160,000
Shares issued and outstanding, value	'	'	$25,000