UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
March 31, 2015
o
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period _____________to______________
Commission File Number333-193967
| PRESTON CORP. |
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| (Exact name of small Business Issuer as specified in its charter) |
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Nevada |
| 46-4474279 |
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(State or other jurisdiction of |
| (IRS Employer Identification No.) |
incorporation or organization) |
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311 West Third Street, Suite 4001 |
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Carson City, NV |
| 89703 |
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(Address of principal executive offices) |
| (Postal or Zip Code) |
Issuer's telephone number, including area code: |
| (775) 345-3449 |
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| (Former name, former address and former fiscal year, if changed since |
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| last report) |
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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Small reporting company
x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
oYes x No
State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 72,400,000 shares of $0.001 par value common stock outstanding as of May15, 2015.
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PART I.
FINANCIAL INFORMATION
Item 1.
Financial Statements
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PRESTON CORP.
BALANCE SHEETS
(Unaudited)
ASSETS |
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| March 31, 2015 | September 30, 2014 |
Current assets: |
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Cash | $ 6,015 | $ 5,892 |
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Prepaid deposits | 9,474 | 9,499 |
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Total currents assets | 15,489 | 15,391 |
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Computer | 1,454 | 1,454 |
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Mining license | 61,000 | - |
Total assets | $ 77,943 | $ 16,845 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
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Accounts payable - related party | $ 15,000 | $ 6,000 |
Advances | 24,800 | - |
Advances - related party | 65,900 | 65,900 |
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Total current liabilities | 105,700 | 71,900 |
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Total liabilities | 105,700 | 71,900 |
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Commitments |
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STOCKHOLDERS' DEFICIT |
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Preferred stock, $0.001 par value, 5,000,000 shares authorized; |
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Series A Convertible Preferred, $0.001 par value, 500,000 shares authorized, 500,000 and 0 shares issued and outstanding at March 31, 2015 and September 30, 2014, respectively | 500 | - |
Common stock, $0.001 par value, 200,000,000 shares authorized, 72,400,000 and 169,400,000 shares issued and outstanding at March 31, 2015 and September 30, 2014, respectively | 72,400 | 169,400 |
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Additional paid in capital | 31,700 | (125,800) |
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Accumulated deficit | (132,357) | (98,655) |
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Total stockholders' deficit | (27,757) | (55,055) |
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Total liabilities and stockholders' deficit | $ 77,943 | $ 16,845 |
The accompanying notes are an integral part of these financial statements.
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PRESTON CORP.
STATEMENTS OF OPERATIONS
For the three and six months ended March 31, 2015 and 2014
(Unaudited)
| Three months | Three months | Six months | Six months |
| March 31, 2015 | March 31, 2014 | March 31, 2015 | March 31, 2014 |
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Operating expenses: |
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Exploration | $ - | $ - | $ - | $ - |
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General and administration | 17,169 | 19,835 | 33,702 | 30,581 |
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Total operating expenses | 17,169 | 19,835 | 33,702 | 30,581 |
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Net loss | $ (17,169) | $ (19,835) | $ (33,702) | $ (30,581) |
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Net loss per share: |
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Basic and diluted | $ ( 0.00) | $ ( 0.00) | $ ( 0.00) | $ ( 0.00) |
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Weighted average shares |
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outstanding: |
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Basic and diluted | 116,588,889 | 169,400,000 | 143,284,615 | 146,253,846 |
The accompanying notes are an integral part of these financial statements.
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PRESTON CORP.
STATEMENTS OF CASH FLOWS
For the six months ended March 31, 2015 and 2014
(Unaudited)
| Six months ended | Six months ended |
| March 31, 2015 | March 31, 2014 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss | $ (33,702) | $ (30,581) |
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Adjustment to reconcile net loss to cash used in operating |
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activities: |
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Net change in: |
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Prepaid deposits | 25 | (7,500) |
Accounts payable | - | 42 |
Accounts payable - related party | 9,000 | - |
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CASH FLOWS USED IN OPERATING ACTIVITIES: | (24,677) | (38,039) |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment | - | - |
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CASH FLOWS USED IN INVESTING ACTIVITIES: | - | - |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Cash received from the sale of common stock | - | 22,600 |
Proceeds from advances, related party | - | 40,000 |
Proceeds from advances | 24,800 | - |
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CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | 24,800 | 62,600 |
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NET CHANGE IN CASH | 123 | 24,561 |
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Cash, beginning of period | 5,892 | 6,974 |
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Cash, end of period | $ 6,015 | $ 31,535 |
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SUPPLEMENTAL CASH FLOW INFORMATION |
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Cash paid on interest expenses | $ - | $ - |
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Cash paid for income taxes | $ - | $ - |
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Non-cash and Investing and financing activities: |
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Reclassification of par value from APIC to Common Stock | $ - | $ 31,850 |
Preferred stock issued for mining license | $ 61,000 | $ - |
Return and cancellation of common stock | $ 97,000 | $ - |
The accompanying notes are an integral part of these financial statements.
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PRESTON CORP.
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2015
(UNAUDITED)
Note 1
Basis of Presentation
The accompanying unaudited interim financial statements of Preston Corp. (“Preston” or the “Company”) 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 the Company’s Annual Report filed with the SEC on Form 10-K. 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 our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2014, as reported in the Form 10-K of the Company, have been omitted.
General
The Company is in the exploration stage, and is in the process of exploring and evaluating its mineral properties and determining whether they contain ore reserves that are economically recoverable. The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable ore reserves, the ability of the Company to obtain the necessary financing to complete development, confirmation of the Company’s interest in the underlying mineral claims and upon future profitable production or proceeds from the disposition of all or part of its mineral properties.
Development Stage Company
The Company is a development stage company as defined under the then current Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 915-205 “Development-Stage Entities” and among the additional disclosures required as a development stage company are that the financial statements were identified as those of a development stage company, and that the statement of operations, stockholders’ deficit and cash flows disclosed activity since the date of our Inception (January 19, 2013) as a development stage company. Effective June 10, 2014, FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements.
Note 2
Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2015, the Company had not yet achieved profitable operations, has accumulated losses of $132,357 and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.
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Note 3
Mining License
On January 27, 2015, pursuant to a License Purchase Agreement, the Company acquired all of the right, title and interest in and to a license to develop and mine for gold on approximately 80.4 square kilometers located southeast of Handeni in eastern Tanzania (the “License”). The License was acquired from AFGF (Tanzania) Ltd. (“AFGF”) for 500,000 shares of the Company’s Series A Convertible Preferred Stock (the “Purchase Price”). AFGF is a wholly-owned subsidiary of Kokanee Placer Ltd., a corporation wholly-owned by Laurence Stephenson, the President, director and majority shareholder of the Company. The purchase price of the mining license was $61,000. The Purchase Price was determined based on the historical renewal fees paid to maintain the mining license.
Note 4
Advances
During the period ended March 31, 2015, the Company received advances in an aggregate of $24,800. The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of March 31, 2015, the advances totaled $24,800.
Note 5
Related Party Transactions
The related party advances are due to the director and President of the Company for funds advanced. The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of March 31, 2015, the advances totaled $65,900.
The Company was charged management fees by the President of the Company when funds are available. Effective April 1, 2014, the Company agreed to pay the President of the Company $2,000 per month for management services if funds are available or to accrue such amount if funds are not available. Accounts payable – related party are the fees earned but not yet paid of $15,000 and $6,000 at March 31, 2015 and September 30, 2014, respectively.
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| Six months ended March 31, 2015 | Six months ended March 31, 2014 |
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| Management fees | $ 12,000 | $ 8,000 |
Note 6
Equity Transactions
On December 29, 2014, we filed an Amendment to the Company’s Articles of Incorporation (the “Certificate of Amendment”) with the Nevada Secretary of State. The Certificate of Amendment amended the Article 3 of the Company’s Articles of Incorporation to: authorize the issuance of up to five million (5,000,000) shares of Preferred Stock, par value $0.001 per share, of which the voting and other powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions of the shares of such series shall be determined by the Board of Directors. As a result of the Certificate of Amendment, we now have two hundred and five million (205,000,000) authorized shares, par value $0.001 per share, consisting of two classes designated as “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock that we have authority to issue is two hundred million (200,000,000) shares and the total number of shares of Preferred Stock that we have authority to issue is five million (5,000,000) shares.
On January 7, 2015, pursuant to Article 3 of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Convertible Preferred Stock (“Series A Preferred Stock”), consisting of five hundred thousand (500,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock may convert their shares into shares of our common stock on the basis of one (1) share of common stock for every one (1) share of Series A Preferred Stock converted. Holders are further entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 200 votes for each share of Series A Preferred Stock held.
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On January 30, 2015, we issued a total of 500,000 shares of our newly designated Series A Convertible Preferred Stock to AFGF (Tanzania) Ltd., a wholly-owned subsidiary of Kokanee Placer Ltd., a corporation wholly-owned by Laurence Stephenson, our President, in exchange for the acquisition of a License to develop and mine for gold on property located in Tanzania.
On February 10, 2015, Laurence Stephenson, President of the Company, returned 97,000,000 shares of common stock. The Company immediately cancelled the returned shares.
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Item 2. Management’s Discussion and Analysis or Plan of Operation
This document includes statements that may constitute forward-looking statements made pursuant to the Safe Harbor provisions of thePrivate Securities Litigation Reform Act of 1995. We caution readers regarding certain forward-looking statements in this document, press releases, securities filings, and all other documents and communications. All statements, other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this Quarterly Report on Form 10-Q ("Report") are forward looking. The words "believes," "anticipates," "estimates," "expects," and words of similar import, constitute "forward-looking statements." While we believe in the veracity of all statements made herein, forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and contingencies and known and unknown risks. As a result of such risks, our actual results could differ materially from those expressed in any forward-looking statements made by, or on behalf of, our company. We will not necessarily update information if any forward-looking statement later turns out to be inaccurate. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including risks and uncertainties set forth in our S-1 Registration Statement, as well as in other documents we file with the Securities and Exchange Commission ("SEC").
The following information has not been audited. You should read this information in conjunction with the unaudited financial statements and related notes to the financial statements included in this report.
General
We are an “exploration stage” company that has not realized any revenues to date. Our business is the acquisition and exploration of mining properties with the objective of identifying potential gold and silver ore deposits.
We have commenced an exploration program on our mineral lease located in Esmeralda County, Nevada, at Oasis Divide, Nevada. On November 15, 2013, we acquired four federal lode mining claims in the Oasis Divide area of Esmeralda County in Nevada, known as the Silver Oasis #1- #4 (the “Silver Oasis Claims”).
On January 27, 2015, pursuant to a License Purchase Agreement, we acquired all of the right, title and interest in and to a license to develop and mine for gold on approximately 80.4 square kilometers located southeast of Handeni in eastern Tanzania (the “HandeniLicense”). The Handeni License was acquired from AFGF (Tanzania) Ltd. (“AFGF”) for 500,000 shares of the Company’s Series A Preferred Stock referred to below (the “Purchase Price”). AFGF is a wholly-owned subsidiary of Kokanee Placer Ltd., a corporation wholly-owned by Laurence Stephenson, our President, director and majority shareholder. Our Board reviewed the transaction, and Mr. Stephenson abstaining from voting, the transaction was approved. Our Board believes that the Purchase Price for this acquisition was fair and reasonable and at or below the fair market price that an independent third party would pay. Our Board further believes that this acquisition is in the best interests of both our company and our shareholders.
On December 29, 2014, we filed an Amendment to our Articles of Incorporation (the “Certificate of Amendment”) with the Nevada Secretary of State. The Certificate of Amendment amended the Article 3 of our Articles of Incorporation to: authorize the issuance of up to five million (5,000,000) shares of Preferred Stock, par value $0.001 per share, of which the voting and other powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions of the shares of such series shall be determined by the Board of Directors. As a result of the Certificate of Amendment, we now have two hundred and five million (205,000,000) authorized shares, par value $0.001 per share, consisting of two classes designated as “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock that we have authority to issue is two hundred million (200,000,000) shares and the total number of shares of Preferred Stock that we have authority to issue is five million (5,000,000) shares. Our Board of Directors and a majority of our shareholders approved the Certificate of Amendment.
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On January 7, 2015, pursuant to Article 3 of our Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Convertible Preferred Stock (“Series A Preferred Stock”), consisting of five hundred thousand (500,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock may convert their shares into shares of our common stock on the basis of one share of common stock for every one share of Series A Preferred Stock converted. Holders are further entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of 200 votes for each share of Series A Preferred Stock held.
Plan of Operation
We have completed the first phase of the recommended exploration program on our Silver Oasis claims. The program was finalized in December 2013 by our geologist, Charles P. Watson, President of Advanced Geologic Exploration, Inc. The first phase cost $9,000, which included the staking of the property. The exploration program was recommended by our geologist Advanced Geologic Exploration, Inc., in its Phase 1 Reconnaissance Sampling Report dated December 31, 2013, based on his evaluation of the property, its history and the surrounding geological setting. Our primary focus is in the exploration of silver deposits. The geographical area in and around our claims have shown strong silver and base metal mineralization. Further exploration is required. Whether or not we will discover commercially viable mineral deposits will depend on this further exploration.
Our plan of operation is to continue exploration work on the Silver Oasis Claims. We have not as yet determined our plans for exploration work on the Handeni License. There is no assurance that an economic mineral deposit exists on the Silver Oasis Claims or Handeni License. Even if we complete our proposed exploration program on the Silver Oasis Claims or any exploration program on the Handeni License and we are successful in identifying a mineral deposit, we would have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit.
The Phase 1 reconnaissance exploration and sampling program results from the Silver Oasis Claims are very encouraging and suggest that high-grade silver mineralization could occur at depth. The “Paymaster Zone” of the Palmetto mining district is noted for high-grade silver veins and considering the Silver Oasis claims are located at the north end of that zone, it is likely that these results are indicative of a “sleeper” silver deposit. Moreover, the association of silver mineralization in both the massive quartz vein and iron oxide mineralization suites indicates that the complex ore genesis contained elevated silver throughout its processes. Coupled with the base metal counterparts and the large spatial distributions of the alteration haloes, the Silver Oasis claims have an excellent potential for economic silver deposit.
Other base metal mineralization, such as copper, lead, zinc and tungsten, is observed in nearly every sample and suggests that a complex poly-metallic ore geneses. This high-grade mineralization is consistent with other accounts from other mines found in the mining district.
Our plan of operation for the next twelve months is to carry out the second phase of the recommended exploration program on the Silver Oasis Claims and assess the Handeni License for a potential exploration program. The Silver Oasis Claim program may consist of acquiring additional prospects contiguous to the Silver Oasis Claims and sampling, assaying those claims, as well as geological mapping, a detailed rock sampling program and map and sample underground workings for future drill targets. Phase 2 is estimated to cost between $30,000 and $40,000, which we plan to carry out when financing allows. The exploration program was recommended by Advanced Geologic Exploration, Inc., in its geological report dated December 31, 2013, based on their evaluation of the property, its history and the surrounding geological setting.
We will require additional funding in order to proceed with additional exploration on Silver Oasis Claims and any exploration program we may undertake on the Handeni License. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or from director loans. We do not have any arrangements in place for any future equity financing or loans.
In addition to exploration costs of approximately $40,000 for the Silver Oasis Claims, we will incur salary expenses for Mr. Stephenson of $24,000 for a total of $64,000 for the year. If we cannot afford to pay this salary it will be accrued. In addition, we anticipate spending an additional $83,000 on administrative fees, new employees, legal and
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accounting fees and complying with future SEC reporting obligations. Total expenditures over the next 12 months are therefore expected to be approximately $147,000. With these expenditures and Mr. Stephenson’s education and experience the second phase of exploration will be completed and evaluated. Upon that evaluation a third phase of exploration could be recommended that could cost in the range of $50,000 - $100,000 and will delineate final drilling targets We cannot at this time estimate the cost of an exploration program on the Handeni License.
If we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource or non-resource sector. Any business opportunity would require our management to perform diligence on possible acquisition of additional resource properties. Such due diligence would likely include purchase investigation costs, such as professional fees by consulting geologists, preparation of geological reports on the properties, conducting title searches and travel costs for site visits.
Based on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We base this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include the following:
• our ability to raise additional funding;
• our ability to locate and acquire a suitable interest in a mineral property;
• the market price for minerals;
• the results of our proposed exploration programs; and
• our ability to find joint venture partners for the development of any property interests
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
We have had no operating revenues during the three and six months ended March 31, 2015, and have incurred operating expenses in the amount of $17,169 and $33,702, respectively, for the same period. Our activities have been financed from the proceeds of share subscriptions, advances, and advances from related party.
Results of Operations for Three and Six Months Ending March 31, 2015 and March 31, 2014
We did not earn any revenues during the three or six month periods ending March 31, 2015 and 2014. We incurred operating expenses in the amount of $17,169 and $33,702, respectively, for the three and six months ended March 31, 2015, compared to $19,835 and $30,581, respectively, for the three and six months ended March 31, 2014.
Liquidity and Capital Resources
As of March 31, 2015, we had total current assets of $15,489, consisting of cash of $6,015 and prepaid deposits of $9,474 for a working capital deficit of $90,211, compared to total currents assets of $15,391 and working capital deficit of $56,509 as of the year ended September 30, 2014. Our liabilities consisted mostly of accounts payable, advances, and related party advances to us.
We expect to continue incurring losses in the next twelve months. We have no agreements for additional financing and cannot provide any assurance that additional funding will be available to finance our operations on acceptable terms in order to enable us to complete our plan of operations. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of our mineral claim and our venture will fail.
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We plan to continue to finance our activities in the short term through shareholder advances similar to the ones that have occurred to date. In the longer term it is hoped there will be further equity financings but none are planned at the moment.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet transactions, arrangements, or obligations that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, or capital resources.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4:
Controls and Procedures
Evaluation of Disclosure Controls
Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our management, with participation of our Chief Executive Officer and Chief Financial Officer as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting.
As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) under theSecurities Exchange Act of 1934. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under the framework, management has concluded that our internal control over financial reporting was not effective as of March 31, 2015.
Certain internal control weaknesses became evident that, in the aggregate, represent material weaknesses, including: (i) lack of segregation of incompatible duties; and (ii) insufficient Board of Directors representation.
There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.
PART II- OTHER INFORMATION
Item 1.
Legal Proceedings
We are not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.
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Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
On January 30, 2015, we issued a total of 500,000 shares of our newly designated Series A Convertible Preferred Stock to AFGF (Tanzania) Ltd., a wholly-owned subsidiary of Kokanee Placer Ltd., a corporation wholly-owned by Laurence Stephenson, our President, in exchange for the acquisition of a License to develop and mine for gold on property located in Tanzania. For further information please see our Form 8-K filed with the SEC on February 4, 2015 which is incorporated by reference herein.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The investor represented his intention to acquire the securities for investment only and not with a view towards distribution. The investor was given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Submission of Matters to a Vote of Security Holders
None.
Item 5.
Other Information
None.
Item 6.
Exhibits
(a)
Exhibit(s)
Number | Exhibit Description | |
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31.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 Or 15d-14 of theSecurities Exchange Act Of 1934,as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002 | |
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32.1 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002 | |
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101 | Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements. | |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DATED: May 15, 2015
PRESTON CORP. |
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By:/s/ Laurence Stephenson |
Laurence Stephenson |
CEO, President, Secretary/Treasurer, and Director |
(Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) |