UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURUTIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2014
Commission file number 333-152805
Lake Forest Minerals, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 26-2862618
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
711 S. Carson Street, Suite 4
Carson City, NV 89701
(Address of Principal Executive Offices including Zip Code)
(206) 203-4100
(Telephone Number)
Resident Agents of Nevada, Inc.
711 S. Carson Street, Suite 4
Carson City, NV 89701
(775) 882 4641
(Name, Address and Telephone Number of Agent for Service)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of September 22, 2014, the registrant had 11,000,000 shares of common stock
issued and outstanding. No market value has been computed based upon the fact
that no active trading market had been established as of September 22, 2014.
LAKE FOREST MINERALS, INC.
TABLE OF CONTENTS
Page No.
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Part I
Item 1. Business 3
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 8
Item 2. Properties 8
Item 3. Legal Proceedings 9
Item 4. Mine Safety Disclosures 9
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters And Issuer Purchases of Equity Securities 9
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 14
Item 8. Financial Statements 15
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 24
Item 9A(T). Controls and Procedures 24
Item 9B. Other Information 25
Part III
Item 10. Director, Executive Officer and Corporate Governance 26
Item 11. Executive Compensation 27
Item 12. Security Ownership of Certain Beneficial Owners and Management 28
Item 13. Certain Relationships, Related Transactions, and Director
Independence 29
Item 14. Principal Accounting Fees and Services 29
Part IV
Item 15. Exhibits 29
Signatures 30
2
PART I
ITEM 1. BUSINESS
You should read the following summary together with the more detailed business
information and the financial statements and related notes that appear elsewhere
in this annual report. In this annual report, unless the context otherwise
denotes, references to "we", "us", "our", "the Company", "Lake Forest" and "Lake
Forest Minerals" are to Lake Forest Minerals Inc.
Lake Forest Minerals was incorporated in the State of Nevada on June 23, 2008.
We are a development stage company with no revenues or operating history.
We have sold $42,000 in equity securities since inception, $12,000 from the sale
of 8,000,000 shares of stock to our officer and director and $30,000 from the
sale of 3,000,000 shares registered pursuant to our S-1 Registration Statement
which became effective on August 18, 2008. The offering was completed on
September 11, 2008.
Our financial statements from inception through the year ended June 30, 2014
report no revenues and a net loss of $98,178. Seale and Beers, Certified Public
Accountants, our independent auditor, has issued an audit opinion for Lake
Forest Minerals which includes a statement expressing substantial doubt as to
our ability to continue as a going concern.
Effective June 26, 2008, the Company entered into a Mineral Property Option
Agreement with T.L. Sadlier-Brown, whereby the Company obtained an option to
acquire the VIN Mineral Claim located in the Princeton Mining Division of
British Columbia.
Under the terms of the Agreement, the Company paid $2,500 by June 30, 2008, paid
a further $5,000 by August 15, 2009 and in order to maintain the option was
required to pay an additional $7,500 by June 30, 2010. Upon completion of the
required payments the Company would have owned an undivided 100% interest in the
VIN Mineral Claim subject to a 2% net smelter returns royalty reserved in favour
of the Optionor.
Prior to completing the payments required under the Agreement, the Company had
the right to conduct exploration and development activities on the property at
its sole discretion and, having provided notice to the vendor, had the option to
terminate the Agreement and relieve itself from any obligations thereunder.
On February 22, 2010 the Company provided notice to Mr. Sadlier-Brown, and
terminated the Option Agreement and relieved itself from any obligations
thereunder.
Our plan is to seek, investigate, and consummate a merger or other business
combination, purchase of assets or other strategic transaction (i.e. a merger)
with a corporation, partnership, limited liability company or other operating
business entity (a "Merger Target") desiring the perceived advantages of
becoming a publicly reporting and publicly held corporation. We have no
operating business, and conduct minimal operations necessary to meet regulatory
requirements. Our ability to commence any operations is contingent upon
obtaining adequate financial resources. We are currently considered a "shell"
company inasmuch as we are not generating revenues, do not own an operating
business, and have no specific plan other than to engage in a merger or
acquisition transaction with a yet-to-be identified operating company or
business. We have no employees and no material assets.
We currently have no definitive agreements or understandings with any
prospective business combination candidates and there are no assurances that we
will find a suitable business with which to combine. The implementation of our
business objectives is wholly contingent upon a business combination and/or the
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successful sale of our securities. We intend to utilize the proceeds of any
offering, any sales of equity securities or debt securities, bank and other
borrowings or a combination of those sources to effect a business combination
with a target business which we believe has significant growth potential. While
we may, under certain circumstances, seek to effect business combinations with
more than one target business, unless additional financing is obtained, we will
not have sufficient proceeds remaining after an initial business combination to
undertake additional business combinations.
A common reason for a target company to enter into a merger with a shell company
is the desire to establish a public trading market for its shares. Such a
company would hope to avoid the perceived adverse consequences of undertaking a
public offering itself, such as the time delays and significant expenses
incurred to comply with the various federal and state securities law that
regulate initial public offerings.
As a result of our limited resources, unless and until additional financing is
obtained we expect to have sufficient proceeds to effect only a single business
combination. Accordingly, the prospects for our success will be entirely
dependent upon the future performance of a single business. Unlike certain
entities that have the resources to consummate several business combinations or
entities operating in multiple industries or multiple segments of a single
industry, we will not have the resources to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses. A target business
may be dependent upon the development or market acceptance of a single or
limited number of products, processes or services, in which case there will be
an even higher risk that the target business will not prove to be commercially
viable.
Our officer is only required to devote a small portion of his time to our
affairs on a part-time or as-needed basis. We expect to use outside consultants,
advisors, attorneys and accountants as necessary, none of which will be hired on
a retainer basis. We do not anticipate hiring any full-time employees so long as
we are seeking and evaluating business opportunities.
We do not expect our present management to play any managerial role for us
following a business combination. Although we intend to scrutinize closely the
management of a prospective target business in connection with our evaluation of
a business combination with a target business, our assessment of management may
be incorrect.
In evaluating a prospective target business, we will consider several factors,
including the following:
- experience and skill of management and availability of additional
personnel of the target business;
- costs associated with effecting the business combination;
- equity interest retained by our stockholders in the merged entity;
- growth potential of the target business;
- capital requirements of the target business;
- capital available to the target business;
- stage of development of the target business;
- proprietary features and degree of intellectual property or other
protection of the target business;
- the financial statements of the target business; and
- the regulatory environment in which the target business operates.
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The foregoing criteria are not intended to be exhaustive and any evaluation
relating to the merits of a particular target business will be based, to the
extent relevant, on the above factors, as well as other considerations we deem
relevant. In connection with our evaluation of a prospective target business, we
anticipate that we will conduct a due diligence review which will encompass,
among other things, meeting with incumbent management as well as a review of
financial, legal and other information.
The time and costs required to select and evaluate a target business (including
conducting a due diligence review) and to structure and consummate the business
combination (including negotiating and documenting relevant agreements and
preparing requisite documents for filing pursuant to applicable corporate and
securities laws) cannot be determined at this time. Our president intends to
devote only a very small portion of his time to our affairs, and, accordingly,
the consummation of a business combination may require a longer time than if he
devoted his full time to our affairs. However, he will devote such time as he
deems reasonably necessary to carry out our business and affairs. The amount of
time devoted to our business and affairs may vary significantly depending upon,
among other things, whether we have identified a target business or are engaged
in active negotiation of a business combination.
We anticipate that various prospective target businesses will be brought to our
attention from various sources, including securities broker-dealers, investment
bankers, venture capitalists, bankers and other members of the financial
community, including, possibly, the executive officers and our affiliates.
Various impediments to a business combination may arise, such as appraisal
rights afforded the stockholders of a target business under the laws of its
state of organization. This may prove to be deterrent to a particular
combination.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
PATENTS, TRADEMARKS, FRANCHISES, ROYALTY AGREEMENTS OR LABOR CONTRACTS
We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. We
will assess the need for any copyright, trademark or patent applications on an
ongoing basis.
NEED FOR GOVERNMENT APPROVAL OF PRODUCTS OR SERVICES
We are not required to apply for or have any government approval for our
products or services.
RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS
We have not expended funds for research and development costs since inception.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
Our only employee is our sole officer, Jeffrey Taylor. Mr. Taylor currently
devotes 10 hours per week to company matters and he will continue to devote as
much time as the board of directors determines is necessary to manage the
affairs of the company. There are no formal employment agreements between the
company and our current employee.
5
REPORTS TO SECURITIES HOLDERS
We provide an annual report that includes audited financial information to our
shareholders. We make our financial information equally available to any
interested parties or investors through compliance with the disclosure rules for
a small business issuer under the Securities Exchange Act. We are subject to
disclosure filing requirements, including filing Form 10-K annually and Form
10-Q quarterly. In addition, we will file Form 8-K and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event that our obligation to file such
reports is suspended under the Exchange Act. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically.
ITEM 1A. RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING KNOWN RISKS AND UNCERTAINTIES IN
ADDITION TO OTHER INFORMATION IN THIS REPORT IN EVALUATING OUR COMPANY. OUR
BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE SERIOUSLY HARMED
DUE TO ANY OF THE FOLLOWING KNOWN RISKS. THE RISKS DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US MAY
ALSO IMPAIR OUR BUSINESS OPERATIONS.
WE HAVE NO RECENT OPERATING HISTORY OR BASIS FOR EVALUATING PROSPECTS.
We currently have no operating business or plans to develop one. We are seeking
to enter into a merger or business combination with another operating company.
To date, our efforts have been limited to meeting our regulatory filing
requirements and searching for a merger target.
WE HAVE LIMITED RESOURCES AND NO REVENUES FROM OPERATIONS, AND WILL NEED
ADDITIONAL FINANCING IN ORDER TO EXECUTE ANY BUSINESS PLAN.
We have limited resources, no revenues from operations to date and our cash on
hand may not be sufficient to satisfy our cash requirements during the next
twelve months. In addition, we will not achieve any revenues (other than
insignificant investment income) until, at the earliest, the consummation of a
merger and we cannot ascertain our capital requirements until such time. There
can be no assurance that determinations ultimately made by us will permit us to
achieve our business objectives.
WE WILL BE ABLE TO EFFECT AT MOST ONE MERGER, AND THUS MAY NOT HAVE A
DIVERSIFIED BUSINESS.
Our resources are limited and we will most likely have the ability to effect
only a single merger. This probable lack of diversification will subject us to
numerous economic, competitive and regulatory developments, any or all of which
may have a material adverse impact upon the particular industry in which we may
operate subsequent to the consummation of a merger. We will become dependent
upon the development or market acceptance of a single or limited number of
products, processes or services.
WE DEPEND SUBSTANTIALLY UPON OUR PRESIDENT, WHOSE EXPERIENCE IS LIMITED, TO MAKE
ALL MANAGEMENT DECISIONS.
Our ability to effect a merger will be dependent upon the efforts of our
president, Jeffrey Taylor. Notwithstanding the importance of Mr. Taylor, we have
not entered into any employment agreement or other understanding with Mr. Taylor
6
concerning compensation or obtained any "key man" life insurance on any of his
life. The loss of the services of Mr. Taylor will have a material adverse effect
on achieving our business objectives and success. We will rely upon the
expertise of Mr. Taylor and do not anticipate that we will hire additional
personnel.
THERE IS COMPETITION FOR THOSE PRIVATE COMPANIES SUITABLE FOR A MERGER
TRANSACTION OF THE TYPE CONTEMPLATED BY MANAGEMENT.
We are in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF MANAGEMENT TO LOCATE AND
ATTRACT A SUITABLE ACQUISITION.
The nature of our operations is highly speculative. The success of our plan of
operation will depend to a great extent on the operations, financial condition
and management of the identified business opportunity. While management intends
to seek business combination(s) with entities having established operating
histories, we cannot assure you that we will be successful in locating
candidates meeting that criterion. In the event we complete a business
combination, the success of our operations may be dependent upon management of
the successor firm or venture partner firm and numerous other factors beyond our
control.
WE HAVE NO AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION.
We have no definitive agreement with respect to engaging in a merger with, joint
venture with or acquisition of, a private or public entity. No assurances can be
given that we will successfully identify and evaluate suitable business
opportunities or that we will conclude a business combination. We cannot
guarantee that we will be able to negotiate a business combination on favorable
terms, and there is consequently a risk that funds allocated to the purchase of
our shares will not be invested in a company with active business operations.
MANAGEMENT WILL CHANGE UPON THE CONSUMMATION OF A MERGER.
After the closing of a merger or business combination, it is likely our current
management will not retain any control or managerial responsibilities. Upon such
event, Mr. Taylor intends to resign from his positions with us.
CURRENT STOCKHOLDERS WILL BE IMMEDIATELY AND SUBSTANTIALLY DILUTED UPON A MERGER
OR BUSINESS COMBINATION.
Our Articles of Incorporation authorized the issuance of 75,000,000 shares of
Common Stock. There are currently 64,000,000 authorized but unissued shares of
Common Stock available for issuance. To the extent that additional shares of
Common Stock are authorized and issued in connection with a merger or business
7
combination, our stockholders could experience significant dilution of their
respective ownership interests. Furthermore, the issuance of a substantial
number of shares of Common Stock may adversely affect prevailing market prices,
if any, for the Common Stock and could impair our ability to raise additional
capital through the sale of equity securities.
CONTROL BY EXISTING STOCKHOLDER.
Mr. Taylor beneficially owns 72% of the outstanding shares of our Common Stock.
As a result, this stockholder is able to exercise control over matters requiring
stockholder approval, including the election of directors, and the approval of
mergers, consolidations and sales of all or substantially all of our assets.
OUR COMMON STOCK IS A "PENNY STOCK" WHICH MAY RESTRICT THE ABILITY OF
STOCKHOLDERS TO SELL OUR COMMON STOCK IN THE SECONDARY MARKET.
The SEC has adopted regulations which generally define "penny stock" to be an
equity security that has a market price, as defined, of less than $5.00 per
share, or an exercise price of less than $5.00 per share, subject to certain
exceptions, including an exception of an equity security that is quoted on a
national securities exchange. Our Common Stock is not now quoted on a national
exchange but is traded on FINRA's OTC Bulletin Board ("OTCBB"). Thus, they are
subject to rules that impose additional sales practice requirements on
broker-dealers who sell these securities. For example, the broker-dealer must
make a special suitability determination for the purchaser of such securities
and have received the purchaser's written consent to the transactions prior to
the purchase. Additionally, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the SEC relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered underwriter, and current quotations
for the securities, and, if the broker-dealer is the sole market maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, among other requirements, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. The "penny stock" rules,
may restrict the ability of our stockholders to sell our Common Stock and
warrants in the secondary market.
LIQUIDITY IS LIMITED, AND WE MAY BE UNABLE TO OBTAIN LISTING OF OUR COMMON STOCK
ON A MORE LIQUID MARKET.
Our Common Stock is quoted on the OTC Bulletin Board ("OTCBB"), which provides
significantly less liquidity than a securities exchange (such as the American or
New York Stock Exchange) or an automated quotation system (such as the Nasdaq
Global Market or Capital Market). There is uncertainty that we will ever be
accepted for a listing on an automated quotation system or national securities
exchange.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We do not currently own any property. The company's corporate documents are
stored at the home of our president for no charge. The telephone number is (206)
203-4100. The mailing address for the company is 711 S. Carson Street, Suite 4,
Carson City, NV 89701. This is the address of our resident agent in Nevada. Due
to the company's limited capital resources and the nature of its business we
determined this was the best arrangement for the company. Management believes
the current arrangement is sufficient for its needs at this time.
8
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
ITEM 4. MINE SAFETY DISCLOSURES
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our shares are quoted on the Over-the-Counter Electronic Bulletin Board (OTCBB)
under the symbol "LAKF". The OTCBB is a regulated quotation service that
displays real-time quotes, last sale prices and volume information in
over-the-counter securities. The OTCBB is not an issuer listing service, market
or exchange. Although the OTCBB does not have any listing requirements per se,
to be eligible for quotation on the OTCBB issuers must remain current in their
filings with the SEC or applicable regulatory authority. Securities quoted on
the OTCBB that become delinquent in their required filings will be removed
following a 30 or 60 day grace period if they do not make their required filing
during that time. We cannot guarantee that we will continue to have the funds
required to remain in compliance with our reporting obligations.
There has been no active trading of our securities, and, therefore, no high and
low bid pricing. As of the date of this report Lake Forest Minerals had
21shareholders of record. We have paid no cash dividends and have no outstanding
options.
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. Our shares constitute penny stock under the Securities and Exchange Act.
The shares will remain penny stocks for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, which makes it more difficult for a
purchaser to liquidate his/her investment. Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in us will be subject to
Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than
creating a need to comply with those rules, some broker-dealers will refuse to
attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document, which:
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- contains a description of the nature and level of risk in the market
for penny stock in both public offerings and secondary trading;
- contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties or other requirements of the
Securities Act of 1934, as amended;
- contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock and the
significance of the spread between the bid and ask price;
- contains a toll-free telephone number for inquiries on disciplinary
actions;
- defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
- contains such other information and is in such form (including
language, type, size and format) as the Securities and Exchange
Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- the bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the
transaction;
- the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
- monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
REPORTS
We are subject to certain filing requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountant, and will
furnish un-audited quarterly financial reports in our quarterly reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
TRANSFER AGENT
The company has retained Holladay Stock Transfer, Inc. of 2939 North 67th Place,
Suite C, Scottsdale, Arizona as transfer agent.
10
ITEM 6. SELECTED FINANCIAL DATA
Not required.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
We are still in our development stage and have not generated any revenue.
We incurred operating expenses of $13,044 and $14,576 for the years ended June
30, 2014 and 2013, respectively. For the year ended June 30, 2014 these expenses
consisted of $3,770 in general operating expenses and $9,274 in professional
fees incurred in connection with the day to day operation of our business and
the preparation and filing of our periodic reports. For the year ended June 30,
2013 these expenses consisted of $5,247 in general operating expenses and $9,329
in professional fees incurred in connection with the day to day operation of our
business and the preparation and filing of our periodic reports.
Our net loss from inception (June 23, 2008) through June 30, 2014 was $98,178.
Our auditors expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.
LIQUIDITY AND CAPITAL RESOURCES
Our cash in the bank at June 30, 2014 was $1,090 with $57,268 in current
liabilities. We have sold $42,000 in equity securities since inception, $12,000
from the sale of 8,000,000 shares of stock to our officer and director and
$30,000 from the sale of 3,000,000 shares registered pursuant to our S-1
Registration Statement which became effective on August 18, 2008. The offering
was completed on September 11, 2008.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEAR END - The Company's fiscal year end is June 30.
USE OF ESTIMATES - The preparation of the financial statements in conformity
with generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
INCOME TAXES - The Company provides for income taxes under ASC 740, Accounting
for Income Taxes. ASC 740 requires the use of an asset and liability approach in
accounting for income taxes. Deferred tax assets and liabilities are recorded
based on the differences between the financial statement and tax bases of assets
and liabilities and the tax rates in effect when these differences are expected
to reverse.
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ASC 740 requires the reduction of deferred tax assets by a valuation allowance
if, based on the weight of available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided
by applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
June 30, 2014 June 30, 2013
------------- -------------
Income tax expense at statutory rate $ 5,087 $ 5,685
Common stock issued for services -- --
Valuation allowance (5,087) (5,685)
Income tax expense per books $ -- $ --
Net deferred tax assets consist of the following components as of:
June 30, 2014 June 30, 2013
------------- -------------
NOL carryover $ 38,290 $ 33,203
Valuation allowance (38,290) (33,203)
Net deferred tax asset $ -- $ --
REVENUE RECOGNITION - The Company has no current source of revenue; therefore
the Company has not yet adopted any policy regarding the recognition of revenue
or cost.
NET LOSS PER COMMON SHARE - Basic net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the period. The calculation
of diluted net loss per share gives effect to common stock equivalents; however,
potential common shares are excluded if their effect is anti-dilutive. For the
period from June 23, 2008 (Date of Inception) through June 30, 2014 the Company
had no potentially dilutive securities.
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and
has not granted any stock options. Accordingly no stock-based compensation has
been recorded to date.
CASH AND CASH EQUIVALENTS - For purposes of Statements of Cash Flows, the
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents to the extent the funds are not
being held for investment purposes.
ADVERTISING COSTS - The Company's policy regarding advertising is to expense
advertising when incurred. The Company had not incurred any advertising expenses
as of June 30, 2014.
LONG-LIVED ASSETS - The carrying value of intangible assets and other long-lived
assets is reviewed on a regular basis for the existence of facts or
circumstances that may suggest impairment. The Company recognizes impairment
when the sum of the expected undiscounted future cash flows is less than the
carrying amount of the asset. Impairment losses, if any, are measured as the
excess of the carrying amount of the asset over its estimated fair value.
MINERAL PROPERTY COSTS - The Company has been in the exploration stage since its
inception on June 23, 2008 and has not yet realized any revenues from its
planned operations, being the acquisition and exploration of mining properties.
Mineral property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized when incurred. The Company assesses
12
the carrying costs for impairment at each fiscal quarter end. When it has been
determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs then incurred to develop
such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
RECENT ACCOUNTING PRONOUNCEMENTS - From June 30, 2014 through the filing date of
these financial statements, the FASB (Financial Accounting Standards Board)
issued various Accounting Standards Updates relating to the treatment and
recording of certain accounting transactions. Management has determined that
these recent accounting pronouncements will have no impact on the financial
statements of Lake Forest Minerals Inc.
PLAN OF OPERATION
Our plan is to seek, investigate, and consummate a merger or other business
combination, purchase of assets or other strategic transaction (i.e. a merger)
with a corporation, partnership, limited liability company or other operating
business entity (a "Merger Target") desiring the perceived advantages of
becoming a publicly reporting and publicly held corporation. We have no
operating business, and conduct minimal operations necessary to meet regulatory
requirements. Our ability to commence any operations is contingent upon
obtaining adequate financial resources.
We are not currently engaged in any business activities that provide cash flow.
The costs of investigating and analyzing business combinations for the next 12
months and beyond such time will be paid with money in our treasury.
During the next twelve months we anticipate incurring costs related to:
(i) filing of Exchange Act reports, and
(ii) costs relating to identifying and consummating a transaction with a
Merger Target.
We believe we will be able to meet these costs through use of funds in our
treasury and additional amounts, as necessary, to be loaned to or invested in us
by our stockholders, management or other investors.
We may consider a business which has recently commenced operations, is a
developing company in need of additional funds for expansion into new products
or markets, is seeking to develop a new product or service, or is an established
business which may be experiencing financial or operating difficulties and is in
need of additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.
Jeffrey Taylor is our president, secretary and our chief financial officer. Mr.
Taylor is only required to devote a small portion of his time to our affairs on
a part-time or as-needed basis. No regular compensation has, in the past, nor is
anticipated in the future, to be paid to any officer or director in their
capacities as such. We do not anticipate hiring any full-time employees as long
as we are seeking and evaluating business opportunities.
13
At June 30, 2014, we had cash on hand of $1,090. Since we have no revenue or
plans to generate any revenue, if our expenses exceed our cash currently on hand
we will be dependent upon loans to fund losses incurred in excess of our cash.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
14
ITEM 8. FINANCIAL STATEMENTS
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Lake Forest Minerals, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Lake Forest Minerals, Inc. (A
Development Stage Company) as of June 30, 2014 and 2013, and the related
statements of operations, stockholders' equity (deficit), and cash flows for the
years then ended and for the period since inception on June 23, 2008 through
June 30, 2014. Lake Forest Minerals, Inc.'s management is responsible for these
financial statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lake Forest Minerals, Inc. (A
Development Stage Company) as of June 30, 2014 and 2013, and the related
statements of operations, stockholders' equity (deficit), and cash flows for the
years then ended and for the period since inception on June 23, 2008 through
June 30, 2014 in conformity with accounting principles generally accepted in the
United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has no revenues, has negative working capital
at June 30, 2014, has incurred recurring losses and recurring negative cash flow
from operating activities, and has an accumulated deficit. These factors raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 5. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Seale and Beers, CPAs
-----------------------------------
Seale and Beers, CPAs
Las Vegas, Nevada
September 15, 2014
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107
Phone: (888)727-8251 Fax: (888)782-2351
15
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Balance Sheets
(Expressed in U.S. Dollars)
Audited as of Audited as of
June 30, 2014 June 30, 2013
------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 1,090 $ 1,009
-------- --------
Total Current Assets 1,090 1,009
-------- --------
Total Assets $ 1,090 $ 1,009
======== ========
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 5,768 $ 6,143
Due to related party 51,500 38,000
-------- --------
Total Current Liabilities 57,268 44,143
-------- --------
STOCKHOLDERS' EQUITY
Share Capital
10,000,000 authorized preferred shares, par value $0.001
nil ssued and outstanding
75,000,000 authorized shares, par value $0.001
11,000,000 shares issued and outstanding 11,000 11,000
Additional Paid-in-Capital 31,000 31,000
Deficit accumulated during development stage (98,178) (85,134)
-------- --------
Total Stockholders' Equity (Deficit) (56,178) (43,134)
-------- --------
Total Liabilities and Stockholders' Equity $ 1,090 $ 1,009
======== ========
The accompanying notes are an integral part of these financial statements.
16
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Statements of Operations
(Expressed in U.S. Dollars)
Period from
June 23, 2008
For the Year For the Year (Date of inception)
Ended Ended through
June 30, 2014 June 30, 2013 June 30, 2014
------------- ------------- -------------
REVENUES:
Revenues $ -- $ -- $ --
------------ ------------ ------------
Total Revenues -- -- --
EXPENSES:
Operating Expenses
Exploration expenses -- -- 5,000
Impairment of mineral property -- -- 7,500
General and Adminstrative 3,770 5,247 21,540
Professional Fees 9,274 9,329 64,138
------------ ------------ ------------
Total Expenses 13,044 14,576 98,178
------------ ------------ ------------
Loss from Operations (13,044) (14,576) (98,178)
PROVISION FOR INCOME TAXES:
Income Tax Benefit -- -- --
------------ ------------ ------------
Net Loss $ (13,044) $ (14,576) $ (98,178)
============ ============ ============
Basic and Diluted Earnings (Loss) Per
Common Share $ (0.00) $ (0.00)
============ ============
Weighted Average number of Common Shares
used in per share calculations 11,000,000 11,000,000
============ ============
The accompanying notes are an integral part of these financial statements.
17
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Statements of Stockholders' Equity
For the period from June 23, 2008 (inception) to June 30, 2014
(Expressed in U.S. Dollars)
$0.001 Paid-In Accumulated Stockholders'
Shares Par Value Capital Deficit Equity
------ --------- ------- ------- ------
Balance, June 23, 2008 (Date of Inception) -- $ -- $ -- $ -- $ --
Stock Issued for cash at $0.0015 per share
on June 26, 2008 8,000,000 8,000 4,000 -- 12,000
Net Loss for the Period (Audited) -- -- -- (6,239) (6,239)
---------- ------- ------- -------- --------
Balance, June 30, 2008 8,000,000 8,000 4,000 (6,239) 5,761
Stock Issued for cash at $0.01 per share
on September 11, 2008 3,000,000 3,000 27,000 -- 30,000
Net Loss for the Year (Audited) -- -- -- (20,013) (20,013)
---------- ------- ------- -------- --------
Balance, June 30, 2009 11,000,000 11,000 31,000 (26,252) 15,748
Net Loss for the Year (Audited) -- -- -- (19,582) (19,582)
---------- ------- ------- -------- --------
Balance, June 30, 2010 11,000,000 11,000 31,000 (45,834) (3,834)
Net Loss for the Year (Audited) -- -- -- (12,381) (12,381)
---------- ------- ------- -------- --------
Balance, June 30, 2011 11,000,000 11,000 31,000 (58,215) (16,215)
Net Loss for the Year (Audited) -- -- -- (12,343) (12,343)
---------- ------- ------- -------- --------
Balance, June 30, 2012 11,000,000 11,000 31,000 (70,558) (28,558)
Net Loss for the Year (Audited) -- -- -- (14,576) (14,576)
---------- ------- ------- -------- --------
Balance, June 30, 2013 11,000,000 11,000 31,000 (85,134) (43,134)
Net Loss for the Year (Audited) -- -- -- (13,044) (13,044)
---------- ------- ------- -------- --------
Balance, June 30, 2014 11,000,000 $11,000 $31,000 $(98,178) $(56,178)
========== ======= ======= ======== ========
The accompanying notes are an integral part of these financial statements.
18
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Statements of Cash Flows
(Expressed in U.S. Dollars)
Period from
For the Year For the Year June 23, 2008
Ended Ended (Date of inception) to
June 30, 2014 June 30, 2013 June 30, 2014
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(13,044) $(14,576) $(98,178)
Adjustments to reconcile net loss to net
cash used in operating activities:
Accounts payable (375) 955 5,768
Impairment of mineral property -- -- 7,500
-------- -------- --------
Net Cash Provided by (Used in) Operating Activities (13,419) (13,621) (84,910)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Mineral property option payment -- -- (7,500)
-------- -------- --------
Net Cash (Used in) Investing Activities -- -- (7,500)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common Stock issued for cash -- -- 42,000
Due to related party 13,500 14,000 51,500
-------- -------- --------
Net Cash Provided by Financing Activities 13,500 14,000 93,500
-------- -------- --------
Net Increase (Decrease) in Cash 81 379 1,090
-------- -------- --------
Cash Balance, Beginning of Period 1,009 630 --
-------- -------- --------
Cash Balance, End of Period $ 1,090 $ 1,009 $ 1,090
======== ======== ========
The accompanying notes are an integral part of these financial statements.
19
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
DESCRIPTION OF BUSINESS AND HISTORY - Lake Forest Minerals Inc., a Nevada
corporation, (hereinafter referred to as the "Company" or "Lake Forest
Minerals") was incorporated in the State of Nevada on June 23, 2008. The Company
was formed to engage in the acquisition, exploration and development of natural
resource properties of merit. During the initial period ending June 30, 2008,
the Company entered into an option agreement to acquire certain mineral claims
located in British Columbia (refer to Note 3).
On February 22, 2010 the Company provided notice to the Optionor, and terminated
the Option Agreement and relieved itself from any obligations thereunder.
The Company's operations have been limited to general administrative operations,
initial property staking and investigation, and is considered an Exploration
Stage Company in accordance with ASC 915.
THE COMPANY TODAY - The Company is currently a development stage company
reporting under the provisions of ASC 915 "Accounting and Reporting for
Development Stage Enterprises."
Since February 22, 2010, our purpose has been to serve as a vehicle to acquire
an operating business and we are currently considered a "shell" company inasmuch
as we are not generating revenues, do not own an operating business, and have no
specific plan other than to engage in a merger or acquisition transaction with a
yet-to-be identified operating company or business. We have no employees and no
material assets.
MANAGEMENT OF COMPANY - The Company filed its articles of incorporation with the
Nevada Secretary of State on June 23, 2008. The initial list of officers filed
with the Nevada Secretary of State on June 23, 2008, indicates the sole director
Jeffrey Taylor as the President, Secretary, and Treasurer.
YEAR END - The Company's fiscal year end is June 30.
USE OF ESTIMATES - The preparation of the financial statements in conformity
with generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
20
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
INCOME TAXES - The Company provides for income taxes under ASC 740, Accounting
for Income Taxes. ASC 740 requires the use of an asset and liability approach in
accounting for income taxes. Deferred tax assets and liabilities are recorded
based on the differences between the financial statement and tax bases of assets
and liabilities and the tax rates in effect when these differences are expected
to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance
if, based on the weight of available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided
by applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
June 30, 2014 June 30, 2013
------------- -------------
Income tax expense at statutory rate $ 5,087 $ 5,685
Common stock issued for services -- --
Valuation allowance (5,087) (5,685)
Income tax expense per books $ -- $ --
Net deferred tax assets consist of the following components as of:
June 30, 2014 June 30, 2013
------------- -------------
NOL carryover $ 38,290 $ 33,203
Valuation allowance (38,290) (33,203)
Net deferred tax asset $ -- $ --
REVENUE RECOGNITION - The Company has no current source of revenue; therefore
the Company has not yet adopted any policy regarding the recognition of revenue
or cost.
NET LOSS PER COMMON SHARE - Basic net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the period. The calculation
of diluted net loss per share gives effect to common stock equivalents; however,
potential common shares are excluded if their effect is anti-dilutive. For the
period from June 23, 2008 (Date of Inception) through June 30, 2014 the Company
had no potentially dilutive securities.
21
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Notes to the Financial Statements
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and
has not granted any stock options. Accordingly no stock-based compensation has
been recorded to date.
CASH AND CASH EQUIVALENTS - For purposes of Statements of Cash Flows, the
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents to the extent the funds are not
being held for investment purposes.
ADVERTISING COSTS - The Company's policy regarding advertising is to expense
advertising when incurred. The Company had not incurred any advertising expenses
as of June 30, 2014.
LONG-LIVED ASSETS - The carrying value of intangible assets and other long-lived
assets is reviewed on a regular basis for the existence of facts or
circumstances that may suggest impairment. The Company recognizes impairment
when the sum of the expected undiscounted future cash flows is less than the
carrying amount of the asset. Impairment losses, if any, are measured as the
excess of the carrying amount of the asset over its estimated fair value.
MINERAL PROPERTY COSTS - The Company has been in the exploration stage since its
inception on June 23, 2008 and has not yet realized any revenues from its
planned operations, being the acquisition and exploration of mining properties.
Mineral property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized when incurred. The Company assesses
the carrying costs for impairment at each fiscal quarter end. When it has been
determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs then incurred to develop
such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
RECENT ACCOUNTING PRONOUNCEMENTS - From June 30, 2014 through the filing date of
these financial statements, the FASB (Financial Accounting Standards Board)
issued various Accounting Standards Updates relating to the treatment and
recording of certain accounting transactions. Management has determined that
these recent accounting pronouncements will have no impact on the financial
statements of Lake Forest Minerals Inc.
2. PROPERTY AND EQUIPMENT
As of June 30, 2014, the Company does not own any property and/or equipment.
22
LAKE FOREST MINERALS INC.
(A Development Stage Company)
Notes to the Financial Statements
3. STOCKHOLDER'S EQUITY
The Company has 75,000,000 common shares and 10,000,000 preferred shares
authorized with a par value of $0.001 per share.
The Company has not issued any preferred shares since inception through June 30,
2014.
A total of 11,000,000 shares of the Company's common stock have been issued as
of June 30, 2014, 8,000,000 of these shares were issued to the sole director of
the Company pursuant to a stock subscription agreement at $0.0015 per share for
total proceeds of $12,000 on June 26, 2008. The remaining 3,000,000 shares of
the. Company's issued and outstanding common stock were issued at a price of
$0.01 per share for gross proceeds of $30,000.
4. RELATED PARTY TRANSACTIONS
Jeffrey Taylor, the sole officer and director of the Company was not paid for
any underwriting services that he performed on behalf of the Company with
respect to the Company's S-1 prospectus offering, filed August 6, 2008.
To June 30, 2014, Jeffrey Taylor loaned the Company $51,500 for operating
expenses, the loan bears no interest and has no specific terms of payment.
5. GOING CONCERN
The Company has incurred net losses of approximately $98,178 for the period from
June 23, 2008 (Date of Inception) through June 30, 2014 and has commenced
limited operations, raising substantial doubt about the Company's ability to
continue as a going concern. The Company will seek additional sources of capital
through the issuance of debt or equity financing, but there can be no assurance
the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on
additional sources of capital and the success of the Company's plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
6. SUBSEQUENT EVENTS
The Company's management has reviewed all material subsequent events through the
filing date of these financial statements in accordance with ASC 885-10, and has
determined that there are no material subsequent events to report.
23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer (our
president), we have conducted an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the
end of the period covered by this report. Based on this evaluation, our
principal executive officer and principal financial officer concluded as of the
evaluation date that our disclosure controls and procedures were effective such
that the material information required to be included in our Securities and
Exchange Commission reports is accumulated and communicated to our management,
including our principal executive and financial officer, recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms relating to our company, particularly during
the period when this report was being prepared.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, for the company.
Internal control over financial reporting includes those policies and procedures
that: (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of its management and directors; and (3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness
of any system of internal control, and accordingly, even effective internal
control can provide only reasonable assurance with respect to financial
statement preparation and may not prevent or detect material misstatements. In
addition, effective internal control at a point in time may become ineffective
in future periods because of changes in conditions or due to deterioration in
the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in there being a more than remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected.
Under the supervision and with the participation of our president, management
conducted an evaluation of the effectiveness of our internal control over
financial reporting, as of June 30, 2014, based on the framework set forth in
Internal Control-Integrated Framework issued by the Committee of Sponsoring
24
Organizations of the Treadway Commission (COSO). Based on our evaluation under
this framework, management concluded that our internal control over financial
reporting was not effective as of the evaluation date due to the factors stated
below.
Management assessed the effectiveness of the Company's internal control over
financial reporting as of evaluation date and identified the following material
weaknesses:
INSUFFICIENT RESOURCES: We have an inadequate number of personnel with requisite
expertise in the key functional areas of finance and accounting.
INADEQUATE SEGREGATION OF DUTIES: We have an inadequate number of personnel to
properly implement control procedures.
LACK OF AUDIT COMMITTEE & OUTSIDE DIRECTORS ON THE COMPANY'S BOARD OF DIRECTORS:
We do not have a functioning audit committee or outside directors on our board
of directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue
to use third party specialists to address shortfalls in staffing and to assist
the Company with accounting and finance responsibilities, (2) increase the
frequency of independent reconciliations of significant accounts which will
mitigate the lack of segregation of duties until there are sufficient personnel
and (3) may consider appointing outside directors and audit committee members in
the future.
Management, including our president, has discussed the material weakness noted
above with our independent registered public accounting firm. Due to the nature
of this material weakness, there is a more than remote likelihood that
misstatements which could be material to the annual or interim financial
statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to provide
only management's report in this annual report.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter for our fiscal year ended June 30, 2014
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
25
PART III
ITEM 10. DIRECTOR, EXECUTIVE OFFICER AND CORPORATE GOVERNANCE
The officer and director of Lake Forest Minerals, whose one year terms will
expire 6/30/15, or at such a time as his successor(s) shall be elected and
qualified is as follows:
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
Jeffrey Taylor 47 President, 6/24/08 6/30/15
711 S. Carson Street Secretary,
Suite 4 Treasurer,
Carson City, NV 89701 CFO, CEO &
Director
The foregoing person is a promoter of Lake Forest Minerals Inc., as that term is
defined in the rules and regulations promulgated under the Securities and
Exchange Act of 1933. Directors are elected to serve until the next annual
meeting of stockholders and until their successors have been elected and
qualified. Officers are appointed to serve until the meeting of the board of
directors following the next annual meeting of stockholders and until their
successors have been elected and qualified.
Jeffrey Taylor currently devotes 10 hours per week to company matters, in the
future he intends to devote as much time as the board of directors deems
necessary to manage the affairs of the company.
No executive officer or director of the corporation has been the subject of any
order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending or
otherwise limiting him or her from acting as an investment advisor, underwriter,
broker or dealer in the securities industry, or as an affiliated person,
director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities.
No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
BACKGROUND INFORMATION
JEFFREY TAYLOR has been the President, Secretary, Treasurer and a Director of
Lake Forest Minerals since June 24, 2008.
From 1995 to present Mr. Taylor has been the owner and operator of Stump
Grinding Northwest, a privately held company located in Washington State.
From 1993 to 1995 he worked as a loan officer for Home Lending Associates and
Eagle Mortgage in Bellevue, Washington.
From 1990 to 1992 he worked as an Urban Forester for Puget Power, a utility
company in Washington State.
Mr. Taylor earned a Bachelor of Science Degree in Forest Management from The
University of Washington in 1989.
26
CODE OF ETHICS
We do not currently have a code of ethics, because we have only limited business
operations and one officer and director, we believe a code of ethics would have
limited utility. We intend to adopt such a code of ethics as our business
operations expand and we have more directors, officers and employees.
ITEM 11. EXECUTIVE COMPENSATION
Our current officer receives no compensation. The current Board of Directors is
comprised of Jeffrey Taylor.
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Jeffrey 2014 0 0 0 0 0 0 0 0
Taylor, 2013 0 0 0 0 0 0 0 0
President, 2012 0 0 0 0 0 0 0 0
CFO & CEO
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Jeffrey 0 0 0 0 0 0 0 0 0
Taylor,
CEO & CFO
27
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Jeffrey Taylor, 0 0 0 0 0 0 0
Director
There are no current employment agreements between the company and its executive
officer.
In June 2008 Jeffrey Taylor purchased 8,000,000 shares of our common stock at
$0.0015 per share. The terms of these stock issuances were as fair to the
company, in the opinion of the board of directors, as could have been made with
an unaffiliated third party.
Mr. Taylor currently devotes approximately 10 hours per week to manage the
affairs of the company. He has agreed to work with no remuneration until such
time as the company receives sufficient revenues necessary to provide management
salaries. At this time, we cannot accurately estimate when sufficient revenues
will occur to implement this compensation, or what the amount of the
compensation will be.
For the year ended June 30, 2014 Jeffrey Taylor loaned the company $13,500 for
operating expenses. The loan balance at June 30, 2014 was $51,500; the loan
bears no interest and has no specific terms of repayment.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
company or any of its subsidiaries, if any.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information on the ownership of Lake Forest
Minerals voting securities by officers, directors and major shareholders as well
as those who own beneficially more than five percent of our common stock as of
the date of this annual report:
Name of No. of Percentage
Beneficial Owner(1) Shares of Ownership
------------------- ------ ------------
Jeffrey Taylor 8,000,000 72%
711 S. Carson Street
Suite 4
Carson City, NV 89701
All Officers and
Directors as a Group 8,000,000 72%
----------
(1) The person named may be deemed to be a "parent" and "promoter" of the
Company, within the meaning of such terms under the Securities Act of 1933,
as amended.
28
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
In June 2008 Mr. Taylor purchased 8,000,000 shares of our common stock at
$0.0015 per share. All of such shares are "restricted" securities, as that term
is defined by the Securities Act of 1933, as amended, and are held by the
officer and director of the Company. (See "Principal Stockholders".)
For the year ended June 30, 2014 Jeffrey Taylor loaned the company $13,500 for
operating expenses. The loan balance at June 30, 2014 was $51,500; the loan
bears no interest and has no specific terms of repayment.
There are no independent directors currently serving on the Board of Directors.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The total fees charged to the company for audit services were $8,000 for tax
services were $Nil and for other services were $Nil during the year ended June
30, 2014.
The total fees charged to the company for audit services were $8,000, for tax
services were $Nil and for other services were $Nil during the year ended June
30, 2013.
ITEM 15. EXHIBITS
Exhibit Description Method of Filing
------- ----------- ----------------
3.1 Articles of Incorporation Incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1 filed
with the SEC on August 6, 2008.
3.2 Bylaws Incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-1 filed
with the SEC on August 6, 2008.
31.1 Certification of Chief Executive Filed electronically herewith
Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Filed electronically herewith
Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Filed electronically herewith
Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
101 Interactive data files pursuant to Rule Filed electronically herewith
405 of Regulation S-T
29
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
/s/ Jeffrey Taylor September 22, 2014
------------------------------------- ------------------
Jeffrey Taylor, President & Director Date
(Principal Executive Officer,
Principal Financial Officer,
Principal Accounting Officer)
30