UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2007
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission file # 333-133232
KINGSTON MINES LTD.
(Exact Name of Registrant as Specified in its Charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0471111
(I.R.S. Employer Identification number)
102-2020 S.E. KENT AVE., VANCOUVER, BRITISH COLUMBIA V5P 4X5
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (604) 642-9561
106-1990 S.E. KENT AVE., VANCOUVER, BRITISH COLUMBIA V5P 4X5
(Former Name or Address if Changed Since Last Report)
Securities registered under Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK,
$0.0001 PAR VALUE
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. Yes [ x ] No [ ]
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 May 31, 2007, the Issuer had 9,250,250 shares of its Common Stock
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KINGSTON MINES LTD.
(An exploration stage company)
Balance Sheets
May 31, 2007
(EXPRESSED IN U.S. DOLLARS)
- ---------------------------------------------------------------------------------------------------------
May 31 August 31
2007 2006
- ---------------------------------------------------------------------------------------------------------
(audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 95,953 $ 6,804
Prepaid expenses - 2,500
Funds held by escrow agent 51,360 -
- ---------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS $147,313 $ 9,304
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS $147,313 $ 9,304
- ---------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
LIABILITIES
CURRENT LIABILITIES
Promissory note - Related Party - 4,297
Other payable 430
Accounts payable and accrued liabilities 829 14,827
- ---------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,259 19,124
CONVERTIBLE DEBENTURE - RELATED PARTY 15,000 15,000
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 16,259 34,124
- ---------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
SHARE CAPITAL
Authorized:
50,000,000 preferred shares at a par value of $0.0001 per share
Issued and outstanding: Nil
100,000,000 common shares with a par value of $0.0001 per share
Issued and outstanding: 9,250,000 common shares 525 400
(August 31, 2006: 8,000,000 common shares)
ADDITIONAL PAID-IN CAPITAL 125,674 463
Share subscriptions received 51,195 -
(DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (46,340) (25,683)
- ---------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 131,054 (24,820)
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $147,313 $ 9,304
=========================================================================================================
The accompanying notes are an integral part of these financial statements.
KINGSTON MINES LTD.
(An exploration stage company)
Statements of Stockholders' Equity (Deficiency)
For the period from June 16, 2005 (inception) to May 31, 2007
(EXPRESSED IN U.S. DOLLARS)
- ------------------------------------------------------------------------------------------------------------------------------------
Deficit
accumulated Total
Additional Share during stockholders'
Preferred Stock Common Stock paid-in subscriptions exploration equity
Shares Amount Shares Amount capital received stage (deficiency)
- ------------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
July 5, 2005 ($0.00005 per share) - $ - 8,000,000 $ 400 $ - $ - $ - $ 400
Imputed interest from a shareholder - - - - 13 - - 13
Loss and comprehensive loss for the period - - - - - - (6,313) (6,313)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2005 - $ - 8,000,000 $ 400 $ 13 $ - $ (6,313) $ (5,900)
- ------------------------------------------------------------------------------------------------------------------------------------
Imputed interest from a shareholder - - - - 450 - - 450
Loss and comprehensive loss for the year - - - - - - (19,370) (19,370)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2006 - $ - 8,000,000 $ 400 $ 463 $ - $ (25,683) $ (24,820)
- ------------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
February 28, 2007 ($0.10 per share) - $ - 1,250,000 $ 125 $ 124,875 $ - $ - $ 125,000
Accepted share subscriptions of
511,950 common shares at $0.10 per share - $ - - $ - $ - $ 51,195 - 51,195
Imputed interest from a shareholder - - - - 336 - - 336
Loss and comprehensive loss for the period - - - - - - (20,657) (20,657)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 2007 - $ - 9,250,000 $ 525 $ 125,674 $ 51,195 $ (46,340) $ 131,054
====================================================================================================================================
The accompanying notes are an integral part of these financial statements
KINGSTON MINES LTD.
(An exploration stage company)
Statements of Operations
(EXPRESSED IN U.S. DOLLARS)
- -------------------------------------------------------------------------------------------------------------------------
Cumulative from
June 16, 2005 Three months ended Nine months ended
(inception) to May 31 May 31
May 31, 2007 2007 2006 2007 2006
- -------------------------------------------------------------------------------------------------------------------------
EXPENSES
Accounting and audit $ 16,947 $ 1,166 $ 3,758 $ 7,282 $ 7,758
Legal fees 3,323 - 3,000 - 3,000
Bank charges 467 344 46 379 74
Filing fees 1,997 - - - -
Interest 1,073 385 113 610 337
Consulting fees 2,803 - - - 2,803
Office expenses 936 239 - 435 212
Transfer agent 4,329 2,328 - 4,329 -
Foreign exchange (gain) loss 40 (65) - (65) 105
Resource property acquisition and exploration costs 14,425 1,976 - 7,687 463
- -------------------------------------------------------------------------------------------------------------------------
LOSS FROM OPERATIONS 46,340 6,373 6,917 20,657 14,752
- -------------------------------------------------------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (46,340) $ (6,373) $ (6,917) $ (20,657) $ (14,752)
- -------------------------------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========================================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- - basic and diluted 9,250,000 8,000,000 8,421,245 8,000,000
=========================================================================================================================
The accompanying notes are an integral part of these financial statements
KINGSTON MINES LTD.
(An exploration stage company)
Statements of Cash Flows
(EXPRESSED IN U.S. DOLLARS)
- -------------------------------------------------------------------------------------------------------
Cumulative from
June 16, 2005 Nine months ended
(inception) to May 31
May 31, 2007 2007 2006
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net (Loss) for the period $ (46,340) $ (20,657) $ (14,752)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
- - imputed interest 799 336 337
Changes in operating assets and liabilities
- - (increase) in prepaid expenses - 2,500 (2,500)
- - accounts payable and accrued liabilities and other payable 1259 (13,568) 8,433
- -------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (44,282) (31,389) (8,482)
- -------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Increase in promissory note - Related Party - (4,297) -
Proceeds from convertible debenture - Related Party 15,000 - -
Proceeds from issuance of common stock / share subscriptions 176,595 176,195 -
- -------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 191,595 171,898 -
- -------------------------------------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 147,313 140,509 (8,482)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 6,804 15,394
- -------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 147,313 $ 147,313 $ 6,912
- -------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS COMPRISE OF:
CASH AND CASH EQUIVALENTS $ 95,953 $ 95,953 $ 6,912
FUNDS HELD IN ESCROW AGENT 51,360 51,360 -
$ 147,313 $ 147,313 $ 6,912
=======================================================================================================
The accompanying notes are an integral part of these financial statements
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Kingston Mines Ltd. (hereinafter "the Company") was incorporated in the State of
Nevada, U.S.A., on June 16, 2005. The Company's fiscal year end is August 31.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its operations. It is primarily engaged in the
acquisition and exploration of mining properties. Upon location of a
commercially minable reserve, the Company expects to actively prepare the site
for its extraction and enter a development stage. In 2005, the Company acquired
a mineral interest in a property located near the southern boundary of the Town
of Merritt in British Columbia, Canada and has not yet determined whether this
property contains reserves that are economically recoverable.
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America applicable to a
going concern which assume that the Company will realize its assets and
discharge its liabilities in the normal course of business. The Company has
incurred accumulated losses of $46,340 since inception and has no source of
revenue. The future of the Company is dependent upon its ability to obtain
financing and upon future acquisition, exploration and development of profitable
operations from its mineral properties. These factors create doubt as to the
ability of the Company to continue as a going concern. Realization values may
be substantially different from the carrying values as shown in these financial
statements should the Company be unable to continue as a going concern.
Management is in the process of identifying sources for additional financing to
fund the ongoing development of the Company's business.
On November 30, 2005, the board of directors approved a 2 for 1 forward stock
split of our issued and outstanding shares of common stock. These Financial
Statements of Kingston Mines Ltd. have been restated to reflect the 2 for 1
forward stock split.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
the generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates that have been made using careful judgment. The
financial statements have, in management's opinion been properly prepared within
reasonable limits of materiality and within the framework of the significant
accounting policies summarized below:
Accounting Method
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments and short-term debt instruments with original maturities of
three months or less to be cash equivalents. As at May 31, 2007, there were no
cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk
The Company places its cash and cash equivalents with high credit quality
financial institutions. As of May 31, 2007, the Company had no balance in a
bank beyond insured limits.
Foreign Currency Transactions
The Company is located and operating outside of the United States of America.
It maintains its accounting records in U.S. Dollars as follows:
At the transaction date each asset, liability, revenue and expense is translated
into U.S. dollars by the use of the exchange rate in effect at that date. At
the period end, monetary assets and liabilities are remeasured by using the
exchange rate in effect at that date. The resulting foreign exchange gains and
losses are included in operations.
Fair Value of Financial Instruments
The Company's financial instruments as defined by Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments," include cash and cash equivalents, accounts payable and accrued
liabilities, promissory note and convertible debenture. Fair values were
assumed to approximate carrying value for these financial instruments, except
where noted. Management is of the opinion that the Company is not exposed to
significant interest or credit risks arising from these financial instruments.
The Company is operating outside the United States of America and has
significant exposure to foreign currency risk due to the fluctuation of currency
in which the Company operates and U.S. dollars.
Mineral Property Payments and Exploration Costs
The Company expenses all costs related to the acquisition, maintenance and
exploration of mineral claims in which it has secured exploration rights prior
to establishment of proven and probable reserves. When it has been determined
that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs 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. To
date, the Company has not established the commercial feasibility of its
exploration prospects; therefore, all costs are being expensed.
Long-lived assets impairment
Long-term assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets.
Management considers assets to be impaired if the carrying value exceeds the
future projected cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets will be written
down to fair value. Fair value is generally determined using a discounted cash
flow analysis.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets retirement obligations
The Company has adopted SFAS No 143, Accounting for Assets Retirement
Obligations which requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred. SFAS
No. 143 requires the Company to record a liability for the present value of the
estimated site restoration costs with corresponding increase to the carrying
amount of the related long-lived assets. The liability will be accreted and the
asset will be depreciated over the life of the related assets. Adjustments for
changes resulting from the passage of time and changes to either the timing or
amount of the original present value estimate underlying the obligation will be
made. As at May 31, 2007, the Company does not have any asset retirement
obligations.
Costs associated with environmental remediation obligations will be accrued when
it is probable that such costs will be incurred and they can be reasonably
estimated.
Stock-Based Compensation
The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for
its stock options and similar equity instruments issued. Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over the
expected vesting period. SFAS No. 123(revised) requires excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
The Company did not grant any stock options during the period ended May 31,
2007.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS
130), Reporting Comprehensive Income, which establishes standards for reporting
and display of comprehensive income, its components and accumulated balances.
The Company is disclosing this information on its Statement of Stockholders'
Equity (Deficiency). Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners. The Company
has no elements of "other comprehensive income" for the period ended May 31,
2007.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109
(SFAS 109), Accounting for Income Taxes, which requires the Company to recognize
deferred tax liabilities and assets for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns using the liability method. Under this method, deferred tax liabilities
and assets are determined based on the temporary differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the differences are expected to reverse.
Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted loss per
common share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would be outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 153. This statement addresses the
measurement of exchanges of non-monetary assets. The guidance in APB Opinion
No. 29, "Accounting for Non-monetary Transactions," is based on the principle
that exchanges of non-monetary assets should be measured based on the fair value
of the assets exchanged. The guidance in that opinion; however, included
certain exceptions to that principle. This statement amends Opinion 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. A non-monetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. This statement is effective for
financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for non-monetary asset exchanges incurred during fiscal
years beginning after the date of this statement is issued. Management believes
the adoption will have no impact on the financial statements of the Company.
In May 2005, the FASB issued SFAS No. 154, entitled Accounting Changes and Error
Corrections--a replacement of APB Opinion No. 20 and FASB Statement No. 3. This
Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
the requirements for the accounting for and reporting of a change in accounting
principle. This Statement applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. Opinion 20 previously required that most voluntary changes in
accounting principle be recognized by including in net income of the period of
the change the cumulative effect of changing to the new accounting principle.
This Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. This Statement defines retrospective application as the application of a
different accounting principle to prior accounting periods as if that principle
had always been used or as the adjustment of previously issued financial
statements to reflect a change in the reporting entity. This Statement also
redefines restatement as the revising of previously issued financial statements
to reflect the correction of an error. The adoption of SFAS 154 did not impact
the financial statements.
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, "Accounting for Uncertainties in Income Taxes", ("FIN
48"). FIN 48 clarifies the accounting for uncertainty in income taxes and
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 is effective for financial statements as of
December 15, 2006. The adoption of FIN 48 is expected to have no impact on the
Company's financial statements.
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements but does not require any new fair value measurements.
FAS 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. The
Company has not yet determined the impact of applying FAS 157.
In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 158, "Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans", ("FAS 158"). FAS 158 requires an employer to recognize
the overfunded or underfunded status of a defined benefit postretirement plan
(other than a multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income. FAS 158 is effective for
financial statements as of December 31, 2006. The adoption of FAS No. 158 is
expected to have no impact on the Company's financial statements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. SFAS No. 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between entities that choose
different measurement attributes for similar types of assets and liabilities.
SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.
The Company has not yet determined whether it will elect the fair value option
for any of its financial instruments.
NOTE 3 - MINERAL PROPERTY INTEREST
On August 30, 2005 the Company acquired a 100% interest in a mineral claim from
its principal shareholder and a director of the Company, known as the "Sugarloaf
Property" located near the southern boundary of the Town of Merritt in British
Columbia, Canada, for consideration of $4,297 being the cost to the principal
shareholder, by issuance of a promissory note. The Company expensed the entire
amount.
On November 21, 2005, the Company acquired a 100% interest in four claims that
are contiguous with the Company's other mineral claim and are located near the
southern boundary of the Town of Merritt in British Columbia, Canada. The total
cost of acquisition of these claims was $463. The Company expensed entire
amount.
NOTE 4 - PROMISSORY NOTE
On August 30, 2005, the Company issued a non-interest bearing promissory note to
its principal shareholder and a director in the amount of $4,297 for the
purchase of the mineral property (See Note 3). The promissory note was repaid
in full on March 5, 2007.
NOTE 5 - CONVERTIBLE DEBENTURE
On August 22, 2005, the Company issued a convertible debenture to its principal
shareholder and a director in the amount of $15,000. The convertible debenture
is unsecured, non-interest bearing, due December 31, 2007 and convertible at the
option of the holder at a price of $0.25 per share at any time. The Company
charged imputed interest at 3.0% per annum and recorded a total of $799 to the
additional paid-in capital for the period from inception to May 31, 2007.
The Company did not incur beneficial conversion charges because the conversion
price is greater than the fair value of the equity of the Company.
NOTE 6 - PREFERRED AND COMMON STOCK
The Company has 50,000,000 shares of preferred stock authorized and none issued.
The Company has 100,000,000 shares of common stock authorized, of which
8,000,000 shares are issued and outstanding. All shares of common stock are
non-assessable and non-cumulative, with no preemptive rights.
On February 28, 2007, the Company's Board of Directors approved, accepted and
issued 1,250,000 shares of common stock subscription for cash proceeds of
$125,000.
NOTE 7 - SEGMENT INFORMATION
The Company currently conducts all of its operations in Canada
NOTE 8 - SUBSEQUENT EVENTS
Subsequent to May 31, 2007, the Company's Board of Directors approved and issued
511,950 shares of common stock subscription for cash proceeds of $51,195.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We are a mineral resource exploration stage company that has not begun
operations. Our capital has been obtained via issuance of common stock and
shareholder loans.
On September 12, 2006, the Securities and Exchange Commission declared our Form
SB-2 Registration Statement (Commission File No. 333-133232) effective. Our
offering commenced on September 12, 2006, and is ongoing. We have sold
1,761,950 shares of our common stock through the offering for gross proceeds of
$176,195.
As of May 31, 2007, we had total assets of $147,313, comprised of $95,953 in
cash and $51,360 held in escrow by our transfer agent. This is an increase from
$9,304 in total assets as of August 31, 2006, and is entirely due to our public
offering.
As of May 31, 2007, our total liabilities decreased to $16,259 from $34,124 as
of August 31, 2006, due primarily to the payment of trade creditors.
As of May 31, 2007, we had working capital of $146,054 compared with a working
capital deficit of $9,820 as of August 31, 2006.
We have not generated revenue since the date of inception. We presently have
sufficient working capital to satisfy our cash requirements for the next 12
months of operations.
We do not intend to purchase any significant equipment during the next 12
months.
We do not anticipate hiring any employees over the next 12 months.
RESULTS OF OPERATIONS
We posted an operating loss of $6,373 for the three month period ending May 31,
2007, due primarily to renewal of the original Sugarloaf claim, transfer agent
fees and quarterly review fees. This was a nominal decrease from the operating
loss of $6,917 for the three month period ending May 31, 2005.
ITEM 3. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the
end of the period covered by this quarterly report, being May 31, 2007, we have
carried out an evaluation of the effectiveness of the design and operation of
our company's disclosure controls and procedures. This evaluation was carried
out under the supervision and with the participation of our company's
management, including our company's president. Based upon that evaluation, our
company's president concluded that our company's disclosure controls and
procedures are effective as at the end of the period covered by this report.
There have been no significant changes in our internal controls over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect our internal
controls over financial reporting.
Disclosure controls and procedures and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time period specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934 is accumulated and communicated to management, including
our president and secretary as appropriate, to allow timely decisions regarding
required disclosure.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings and to its
knowledge, no such proceedings are threatened or contemplated.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
At present, our common stock is not traded publicly.
As of July 5, 2007, there were 88 owners of record of our common stock.
DIVIDEND POLICY
Our Board of Directors may declare and pay dividends on outstanding shares of
common stock out of funds legally available therefor in our sole discretion;
however, to date no dividends have been paid on common stock and we do not
anticipate the payment of dividends in the foreseeable future.
USE OF PROCEEDS FROM REGISTERED SECURITIES
On September 12, 2006, the Securities and Exchange Commission declared our Form
SB-2 Registration Statement (Commission File No. 333-130922) effective. Our
offering commenced on the effective date and terminated on May 13, 2007. As of
May 31, 2007, we have sold 1,761,950 shares of our common stock for gross
proceeds of $176,195, which 511,950 common shares have been approved and issued
subsequent to May 31, 2007.
We budgeted $25,000 from the proceeds of our offering for offering expenses. Of
this amount, we paid a total of $9,665 for accounting fees. All other offering
expenses were paid from the proceeds of a non-interest bearing loan of $15,000
from a director advanced prior to the commencement of our offering. We will use
the remainder of the amount budgeted for offering expenses ($15,335) to repay
the director's loan in full, with the surplus ($335) being used for working
capital.
After paying offering expenses and repaying the director's loan, net proceeds
from our offering that are available for operations are $151,530. As of May 31,
2007, we spent $399 on office expenses, $19,113 for professional fees, and
$9,790 on claim maintenance. Professional fees significantly exceeded our
budgeted amount of $10,000 due to higher than expected accounting costs. Claim
maintenance fees also exceeded budgeted amounts due to fluctuations in currency
exchange rates.
We budgeted $6,323 from the proceeds of our offering for the repayment of a debt
owing to a director. This debt was repaid from the proceeds of the director's
loan. The proceeds that would otherwise have been allocated for debt repayment
will be used to pay for professional fees.
ITEM 3. DEFAULT UPON SENIOR NOTES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
EXHIBIT DESCRIPTION
31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Officers' Certification
32.2 Officers' Certification
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
KINGSTON MINES LTD.
By:/s/ Lou Hilford
Lou Hilford
President, Chief Executive Officer and a director
(Principal Executive Officer)
By:/s/ Thomas Mills
Thomas Mills
Vice-President, Treasurer, Secretary and a director
(Principal Financial Officer and Principal Accounting Officer)
Date: July 5, 2007