UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
October 31, 2012
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission File Number
000-54700
GOLD AND GEMSTONE MINING
INC.
(Exact name of registrant as specified in its
charter)
Nevada
|
98-0642269
|
(State or other jurisdiction of incorporation or
organization)
|
(IRS Employer Identification No.)
|
|
|
2144 Whitekirk Way, Draper, Utah
|
84020
|
(Address of principal executive offices)
|
(Zip Code)
|
(801) 882-1179
(Registrants telephone number,
including area code)
N/A
(Former name, former address and former
fiscal year, if changed since last report)
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.
[X] YES [ ] 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 (§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).
[X] YES [ ] NO
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [X]
|
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act
[ ] YES [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
[ ]
YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable
date.
150,750,000 common shares issued and outstanding as of December
13, 2012.
GOLD AND GEMSTONE MINING INC.
Form 10-Q
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
3
GOLD AND GEMSTONE MINING INC.
(FORMERLY GLOBAL GSM
SOLUTIONS, INC.)
(AN EXPLORATION STAGE COMPANY)
FINANCIAL STATEMENTS
OCTOBER 31, 2012
4
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
BALANCE SHEETS (unaudited)
|
AS OF OCTOBER 31, 2012 AND JANUARY 31, 2012
|
|
|
October 31,
|
|
|
|
|
|
|
2012
|
|
|
January 31, 2012
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
25,000
|
|
$
|
0
|
|
Prepaid expenses
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
$
|
25,000
|
|
$
|
0
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
Accrued expenses
|
$
|
70,435
|
|
$
|
6,873
|
|
Accrued interest
|
|
257
|
|
|
0
|
|
Due to related
parties
|
|
25,733
|
|
|
10,436
|
|
Convertible loan payable
|
|
33,855
|
|
|
0
|
|
Total Liabilities
|
|
130,280
|
|
|
17,309
|
|
|
|
|
|
|
|
|
Stockholders Equity (Deficit)
|
|
|
|
|
|
|
Common stock, $0.001 par
value, 400,000,000 shares authorized,
150,750,000 (January 31, 2012-7,350,000 shares issued and outstanding,
respectively )
|
|
5,395
|
|
|
7,350
|
|
Additional paid
in capital
|
|
31,445
|
|
|
29,490
|
|
Deficit accumulated during the
development stage
|
|
(142,120
|
)
|
|
(54,149
|
)
|
Total Stockholders Equity (Deficit)
|
|
(105,280
|
)
|
|
(17,309
|
)
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
(DEFICIT)
|
$
|
25,000
|
|
$
|
0
|
|
See accompanying notes to financial statements.
F-1
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
STATEMENTS OF OPERATIONS (unaudited)
|
FOR THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31,
2012 AND 2011
|
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO
OCTOBER 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
Nine
|
|
|
|
|
|
March 5,
|
|
|
|
Three months
|
|
|
|
|
|
months
|
|
|
|
|
|
2008
|
|
|
|
ended
|
|
|
Three months
|
|
|
ended
|
|
|
Nine months
|
|
|
(Inception)
|
|
|
|
October 31,
|
|
|
ended October
|
|
|
October
|
|
|
ended October
|
|
|
to October
|
|
|
|
2012
|
|
|
31,
2011
|
|
|
31,
2012
|
|
|
31,
2011
|
|
|
31,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporation costs
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
840
|
|
Professional fees
|
|
2,025
|
|
|
1,716
|
|
|
28,905
|
|
|
4,287
|
|
|
59,635
|
|
Consulting
|
|
15,000
|
|
|
0
|
|
|
52,000
|
|
|
0
|
|
|
52,000
|
|
Transfer
agent expense
|
|
0
|
|
|
4,916
|
|
|
6,809
|
|
|
10,116
|
|
|
23,208
|
|
General and
administrative
|
|
236
|
|
|
973
|
|
|
257
|
|
|
3,293
|
|
|
6,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OPERATING EXPENSES
|
|
17,261
|
|
|
7,605
|
|
|
87,971
|
|
|
17,696
|
|
|
142,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE INCOME
TAXES
|
|
(17,261
|
)
|
|
(7,605
|
)
|
|
(87,971
|
)
|
|
(17,696
|
)
|
|
(142,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
$
|
(17,261
|
)
|
$
|
(7,605
|
)
|
$
|
(87,971
|
)
|
$
|
(17,696
|
)
|
$
|
(142,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC
AND DILUTED
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED (as
adjusted
for 45:1 stock split)
|
|
150,750,000
|
|
|
330,750,000
|
|
|
210,750,000
|
|
|
330,750,00
|
|
|
|
|
See accompanying notes to financial statements.
F-2
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
(unaudited)
|
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO
OCTOBER 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
Deficit accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
during the
|
|
|
|
|
|
|
Common stock
|
|
|
Additional paid in
|
|
|
exploration
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inception, March 5, 2008
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period from March 5, 2008
(inception) to January 31, 2009
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(840
|
)
|
|
(840
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2009
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(840
|
)
|
|
(840
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued at $0.001 per share for cash
|
|
6,000,000
|
|
|
6,000
|
|
|
-
|
|
|
-
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the fiscal year ended January 31, 2010
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,900
|
)
|
|
(4,900
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2010
|
|
6,000,000
|
|
|
6,000
|
|
|
-
|
|
|
(5,740
|
)
|
|
260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued at $0.02 per share for cash
|
|
1,350,000
|
|
|
1,350
|
|
|
25,650
|
|
|
-
|
|
|
27,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended January 31, 2011
|
|
|
|
|
|
|
|
|
|
|
(20,108
|
)
|
|
(20,108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2011
|
|
7,350,000
|
|
|
7,350
|
|
|
25,650
|
|
|
(25,848
|
)
|
|
7,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forgiveness of shareholder debt
|
|
-
|
|
|
-
|
|
|
3,840
|
|
|
-
|
|
|
3,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended January 31, 2012
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(28,301
|
)
|
|
(28,301
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2012
|
|
7,350,000
|
|
|
7,350
|
|
|
29,490
|
|
|
(54,149
|
)
|
|
(17,309
|
)
|
Share split 45:1
|
|
323,400,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
Shares returned for voluntary cancellation
|
|
(180,000,000
|
)
|
|
(1,955
|
)
|
|
1,955
|
|
|
-
|
|
|
0
|
|
Net loss for the period ended October 31,
2012
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(87,971
|
)
|
|
(87,971
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, October 31, 2012
|
|
150,750,000
|
|
$
|
5,395
|
|
$
|
31,445
|
|
$
|
(142,120
|
)
|
$
|
(105,280
|
)
|
See accompanying notes to financial statements.
F-3
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
STATEMENTS OF CASH FLOWS (unaudited)
|
FOR THE NINE MONTHS OCTOBER 31, 2012 AND 2011
|
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO
OCTOBER 31, 2012
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
March 5, 2008
|
|
|
|
Nine months
|
|
|
Nine months
|
|
|
(Inception) to
|
|
|
|
ended October
|
|
|
ended October
|
|
|
October 31,
|
|
|
|
31,
2012
|
|
|
31,
2011
|
|
|
2012
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
$
|
(87,971
|
)
|
$
|
(17,696
|
)
|
$
|
(142,120
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in
prepaid expenses
|
|
0
|
|
|
7,700
|
|
|
0
|
|
Increase
(decrease) in accrued expenses
|
|
63,819
|
|
|
1,954
|
|
|
70,692
|
|
Net Cash Used in Operating Activities
|
|
(24,152
|
)
|
|
(8,042
|
)
|
|
(71,428
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds
from due to related party loan
|
|
15,297
|
|
|
0
|
|
|
29,573
|
|
Proceeds from convertible
loan
|
|
33,855
|
|
|
|
|
|
33,855
|
|
Proceeds
from sale of common stock
|
|
0
|
|
|
0
|
|
|
33,000
|
|
Net Cash Provided by Financing Activities
|
|
49,152
|
|
|
0
|
|
|
96,428
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
25,000
|
|
|
(8,042
|
)
|
|
25,000
|
|
Cash, beginning of period
|
|
0
|
|
|
8,042
|
|
|
0
|
|
Cash, end of period
|
$
|
25,000
|
|
$
|
0
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Income taxes paid
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL NON-CASH INVESTING AND
FINANCING
INFORMATION:
|
|
|
|
|
|
|
|
|
|
Forgiveness of shareholder debt
|
$
|
0
|
|
$
|
0
|
|
$
|
3,840
|
|
See accompanying notes to financial statements.
F-4
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO THE FINANCIAL STATEMENTS
|
OCTOBER 31, 2012
|
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Description of Business
Gold and
GemStone Mining Inc. (formerly Global GSM Solutions, Inc.) (the Company) was
incorporated under the laws of the State of Nevada, U.S. on March 5, 2008.
On April 24, 2012, the Company amended its articles of
incorporation to the change the name of the Company to Gold and GemStone Mining
Inc. The Company's principal business is the acquisition and exploration of
mineral resources.
Exploration Stage Company
The Company is an
Exploration Stage Company, as defined by Financial Accounting Standards Board
(FASB) Accounting Standards Codification ("ASC") 915,
Development Stage
Entities
.
Basis of Presentation
The financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles in the United States of America and are presented in US dollars.
Accounting Basis
The accompanying interim financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America and the rules of the Securities and
Exchange Commission (SEC). In the opinion of management, all adjustments
necessary in order for the financial statements to be not misleading have been
reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year.
Cash and Cash Equivalents
The Company considers all
highly liquid investments with the original maturities of three months or less
to be cash equivalents. The Company had $25,000 and $0 of cash as of October 31,
2012 and January 31, 2012, respectively.
Fair Value of Financial Instruments
The Companys
financial instruments consist of cash and cash equivalents, prepaid expenses,
accrued expenses and amounts due to a related party. The carrying amount of
these financial instruments approximates fair value due either to length of
maturity or interest rates that approximate prevailing market rates unless
otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the
asset and liability method. Under the asset and liability method, deferred
income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the currently enacted tax rates and laws. A valuation allowance
is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
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 the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
F-5
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO THE FINANCIAL STATEMENTS
|
OCTOBER 31, 2012
|
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Revenue Recognition
The Company recognizes revenue
when products are fully delivered or services have been provided and collection
is reasonably assured.
Stock-Based Compensation
Stock-based compensation is
accounted for at fair value in accordance with ASC Topic 718. To date, the
Company has not adopted a stock option plan and has not granted any stock
options.
Basic Income (Loss) Per Share
Basic income (loss) per
share is calculated by dividing the Companys net loss applicable to common
shareholders by the weighted average number of common shares during the period.
Diluted earnings per share is calculated by dividing the Companys net income
available to common shareholders by the diluted weighted average number of
shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of October 31, 2012.
Comprehensive Income
The Company has which
established standards for reporting and display of comprehensive income, its
components and accumulated balances. When applicable, the Company would disclose
this information on its Statement of Stockholders Equity. Comprehensive income
comprises equity except those resulting from investments by owners and
distributions to owners. The Company has not had any significant transactions
that are required to be reported in other comprehensive income.
Recent Accounting Pronouncements
The Company does not
expect the adoption of recently issued accounting pronouncements to have a
significant impact on the Companys results of operations, financial position or
cash flow.
NOTE 2 GOING CONCERN
The financial statements have been prepared on a going concern
basis which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
of $142,120 as of October 31, 2012 and further losses are anticipated in the
development of its business raising substantial doubt about the Companys
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand and loans from directors and or private placement of
common stock.
F-6
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO THE FINANCIAL STATEMENTS
|
OCTOBER 31, 2012
|
NOTE 3 ACCRUED EXPENSES
Accrued expenses consisted of the following at October 31, 2012
and January 31, 2012:
|
|
October 31,
|
|
|
January 31,
|
|
|
|
2012
|
|
|
2012
|
|
Audit fees
|
$
|
0
|
|
$
|
4,200
|
|
Accounting fees
|
|
4,575
|
|
|
525
|
|
Legal
|
|
16,871
|
|
|
768
|
|
Consulting
|
|
45,000
|
|
|
0
|
|
Transfer agent
|
|
2,859
|
|
|
250
|
|
Promotion
|
|
1,130
|
|
|
1,130
|
|
|
$
|
70,435
|
|
$
|
6,873
|
|
NOTE 4 DUE TO RELATED PARTIES
An officer loaned $840 to the Company on March 5, 2008 and an
additional $3,000 to the Company during the year ended January 31, 2011. The
loans were due on demand, non-interest bearing and unsecured. The loans were
forgiven during the year ended October 31, 2012 and recorded as contributed
capital in accordance with ASC 470-50. The total due to the officer was $0 and
$3,840 as of October 31, 2012 and January 31, 2012 respectively.
During the period ended October 31, 2012, a shareholder and
officer paid for expenses totaling $15,297. The total amount due to this
shareholder and officer at October 31, 2012 is $25,733. The amount is unsecured,
non-interest bearing and due on demand.
NOTE 5 CONVERTIBLE LOANS PAYABLE
The convertible promisors note payable in the amount of $ 8,855
bears interest at 8% and is due July 18, 2013. The loan can be converted into
common shares of the company at fair market value, determined as the share price
at the last private offering or the 30 day average of the Common Stock.
On October 31, 2012, the Company signed a promissory note
payable in the amount of $ 25,000, bearing interest at 6% per annum due October
31, 2013. The loan can be converted into common shares of the company at fair
market value, determined as the share price at the last private offering or the
30 day average of the Common stock.
NOTE 6 COMMON STOCK
The Company has 400,000,000 common shares authorized with a par
value of $ 0.001 per share.
On January 19, 2010, the Company issued 6,000,000 shares of its
common stock at $0.001 per share for total cash proceeds of $6,000.
On October 28, 2010, the Company issued 1,350,000 shares of its
common stock at $0.02 per share to total cash proceeds of $27,000.
On April 24, 2012, the Company increased the authorized capital
from 75,000,000 to 400,000,000 shares of $0.001 par value common stock.
F-7
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO THE FINANCIAL STATEMENTS
|
OCTOBER 31, 2012
|
NOTE 6 COMMON STOCK (continued)
On May 4, 2012, the Company effected a 45:1 share split. At the
same time, 180,000,000 shares of common stock were returned for voluntary
cancellation.
Total shares of common stock outstanding as of October 31, 2012
and 2011 were 150,750,000 and 7,350,000 respectively.
NOTE 7 COMMITMENTS
The Company neither owns nor leases any real or personal
property. An officer has provided office services without charge. There is no
obligation for the officer to continue this arrangement. Such costs are
immaterial to the financial statements and accordingly are not reflected herein.
The officers and directors are involved in other business activities and most
likely will become involved in other business activities in the future.
On May 4, 2012, the Company entered into a collaboration
agreement (the JV Agreement) with Ridgeback Mining (Sierra Leone) Limited
(RMSL) regarding a joint venture on three prospective diamond and gold
properties in Sierra Leone (the Properties). Pursuant to the JV Agreement, the
Company has initiated the incorporation of Gold and Gemstone Sierra Leone
Limited, a Sierra Leone company (the JV Company). The shares capital of the JV
Company is distributed equally between our company and the shareholders of RMSL,
with our company holding fifty percent and profits will be distributed evenly as
well. Pursuant to the terms of the JV Agreement, RMSL will transfer the
Properties into JV Company and we will provide ongoing financing for all joint
venture operations. Our investment into the JV Company is required to reach
$1,500,000 per concession for an aggregate total of $4,500,000 within the first
twelve months of operation. If we do not invest the required $1,500,000 per
concession within the first twelve months, each concession for which the
requirement was not fulfilled will be returned to the ownership of RMSL. In
conjunction with the execution of the JV Agreement, on May 4, 2012 our companys
majority shareholders took a number of actions to reconfigure our capital
structure. Our former directors and officers, Gennady Fedosov and Anna Ivashenko
cancelled an aggregate of 180,000,000 shares of our common stock and transferred
an additional 88,000,000 to incoming management.
NOTE 8 INCOME TAXES
As of October 31, 2012, the Company had net operating loss
carry forwards of approximately $142,000 that may be available to reduce future
years taxable income in varying amounts through 2032. Future tax benefits which
may arise as a result of these losses have not been recognized in these
financial statements, as their realization is determined not likely to occur and
accordingly, the Company has recorded a valuation allowance for the deferred tax
asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following
at October 31, 2012 and 2011:
|
|
2012
|
|
|
2011
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
Current operations
|
$
|
29,910
|
|
$
|
6,015
|
|
Less: valuation
allowance
|
|
(29,910
|
)
|
|
(6,015
|
)
|
Net provision for Federal income taxes
|
$
|
0
|
|
$
|
0
|
|
F-8
GOLD AND GEMSTONE MINING INC.
|
(FORMERLY GLOBAL GSM SOLUTIONS, INC.)
|
(AN EXPLORATION STAGE COMPANY)
|
NOTES TO THE FINANCIAL STATEMENTS
|
OCTOBER 31, 2012
|
NOTE 8 INCOME TAXES (continued)
The cumulative tax effect at the expected rate of 34% of
significant items comprising our net deferred tax amount is as follows as of
October 31, 2012 and January 31, 2012:
|
|
October 31,
|
|
|
January 31,
|
|
|
|
2012
|
|
|
2012
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
Net operating loss carryover
|
$
|
48,321
|
|
$
|
18,411
|
|
Less: valuation
allowance
|
|
(48,321
|
)
|
|
(18,411
|
)
|
Net deferred tax asset
|
$
|
0
|
|
$
|
0
|
|
Due to the change in ownership provisions of the Tax Reform Act
of 1986, net operating loss carry forwards of approximately $142,120 for Federal
income tax reporting purposes are subject to annual limitations. Should a change
in ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 9 SUBSEQUENT EVENTS
As of October 22, 2012 RMSL notified both the Nimikoro Chiefdom
and the Nimiyama Chiefdom that RMSL has assigned the respective concession in to
the JV Company effective October 29, 2012. The notice confirmed that the Company
will have 12 months from the date of the assignment to raise $1,500,000 for each
concession in to the JV Company or the concessions will revert back to RMSL.
On November 28, 2012, the Company entered into two separate
agreements for the exploration and development of mineral properties in Africa.
The agreements are summarized as follows:
|
1.
|
Joint venture agreement between the Company and TTM
Global Enterprises Ltd., a company incorporated under the laws of the U.K.
This agreement relates to the investment by the Company into a 30%
interest in mining operations in Siguiri, Guinea, Africa. The term of the
agreement is 90 days, within which the Company is required to provide
financing of $1,500,000 and take on the financial responsibilities for all
administrative fees associated with operations on the property. Of the
$1,500,000, $250,000 is a fee to TTM Global for acquiring the 30% interest
in the property. The $250,000 is to be delivered to TTM Global within 30
days of signing the TTM Global joint venture agreement and the remaining
$1,250,000 must be provided within 90 days. If the Company is not able to
provide the required funds, the agreement terminates.
|
|
|
|
|
2.
|
Joint venture agreement between the Company and Blue
Orange Mining Limited, a company incorporated under the laws of Ghana.
This agreement relates to the investment by the Company into a 50%
interest in thirteen gold concessions within the Ashanti-belt in Ghana.
The term of the agreement is 90 days, within which the Company is required
to provide financing of $5,000,000 towards the joint venture. Of the
$5,000,000, $500,000 is a fee payable to Blue Orange for acquiring the 50%
interest in the concessions. The $500,000 is to be delivered to Blue
Orange within 30 days of signing the Blue Orange joint venture and the
remaining $4,500,000 must be provided within 90 days. If the Company is
not able to provide the required funds, the agreement
terminates.
|
On December 3, 2012, the Company appointed Mr. Martin Hall and
Mr. Michael Arnold to its board of directors, bringing the total members of the
board of directors to five. Mr. Hall will also serve as the chairman of the
Companys board of directors and Mr. Arnold will also serve as vice president of
international business development.
F-9
In accordance with ASC 855-10, the Company has analyzed its
operations subsequent to October 31, 2012 to the date these financial statements
were issued, and has determined that it does not have any material subsequent
events to disclose in these financial statements other than the events described
above.
F-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, which may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Unless otherwise specified in this quarterly report, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to shares of our common stock.
As used in this quarterly report, the terms we, us, our
and our company mean Gold and GemStone Mining Inc., unless otherwise
indicated.
General Overview
We were incorporated in the State of Nevada as a for-profit
company on March 5, 2008 under the name Global GSM Solutions Inc. We established
a fiscal year end of January 31. We do not have revenues, have minimal assets
and have incurred losses since inception. Our company was originally formed to
develop, manufacture, and distribute our product and services to the gaming and
vending industry that allows remote monitoring of amusement and vending devices.
Our product was intended to improve security, productivity, and profitability of
devices such as arcade games, toy dispensing machines, redemption games and
vending machines. We were not able to raise sufficient capital to carry out our
business plan and our management changed our focus to acquiring operating assets
or businesses. On May 4, 2012 we entered into a collaboration agreement (the JV
Agreement) and changed our business to that of mineral exploration.
Our common stock was initially approved for quotation on the
OTC Bulletin Board under the symbol GGSM on December 27, 2010. On April 24,
2012, we filed a Certificate of Amendment with the Nevada Secretary of State to
change our name from Global GSM Solutions Inc. to Gold and GemStone Mining Inc.
and to increase our authorized capital from 75,000,000 to 400,000,000 shares of
common stock, par value of $0.001. These amendments became effective on April
30, 2012 upon approval from the Financial Industry Regulatory Authority
(FINRA). Also effective April 30, 2012, our issued and outstanding shares of
common stock increased from 7,350,000 to 330,750,000 shares of common stock, par
value of $0.001, pursuant to a 1 old for 45 new forward split of our issued and
outstanding shares of common stock. On May 4, 2012 our companys majority
shareholders took a number of actions to reconfigure our capital structure. Our
former directors and officers, Gennady Fedosov and Anna Ivashenko cancelled an
aggregate of 180,000,000 shares of our common stock and transferred an
additional 88,000,000 to incoming management. Subsequent to all cancellations
and transfers, we had 150,750,000 shares issued and outstanding.
5
Our CUSIP number is 380485102.
Other than as set out in this current report, we have not been
involved in any bankruptcy, receivership or similar proceedings, nor have we
been a party to any material reclassification, merger, consolidation or purchase
or sale of a significant amount of assets not in the ordinary course of our
business.
Our Business
On May 4, 2012, we entered into the JV Agreement with Ridgeback
Mining (Sierra Leone) Limited (RMSL) regarding a joint venture on three
prospective diamond and gold properties in Sierra Leone (the Properties).
Pursuant to the JV Agreement, we have initiated the incorporation of Gold and
Gemstone Sierra Leone Limited, a Sierra Leone company (the JV Company). The
share capital of the JV Company is distributed equally between our company and
the shareholders of RMSL, with our company holding fifty percent and profits
will be distributed evenly as well. Pursuant to the terms of the JV Agreement,
RMSL will transfer the Properties into JV Company and we will provide ongoing
financing for all joint venture operations. Our investment into the JV Company
is required to reach $1,500,000 per concession for an aggregate total of
$4,500,000 within the first twelve months of operation. If we do not invest the
required $1,500,000 per concession within the first twelve months, each
concession for which the requirement was not fulfilled will be returned to the
ownership of RMSL.
As of October 22, 2012 RMSL notified both the Nimikoro Chiefdom
and the Nimiyama Chiefdom that RMSL has assigned the respective concession in to
the JV Company effective October 29, 2012. The notice confirmed that we will
have 12 months from the date of the assignment to raise $1,500,000 for each
concession in to the JV Company or the concessions will revert back to RMSL.
On November 28, 2012, we entered into two separate agreements
for the exploration and development of mineral properties in Africa. The
agreements are summarized as follows:
|
1.
|
Joint venture agreement between our company and TTM
Global Enterprises Ltd., a company incorporated under the laws of the U.K.
This agreement relates to the investment by our company into a 30%
interest in mining operations in Siguiri, Guinea, Africa. The term of the
agreement is 90 days, within which we are required to provide financing of
$1,500,000 and take on the financial responsibilities for all
administrative fees associated with operations on the property. Of the
$1,500,000, $250,000 is a fee to TTM Global for acquiring the 30% interest
in the property. The $250,000 is to be delivered to TTM Global within 30
days of signing the TTM Global joint venture agreement and the remaining
$1,250,000 must be provided within 90 days. If we are not able to provide
the required funds, the agreement terminates.
|
|
|
|
|
2.
|
Joint venture agreement between our company and Blue
Orange Mining Limited, a company incorporated under the laws of Ghana.
This agreement relates to the investment by our company into a 50%
interest in thirteen gold concessions within the Ashanti-belt in Ghana.
The term of the agreement is 90 days, within which we are required to
provide financing of $5,000,000 towards the joint venture. Of the
$5,000,000, $500,000 is a fee payable to Blue Orange for acquiring the 50%
interest in the concessions. The $500,000 is to be delivered to Blue
Orange within 30 days of signing the Blue Orange joint venture and the
remaining $4,500,000 must be provided within 90 days. If we are not able
to provide the required funds, the agreement
terminates.
|
Results of Operations
Our financial statements have been prepared assuming that we
will continue as a going concern and accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of
liabilities that might be necessary should we be unable to continue in
operation.
We expect we will require additional capital to meet our long
term operating requirements. We expect to raise additional capital through,
among other things, the sale of equity or debt securities.
6
Three and Nine Month Periods Ended October 31, 2012 Compared
to the Three and Nine Month Periods Ended October 31, 2011 and the Period from
Inception (March 5, 2008) to October 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
Three months
|
|
|
Three months
|
|
|
Nine months
|
|
|
Nine months
|
|
|
March 5, 2008
|
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
(Inception) to
|
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
$
|
Nil
|
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
17,261
|
|
$
|
7,605
|
|
$
|
87,971
|
|
$
|
17,696
|
|
$
|
142,120
|
|
Net Income (Loss)
|
$
|
(17,261
|
)
|
$
|
(7,605
|
)
|
$
|
(87,971
|
)
|
$
|
(17,696
|
)
|
$
|
(142,120
|
)
|
Our net loss for the three month period ended October 31, 2012
was $17,261 compared to a net loss of $7,605 for the three month period ended
October 31, 2011. Our net loss for the nine month period ended October 31, 2012
was $87,971 compared to a net loss of $17,696 for the nine month period ended
October 31, 2011. Our net loss was $142,120 during the period from inception
(March 5, 2008) to October 31, 2012. During the nine month period ended October
31, 2012, we did not generate any revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
Three months
|
|
|
Three months
|
|
|
Nine months
|
|
|
Nine months
|
|
|
March 5, 2008
|
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
ended
|
|
|
(Inception) to
|
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
Incorporation costs
|
$
|
Nil
|
|
$
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
$
|
840
|
|
Professional fees
|
$
|
2,025
|
|
$
|
1,716
|
|
|
28,905
|
|
|
4,287
|
|
$
|
59,635
|
|
Consulting fees
|
$
|
15,000
|
|
$
|
Nil
|
|
|
52,000
|
|
|
Nil
|
|
$
|
52,000
|
|
Transfer agent expense
|
$
|
Nil
|
|
$
|
4,916
|
|
|
6,809
|
|
|
10,116
|
|
$
|
23,208
|
|
General and administrative
|
$
|
236
|
|
$
|
973
|
|
|
257
|
|
|
3,293
|
|
$
|
6,437
|
|
During the three month period ended October 31, 2012, we
incurred operating expenses of $17,261 compared to $7,605 for the three month
period ended October 31, 2011. During the nine month period ended October 31,
2012, we incurred operating expenses of $87,971 compared to $17,696 for the nine
month period ended October 31, 2011. We incurred $142,120 incurred during the
period from inception (March 5, 2008) to October 31, 2012. The increase in our
operating expenses was primarily due to increased professional fees and
consulting fees.
Liquidity and Capital Resources
Working Capital
|
|
As at
|
|
|
As at
|
|
|
|
October 31,
|
|
|
January 31,
|
|
|
|
2012
|
|
|
2012
|
|
Current Assets
|
$
|
25,000
|
|
$
|
Nil
|
|
Current Liabilities
|
$
|
130,280
|
|
$
|
17,309
|
|
Working Capital (Deficit)
|
$
|
(105,380
|
)
|
$
|
(17,309
|
)
|
7
Cash Flows
|
|
|
|
|
|
|
|
Period from
|
|
|
|
Nine months
|
|
|
Nine months
|
|
|
March 5, 2008
|
|
|
|
Ended
|
|
|
Ended
|
|
|
(Inception) to
|
|
|
|
October 31,
|
|
|
October 31,
|
|
|
October 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
Net cash used in operating activities
|
$
|
(24,152
|
)
|
$
|
(8,042
|
)
|
$
|
(71,428
|
)
|
Net cash used in investing activities
|
$
|
Nil
|
|
$
|
Nil
|
|
$
|
Nil
|
|
Net cash provided by financing activities
|
$
|
49,152
|
|
$
|
Nil
|
|
$
|
96,428
|
|
Increase (decrease) in cash
|
$
|
25,000
|
|
$
|
(8,042
|
)
|
$
|
25,000
|
|
As at October 31, 2012, our current assets were $25,000
compared to $Nil in current assets as at January 31, 2012. As at October 31,
2012, our current liabilities were $130,280 compared to $17,309 current
liabilities as at January 31, 2012. Current liabilities at October 31, 2012 were
comprised of $70,435 in accrued expenses, $257 in accrued interest, $25,733 due
to related parties and $33,855 in convertible loan payable.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating
activities. For the nine month period ended October 31, 2012, net cash flows
used in operating activities was $24,152 consisting of a net loss of $87,971, a
decrease in prepaid expenses of $7,700 and an increase in accrued expenses of
$61,865. Net cash flows used in operating activities was $71,428 for the period
from March 5, 2008 (inception) to October 31, 2012.
Cash Flows from Investing Activities
For the nine month period ended October 31, 2012, we did not
generate any cash flows from investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either
advancements or the issuance of equity and debt instruments. For the nine month
period ended October 31, 2012, net cash flows from financing activities was
$49,152. For the period from inception (March 5, 2008) to October 31, 2012, net
cash provided by financing activities was $96,428 received mainly from related
party loans and convertible loans.
Plan of Operation and Funding
Upon the execution of the JV Agreement, we shifted our business
focus to that of diamond exploration in Sierra Leone. The properties which are
the subject of our joint venture with RMSL are currently in the exploration
stage and no reserves have been proven. Through the joint venture arrangement,
we will undertake exploration activity on the Properties, and will also make
efforts to increase our own land holdings and assets in the gold and diamond
exploration industry throughout Africa.
Pursuant to the JV Agreement with RMSL, we are required to
finance each of the three claims subject to our joint venture with a minimum of
$1,500,000 per claim, for an aggregate total of $4,500,000. If we fail to invest
the required amount for any of the claims within 12 months, the claims will
revert back to the sole ownership of RMSL. We do not currently have enough funds
to meet our investment obligations for any of the claims.
We have little cash on hand, no financing arrangements and no
lines of credit or other bank financing arrangements. There can be no assurance
that we will be able to close any financing and if we do close any financings,
there can be no assurance that they will be sufficient to meet our needs for the
upcoming 12 months.
We expect that working capital requirements will continue to be
funded through a combination of our existing funds and further issuances of
securities. Our working capital requirements are expected to increase in line
with the growth of our business.
8
Existing working capital, further advances and debt
instruments, and anticipated cash flow are expected to be adequate to fund our
operations over the next twelve months. We have no lines of credit or other bank
financing arrangements. Generally, we have financed operations to date through
the proceeds of the private placement of equity and debt instruments. In
connection with our business plan, management anticipates additional increases
in operating expenses and capital expenditures. We intend to finance these
expenses with further issuances of securities, and debt issuances. Thereafter,
we expect we will need to raise additional capital and generate revenues to meet
long-term operating requirements. Additional issuances of equity or convertible
debt securities will result in dilution to our current shareholders. Further,
such securities might have rights, preferences or privileges senior to our
common stock. Additional financing may not be available upon acceptable terms,
or at all. If adequate funds are not available or are not available on
acceptable terms, we may not be able to take advantage of prospective new
business endeavors or opportunities, which could significantly and materially
restrict our business operations. We will have to raise additional funds in the
next twelve months in order to sustain and expand our operations. We currently
do not have a specific plan of how we will obtain such funding; however, we
anticipate that additional funding will be in the form of equity financing from
the sale of our common stock. We have and will continue to seek to obtain
short-term loans from our directors, although no future arrangement for
additional loans has been made. We do not have any agreements with our directors
concerning these loans. We do not have any arrangements in place for any future
equity financing.
Off-Balance Sheet Arrangements
We have no 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
stockholders.
Going Concern
The independent auditors' report accompanying our January 31,
2012 financial statements contained an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The
financial statements have been prepared "assuming that we will continue as a
going concern," which contemplates that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business.
Critical Accounting Policies
The preparation of financial statements in conformity with
United States generally accepted accounting principles requires our management
to make estimates and assumptions that affect the reported amount 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
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.
Exploration Stage Company
Our company is an Exploration Stage Company, as defined by
Financial Accounting Standards Board (FASB) Accounting Standards Codification
("ASC") 915,
Development Stage Entities
.
Basis of Presentation
The financial statements of our company have been prepared in
accordance with generally accepted accounting principles in the United States of
America and are presented in US dollars.
9
Accounting Basis
The accompanying interim financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange Commission
(SEC). In the opinion of management, all adjustments necessary in order for
the financial statements to be not misleading have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year.
Cash and Cash Equivalents
Our company considers all highly liquid investments with the
original maturities of three months or less to be cash equivalents. Our company
had $25,000 and $0 of cash as of October 31, 2012 and January 31, 2012,
respectively.
Fair Value of Financial Instruments
Our companys financial instruments consist of cash and cash
equivalents, prepaid expenses, accrued expenses and amounts due to a related
party. The carrying amount of these financial instruments approximates fair
value due either to length of maturity or interest rates that approximate
prevailing market rates unless otherwise disclosed in these financial
statements.
Income Taxes
Income taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
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 the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue Recognition
Our company recognizes revenue when products are fully
delivered or services have been provided and collection is reasonably
assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in
accordance with ASC Topic 718. To date, our company has not adopted a stock
option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing our
companys net loss applicable to common shareholders by the weighted average
number of common shares during the period. Diluted earnings per share is
calculated by dividing our companys net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year.
The diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted for any potentially dilutive debt or equity. There are
no such common stock equivalents outstanding as of October 31, 2012.
10
Comprehensive Income
Our company has which established standards for reporting and
display of comprehensive income, its components and accumulated balances. When
applicable, our company would disclose this information on its Statement of
Stockholders Equity. Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners. Our company
has not had any significant transactions that are required to be reported in
other comprehensive income.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item 4. Controls and Procedures
Managements Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief financial officer (our principal executive officer, principal financial
officer and principal accounting officer) to allow for timely decisions
regarding required disclosure.
As of the end of our quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
president and chief financial officer (our principal executive officer,
principal financial officer and principal accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president and chief financial officer
(our principal executive officer, principal financial officer and principal
accounting officer) concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial
Reporting
During the period covered by this report there were no changes
in our internal control over financial reporting that materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
11
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
On December 3, 2012, we appointed Mr. Martin Hall and Mr.
Michael Arnold to our board of directors, bringing the total members of the
board of directors to five. Mr. Hall will also serve as the chairman of our
board of directors and Mr. Arnold will also serve as vice president of
international business development.
Item 6. Exhibits
Exhibit
|
Description
|
No.
|
|
|
|
(3)
|
(i) Articles; (ii)
By-laws
|
|
|
3.1
|
Articles of Incorporation
(Incorporated by reference to our Registration Statement on Form S-1 filed
on April 7, 2010).
|
|
|
3.2
|
By-Laws (Incorporated by
reference to our Registration Statement on Form S-1 filed on April 7,
2010).
|
|
|
3.3
|
Certificate of Amendment filed
with the Nevada Secretary of State on April 24, 2012 (incorporated by
reference from our Current Report on Form 8-K filed on April 30, 2012)
|
|
|
(10)
|
Material Contracts
|
10.1
|
Collaboration Agreement between our company and
Ridgeback Mining (Sierra Leone) Limited dated May 4, 2012 (incorporated by
reference to our Current Report on Form 8-K filed on May 4, 2012)
|
|
|
10.2
|
Letter Agreement between Ridgeback Mining
(Sierra Leone) Limited and the Nimiyama Sewafe Chiefdom with respect to
the Nimiyama concession (incorporated by reference to our Current Report
on Form 8-K filed on May 4, 2012)
|
|
|
10.3
|
Letter Agreement between Ridgeback Mining
(Sierra Leone) Limited and the Nimikoro Chiefdom with respect to the
Nimikoro concession (incorporated by reference to our Current Report on
Form 8-K filed on May 4, 2012)
|
|
|
10.4
|
Letter Agreement between Ridgeback Mining
(Sierra Leone) Limited and the Sandoh Chiefdom with respect to the Sandoh
concession (incorporated by reference to our Current Report on Form 8-K
filed on May 4, 2012)
|
|
|
10.5
|
Extension Agreement between Ridgeback Mining
(Sierra Leone) Limited and the Nimiyama Sewafe Chiefdom with respect to
the Nimiyama concession (incorporated by reference to our Current Report
on Form 8-K filed on May 25, 2012)
|
|
|
10.6
|
Extension Agreement between Ridgeback Mining
(Sierra Leone) Limited and the Nimikoro Chiefdom with respect to the
Nyamundu concession (incorporated by reference to our Current Report on
Form 8-K filed on May 30, 2012)
|
|
|
10.7
|
Certificate of Incorporation of Gold and
Gemstone Mining S. L. Limited (incorporated by reference to our Current
Report on Form 8-K filed on November 14, 2012)
|
|
|
10.8
|
Certificate of Mining Registration of Gold and
Gemstone Mining S. L. Limited (incorporated by reference to our Current
Report on Form 8-K filed on November 14, 2012)
|
|
|
10.9
|
Assignment Notice to the Nimiyama Chiefdom
delivered on October 22, 2012 (incorporated by reference to our Current
Report on Form 8-K/A filed on December 4, 2012)
|
|
|
10.10
|
Assignment Notice to the Nimikoro Chiefdom
delivered on October 22, 2012 (incorporated by reference to our Current
Report on Form 8-K/A filed on December 4, 2012)
|
|
|
10.11
|
Joint Venture Agreement between our company and
TTM Global Enterprises Ltd. dated November 28, 2012 (incorporated by
reference to our Current Report on Form 8-K filed on December 5, 2012)
|
12
*
|
Filed herewith.
|
|
|
**
|
Furnished herewith. Pursuant to Rule 406T of
Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are
deemed not filed or part of any registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed
not filed for purposes of Section 18 of the Securities and Exchange Act of
1934, and otherwise are not subject to liability under those
sections.
|
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
GOLD AND GEMSTONE MINING INC.
|
|
|
|
|
Date: December 17, 2012
|
/s/
Charmaine King
|
|
Charmaine King
|
|
President, Chief Executive Officer, Chief
Financial
|
|
Officer, Secretary, Treasurer and Director
|
|
(Principal Executive Officer, Principal
Financial Officer
|
|
and Principal Accounting Officer)
|
14
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