NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
NOTE
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A)
Presentation and Organization
The
accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.
Accordingly, they do not include all the information necessary for a comprehensive presentation of the financial position and results
of operations.
These
unaudited condensed financial statements should be read in conjunction with the financial statements and related notes thereto included
in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022, filed with the SEC on March 2, 2023.
It
is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary
for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected
for the year.
Golden
Royal Development Inc. (the “Company”) was incorporated under the laws of the State of Delaware on November 13, 2016.
The
Company’s accounting year end is September 30.
The
Company is a business that is designed to engage in mineral exploration activities. The Company’s activities since inception have
consisted of identifying and acquiring oil, gas, and mining properties. The Company is also in the process of raising additional equity
capital to support its development activities to acquire additional mining properties as soon as possible. The Company’s activities
are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s
current plan to identify and acquire the mining properties. To date, the Company has not generated any revenues from its oil, gas, and
mining properties.
(B)
Use of Estimates
In
preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
(C)
Cash and Cash Equivalents
The
Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.
At March 31, 2023, and September 30, 2022, the Company had no cash equivalents.
(D)
Loss Per Share
Basic
and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No.
260, “Earnings Per Share.” Diluted loss per share is computed by dividing net loss by the weighted average number of shares
of common stock, common stock equivalents, and potentially dilutive securities outstanding during the period. At March 31, 2023, and
2022, the Company did not have any outstanding dilutive securities.
GOLDEN
ROYAL DEVELOPMENT INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
(E)
Income Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
(F)
Revenue Recognition
The
Company’s revenue recognition policy follows guidance from Accounting Standards Codification (ASC) 606, Revenue from Contract with
Customers. Revenue is recognized when the Company transfers promised goods and services to the customer and in the amount that reflects
the consideration to which the Company expects to be entitled in exchange for those goods and services.
The
Company applies the following five-step model in order to determine this amount:
| |
(i) |
Identification of contact with a customer; |
| |
(ii
) |
Identify the performance obligation of the contract |
| |
(iii) |
Determine the transaction price; |
| |
(iv) |
Allocation of the transaction price to the performance obligations; and |
| |
(v)
|
Recognition of revenue when (or as) the Company satisfies each performance obligation. |
The
Company has been in the exploration stage since its formation on November 13, 2016, and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and exploration of oil, gas, and mining properties.
(G)
Mineral Properties
Acquisition
costs of mining properties are capitalized pursuant to ASC 932 Extractive Activities - Oil and Gas and ASC 930 Extractive Activities
– Mining. Mineral exploration expenditures are expensed as incurred. When production is attained, capitalized acquisition costs
will be depleted using either the unit of production method based upon estimated proven recoverable reserves or the estimated production
life of the properties. When capitalized costs on individual properties exceed their estimated net realizable value, the properties are
written down to the estimated value. Costs relating to properties abandoned are charged to operations in the period in which that determination
is made.
(H)
Impairment of Long-Lived Assets
Management
reviews the net carrying value of all property and equipment and other long-lived assets, including mineral properties, on a periodic
basis in accordance with ASC 360 Property, Plant, and Equipment. The Company estimates the net realizable value of an asset based on
the estimated undiscounted future cash flows that will be generated from operations at each property, the estimated salvage value of
the surface plant and equipment, and the value associated with property interests. These estimates of undiscounted future cash flows
are dependent upon the estimates of minerals to be recovered from proven and probable ore reserves, future production cost estimates,
and future mineral price estimates over the estimated remaining life of the mineral property. If undiscounted cash flows are less than
the carrying value of a property, an impairment loss will be recognized based upon the estimated expected future cash flows from the
property discounted at an interest rate commensurate with the risk involved. For the six months ended March 31, 2023, and 2022, the Company
recorded impairment expense of $1,100 and $1,590, respectively, related to the mineral rights acquisition and exploration costs (see
Note 4).
GOLDEN
ROYAL DEVELOPMENT INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
(I)
Fair Value of Financial Instruments
The
Company measures its financial assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures. For certain
of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate
fair value due to their short maturities.
ASC
820 defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any
new fair value measurements but rather applies to all other accounting pronouncements that require or permit fair value measurements.
This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the
market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach
(cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes
the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those
three levels:
| |
● |
Level
1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| |
|
|
| |
● |
Level
2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets
or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
| |
|
|
| |
● |
Level
3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by
us, which reflect those that a market participant would use. |
(J)
Recent Accounting Pronouncements
All
newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.
NOTE
2 RELATED PARTY TRANSACTIONS
(A)
Due to Officer – Related Party
During
the six months ended March 31, 2023, the Company’s President, who is also its majority shareholder, advanced $24,924 to the Company
to pay Company expenses and was repaid $2,681. The advances are non-interest bearing, unsecured, and due on demand. As of March 31, 2023
and September 30, 2022, the amount due to the officer was $126,977 and $104,734, respectively.
During
the six months ended March 31, 2022, the Company’s President, who is also its majority shareholder, advanced $8,929
to the Company to pay Company expenses and was repaid $157.
The advances are non-interest bearing, unsecured, and due on demand. As of March 31, 2022, the amount due to the officer was
$83,938.
(B)
Accounts Payable – Related Party
On
November 1, 2018, the Company entered into a month-to-month office lease with the Company’s President for its office space at a
monthly rate of $100. The lease was terminated in December 2022. For the six months ended March 31, 2023 and 2022, the Company had recorded
rent expense of $300 and $600, respectively. As of March 31, 2023, and September 30, 2022, the accounts payable owed to the related party
was $5,000 and $4,700, respectively.
GOLDEN
ROYAL DEVELOPMENT INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
NOTE
3 STOCKHOLDERS’ DEFICIT
(A)
Preferred Stock
The
Company was incorporated on November 13, 2016. On March 29, 2017, the Company became authorized to issue 5,000,000 shares of preferred
stock with a par value of $0.00001 per share. Preferred stock may be issued in one or more series. Rights and preferences are to be determined
by the Board of Directors.
The
Board of Directors has designated 1,000 shares of the preferred stock as Series A Preferred Stock. On March 29, 2017, Jacob Roth purchased
the 1,000 shares of Series A Preferred Stock for their par value (See Note 4). At any shareholders meeting or in connection with the
giving of shareholder consents, the holder of each share of Series A Preferred Stock is entitled to exercise voting power equal to 0.051%
of the aggregate voting power. The holder of Series A Preferred Stock will receive dividends when and if they are declared by the Board
of Directors. The Series A Preferred Stock has a liquidation preference of $0.00001 per share. As of March 31, 2023, and September 30,
2022, there were 1,000 shares of Series A Preferred Stock issued and outstanding.
(B)
Common Stock Issued for Cash
The
Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.00001 per share.
As
of March 31, 2023, and September 30, 2022, there were 7,841,550 shares of Common Stock issued and outstanding.
NOTE
4 MINERAL PROPERTIES
On
February 6, 2023 the Board of Land Commissions of the Wyoming Office of State Lands and Investments accepted the Company’s application
to purchase oil and gas leases No. 22-00255 (five-year oil and gas leasehold on 80 acres in Converse County) and 22-00256 (five-year
oil and gas leasehold on 80 acres in Laramie County). During the six months ended March 31, 2023 and 2022, the Company recorded $300
and $0, respectively, as impairment expense pertaining to the property, which has been recorded in general and administrative expenses
on the Statement of Operations.
On
March 17, 2022, the Company entered into a ten-year mineral lease to prospect and extract gold, silver, and precious metals with an effective
date of April 1, 2022. The property is located in Crook County, Wyoming. During the year ended September 30, 2022, the Company paid a
$50 application fee and committed to pay the State of Wyoming $460 per year for five years and $919 per year for the next five years.
Under ASC 930 Extractive Activities - Mining, costs are to be capitalized as an asset, however, the Company has fully impaired the asset
as the Company determined that there was insufficient evidence to support a likelihood that the asset will generate future cash flows.
During the six months ended March 31, 2023 and 2022, the Company recorded $0 and $50, respectively, as impairment expense pertaining
to the property, which has been recorded in general and administrative expenses on the Statement of Operations.
On
November 9, 2021, the Company entered into a ten-year mineral lease to prospect and extract gold, silver, and precious metals with an
effective date of February 2, 2022. The property is located in Crook County, Wyoming. During the year ended September 30, 2022, the Company
paid a $50 application fee and committed to pay the State of Wyoming $160 per year for five years and $320 per year during the next five
years. Under ASC 930 Extractive Activities - Mining, costs are to be capitalized as an asset, however, the Company has fully impaired
the asset as the Company determined that there was insufficient evidence to support a likelihood that the asset will generate future
cash flows. During the six months ended March 31, 2023 and 2022, the Company recorded $160 and $210, respectively, as impairment expense
pertaining to the property, which has been recorded in general and administrative expenses on the Statement of Operations.
GOLDEN
ROYAL DEVELOPMENT INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
On
November 8, 2021, the Company entered into a ten-year mineral lease to prospect and extract gold, silver, and precious metals with an
effective date of February 2, 2022. The property is located in Crook County, Wyoming. During the year ended September 30, 2022, the Company
paid a $50 application fee and committed to pay the State of Wyoming $640 per year for five years and $1,280 per year for the next five
years. Under ASC 930 Extractive Activities - Mining, costs are to be capitalized as an asset, however, the Company has fully impaired
the asset as the Company determined that there was insufficient evidence to support a likelihood that the asset will generate future
cash flows. During the six months ended March 31, 2023 and 2022, the Company recorded $640 and $690, respectively, as impairment expense
pertaining to the property, which has been recorded in general and administrative expenses on the Statement of Operations.
On
December 6, 2018, the Company entered into an Assignment Agreement with the Company’s President and majority shareholder, pursuant
to which the Company’s President assigned to the Company all of the beneficial interest in a ten-year lease to prospect and extract
gold, silver and precious minerals which was granted to the Company’s President on November 18, 2018. The Company assumed responsibility
for all fees, rents, and taxes that accrue with respect to that property, including the commitment to pay the State of Wyoming $640 per
year. The property is located in Crook County, Wyoming. Under ASC 930 Extractive Activities – Mining, costs are to be capitalized
as an asset, however, the Company has fully impaired the asset as the Company determined that there is insufficient evidence to support
a likelihood that the asset will generate future cash flows. During the six months ended March 31, 2023 and 2022, the Company recorded
$0 and $640, respectively, as impairment expense pertaining to the property, which has been recorded in general and administrative expenses
on the Statement of Operations. As of March 31, 2023 and September 30, 2022 the Company has accrued $1,920 for the annual lease fees
owed to the lessor, therefore the Company is in default for non-payment and is at risk to lose the lease if contacted by the lessor and
the default is not cured within 30 days of a notice of non-payment.
On
September 27, 2018, the Company entered into an Assignment Agreement with the Company’s President and majority shareholder, pursuant
to which the Company’s President assigned to the Company all of the beneficial interest in a ten-year mineral lease to mine for
oil and gas which was granted to the Company’s President on February 1, 2017. The Company assumed responsibility for all fees,
rents and taxes that accrue with respect to that property, including the commitment to pay the State of Wyoming $360 per year. The property
is located in Fremont County, Wyoming. Under ASC 932 Extractive Activities - Oil and Gas, costs are to be capitalized as an asset, however,
the Company has fully impaired the asset as the Company determined that there is insufficient evidence to support a likelihood that the
asset will generate any future cash flows. During the six months ended March 31, 2023 and 2022, the Company recorded $0 and $0, respectively,
as impairment expense pertaining to the property, which has been recorded in general and administrative expenses on the Statement of
Operations. As of March 31, 2023 and September 30, 2022 the Company has accrued $1,440 for the annual lease fees owed to the lessor,
therefore the Company is in default for non-payment and is at risk to lose the lease if contacted by the lessor and the default is not
cured within 30 days of a notice of non-payment.
GOLDEN
ROYAL DEVELOPMENT INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
AS
OF MARCH 31, 2023
(UNAUDITED)
NOTE
5 LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS
These
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business.
As
reflected in the accompanying financial statements, for the six months ended March 31, 2023, the Company had:
| |
● |
Net
loss of $34,592; and |
| |
|
|
| |
● |
Net
cash used in operations was $21,410 |
Additionally,
as of March 31, 2023, the Company had:
| |
● |
Accumulated
deficit of $262,559 |
| |
|
|
| |
● |
Stockholders’
deficit of $232,258; and |
| |
|
|
| |
● |
Working
capital deficit of $232,258 |
The
Company had $585 cash on hand at March 31, 2023. Although the Company intends to raise additional debt (third party and related party
lenders) or equity capital, the Company expects to incur losses from operations and have negative cash flows from operating activities
for the near-term. These losses could be significant as the Company executes its business plan.
These
factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent
to the date that these financial statements are issued. The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes
the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments
in the ordinary course of business.
NOTE
6 SUBSEQUENT EVENTS
Subsequent
to March 31, 2023, the Company’s President and majority shareholder advanced $5,116 to the Company to pay Company expenses.
*
* * * *