NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Ranger Gold Corp. (an exploration stage company) is presented to assist in understanding the Company's financial statements.
Organization and Basis of Presentation
Ranger Gold Corp. (the “Company”) was incorporated on May 11, 2007 under the laws of the State of Nevada under the name Fenario, Inc. On October 28, 2009 the Company’s principal shareholder entered into a Stock Purchase Agreement which provided for the sale of 25,000,000 shares of common stock of the Company to Gary Basrai.
Effective as of October 28, 2009, in connection with the share acquisition, Mr. Basrai was appointed President, Chief Executive Officer, Chief Financial Officer, Treasurer, Director, and Chairman of the Company.
On November 9, 2009, Mr. Basrai, as the holder of 25,000,000 (at the time representing 55.5%) of the issued and outstanding shares of the Company’s common stock, provided the Company with written consent in lieu of a meeting of stockholders authorizing the Company to amend the Company’s Articles of Incorporation for the purpose of changing the name of the Company from “Fenario, Inc.” to “Ranger Gold Corp.” In connection with the change of the Company’s name to Ranger Gold Corp. the Company’s business was changed to mineral resource exploration. The change in name and business received its final approval by the regulatory authorities on January 7, 2010.
The accounting policies conform to generally accepted accounting principles in the United States and have been consistently applied in the preparation of the financial statements.
Nature of Operations
The Company has no products or services as of September 30, 2013. The Company is currently engaging in the acquisition, exploration, and if warranted and feasible, development of natural resource properties with a focus on gold. The Company currently has one mineral property under option located in Nevada.
Interim Reporting
The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the financial position of Ranger Gold Corp. and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2013. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended March 31, 2013 has been omitted. The results of operations for the three and six month periods ended September 30, 2013 are not necessarily indicative of results for the entire year ending March 31, 2014 or for any future interim or annual period.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $1,040,378 for the period from May 11, 2007 (inception) to September 30, 2013, and has no sales.
The Company's ability to continue as a going concern is dependent on its ability to develop its natural resource property and ultimately achieve profitable operations and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable. The Company expects that it will need approximately $59,000 to fund its planned operations during the next twelve months which will include a property lease payment, annual claim fees as well as the costs associated with maintaining an office. As a result of the financing in November 2011, the Company has sufficient cash on hand to fund its planned operations for the next twelve months. However, in order to continue to explore and develop its property in the future, the Company will need to obtain additional financing. Management may seek additional capital through private placements and public offerings of its common stock. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern.
If the Company were unable to continue as a going concern, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used.
Management’s Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and notes. Significant areas requiring the use of estimates relate to accrued liabilities, stock-based compensation, and the impairment of long-lived assets. Management believes the estimates utilized in preparing these financial statements are reasonable and prudent and are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could differ significantly from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Concentration of Credit Risk
The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits.
Loss per Share
Net income (loss) per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. As of September 30, 2013, the Company has outstanding common stock options and warrants of 1,400,000 and 1,100,000, respectively. The effects of the Company’s common stock equivalents are anti-dilutive for September 30, 2013 and are thus not presented.
Comprehensive Income
The Company has adopted SFAS No. 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 Operations. Comprehensive income is comprised of net income (loss) and all changes to capital deficit except those resulting from investments by owners and distribution to owners.
Income Taxes
The Company adopted FASB ASC 740, Income Taxes, at its inception 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, including tax loss and credit carryforwards, 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. 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.
Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and
non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of September 30, 2013.
Uncertain Tax Positions
The Company adopted the provisions of ASC 740-10-50, formerly FIN 48, Accounting for Uncertainty in Income Taxes. The Company had no material unrecognized income tax assets or liabilities for the period ended September 30, 2013 or for the years ended March 31, 2013 or 2012.
The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the years ended March 31, 2013 and 2012, there was no income tax, or related interest and penalty items in the income statement, or liability on the balance sheet. The Company files income tax returns in the U.S. federal jurisdiction.
Tax years 2010 to present remain open to U.S. Federal income tax examination.
The Company is not currently involved in any income tax examinations.
Stock Options
The Company implemented Accounting Standards Codification ("ASC") Section 718-10-25 (formerly Statement of Financial Accounting Standards ("SFAS") 123R, Accounting for Stock-Based Compensation) requiring the Company to provide compensation costs for the Company's stock options determined in accordance with the fair value based method prescribed in ASC Section 718-20-25. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option.
Property Holding Costs
Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees payments, and environmental monitoring and reporting costs.
Exploration and Development Costs
Mineral property interests include optioned and acquired mineral development and exploration stage properties. The amount capitalized related to a mineral property interest represents its fair value at the time it was optioned or acquired, either as an individual asset or as a part of a business combination. The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Exploration costs are expensed as incurred and development costs are capitalized if proven and probable reserves exist and the property is a commercially minable property. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mineral interests costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments, including prepaid expenses, accounts payable and accrued liabilities, at September 30, 2013 approximates their fair values due to the short-term nature of these financial instruments.
New Accounting Pronouncements
The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued through the date these financial statements were issued.
NOTE 2 – MINERAL EXPLORATION PROPERTY
On February 18, 2013, the Company executed a property lease agreement with Nevada Mine Properties II, Inc. (“NMP”) granting the Company a lease on 100% of the mining interests of a Nevada mineral exploration property currently controlled by NMP, a natural resource exploration company (the “Lease”). The property known as the Gent Property is located in Lander County, Nevada and currently consists of four unpatented claims (the “Property”). The Lease is for a period of 20 years. The Company paid NMP $5,000 upon signing the Lease and the Lease requires annual lease payments $5,000.
Starting on the fifth anniversary of the Lease the Company will be obligated to spend a minimum of $50,000 on the Property as annual exploration expenditure requirements. Any exploration programs undertaken by the Company on the Property during the Lease period shall constitute an aggregate and will carry forward against any future expenditure requirements between the Company and NMP under the Lease.
At any time after the payment of an aggregate $30,000 in Lease payments and the payment of claim fees for federal and county filing for the years 2013-2016 the Company may terminate the Agreement upon providing NMP with 60 days advance written notice. Upon termination, the Company will have no further obligations, except for reclamation obligations and environmental responsibilities that may have accrued as determined by local, state and federal entities.
NOTE 3 – RECLAMATION DEPOSIT
The Company has paid a $16,000 reclamation deposit on its CX property. The reclamation deposit is refundable upon completion of the required remediation of the property at the completion of the Company’s planned drill program. The Company has applied for a refund of the reclamation bond and is awaiting a review of the reclamation work completed by the Company on the CX property.
NOTE 4 – RELATED PARTY TRANSACTIONS
Until his resignation on July 17, 2013 the Company paid one of its directors $500 per month to serve on its Board of Directors. The payments are made quarterly in advance. The total amount paid to the Directors for the six months ended September 30, 2013 was $1,500 (2012 - $6,000).
NOTE 5 – SHAREHOLDERS’ EQUITY
Stock Options
On February 3, 2010 the Company adopted its 2010 Stock Option Plan (“the 2010 Plan”). The 2010 Plan provides for the granting of up to 5,000,000 stock options to key employees, directors and consultants, of common shares of the Company. Under the 2010 Plan, the granting of stock options, the exercise prices, and the option terms are determined by the Company's Option Committee, a committee designated to administer the 2010 Plan by the Board of Directors. For incentive options, the exercise price shall not be less than the fair market value of the Company's common stock on the grant date. (In the case of options granted to an employee who owns stock possessing more than 10% of the voting power of all classes of the Company's stock on the date of grant, the option price must not be less than 110% of the fair market value of common stock on the grant date.). Options granted are not to exceed terms beyond five years.
In order to exercise an option granted under the Plan, the optionee must pay the full exercise price of the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the discretion of the Committee, by delivering shares of common stock already owned by the optionee that have a fair market value equal to the applicable exercise price; or (iii) with the approval of the Committee, with monies borrowed from us.
Subject to the foregoing, the Committee has broad discretion to describe the terms and conditions applicable to options granted under the Plan. The Committee may at any time discontinue granting options under the Plan or otherwise suspend, amend or terminate the Plan and may, with the consent of an optionee, make such modification of the terms and conditions of such optionee’s option as the Committee shall deem advisable.
During the year ended March 31, 2010, the Company granted 1,400,000 stock options to various consultants at exercise prices of $0.50 and $1.00 per share. The Company has used the Black-Scholes model to determine the fair value of these stock options. All of the outstanding stock options have fully vested as of March 31, 2013. As a result, there has been no stock-based compensation recognized for the three and six months ended September 30, 2013. The vesting period for some of these options was up to three years. Therefore, the unvested portion of the options have been revalued in prior periods resulting in the reversal of stock-based compensation expense of $495 and $3,442 respectively for the three and six months ended September 30, 2012 with all of the balance being recorded as mineral property exploration expenditures.
The following table sets forth the options outstanding under the 2010 Plan as of September 30, 2013:
|
|
|
Available
For Grant
|
|
|
Options Outstanding
|
|
|
Weighted Average Exercise Price
|
|
|
Balance, March 31, 2013
|
|
|
3,600,000
|
|
|
|
1,400,000
|
|
|
$
|
0.68
|
|
|
Options granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Balance, September 30, 2013
|
|
|
3,600,000
|
|
|
|
1,400,000
|
|
|
$
|
0.68
|
|
The following table summarizes information concerning outstanding and exercisable common stock options under the 2010 Plan at September 30, 2013:
|
Exercise Prices
|
Options Outstanding
|
Remaining Contractual Life
(in years)
|
Weighted
Average
Exercise Price
|
Number of Options Currently Exercisable
|
Weighted
Average
Exercise Price
|
|
$ 0.50
|
900,000
|
1.46
|
$ 0.50
|
900,000
|
$ 0.50
|
|
$ 1.00
|
500,000
|
1.46
|
$ 1.00
|
500,000
|
$ 1.00
|
|
|
1,400,000
|
|
$ 0.68
|
1,400,000
|
$ 0.68
|
The aggregate intrinsic value of stock options outstanding at September 30, 2013 was none and the aggregate intrinsic value of stock options exercisable at September 30, 2013 was also none. No stock options were exercised during the three or six-months ended September 30, 2013 or 2012. As of September 30, 2013 there was no unrecognized compensation expense as all stock options have vested.
Warrants
The following table sets forth common share purchase warrants outstanding as of September 30, 2013:
|
|
|
Warrants Outstanding
|
|
|
Balance, March 31, 2013
|
|
|
1,100,000
|
|
|
Warrants granted
|
|
|
-
|
|
|
Balance, September 30, 2013
|
|
|
1,100,000
|
|
The following table lists the common share warrants outstanding at September 30, 2013. Each warrant is exchangeable for one common share.
|
Number Outstanding
|
Exercise
Price
|
Weighted Average Contractual Remaining Life (years)
|
Number Currently Exercisable
|
Exercise
Price
|
|
550,000
|
$ 0.25
|
1.33
|
550,000
|
$ 0.25
|
|
550,000
|
$ 0.50
|
1.33
|
550,000
|
$ 0.50
|
|
1,100,000
|
|
|
1,100,000
|
|