Notes to Financial Statements
May 31, 2014
(Stated in US Dollars)
(Unaudited)
1. Organization
Valmie Resources Inc. (the “Company”)
was incorporated on August 26, 2011, in the State of Nevada, U.S.A. The accounting and reporting policies of the Company
conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is
November 30.
The Company is an exploration stage company
that engages principally in the acquisition, exploration, and development of resource properties.
Exploration Stage Company
The Company is considered to be in the exploration
stage as defined in FASC 915-10-05 “
Development Stage Entities
”, and interpreted by the Securities and Exchange
Commission (the “SEC”) for mining companies in Industry Guide 7. The Company is devoting substantially all of its
efforts to development of business plans and the acquisition of mineral properties.
2. Basis of Presentation
Unaudited Interim Financial Statements
The accompanying unaudited interim financial
statements have been prepared in accordance with generally accepted accounting principles for interim financial information and
the rules and regulations of the SEC. They do not include all information and footnotes required by United States generally accepted
accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes
in the information disclosed in the notes to the financial statements for the year ended November 30, 2013, included in the Company’s
Form 10-K filed with the SEC. The unaudited interim financial statements should be read in conjunction with those financial statements
included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting
solely of normal recurring adjustments, have been made. Operating results for the six months ended May 31, 2014, are not necessarily
indicative of the results that may be expected for the year ending November 30, 2014.
3. Capital Stock
Authorized Stock
At inception, the Company authorized 100,000,000
common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on
any matter on which action of the stockholders of the corporation is sought.
On December 3, 2013, the holders of a majority
of the Company’s issued and outstanding common stock approved an increase in its authorized capital from 100,000,000 shares
of common stock, par value $0.001, to 750,000,000 shares of common stock, par value $0.001 (the “Authorized Capital Increase”).
The Company formally effected the Authorized Capital Increase on December 4, 2013 by filing a Certificate of Amendment with the
Nevada Secretary of State.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
May 31, 2014
(Stated in US Dollars)
(Unaudited)
3. Capital Stock (continued)
On December 3, 2013, the Company’s sole
director approved a stock dividend of 59 authorized but unissued shares of its common stock on each one (1) issued and outstanding
share of its common stock held by shareholders of record as of December 16, 2013. The payment date for the stock dividend was
December 17, 2013, as determined by the Financial Industry Regulatory Authority (FINRA). Upon the payment of the stock dividend,
the Company had 296,400,000 issued and outstanding shares of common stock, which represents an increase of 291,460,000 shares
over its prior total of 4,940,000 issued and outstanding shares of common stock. The split is reflected retrospectively in the
accompanying financial statements.
Share Issuances
Since its inception (August 26, 2011), the Company has issued shares
of its common stock as follows:
|
Date
|
|
Description
|
|
Shares
|
|
|
Price Per Share
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09/29/11
|
|
Shares issued for cash
|
|
|
210,000,000
|
|
|
$
|
0.00017
|
|
|
$
|
35,000
|
|
|
11/15/11
|
|
Shares issued for cash
|
|
|
86,400,000
|
|
|
|
0.00017
|
|
|
|
14,400
|
|
|
|
|
|
Cumulative Totals
|
|
|
296,400,000
|
|
|
|
|
|
|
$
|
49,400
|
|
Of these shares, 210,000,000 were issued to
a director and officer of the Company. 86,400,000 shares were issued to independent investors.
At May 31, 2014, the Company had no issued
or outstanding stock options or warrants.
4.
Mineral Property Costs
Lander County, Nevada Claims
On September 30, 2011, the Company entered
into an option agreement that would provide for the purchase of a 100% interest in the Carico Lake Valley Property (the “Property”).
The Property is located in the State of Nevada.
To complete the option, the agreement requires
the Company to make the following payments and incur the following amounts on exploration and development:
|
a)
|
$15,000 cash on
September 30, 2011 (paid);
|
|
|
|
|
b)
|
an additional $30,000 cash on
September 30, 2013 (not paid);
|
|
|
|
|
c)
|
an additional $60,000 cash on
September 30, 2013 (not paid);
|
|
|
|
|
d)
|
an additional $120,000 cash on
September 30, 2014 and
|
|
|
|
|
e)
|
incur a minimum of $125,000 ($6,248
has been incurred as of May 31, 2014) on exploration and development work by December
31, 2013 and every subsequent year thereafter, through 2014.
|
The Company is in
default in the option payments. The entity that owns the Property has made the payments due to the Bureau of Land Management,
Nevada (“BLM”) and Lander County. The payments ($6,406) are reflected in accounts payable and accrued liabilities.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
May 31, 2014
(Stated in US Dollars)
(Unaudited)
4.
Mineral Property Costs (continued)
The entity that owns the Property has indicated
a willingness to work with the Company if the Company reimburses the $6,406 mentioned above and makes an effort to become current
with the option payments of $90,000 that are in default. Otherwise, the owner may terminate the option and explore other financing
arrangements related to the Property.
The Company is responsible for any and all
property payments due to any government authority on the Property during the term of the option agreement (BLM: $3,920 yr., Lander
County: $294 yr.).
The Property is subject to a 6% Net Smelter
Royalty, for which the Company has the right to purchase 3% for a onetime payment of $5,000,000 at any time until the tenth anniversary
of the option agreement.
As at May 31, 2014, the Company has incurred
the following on the Property:
|
|
|
May 31, 2014
|
|
|
November 30, 2013
|
|
|
|
|
|
|
|
|
|
|
Acquisition cost
|
|
$
|
15,000
|
|
|
$
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration costs, beginning of period
|
|
$
|
12,654
|
|
|
$
|
6,248
|
|
|
Exploration costs incurred
|
|
$
|
-
|
|
|
$
|
6,406
|
|
|
Exploration costs, end of period
|
|
$
|
12,654
|
|
|
$
|
12,654
|
|
5. Due to Related Party
Amount due to related party at May 31, 2014,
is non-interest bearing, unsecured and with no fixed terms of repayment.
6. Provision for Income Taxes
The Company recognizes the tax effects of
transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for
tax purposes. Deferred taxes are provided in the financial statements under FASC 718-740-20 to give effect to the resulting temporary
differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs
based on the income taxes expected to be payable in future years.
Exploration stage deferred tax assets arising
as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of
their utilization in future periods. Operating loss carryforwards generated during the period from August 26, 2011 (date of inception)
through May 31, 2014 of $194,320 will begin to expire in 2031. Accordingly, deferred tax assets of approximately $68,012 were
offset by the valuation allowance.
The Company follows the provisions of uncertain
tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized
tax benefits.
The Company has no tax position at May 31,
2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties
at November 30, 2013. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its
intended exploration stage activities. The tax years for November 30, 2013, 2012 and 2011 are still open for examination by the
Internal Revenue Service (IRS).
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
May 31, 2014
(Stated in US Dollars)
(Unaudited)
6. Provision for Income Taxes (continued)
|
|
|
2014
|
|
|
|
|
Amount
|
|
|
Tax Effect (35%)
|
|
|
|
|
|
|
|
|
|
|
Net operating losses
|
|
$
|
34,433
|
|
|
$
|
12,051
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(34,433
|
)
|
|
|
(12,051
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset (liability)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
2013
|
|
|
|
|
Amount
|
|
|
Tax Effect (35%)
|
|
|
|
|
|
|
|
|
|
|
Net operating losses
|
|
$
|
32,305
|
|
|
$
|
11,306
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(32,305
|
)
|
|
|
(11,306
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset (liability)
|
|
$
|
-
|
|
|
$
|
-
|
|
7. Going Concern and Liquidity Considerations
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization
of assets and satisfaction of liabilities in the normal course of business. As at May 31, 2014, the Company had a working capital
deficiency of $53,577 (November 30, 2013 – $19,144) and an accumulated deficit of $194,320 (November 30, 2013 – 159,887).
The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the next twelve months.
The ability of the Company to emerge from
the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and
develop the Property and the discovery, development and sale of ore reserves.
In response to these problems, management
intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
8.
Subsequent Events
The Company has evaluated subsequent events
from May 31, 2014, through the date of this report, and determined there are no additional items to disclose.