Bravo Multinational Inc. - Quarter Report: 2010 March (Form 10-Q)

GHDC 10Q

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 March 31, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to __________

Commission file number 000-53505

GOLDCORP HOLDINGS CO.

(Exact name of small business issuer as specified in its charter)


DELAWARE	90-0350814
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

5709 Manatee Avenue West Bradenton, Florida 34209

(Address of principal executive offices)

(941) 761-7819

(Issuer’s telephone number, including area code)

_______________________________________________________

(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. o Yes x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. o Yes o No

Large accelerated filer o Accelerated filer o Non-accelerated filer o 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 o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 187,973,418 shares as of April 30, 2010.

GOLDCORP HOLDINGS CO.

FORM 10-Q REPORT INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Item 4. Controls and Procedures.

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3. Defaults upon Senior Securities.

Item 4. Submission of Matters to a Vote of Security Holders.

Item 5. Other Information.

Item 6. Exhibits.

SIGNATURES

EXHIBIT INDEX

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GOLDCORP HOLDINGS CO.

BALANCE SHEET

MARCH 31, 2010 AND DECEMBER 31, 2009


ASSETS	March 31, 2010 (unaudited)	December 31, 2009 (audited)
Cash and cash equivalents	$ 58	$ -
Other assets	3,000	3,000
Total current assets	3,058	3,000

Mining Properties (see Note 3)	360,000	360,000

Total Assets	$ 363,058	$ 363,000

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Liabilities:
Accounts payable	$ 66,385	$ 74,715
Accrued compensation	1,235,417	1,191,667
Due to related party	82,329	75,329
Accrued interest	37,584	29,770
Notes payable	29,532	29,532
Director's loan	345,163	345,163
Total current liabilities	1,796,410	1,746,176

Due to related party	66,222	66,222
Notes payable	5,959	5,959
Director's loan	-	-
Total liabilities	72,181	72,181

Stockholders' deficit:
Preferred stock, 5,000,000 shares authorized	-	-
Common stock, par value $0.0001, 1,000,000,000 shares authorized, 187,973,418 and 182,851,595 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively	18,797	18,285
Additional paid in capital	4,339,054	4,291,111
Accumulated deficit	(5,863,384)	(5,764,753)
Total stockholders' deficit	(1,505,533)	(1,455,357)

Total Liabilities and Stockholders' Deficit	$ 363,058	$ 363,000

See accompanying notes to financial statements

GOLDCORP HOLDINGS CO.

STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009

(UNAUDITED)


	2010	2009

Revenues:	$ -	$ -

Expenses:
Consulting fees	45,582	19,250
Salaries and wages	43,750	43,750
General and administrative	1,485	3,867
Total expenses	90,817	66,867

Loss from operations	(90,817)	(66,867)

Interest expense	(7,814)	(7,632)

Net Loss	$ (98,631)	$ (74,499)


Net loss per common share – basic and fully diluted	$ -	$ -

Weighted average number of common shares outstanding	201,655,648	195,210,226

See accompanying notes to financial statements.

GOLDCORP HOLDINGS CO.

STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009

(UNAUDITED)


	2010	2009
Cash flows from operating activities:
Net income (loss)	$ (98,631)	$ (74,499)
Adjustments to reconcile net earnings (loss) to net cash (used in) operating activities:
Issuance of common stock for services	48,455	16,000
Increase (decrease) in operating assets and liabilities:
Accounts payable and accrued expenses	(8,330)	1,529
Accrued payroll and payroll liabilities	43,750	43,750
Due to related party	7,000	5,200
Accrued interest	7,814	7,632
Net cash (used in) operating activities	58	(388)

Net increase (decrease) in cash and cash equivalents	58	(388)
Cash and equivalents at beginning of period	-	419
Cash and equivalents at end of period	$ 58	$ 31


	2009	2008
SUPPLEMENTARY DISCLOSURE OF NONCASH TRANSACTIONS

Shares issued for services	$ 48,455	$ 16,000

See accompanying notes to financial statements.

GOLDCORP HOLDINGS CO.

STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2010


	Common Shares	Preferred Shares	Common Stock, At Par	Preferred Stock	Additional Paid in Capital	Accumulated Deficit	Total Shareholder's Deficit

Balance at 12/31/09	182,851,595	-	$ 18,285	$ -	$ 4,291,111	(5,764,753)	$ (1,455,357)

Shares issued for services	5,121,823	-	512	-	47,943	-	48,455
Net loss			-	-		(98,631)	(98,631)
Balance at 3/31/2010	187,973,418	-	$ 18,797	$ -	$ 4,339,054	$ (5,863,384)	$ (1,505,533)

See accompanying notes to financial statements.

GOLDCORP HOLDINGS CO.

NOTES TO INTERIM FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2010 AND 2009 (UNAUDITED)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

GoldCorp Holdings Co., (the “Company”) was originally formed as Montrose Ventures, Inc. in the State of Delaware on May 25, 1989. On April 23, 1996, the Company’s name was changed to Java Group, Inc., and on September 1, 2004 the name was changed to Consolidated General Corp. On August 7, 2007, the company’s name was changed to Goldcorp Holdings Co.

The Company owns land and lease claims on War Eagle Mountain in the state of Idaho. The Company has entered into a lease agreement with Silver Falcon Mining, Inc. (“Silver Falcon”) under which Silver Falcon is entitled to mine the land and the Company is entitled to a 15% royalty on all minerals extracted by Silver Falcon.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Revenue is recognized when earned according to lease and royalty agreements. Lease income is recognized as earned on a monthly basis according to the terms of the lease. Royalty income is recognized as ore is extracted and refined.

Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value.

Investments

Management determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each reporting date. Investments in incorporated entities in which the Company’s ownership is greater than 20% and less than 50%, or which the Company does not control through majority ownership or means other than voting rights, are accounted for by the equity method and are included in long-term assets. The Company accounts for its equity security investments as available for sale securities in accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“FAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” The Company periodically evaluates whether declines in fair values of its investments below the Company’s carrying value are other-than-temporary in accordance with FSP FAS 115 No. 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments.” The Company’s policy is to generally treat a decline in the investment’s quoted market value that has lasted continuously for more than six months as an other-than-temporary decline in value. The Company also monitors its investments for events or changes in circumstances that have occurred that may have a significant adverse effect on the fair value of the investment and evaluates qualitative and quantitative factors regarding the severity and duration of the unrealized loss and the Company’s ability to hold the investment until a forecasted recovery occurs to determine if the decline in value of an investment is other-than-temporary. Declines in fair value below the Company’s carrying value deemed to be other-than-temporary are charged to earnings. Additional information concerning the Company’s equity method and security investments is included in Note 15.

The Company accounts for its investments in auction rate securities in accordance with FAS No. 115. Specifically, when the underlying security of an auction rate security has a stated or contractual maturity date in excess of 90 days, regardless of the frequency of the interest rate reset date, the security is classified as an available-for-sale marketable debt security.

Facilities and equipment

Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such costs over the estimated productive lives, which do not exceed the related estimated mine lives, of such facilities based on proven and probable reserves.

Impairment of Long-Lived Assets

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.

Goodwill

The Company evaluates, on at least an annual basis during the fourth quarter, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, the Company compares the estimated fair value of its reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its estimated fair value, the Company compares the implied fair value of the reporting unit’s goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to earnings. The Company’s fair value estimates are based on numerous assumptions and it is possible that actual fair value will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.

Stock Based Compensation

The Company has issued and may issue stock in lieu of cash for certain transactions. The fair value of the stock, which is based on comparable cash purchases, third party quotations, or the value of services, whichever is more readily determinable, is used to value the transaction

Use of Estimates

The Company’s Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the Company’s Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related 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. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

Basic and Diluted Per Common Share

Under Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share,” basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Because the Company has incurred net losses, basic and diluted loss per share are the same since additional potential common shares would be anti-dilutive.

Research and Development

The Company expenses research and development costs as incurred.

Significant Recent Accounting Pronouncements

Accounting Standards Codification - In June 2009, FASB established the Accounting Standards Codification (“ASC”) as the single source of authoritative US GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants. The ASC is a new structure which took existing accounting pronouncements and organized them by accounting topic. The ASC did not change current US GAAP, but was intended to simplify user access to all authoritative US GAAP by providing all the relevant literature related to a particular topic in one place. All previously existing accounting standards were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 will be communicated by the FASB through Accounting Standards Updates (ASU’s). The ASC was effective during the period ended September 30, 2009. Adoption of the ASC did not have an impact on our consolidated financial position, results of operations or cash flows.

Subsequent Events - In May 2009, the ASC guidance for subsequent events was updated to establish accounting and reporting standards for events that occur after the balance sheet date but before financial statements are issued. The guidance was amended in February 2010. The update sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet in its financial statements, and (iii) the disclosures that an entity should make about events or transactions occurring after the balance sheet date in its financial statements. We adopted the updated guidance in 2009. The adoption had no impact on our consolidated financial position, results of operations or cash flows.

NOTE 3 – NOTES PAYABLE

On March 31, 2010, the Company was indebted to Pierre Quilliam on a promissory note dated December 31, 2009 in the original principal amount of $66,221.57. The note provides for a payment of $4,635.51 on December 31, 2010, and all remaining principal and accrued interest on December 31, 2011. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

On March 31, 2010, the Company was indebted to New Vision Financial, Ltd. on a promissory note dated December 31, 2009 in the principal amount of $2,564.57. The note provides for a payment of $179.52 on December 31, 2010, and all remaining principal and accrued interest on December 31, 2011. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

On March 31, 2010, the Company was indebted to New Vision Financial, Ltd. on a promissory note dated December 31, 2009 in the principal amount of $3,394.79. The note provides for a payment of $237.64 on December 31, 2010, and all remaining principal and accrued interest on December 31, 2011. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

On March 31, 2010, the Company was indebted to New Vision Financial, Ltd. on a promissory note dated June 30, 2008 in the original principal amount of $29,532. The note provides for a payment of $2,067.24 on June 30, 2009, and all remaining principal and accrued interest on June 30, 2010. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

On March 31, 2010, the Company was indebted to Pierre Quilliam on a promissory note dated June 30, 2008 in the original principal amount of $5,830. The note provides for a payment of $408.10 on June 30, 2009, and all remaining principal and accrued interest on June 30, 2010. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

On March 31, 2010, the Company was indebted to Pierre Quilliam on a promissory note dated December 1, 2008 in the original principal amount of $345,163. The note was executed to evidence the terms of repayment of an equal amount of expense reimbursements due Mr. Quilliam. The note provides for an interest payment of $26,174.86 on December 31, 2009, and all remaining principal and accrued interest on December 1, 2010. Interest accrues at a rate of 7% payable annually. Principal and interest due on the note is convertible into common stock at the election of the holder at a conversion price of $0.03 per share.

NOTE 4 - RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2010, the Company borrowed $7,000 from Silver Falcon Mining, Inc. As of March 31, 2010, the amount owed Silver Falcon Mining, Inc. was $76,499. The amounts are non-interest bearing, unsecured demand loans.

NOTE 5 - INCOME TAXES

The effective tax rate varies from the maximum federal statutory rate as a result of the following items for the three months ended March 31, 2010 and 2009:


	March 31, 2010	March 31, 2009

Tax benefit computed at the maximum federal statutory rate	(34.0)%	(34.0)%

State tax rate, net of federal tax benefit	(4.0)	(4.0)

Increase in valuation allowance	38.0	38.0

Effective income tax rate	0.0%	0.0%

Deferred income tax assets and the related valuation allowances result principally from the potential tax benefits of net operating loss carryforwards.

The Company has recorded a valuation allowance to reflect the uncertainty of the ultimate utilization of the deferred tax assets as follows:


	March 31, 2010			March 31, 2009

Deferred tax assets	$	2,225,741		$	2,098,657

Less valuation allowance	(2,225,741		)	(2,098,657		)

Net deferred tax assets	$	—		$	—

For financial statement purposes, no tax benefit has been reported as the Company has had significant losses in recent years and realization of the tax benefits is uncertain. Accordingly, a valuation allowance has been established in the full amount of the deferred tax asset.

At March 31, 2010, the Company had net operating loss carryforwards of approximately $5,863,384 which will be available to offset future taxable income. These net operating loss carryforwards expire at various times through 2030. The utilization of the net operating loss carryforwards is dependent upon the Company’s ability to generate sufficient taxable income during the carryforward period.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

On September 1, 2006, we entered into an employment agreement with Pierre Quilliam under which we agreed to pay Mr. Quilliam $125,000 per year.

On January 1, 2007, we entered into an employment agreement with Allen Breitkreuz under which we agreed to pay Mr. Breitkreuz $50,000 per year for three years and $75,000 for two years.

NOTE 7 - CAPITAL STOCK

At March 31, 2010, the Company's authorized capital stock was 1,000,000,000 shares of Common Stock, par value $0.0001 per share, and 5,000,000 shares of Preferred Stock, par value $0.0001 per share. On that date, the Company had outstanding 187,973,418 shares of Common Stock, and no shares of Preferred Stock.

During the three months ended March 31, 2010, the Company issued shares of Common Stock in the following transactions:

On January 1, 2010, the Company issued 1,060,606 shares of Common Stock for consulting services valued at $0.0075 per share, or $7,955.

On January 1, 2010, the Company issued 533,333 shares of Common Stock for accounting services valued at $0.0075 per share, or $4,000.

On February 1, 2010, the Company issued 700,000 shares of Common Stock for consulting services valued at $0.005 per share, or $3,500.

On March 1, 2010, the Company issued 533,333 shares of Common Stock for accounting services valued at $0.0075 per share, or $4,000.

On March 1, 2010, the Company issued 437,500 shares of Common Stock for consulting services valued at $0.016 per share, or $7,000.

On March 1, 2010, the Company issued 666,667 shares of Common Stock for accounting services valued at $0.006 per share, or $4,000.

On March 8, 2010, the Company issued 315,384 shares of Common Stock for accounting services valued at $0.013 per share, or $4,000.

On March 26, 2010, the Company issued 625,000 shares of Common Stock for consulting services valued at $0.016 per share, or $10,000.

On March 30, 2010, the Company issued 250,000 shares of Common Stock for accounting services valued at $0.016 per share, or $4,000.

As of March 31, 2010, the Company had outstanding three notes payable to Pierre Quilliam in the with an aggregate principal balance of $417,215, and three notes payable to New Vision Financial, Ltd. with an aggregate principal balance of $35,491. All of the notes are convertible into shares of Common Stock at election of the holder at a conversion price of $0.03 per share. At March 31, 2010, an aggregate of 16,082,543 shares of Common Stock were issuable upon conversion of the notes.

As of March 31, 2010 and 2009, the Company did not have outstanding any options, warrants or securities convertible or exchangeable into common stock, other than as discussed above.

NOTE 8 – GOING CONCERN

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, the Company has incurred a net loss of ($98,631) for the three months ended March 31, 2010. The Company has remained in business primarily through the deferral of salaries by management, loans from the Company’s chief executive officer, and loans from a significant shareholder. The Company intends on financing its future development activities from the same sources, until such time that funds provided by operations are sufficient to fund working capital requirements.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Disclosure Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Forward Looking Statements”). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company’s operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company’s proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors (“Important Factors”) and other factors could cause actual results to differ materially from the Company’s expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company’s expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.

Overview

On September 14, 2007, we acquired an interest in 174.82 acres of land on War Eagle Mountain in Idaho from two of our major shareholders for a total of 90,000,000 shares of our common stock. We acquired a 100% interest in five unpatented claims totaling 103 acres, and a 29.166% interest in seven patented claims totaling 71.82 acres. We also own five unpatented lease claims on War Eagle Mountain from the U.S. Bureau of Land Management, each of which covers approximately 20 acres, or approximately 100 acres in total.

On October 11, 2007, we entered into a lease of our mineral rights to Silver Falcon, which is responsible for all mining activities on War Eagle Mountain. We are entitled to annual lease payments of $1,000,000, payable on a monthly basis, a monthly nonaccountable expense reimbursement of $10,000 during any month in which ore is mined from the leased premises, and a royalty of 15% of all amounts earned by Silver Falcon from the processing of ore mined from our properties. The lease provides that lease payments must commence April 1, 2008, but that Silver Falcon may extend the commencement date to July 1, 2009, in which event the lease term will be extended by an equal amount of time.

Our revenue, profitability, and future growth rate depend substantially on factors beyond our control, including Silver Falcon’s success in the commencement of mining operations on our properties, as well as economic, political, and regulatory developments and fluctuations in the market prices of minerals processed from ore derived from our properties.

Results of Operations

Three Months ended March 31, 2010 and 2009

We had no revenues in the three months ended March 31, 2010 and 2009.

We reported losses from operations during the three months ended March 31, 2010 and 2009 of ($90,817) and ($66,867), respectively. The increased operating loss in 2010 as compared to 2009 was largely attributable to an increase in consulting fees of $26,332. All other categories of expenses were approximately the same.

We reported a net loss during the three months ended March 31, 2010 and 2009 of ($98,631) and ($74,499), respectively. The increased net loss in 2009 as compared to 2008 was attributable to higher loss from operations.

Liquidity and Sources of Capital

Our balance sheet as of March 31, 2010 reflects cash and current assets of $3,058, current liabilities of $1,796,410, and a working capital deficit of ($1,793,352). However, most of our current liabilities consist of accrued compensation to our management.

At this time, we have no revenues. We have executed a lease agreement with Silver Falcon, which provides for an annual lease payment of $1,000,000 payable in monthly installments, and a royalty equal to 15% of the proceeds of any ore mined from our property on War Eagle Mountain. However, we do not expect to begin receiving lease payments from Silver Falcon until Silver Falcon commences actual mining operations, which is not expected to occur until July 1, 2010. Until we begin receiving lease payments from Silver Falcon, we are dependent on the deferral of salaries by our management, and loans from our officers and a significant shareholder to pay other administrative expenses.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires us to make estimates and assumptions that affect our reported results of operations and the amount of reported assets, liabilities and proved mineral reserves. Some accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. Actual results may differ from the estimates and assumptions used in the preparation of our financial statements. Described below are the most significant policies we apply in preparing our financial statements, some of which are subject to alternative treatments under accounting principles generally accepted in the United States of America. We also describe the most significant estimates and assumptions we make in applying these policies. See Results of Operations above and Item 13. Financial Statements – Note A, “Summary of Significant Accounting Policies,” for a discussion of additional accounting policies and estimates made by management.

Revenue Recognition

Cash and Cash Equivalents

Facilities and Equipment

Impairment of Long-Lived Assets

We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimate of future cash flows is based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.

Goodwill

We evaluate, on at least an annual basis during the fourth quarter, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, we compare the estimated fair value of our reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its estimated fair value, we compare the implied fair value of the reporting unit’s goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to earnings. Our fair value estimates are based on numerous assumptions and it is possible that actual fair value will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.

Stock Based Compensation

We have issued and may issue stock in lieu of cash for certain transactions. The fair value of the stock, which is based on comparable cash purchases, third party quotations, or the value of services, whichever is more readily determinable, is used to value the transaction

Use of Estimates

Our Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related 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. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

Basic and Diluted Per Common Share

Under Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share,” basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Because we have has incurred net losses, basic and diluted loss per share are the same since additional potential common shares would be anti-dilutive.

Research and Development

We expense research and development costs as incurred.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that 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 are material to investors.

Going Concern

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company incurred a net operating loss in the three months ended March 31, 2010, and had significant unpaid accounts payable and liabilities. The Company needs to raise substantial capital to meet its obligations to fund the drilling of oil and gas wells on acreage it has leased. These factors create an uncertainty about the Company's ability to continue as a going concern. The Company is currently trying to raise capital through a private offering of preferred stock. The ability of the Company to continue as a going concern is dependent on the success of this plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Because the Company is a smaller reporting company, it is not required to provide the information called for by this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our chief executive officer and chief financial officer are responsible for establishing and maintaining our disclosure controls and procedures. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to the our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2009. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the evaluation date, such controls and procedures were inadequate due to a lack of financial resources.

Changes in internal controls

There were no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In the three months ended March 31, 2010, the Company issued shares of Common Stock in the following transactions: