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Bunker Hill Mining Corp. - Annual Report: 2009 (Form 10-K)

Lincoln Mining Inc




UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


[X]

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

For the fiscal year ended: June 30, 2009    


[  ]

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 0-50009


LINCOLN MINING CORP.

(Exact name of registrant as specified in its charter)


Nevada

 

32-0196442

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

605 Pacific Avenue

 

 

Manhattan Beach, CA

 

90266

(Address of principal executive offices)

 

(Zip Code)

(323) 449-2180
(Registrant’s telephone number, including area code)


Securities registered pursuant to section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act: $.001 par value, common voting shares


Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [  ]


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.  (1) Yes [X]  No [   ]


Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-Kor any amendment to this Form 10-KSB.  [  ]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                          Yes [ X ]  No [ ]

The issuer’s revenue for its most recent fiscal year was: $0.










The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity as of  August 20, 2009 was $121,000.


As of August 20, 2009 the issuer had 5,420,000 shares of its $.001 par value common stock outstanding.


Documents incorporated by reference:   None


Transitional Small Business Disclosure Format.

Yes [  ]

No [X]







LINCOLN MINING CORP.

 

FORM 10-K

 

TABLE OF CONTENT

 

 

 

PART I

Page

ITEM 1. DESCRIPTION OF BUSINESS

5

 

 

ITEM 2. DESCRIPTION OF PROPERTY

5

 

 

ITEM 3. LEGAL PROCEEDINGS

5

 

 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

5

 

 

PART II

 

 

 

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

               AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

5

 

 

ITEM 6. SELECTED FINANCIAL DATA

6

 

 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS

6

 

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

11

 

 

ITEM 8. FINANCIAL STATEMENTS SUPPLEMENTARY DATA

12

 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

 

               ACCOUNTING AND FINANCIAL DISCLOSURE

28

 

 

ITEM 9A(T). CONTROLS AND PROCEDURES

28

 

 

ITEM 9B. OTHER INFORMATION

30

 

 

PART III

 

 

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL AND CORPORATE

 

               GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

30

 

 

ITEM 11. EXECUTIVE COMPENSATION

33

 

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

 

                 AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

33

 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

 

                 AND DIRECTOR INDEPENDENCE

36

 

 

ITEM 14. PRINCIPAL ACCOUNTNAT FEES AND SERVICES

37

 

 

PART IV

 

 

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES

38










PART I


INTRODUCTION


Throughout this Annual Report, the terms, “we,” “us,” “our” or “the Company”  refer to Lincoln Mining Corp., (“LMC”).


FORWARD-LOOKING STATEMENTS


This Annual Report on Form 10-Kcontains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with regards to our revenue, spending, cash flow, products, actions, intentions, plans, strategies and objectives.  For this purpose any statements contained in this Annual Report that are not statements of historical fact may be deemed to be forward-looking statements.  Without limiting the foregoing, words such as “may,” “hope,” “will,” “expect,” “believe,” “anticipate,” “estimate” “projected” or “continue” or comparable terminology are intended to identify forward-looking statements.  These statements by their nature involve substantial risks and uncertainty, and actual results may differ materially depending on a variety of factors, many of which are not within our control.  These factors include but are not limited to economic conditions generally and in the industry in which we and our customers participate; competition within our industry, including competition from much larger competitors; legislative requirements or changes which could render our services less competitive or obsolete; our failure to successfully develop new services and/or products or to anticipate current or prospective customers’ needs; price increases or employee limitations; and delays, reductions, or cancellations of contracts we have previously entered.


Forward-looking statements are predictions and not guarantees of future performance or events.  The forward-looking statements are based on current industry, financial and economic information, which we have assessed but which by its nature is dynamic and subject to rapid and possibly abrupt changes.  Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. We undertake no obligation to amend this report or revise publicly these forward looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934) to reflect subsequent events or circumstances.









ITEM 1.  DESCRIPTION OF BUSINESS


The Company was incorporated in the State of Nevada on February 20, 2007. The Company is an Exploration Stage Company as defined by the Statement of Financial Accounting Standard (“SFAS) No.7. The Company had acquired a mineral property located in Elko County, within the state of Nevada and was not able to determine whether this property contains reserves that are economically recoverable. At this time, the Company will not be able to further  discover if this property contains reserves that are economical or keep the mineral claim in good standing due to lack of funding.


The Company is reviewing other potential acquisitions in the resource and non-resource sectors. While the Company is in the process of completing due diligence reviews of several opportunities, there is no guarantee that we will be able to reach any agreement to acquire such assets.



ITEM 2.  DESCRIPTION OF PROPERTY


The principal office of Lincoln Mining Corp. is located in Manhattan, California.  There is no lease.


ITEM 3.  LEGAL PROCEEDINGS



To the knowledge of management, there is no material litigation or governmental agency proceeding pending or threatened against the Company or its management. Further, we are not aware of any material pending or threatened litigation or governmental agency proceeding to which the Company or any of our directors, officers or affiliates are, or would be, a party.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE

OF SECURITIES HOLDERS


We did not hold an annual meeting of stockholders to vote on the following matters:


·

to elect directors to our  Board of Directors; and

·

to appoint Chisholm, Bierwolf, Nilson, and Morrill as the independent registered public accounting firm of the Company for the 2009 fiscal year.



  ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED

STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER

PURCHASES OF EQUITY SECURITITES




5







As of year ended June 30, 2009, our shares are currently being traded on the Over-the-Counter Bulletin Board (“OTCBB”) under the symbol LCNM.  


As of August 20, 2009 we have 29 shareholders holding 5,420,000


Cash Dividends


We have not declared a cash dividend on any class of common equity.  There are no restrictions on our ability to pay cash dividends, other than state law that may be applicable; those limit the ability to pay out all earnings as dividends.  Our board of directors does not, however, anticipate paying any dividends in the foreseeable future; it intends to retain the earnings that could be distributed, if any, for the operations, expansion and development of its business.


Unregistered Sales of Equity Securities


No instruments defining the rights of the holders of any class of registered securities have been materially modified, limited or qualified.


During the year ended June 30, 2009, we did not sell any equity securities.  


Repurchases of Equity Securities


During the year ended June 30, 2009, we did not repurchase any of our equity securities.



ITEM 6.  SELECTED FINANCIAL DATA


As a smaller reporting company we are not required to provide the information required by this item.



ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources


We do not currently possess a financial institution source of financing and there is no guarantee that the existing sources of cash will be adequate to meet our liquidity requirements.  


Our future capital requirements will depend upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. These financial statements do not include any adjustments relating to the recoverability and



6






classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.


As of June 30, 2009, we had cash on hand of $547 compared to $644.  The $98 decrease in cash on hand is the result of start-up cost of operations. We believe that cash on hand will not be sufficient to cover our operating costs over the next twelve months.  We anticipate the need to find other sources of capital at this time. We would seek additional capital in the form of debt and/or equity.  While we believe we are capable of raising additional capital, there is no assurance that we will be successful in locating other sources of capital on favorable terms or at all.


          

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 mineral properties and the discovery, development, and sale of ore reserves.


          

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.


Plan of Operation


Our plan of operation for the twelve months following the date of this report is to continue to review other potential acquisitions in the resource and non-resource sectors. Currently, we are in the process of completing due diligence reviews of several business opportunities. We expect that these reviews could cost us a total of $10,000 in the next 12 months.


As well, we anticipate spending an additional $15,000 on administrative fees, including fees we will incur in complying with reporting obligations. Total expenditures over the next 12 months are therefore expected to be $25,000.


Our cash reserves are not sufficient to meet our obligations for the next twelve-month period. As a result, we will need to seek additional funding in the near future. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We may also seek to obtain short-term loans from our directors, although no such arrangement has been made. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next nine months. We do not have any arrangements in place for any future equity financing.




7






Results of Operations


Comparison of the year ended June, 2009 and 2008


There was no revenues generated during the year ended, June 30, 2009 or in year ended, June 30, 2008


As we are in an exploratory stage of development, we do not anticipate having a profit in the fiscal year ending, June 30, 2010.


Total expenses increased 42% during the year ended June 30, 2009 compared to 2008.  The 42% increase is primarily due to the impairment of mining interest and obligatory reporting cost. We expect total expenses to be approximately 22% higher during the 2010 fiscal year, primarily as a result of obligatory reporting cost, research and development cost.


Cash Flow


During the year ended June 30, 2009 cash was primarily used to fund operations. We had a net decrease in cash of $97 during the year ended June 30, 2009 as compared to June 30, 2008.  See below for additional discussion and analysis of cash flow.


 

For the years ended June 30,

 

2009

 

2008

 

 

 

 

Net cash provided by (used in) operating activities

$                 (14,097)

 

$               (21,277)

Net cash used in investing activities

             -

 

(1,800)

Net cash provided by financing activities

   14,000   

 

   -

 

 

 

 

Net Change in Cash

$                        (97)

 

$               (23,077)


During the year ended June 30, 2009, net cash used in operating activities was $14,097, compared to net cash used in operating activities of $21,277 during the year ended June 30, 2008.  


As discussed herein we realized a net loss from operations of $31,522 during the year ended June 30, 2009, compared to $22,248 during the year ended June 30, 2008.


During the year ended June 30, 2009, net cash provided by financing activities used $14,000 from a related party, compared to $0 for the year ended June 30, 2008


Off-Balance Sheet Arrangements


The Company has no off-balance sheet arrangements and has not entered into any transaction involving unconsolidated limited purpose entities.




8






Recent Accounting Pronouncements


In March 2008, the FASB issued SFAS No.161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES—AN AMENDMENT OF FASB STATEMENT NO. 133. This statement’s objective is intended to enhance the current disclosure framework in statement 133. The statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. This disclosure better conveys the purpose of derivative use in terms of the risks that the entity is intending to manage. The adoption of SFAS 161 did not have an impact on the Company’s financial statements.


In May 2008, the FASB issued SFAS No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.  This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States.  The Board believes that the GAAP hierarchy should be directed to entities because it is the entity (not its auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.  The adoption of SFAS No. 162 did not have an impact on the Company’s consolidated financial statements.


In May 2008, the FASB issued SFAS No. 163, ACCOUNTING FOR FINANCIAL GUARANTEE INSURANCE CONTRACTS—AN INTERPRETATION OF FASB STATEMENT NO. 60.  This statement was issued because diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises.  That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.  This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation.  This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities.  The adoption of SFAS No. 163 does not have an impact on the Company’s consolidated financial statements.


In April 2009, the FASB issued SFAS No. 164, NOT-FOR-PROFIT ENTITIES: MERGERS AND ACQUISTIONS- INCLUDING AND AMENDMENT OF FASB NO. 142. This Statement is to improve the relevance, representational faithfulness, and comparability of the information that a not-for-profit entity provides in its financial reports about a combination with one or more other not-for-profit entities, businesses, or nonprofit activities. This Statement establishes principles and requirements for how a not-for-profit entity by determines whether a combination is a merger or an acquisition, applies the carryover method in accounting for a merger, applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer, and determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger or an acquisition. The adoption of SFAS No. 164 does not have an impact on the Company’s consolidated financial statements.



9






In May 2009, the FASB issued SFAS No.165, SUBSEQUENT EVENTS. This statement is to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This statement sets forth 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. This statement also sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, as well as, the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. In accordance with this Statement, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The adoption of SFAS No. 165 does not have an impact on the Company’s consolidated financial statements.


In June2009, the FASB issued SFAS No. 166, ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS – AN AMENDMENT OF FASB STATEMENT NO. 140. This Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets.   The Board undertook this project to address (1) practices that have developed since the issuance of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, that are not consistent with the original intent and key requirements of that Statement and (2) concerns of financial statement users that many of the financial assets (and related obligations) that have been derecognized should continue to be reported in the financial statements of transferors. The adoption of SFAS No. 166 does not have an impact on the Company’s consolidated financial statements.


In June 2009, the FASB issued SFAS No. 167, AMENDEMENTS TO FASB INTERPRETATION NO.46(R). This Statement is to improve financial reporting by enterprises involved with variable interest entities. The Board undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FASB Statement No. 166, Accounting for Transfers of Financial Assets, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. The adoption of SFAS No. 167 does not have an impact on the Company’s consolidated financial statements.


In June 2009, the FASB issued SFAS No. 168, THE FASB ACCOUNTING STANDARDS CODIFICATIONTM AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES –A REPLACEMENT OF FASB STATEMENT NO. 162. The FASB Accounting Standards CodificationTM (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting



10






and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative.  The adoption of SFAS No. 168 does not have an impact on the Company’s consolidated financial statements.


Critical Accounting Policies and Estimates


The preparation of financial statements in accordance with accounting standards generally accepted in the United States requires management to make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the financial statements and the revenues recognized and expenses incurred during the reporting period. Our estimates and assumptions affect our recognition of deferred expenses, bad debts, income taxes, the carrying value of its long-lived assets and its provision for certain contingencies. We evaluate the reasonableness of these estimates and assumptions continually based on a combination of historical information and other information that comes to its attention that may vary its outlook for the future. Actual results may differ from these estimates under different assumptions.

 

Management suggests that our Summary of Significant Accounting Policies, as described in Note 2 of Notes to Consolidated Financial Statements, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations. We believe the critical accounting policies that most impact our consolidated financial statements are described below.


Basis of Accounting We use the accrual method of accounting.



ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


As a smaller reporting company we are not required to provide the information required by this item.





11










ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

 

 

 

 

 

 

 

 

 

Lincoln Mining Corp

(An Exploration Stage Company)

Audited Financial Statements

(In U.S. Dollars)


June 30, 2009

and

June 30, 2008
































12






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and

Stockholders of Lincoln Mining, Inc

Manhattan, California


We have audited the accompanying balance sheets of Lincoln Mining, Inc as of June 30, 2009 and 2008, and the related statements of operations, stockholders’ equity, and cash flows for years then ended and for the period from February 20, 2007 (inception) through June 30, 2009. Lincoln Mining, Inc.’s management is responsibility for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lincoln Mining, Inc as of June 30, 2009 and 2008, and the results of its operations and its cash flows for the years then ended and for the period from February 20, 2007 (inception) through June 30, 2009, in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has incurred losses since inception and further losses are anticipated in the development of its business, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Chisholm, Bierwolf, Nilson & Morrill, LLC

Bountiful, Utah

September 22, 2009



13







Lincoln Mining Corp.

(An Exploration Stage Company)

Balance Sheets

 

ASSETS

 

 

June 30,

 

June 30,

 

 

2009      

 

2008

Current Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

547

$

       644

 

 

 

 

 

 

 

 

       

Total current assets

 

547

 

644

 

 

 

 

 

Property and Equipment

 

 

 

 

 

 

 

 

 

Mining interests (notes 2 and 4)

 

-

 

11,800

 

 

 

 

 

 

 

 

  

Total property and equipment

 

-

 

11,800

 

 

 

 

Total assets

$

547

$

12,444

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities

 

 

 

 

 

 

 

 

 

Accounts Payable

$

6,345

$

720

 

Related party payable (note 5)

 

14,100

 

        100

 

 

 

 

 

 

 

Total current liabilities  

 

20,445

 

820

 

 

 

 

 

 

 

Total liabilities

 

20,445

 

820

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

Capital stock, $.001 par value,

 

 

 

75,000,000 shares authorized;

 

 

 

5,420,000 shares issued and outstanding, respectively

 

5,420

 

5,420

 

Additional paid-in capital

 

29,580

 

29,580

 

Deficit, accumulated during the exploration stage

 

         (54,898)

 

(23,376)

 

 

 

 

 

 

 

Total stockholders’ equity (deficit)

 

(19,898)

 

11,624

 

 

Total liabilities and stockholders’ equity

$

547           

$

12,444



The accompanying notes are an integral part of these financial statements.

14







Lincoln Mining Corp.

(An Exploration Stage Company)

Statements of Operations

 

 

 

For the Year Ended

 

For the Year Ended

 

Cumulative During the Exploration Stage February 20, 2007  (inception) to

June 30,

 

June 30,

 

June 30,

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

Revenue

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

    Consulting

-

 

5,550

 

5,550

 Impairment of Mining Interest

 

11,800

 

-

 

11,800

    Legal and accounting

 

11,357

 

12,225

 

24,331

 Operation and administration

 

8,365

 

4,473

 

13,217

 

 

 

 

 

 

 

 

Total operating expenses

 

31,522

 

22,248

 

54,898

 

 

 

 

 

 

 

Loss before income tax

 

  (31,522)

 

  (22,248)

 

     (54,898)

    

 

 

 

 

 

 

Provision for income taxes

 

             -

 

             -

 

 -

 

 

 

 

 

 

 

Net loss

$

  (31,522)

$

  (22,248)

$

     (54,898)

 

 

 

 

 

 

 

 

$

 

 

 

 

 

Loss per common share – basic and fully diluted


(0.01)

$

(0.00)

 

 

 

 

5, 420,000

 

5,420,000

 

 

Weighted average common shares

 

 








The accompanying notes are an integral part of these financial statements.

15






Lincoln Mining, Inc.

(An Exploration Stage Company)

Statements of Stockholders' Equity (Deficit)

For the period February 20, 2007 (inception) through June 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Additional Paid in Capital

 

Deficit Accumulated During Exploration Stage

 

Total Stockholders' Equity

Shares

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

Balance, February 20, 2007 (inception)

 

 

$

          -

 $

              -

 $

                   -

 $

                    -

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for Cash at $0.001 per share

 

4,000,000

 

4,000

 

-

 

-

 

4,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for Cash at $0.01 per share

 

1,000,000

 

1,000

 

9,000

 

-

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for Cash at $0.05 per share

 

420,000

 

420

 

    20,580

 

-

 

21,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period ending June 30, 2007

 

         -

 

          -

 

              -

 

             (1,128)

 

              (1,128)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2007

 

5,420,000

 

5,420  

 

    29,580

 

             (1,128)

 

          33,872

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period ending June 30, 2008

 

         -

 

          -

 

              -

 

             (22,248)

 

              (22,248)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2008

 

5,420,000

 

5,420  

 

    29,580

 

             (23,376)

 

11,624

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period ending June 30, 2009

 

         -

 

          -

 

              -

 

             (31,522)

 

              (31,522)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2009

 

5,420,000

$

5,420  

$

    29,580

$

             (54,898)

$

(19,898)

 

 

 

 

 

 

 

 

 

 

 

 



The accompanying notes are an integral part of these financial statements.

16






Lincoln Mining Corp.

(An Exploration Stage Company)

Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

Year ended June 30,

 

Year ended June 30,

 

Accumulated from February 20, 2007 (inception) through June 30,

 

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

            (31,522)

$

      (22,248)

$

             (54,898)

 

 

 

 

 

 

 

 

 

Adjustment to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of mining interests

 

11,800

 

-

 

11,800

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Increase in accounts payable

 

5,625

 

-

 

6,345

 

 

Increase in accrued expenses

 

-

 

720

 

-

 

 

Decrease in prepaid

 

-

 

            251

 

-

 

 

Net cash used in operating activities

 

          (14,097)

 

          (21,277)

 

               (36,753)

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for mining interest

 

-

 

(1,800)

 

(11,800)

 

 

Net cash used in investing activities

 

-

 

(1,800)

 

(11,800)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advance from related party

 

14,000

 

                 -

 

14,100

 

Proceeds from issuance of common stock

 

         -

 

            -

 

               35,000

 

 

Net cash provided by financing activities

 

14,000

 

-

 

                 49,100

 

 

 

 

 

 

 

 

Increase (Decrease) in cash and cash equivalents

 

(97)

 

(23,077)

 

547                 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

644

 

23,721

 

                          -

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

$

547

$

644

$

547

 

 

Lincoln Mining Corp.



The accompanying notes are an integral part of these financial statements.

17






(An Exploration Stage Company)

Statements of Cash Flows (continued)

 

 

 

 

 

 

 

 

 

 

Year ended June 30,

 

Year ended June 30,

 

Accumulated from February 20, 2007 (inception) through June 30,

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

Supplement Disclosures:

 

 

 

 

 

 

Cash paid for interest

$

                  -

$

-

$

                      -

Cash paid for income tax

$

                    -

$

-

$

                      -

 

 

 

 

 

 

 

 




The accompanying notes are an integral part of these financial statements.

18




Note 1 – Nature and Continuance of Operations


The Company was incorporated in the State of Nevada on February 20, 2007. The Company is an Exploration Stage Company as defined by the Statement of Financial Accounting Standard (“SFAS) No.7. The Company had acquired a mineral property located in Elko County, within the state of Nevada and was not able to determine whether this property contains reserves that are economically recoverable. At this time, the Company will not be able to further  discover if this property contains reserves that are economical or keep the mineral claim in good standing due to lack of funding.


The Company is reviewing other potential acquisitions in the resource and non-resource sectors. While the Company is in the process of completing due diligence reviews of several opportunities, there is no guarantee that we will be able to reach any agreement to acquire such assets.


Note 2 - Significant Accounting Policies


The following is a summary of significant account policies used in the preparation of these financial statements.


a. Basis of presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises, and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.


b. Cash and cash equivalents


Cash and cash equivalents include highly liquid investments with original maturities of three months or less.


c. Mineral property costs


The Company has been in the exploration stage since its formation on February 20, 2007 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition and exploration costs are charged to operations as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.




19




Note 2 - Significant Accounting Policies (continued)


c. Mineral property costs (continued)


In the event that facts and circumstances indicate that the costs of long-lived assets, other than oil and gas properties, may be impaired, and evaluation of recoverability would be performed.  If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value is required.  


Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.


d. Fair Value of Financial instruments


In accordance with SFAS No. 157 Fair Value Measurements, which establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The fair value of the Company’s cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate carrying value based on their effective interest rates compared to current market prices.


e. Environmental expenditures


The operations of the Company have been, and may in the future, be affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set by

relevant legislation, by application of technically proven and economically feasible measures.


Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries. No costs have been, or may never be recognized by the Company for environmental expeditions.




20




Note 2 - Significant Accounting Policies (continued)


f. Income taxes


The Financial Accounting Standards Board (FASB) has issued Financial Interpretation No. 48. “Accounting for Uncertainty in Income Taxes – An interpretation of FASB Statement No. 109 (FIN 48).  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109,  “Accounting for Income Taxes”.  FIN 48 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position.  If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.  As a result of the implementation of FIN 48, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FIN 48. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.


g. Basic and diluted net loss per share


The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Share. SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerators) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during

the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. The Company had no common stock equivalents outstanding at June 30, 2009 or June 30, 2008.


 

 

 

For the Year Ended

 

For the Year Ended

 

 

 

June 30, 2009

 

June 30, 2008

Basic Earnings per share:

 

 

 

 

 

Income (Loss) (numerator)

$

                  (31,522)

$

                22,248)

 

Shares (denominator)                     

                   5,420,000

 

                 5,420,000

 

 

Per Share Amount        

$

                         (0.01)                                      

$

                       0.00

 

 

 

 

 

 

Fully Diluted Earnings per share:

 

 

 

 

 

Income (Loss) (numerator)                              

$

          (31,522)

$

   (22,248)

 

Shares (denominator)                                       

                   5,420,000

 

                 5,420,000

 

 

Per Share Amount                                            

$

                       (0.01)

$

                         0.00



21







Note 2 - Significant Accounting Policies (continued)


h. Use of estimates and assumptions


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. In these financial statements, assets, liabilities and earnings involve extensive reliance on management’s estimates. Actual results could differ from those estimates.


The Company’s periodic filing with the Securities and Exchange Commission (“SEC”) include, where applicable, disclosures of estimates, assumptions, uncertainties, and market that could affect the financial statements and future operations of the Company.  


i. Concentrations of credit risk


The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and related party payables. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds and as such, it believes that any associated credit risk exposures are limited.


j. Risks and uncertainties


The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, and other risks associated with operating a resource exploration business, including the potential risk of business failure.  


Note 3 – New Technical Pronouncements


In March 2008, the FASB issued SFAS No.161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES—AN AMENDMENT OF

FASB STATEMENT NO. 133. This statement’s objective is intended to enhance the current disclosure framework in statement 133. The statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. This disclosure better conveys the purpose of derivative use in terms of the risks that the entity is intending to manage.


In May 2008, the FASB issued SFAS No. 162, THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.  This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the



22





Note 3 – New Technical Pronouncements (continued)


preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States.  The

Board believes that the GAAP hierarchy should be directed to entities because it is the entity (not its auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.  The adoption of SFAS No. 162 did not have an impact on the Company’s consolidated financial statements.


In May 2008, the FASB issued SFAS No. 163, ACCOUNTING FOR FINANCIAL GUARANTEE INSURANCE CONTRACTS—AN INTERPRETATION OF FASB STATEMENT NO. 60.  This statement was issued because diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises.  That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.  This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation.  This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities.  The adoption of SFAS No. 163 does not have an impact on the Company’s consolidated financial statements.


In April 2009, the FASB issued SFAS No. 164, NOT-FOR-PROFIT ENTITIES: MERGERS AND ACQUISTIONS- INCLUDING AND AMENDMENT OF FASB

NO. 142. This Statement is to improve the relevance, representational faithfulness, and comparability of the information that a not-for-profit entity provides in its financial reports about a combination with one or more other not-for-profit entities, businesses, or nonprofit activities. This Statement establishes principles and requirements for how a not-for-profit entity by determines whether a combination is a merger or an acquisition, applies the carryover method in accounting for a merger, applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer, and determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger or an acquisition. The adoption of SFAS No. 164 does not have an impact on the Company’s consolidated financial statements.


In May 2009, the FASB issued SFAS No.165, SUBSEQUENT EVENTS. This statement is to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This statement sets forth 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. This statement also sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, as well as, the disclosures that an entity should make about events or



23





Note 3 – New Technical Pronouncements (continued)


transactions that occurred after the balance sheet date. In accordance with this Statement, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The adoption of SFAS No. 165 does not have an impact on the Company’s consolidated financial statements.


In June2009, the FASB issued SFAS No. 166, ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS – AN AMENDMENT OF FASB STATEMENT NO. 140. This Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets.   The Board undertook this project to address (1) practices that have developed since the issuance of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, that are not consistent with the original intent and key requirements of that Statement and (2) concerns of financial statement users that many of the financial assets (and related obligations) that have been derecognized should continue to be reported in the financial statements of transferors. The adoption of SFAS No. 166 does not have an impact on the Company’s consolidated financial statements.


In June 2009, the FASB issued SFAS No. 167, AMENDEMENTS TO FASB INTERPRETATION NO.46(R). This Statement is to improve financial reporting by enterprises involved with variable interest entities. The Board undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FASB Statement No. 166, Accounting for Transfers of Financial Assets, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. The adoption of SFAS No. 167 does not have an impact on the Company’s consolidated financial statements.


In June 2009, the FASB issued SFAS No. 168, THE FASB ACCOUNTING STANDARDS CODIFICATIONTM AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES –A REPLACEMENT OF FASB STATEMENT NO. 162. The FASB Accounting Standards CodificationTM (Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this



24






Note 3 – New Technical Pronouncements (continued)


Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative.  The adoption of SFAS No. 168 does not have an impact on the Company’s consolidated financial statements.


Note 4 - Mineral Property


Pursuant to a mineral property purchase agreement dated May 24, 2007, the Company acquired a 100% undivided right, title and interest in a mineral claim, located in Section 8 of T35N, R36E Mount Diablo Base Meridian in Elko County, within the state of Nevada for a cash payment of $10,000. The Company must annually renew the lease on the land with the state for $1,800 and has done so for this fiscal year end, June 30, 2009.


Since the Company has not established the commercial feasibility of the mineral claim, the acquisition costs have been capitalized. The Company has not depleted the mineral claims as no proven reserves have been found. The Company will not be able to keep the mineral claim in good standing due to lack of funding. The Company will allow the mineral claim to lapse at the end of June. At June 30, 2009, the Company determined that there was little, or no, possibility of the company generating revenues

related to the mining interests. This, coupled with the lapse of the mineral claims lease was determined to be an impairment of the asset. As such, the Company’s management determined to fully impair the mining interest, which was a charge to the Company’s statements of operations in the amount of $11,800.


Note 5 – Related Party Payable


The president, John Pulos, advanced the Company $100 dollars to open the Company’s bank account. Recently, the president advanced the Company an additional $14,000 for operating costs which accrues no interest and is unsecured and due on demand. As of June 30, 2009 the related party payable is $14,100.


Note 6 - Capital Stock


Authorized


The total authorized capital is 75,000,000 common shares with a par value of $0.001 per common share.




25




Note 6 - Capital Stock (continued)


Issued and outstanding


In April 2007 the Company issued 4,000,000 and 1,000,000 shares of our common stock for cash at $0.001 and $0.01 per share, respectively.


In May 2007 the Company issued 420,000 shares of our common stock for cash at $0.05 per share.


At the year ended June 30, 2009 and 2008, the Company had 5,420,000 shares of the common stock issued and outstanding.


Note 7 - Income Taxes


The Financial Accounting Standards Board (FASB) has issued Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If

the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of FIN 48, the Company performed a review of its material tax positions. At inception date of February 20, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate.  


As of June 30, 2009, the Company had no accrued interest and penalties related to uncertain tax positions. The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended June 30, 2009and 2008 due to the following:


Deferred tax assets and the valuation account are as follows:

 

 

 

 

 

 

 

 

 

 

For the Years Ended

 

 

 

June 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

Deferred tax asset:

 

 

 

 

 

Net operating loss carryforward

$

     10,717

 $

       7,564

 

Valuation allowance

 

    (10,717)

 

      (7,564)

 

 

 

 

 

 

 

Total

$

                  -   

 $

                  -   



26







Note 7 - Income Taxes (continued)


The components of income tax expense are as follows:

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended

 

 

 

June 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

Current Federal tax

$

                  -   

 $

                  -   

 

Current State tax

 

                  -   

 

                  -   

 

Change in NOL benefit

 

       3,153

 

       7,180

 

Change in valuation allowance

 

      (3,153)

 

      (7,180)

 

 

 

 

 

 

 

Total

$

                  -   

 $

                  -   


The potential income tax benefit of these losses has been offset by a full valuation allowance.


As at June 30, 2009, the Company has an unused net operating loss carry-forward balance of $54,898 that is available to offset future taxable income. This unused net operating loss carry-forward balance begins to expire in 2027.


Note 8 – Going Concern


These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $54,898 and further losses are anticipated in the development of its business. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.




27




Note 8 – Going Concern (continued)


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 mineral properties and the discovery, development, and sale of ore reserves.


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.




28





ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.


ITEM 9A(T).  CONTROLS AND PROCEDURES

 

     Management has evaluated the effectiveness of our internal control over financial reporting (ICFR) as of June 30, 2009 based on the control criteria established in a report entitled Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO.  Based on our assessment and those criteria, our management has concluded that our internal control over financial reporting had the following deficiencies as of June 30, 2009:


      1)       Certain control procedures were unable to be verified due to performance of the procedure not being sufficiently documented.  As an example, some procedures requiring review of certain reports could not be verified due to there being no written notation on the report by the reviewer.  Because we were unable to verify these procedures, we conclude that as of June 30, 2009 there were control deficiencies related to the preparation and review of our interim and annual consolidated financial statements, in particular with respect to certain account reconciliations, journal entries and spreadsheets, and the authorization of sales transactions and customer billing rates.  While none of these control deficiencies resulted in audit adjustments to our 2009 interim or annual financial statements, they could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected, and therefore we have determined that these control deficiencies constitute material weaknesses.


     2)       Certain of our personnel had access to various financial application programs and data that was beyond the requirements of their individual job responsibilities.  While this control deficiency did not result in any audit adjustments to our 2009 interim or annual consolidated financial statements, it could result in a material misstatement to our interim or consolidated financial statements that would not be prevented or detected, and therefore we have determined that this control deficiency constitutes a material weakness.


     3)       We did not maintain a level of personnel sufficient to execute certain computing controls over our information technology structure. While this control deficiency did not result in any audit adjustments to our 2009 interim or annual financial statements, it could result in a material misstatement to our interim or consolidated financial statements that would not be prevented or detected, and therefore we have determined that this control deficiency constitutes a material weakness.


     4)       We did not maintain adequate segregation of duties within certain areas impacting our financial reporting.  While this control deficiency did not result in any audit adjustments to our 2009 interim or annual financial statements, it could result in a



29




material misstatement to our interim or consolidated financial statements that would not be prevented or detected, and therefore we have determined that this control deficiency constitutes a material weakness.


     To the extent reasonably possible given our resources, we will seek the advice of outside consultants and utilize internal resources to implement additional internal controls to address the above identified material weaknesses.  We are taking steps to implement additional review and approval procedures applicable to our financial reporting process, and are in the planning phase of creating and implementing new information technology policies and procedures related to controls over information technology operations, security and change management.


     Through these steps, we believe that we are addressing the deficiencies that affected our internal control over financial reporting as of June 30, 2009.  Because the remedial actions require upgrading certain of our information technology systems, relying extensively on manual review and approval processes, and possibly hiring of additional personnel, we may not be able to conclude that these material weaknesses have been remedied until these controls have been successfully operation for some period of time.


     Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.  It is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.  It also can be circumvented by collusion or improper management override.

 

     Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.  However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process certain safeguards to reduce, thought not eliminate, this risk.  Management is responsible for establishing and maintaining adequate internal control over our financial reporting.


     This report does not include an attestation of our registered public accounting firm regarding internal control over financial reporting, pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.


     There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



ITEM 9B.  OTHER INFORMATION


None.



30





PART III


ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,

CONTROL PERSONS AND CORPORATE GOVERNANACE;

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT


The following table sets forth the our directors, executive officers, promoters and control persons, their ages, and all offices and positions held within the Company as of

June 30, 2009.  Directors are elected for a period of one year and thereafter serve until their successor is duly elected by the stockholders and qualified.  Officers and other employees serve at the will of the board of directors.

 

 Name 

 

 Age

 

 Present Position With the Company

 

  Director  Since

 

 

 

 

 

 

 

 John Pulos

 

  

 

 Chief Executive and Financial Officer

 

 February 2007

 

 

 

 

 

 

 


The following sets forth certain biographical information relating to the Company’s Officers and Directors:


John Pulos.  Mr. Pulos has been involved in the real estate market for the past 20 years.  Focus has been on development, investment and obtaining land entitlements all over United States and Canada.  Current deals have included a purchase and resale of a 12 building portfolio of retail space as well as numerous acquisitions of undervalued residential projects in the southern California market.  Mr. Pulos obtained his Bachelor of Arts in Political Science from the University of Washington and a Masters of Science in Real Estate Finance at New York University. 


Code of Ethics

 

Our board of directors has adopted a code of ethics that will apply to its principal executive officer, principal financial officer and principal accounting officer or controller and to persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt internal reporting of violations of the code and accountability for adherence to the code.  We will provide a copy of our code of ethics, without charge, to any person upon receipt of written request for such delivered to our corporate headquarters.  All such requests should be sent care of Lincoln Mining Corp, Attn: Corporate Secretary, 605 Pacific Avenue, Manhattan Beach, California 90266.




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Committees of the Board of Directors


Audit Committee


We do not currently have a standing audit committee or other committee performing similar functions, nor have we adopted an audit committee charter.  Given the size of the Company, its available resources and the fact that the OTCBB does not require us to have an audit committee, the board of directors has determined that it is in the Company’s best interest to have the full board fulfill the functions that would be performed by the audit committee, including selection, review and oversight of the Company’s independent accountants, the approval of all audit, review and attest services provided by the independent accountants, the integrity of the Company’s reporting practices and the evaluation of the Company’s internal controls and accounting procedures.  The board is also responsible for the pre-approval of all non-audit services provided by its independent auditors.  Non-audit services are only provided by our independent accountants to the extent permitted by law.  Pre-approval is required unless a “de minimus” exception is met.  To qualify for the “de minimus” exception, the aggregate amount of all such non-audit services provided to the Company must constitute not more than 5% of the total amount of revenues paid by us to our independent auditors during the fiscal year in which the non-audit services are provided; such services were not recognized by us at the time of the engagement to be non-audit services; and the non-audit services are promptly brought to the attention of the board and approved prior to the completion of the audit by the board or by one or more members of the board to whom authority to grant such approval has been delegated.


As we do not currently have a standing audit committee, we do not, at this time have an “audit committee financial expert” as defined under the rules of the Securities and Exchange Commission.  The board does believe, however, that should the Company form a standing audit committee in the future, Mr. Thomas Iwanski, an independent director, could qualify as an audit committee expert.


Nominating Committee


We do not currently have a standing nominating committee or other committee performing similar functions, nor have we adopted a nominating committee charter.  Given the size of the Company, its available resources and the fact that the OTCBB does not require us to have a nominating committee, the board of directors has determined that it is in the Company’s best interest to have the full board of directors to participate in the consideration for director nominees.  In general, when the board determines that expansion of the board or replacement of a director is necessary or appropriate, the board will review through candidate interviews with management, consult with the candidate’s associates and through other means determine a candidate’s honesty, integrity, reputation in and commitment to the community, judgment, personality and thinking style, residence, willingness to devote the necessary time, potential conflicts of interest, independence, understanding of financial statements and issues, and the willingness and ability to engage in meaningful and constructive



32




discussion regarding Company issues.  The board would review any special expertise, for example, that qualifies a person as an audit committee financial expert, membership or influence in a particular geographic or business target market, or other relevant business experience.  To date we have not paid any fee to any third party to identify or evaluate, or to assist it in identifying or evaluating, potential director candidates.


The nominating committee will consider director candidates nominated by shareholders during such times as the Company is actively considering obtaining new directors.  Candidates recommended by shareholders will be evaluated based on the same criteria described above.  Shareholders desiring to suggest a candidate for consideration should send a letter to the Company’s Secretary and include: (a) a statement that the writer is a shareholder (providing evidence if the person's shares are held in street name) and is proposing a candidate for consideration; (b) the name and contact information for the candidate; (c) a statement of the candidate’s business and educational experience; (d) information regarding the candidate’s qualifications to be director, including but not limited to an evaluation of the factors discussed above which the board would consider in evaluating a candidate; (e) information regarding any relationship or understanding between the proposing shareholder and the candidate; (f) information regarding potential conflicts of interest; and (g) a statement that the candidate is willing to be considered and willing to serve as director if nominated and elected.  Because of the small size of the Company and the limited need to seek additional directors, there is no assurance that all shareholder proposed candidates will be fully considered, that all candidates will be considered equally, or that the proponent of any candidate or the proposed candidate will be contacted by the Company or the board, and no undertaking to do so is implied by the willingness to consider candidates proposed by shareholders.


Compensation Committee


We do not have a standing compensation committee or a charter; rather our President evaluates officer and employee compensation issues subject to the approval of our board of Directors.  Our President makes recommendations to the board of directors as to employee benefit programs and officer and employee compensation.  The compensation of President is determined and approved directly by board of directors.  Neither the President nor the board of directors engaged compensation consultants during the year.



ITEM 11.  EXECUTIVE COMPENSATION


None.


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END


None of the named executive officers held an outstanding equity award at our fiscal year end.


DIRECTOR COMPENSATION

None.



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Director Stock Purchase Plan


We do not currently have a director stock purchase plan in place.



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


The following table sets forth as of August 20, 2009, the name and the number of shares of our common stock, par value $0.001 per share, held of record or beneficially by each person who held of record, or was known by us to own beneficially, more than 5% of the issued and outstanding shares of our common stock, and the name and shareholdings of each director and of all executive officers and directors as a group.

 

Type of Security

 

Name and Address

 

Amount & Nature of Beneficial Ownership

 

% of  Class

 

 

 

 

 

 

 

Common

 

John Pulos

 

 

     3,000,000

 


55%

624 13th Street

Manhattan Beach, CA  90266

 

 

 

 

 

 

 

 

Common

 

Xavier Franco

 

 

         250,000

 


4.6%

12100 Wilshire Blvd, 17th Fl

Los Angeles, CA 90025

 

 

 

 

 

 

 

 

Common

 

Marnie Markin

 

 

         250,000

 


4.6%

11831 Laurel Hills Rd.

Studio City, CA 91604

 

 

 

 

 

 

 

 

Common

 

Blair Sorby

 

 

         250,000

 


4.6%

4759 Kester Avenue

Sherman Oaks, CA 91403

 

 

 

 

 

 

 

 

 Common

 

Tiffeni Graves

 

 

         250,000

 


4.6%

11920 Laurel Hills Rd.

Studio City, CA 91604

 

 

 

 

 

 

 

 

 Common

 

Courtney Kramer

 

 

         100,000

 


1.8%

337 n. Curson Avenue , #4

Los Angeles, CA 91036

 

 

 

 

 

 

 

 



34







 Common

 

John H Schweitzer

 

 

         100,000

 


1.8%

5440 La Jolla Blvd. Unit E203

La Jolla, California 92037

 

 

 

 

 

 

 

 

 Common

 

Joey D. Ball

 

 

         100,000

 


1.8%

3740 Beechglen Dr

La Crescenta, CA 91214

 

 

 

 

 

 

 

 

 Common

 

Eric Heldwein

 

 

         100,000

 


1.8%

2222 Foothill Blvd, Ste E206

La Canada, CA 91011

 

 

 

 

 

 

 

 

 Common

 

Steven W Woods

 

 

         100,000

 


1.8%

1012 Huntington Dr.

Duarte, CA 91010

 

 

 

 

 

 

 

 

 Common

 

John Scasino

 

 

         100,000

 


1.8%

147 n Beachwood Dr. #E

Burbank, CA 91506

 

 

 

 

 

 

 

 

 Common

 

Josef W Glennanthony

 

 

         100,000

 


1.8%

5712 Airdrome St.

Los Angeles, CA 90019

 

 

 

 

 

 

 

 

 Common

 

Julie McDonald

 

 

         100,000

 


1.8%

10849 Bloomfield Street, #10

North Hollywood, CA 91602

 

 

 

 

 

 

 

 

 Common

 

Marion Yip

 

 

         100,000

 


1.8%

1550 Sanborn Avenue

Los Angeles, CA 90027

 

 

 

 

 

 

 

 

 Common

 

Thomas Taubman

 

 

         100,000

 


1.8%

4155 Center Street

Los Angeles, CA 90232

 

 

 

 

 

 

 

 

 Common

 

Matthe Moldin

 

 

           30,000

 


0.55%

4759 Kester Avenue

Sherman Oaks, CA 91403

 

 

 

 

 

 

 

 

 Common

 

Tonya Christianson

 

 

           30,000

 


0.55%

6600 Bobbyboyar Avenue

West Hills, CA 91307



35







 

 

 

 

 

 

 

 

 Common

 

Ernesto Barragan

 

 

           30,000

 


0.55%

16501 Sedona Street

Lake Elsinore, CA 92530

 

 

 

 

 

 

 

 

 Common

 

Ryan Mallen

 

 

           30,000

 


0.55%

861 Wilbar Avenue

San Diego, CA 92109

 

 

 

 

 

 

 

 

 Common

 

Aaron M. Coles

 

 

           30,000

 


0.55%

6845 W. 85th Place

Los Angeles, CA 90045

 

 

 

 

 

 

 

 

 Common

 

Stephen Coles

 

 

           30,000

 


0.55%

6845 W. 85th Place

Los Angeles, CA 90045

 

 

 

 

 

 

 

 

 Common

 

Colleen White

 

 

           30,000

 


0.55%

12432 Woodgreen Street

Los Angeles, CA 90066

 

 

 

 

 

 

 

 

 Common

 

Dominic M. Reis

 

 

           30,000

 


0.55%

25908 Pennsylvania Avenue

Lomita, CA 90717

 

 

 

 

 

 

 

 

 Common

 

Cynthia Reis

 

 

           30,000

 


0.55%

25908 Pennsylvania Avenue

Lomita, CA 90717

 

 

 

 

 

 

 

 

 Common

 

Jason Wall

 

 

           30,000

 


0.55%

25561 Eastwind Drive

Dana Point, CA 92629

 

 

 

 

 

 

 

 

 Common

 

Kristin Wall

 

 

           30,000

 


0.55%

25561 Eastwind Drive

Dana Point, CA 92629

 

 

 

 

 

 

 

 

 Common

 

Edward R. Landy

 

 

           30,000

 


0.55%

66870 Hacienda

Desert Hot Springs, CA 92440

 

 

 

 

 

 

 

 



36







 Common

 

Kirk Strassman

 

 

           30,000

 


0.55%

1158 26th Street, #673

Santa Monica, CA 90403

 

 

 

 

 

 

 

 

 Common

 

Robin Landy

 

 

           30,000

 


0.55%

7550 Santa Lucia Street

Fontana, CA 92336

 

 

 

 

 

 

 

 

All executive officers and directors

 

 

3,000,000

 


55%

 

 

 

 

 

 

 

 

Total

 

 

   5,420,000

 


100%


(1)

Mr. Pulos is the Chief Executive and Financial Officer of Lincoln Mining.


Change in Control


To the knowledge of the management, there are no present arrangements or pledges of the Company’s securities that may result in a change in control of the Company.



ITEM 13.  CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE


None.



ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES


Chisholm Bierwolf Nilson & Morrill, LLC. served as the Company’s independent registered public accounting firm for the years ended June 30, 2009 and 208, and is expected to serve in that capacity for the current year.  Principal accounting fees for professional services rendered for the Company by Chisholm Bierwolf Nilson & Morrill, LLC for the year ended June 30, 2009 and 2008, are summarized as follows:

 

 

 

2009

 

2008

 Audit

$

0

 

$

0

 Audit related

$

4,960

 

$

5,975

 Tax

$

0

 

$

0

 All other

$

0

 

$

0

 Total

$

4,960

 

$

5,975

 



37




Audit Fees.  Audit fees were for professional services rendered in connection with our annual financial statement audits and quarterly reviews of financial statements for filing with the Securities and Exchange Commission.



Tax Fees.  Tax fees related to services for tax compliance and consulting.



All Other Fees.  Other fees were for EDGAR filing services provided to the Company.



Board of Directors Pre-Approval Policies and Procedures.  At our regularly scheduled and special meetings, our board of directors, in lieu of an established audit committee, considers and pre-approves any audit and non-audit services to be performed by our independent registered public accounting firm. The board of directors has the authority to grant pre-approvals of non-audit services.




 ITEM 15. EXHIBITS



Exhibits.  The following exhibits are included as part of this Annual Report:



 

Exhibit Number

 

Title of Document

 

 

 

 

 

Exhibit 31.1

 

Certification of Principal Executive Officer Pursuant to

 

 

 

Section 302 of the Sarbanes Oxley Act of 2002

 

 

 

 

 

Exhibit 31.2

 

Certification of Principal Financial Officer Pursuant to

 

 

 

Section 302 of the Sarbanes Oxley Act of 2002

 

 

 

 

 

Exhibit 32.1

 

Certification of Principal Executive Officer Pursuant to

 

 

 

Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

Exhibit 32.2

 

Certification of Principal Financial Officer Pursuant to

 

 

 

Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 







SIGNATURES


In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



LINCOLN MINING CORP.






38




Dated: September 24, 2009

By: /s/ John Pulos

John Pulos, President, Acting

Chief Financial Officer



























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