Bunker Hill Mining Corp. - Quarter Report: 2009 September (Form 10-Q)

Lincoln Mining Inc

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]

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

For the Quarterly Period Ended September 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 000-50009

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		92666
(Address of principal executive offices)		(Zip Code)

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

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 any 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. Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer or a smaller public company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

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 [X] No [ ]

As of October 27, 2009, the registrant had 5,420,000 shares of common stock, par value $0.001, issued and outstanding.

LINCOLN MINING CORP.

FORM 10-Q

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION

Item 1. Condensed Financial Statements
		Page
	Balance Sheets as of September 30, 2009 (unaudited) and June 30, 2009	2

	Unaudited statements of Operations for the Three Months Period Ended September 30, 2009 and 2008 and the period from inception on February 20, 2007 through September 30, 2009	3

	Unaudited statements of Cash Flows for the Three Months Period Ended September 30, 2009 and 2008 and the period from inception on February 20, 2007 through September 30, 2009	4

	Notes to Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		9

Item 3. Quantitative and Qualitative Disclosures About Market Risk		11

Item 4. Controls and Procedures		11

PART II — OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders		13

Item 6. Exhibits		13

Signatures		14


Lincoln Mining Corp.
(An Exploration Stage Company)
Balance Sheets

ASSETS

				September 30			June 30,
				2009			2009
				(unaudited)
Current Assets
	Cash and cash equivalents		$	737		$	547

		Total current assets		737			547

		Total assets	$	737		$	547

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current Liabilities
	Accounts Payable		$		1,491	$	6,345
	Related party payable (note 4)				25,600		14,100

		Total current liabilities			27,091		20,445

		Total liabilities			27,091		20,445

Commitments and contingencies					-		-

Stockholders’ (Deficit)
	Capital stock, $.001 par value,
	75,000,000 shares authorized;
	5,420,000 shares issued and outstanding				5,420		5,420
	Additional paid-in capital				29,580		29,580
	Deficit accumulated during the exploration stage				(61,354)		(54,898)

		Total stockholders’ (deficit)			(26,354)		(19,898)
		Total liabilities and stockholders’ (deficit)	$		737	$	547

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


Lincoln Mining Corp.
(An Exploration Stage Company)
Statements of Operations
(Unaudited)
			For Three Months Ended		For Three Months Ended		Cumulative During the Exploration Stage February 20, 2007 (inception) to
			September 30,		September 30,		September 30,
			2009		2008		2009

Revenue		$	-	$	-	$	-


Operating expenses
Consulting			-		-		5,550
Impairment of Mining Interest			-		-		11,800
Legal and accounting			5,746		5,067		30,077
Operation and administration			710		2,544		13,927

	Total operating expenses		6,456		7,611		61,354

Loss before income tax			(6,456)		(7,611)		(61,354)

Provision for income taxes			-		-		-

Net (loss)		$	(6,456)	$	(7,611)	$	(61,354)

		$
Loss per common share – basic and fully diluted		$	(0.00)	$	(0.00)
			5, 420,000		5,420,000
Weighted average common shares – basic and diluted			5, 420,000		5,420,000

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

Lincoln Mining Corp

(An Exploration Stage Company)

Statements of Cash Flows

(Unaudited)



				For Three Months ended September 30,		For Three Months ended September 30,		Accumulated from February 20, 2007 (inception) through September 30,
				2009		2008		2009
Cash flows from operating activities

	Net loss		$	(6,456)	$	(7,611)	$	(61,354)

	Changes in operating assets and liabilities:
		Increase (decrease) in accounts payable		(4,854)		5,472		1,491
		Net cash used in operating activities		(11,310)		(2,139)		(59,863)

Cash flows from investing activities
	Net cash used in investing activities			-		-		-

Cash flows from financing activities
	Advance from related party			11,500		2,000		25,600
	Proceeds from issuance of common stock			-		-		35,000
	Net cash provided by financing activities			11,500		2,000		60,600

Increase (Decrease) in cash and cash equivalents				190		(139)		737

Cash and cash equivalents, beginning of year				547		644		-

Cash and cash equivalents, end of year			$	737	$	505	$	737


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


Lincoln Mining Corp.
(An Exploration Stage Company)
Statements of Cash Flows (continued) (Unaudited)

		For Three Months ended September 30,		For Three Months ended September 30,		Accumulated from February 20, 2007 (inception) through September 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.

Lincoln Mining Corp

(An Exploration Stage Company)

Notes to the Condensed Financial Statements

Note 1 – Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ deficit or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended June 30, 2009. The interim results for the period ended September 30, 2009 are not necessarily indicative of the results for the full fiscal year.

Note 2 – Nature of Operations and Summary of Significant Accounting Policies

Nature of operations

The Company was incorporated in the State of Nevada on February 20, 2007. 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 contained reserves that were economically recoverable. The Company currently, has ceased their attempts at developing this property.

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.

Exploration Stage

The Company’s financial statements are presented as those of an exploration stage company. Activities during the exploration stage primarily include reviewing potential acquisition in the resource and non-resource sectors

Lincoln Mining Corp

(An Exploration Stage Company)

Notes to the Condensed Financial Statements

Note 3 - 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 not done so for this fiscal year end, June 30, 2010.

Note 3 - Mineral Property (continued)

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 allowed 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 4 – Related Party Payable

The president, John Pulos, advanced the Company $100 dollars to open the Company’s bank account. By fiscal year-end 2009, the president advanced the Company $14,000 for operating cost. During the three months ended September 30, 2009, the president advanced the Company an additional $11,500 for operating costs. The loan accrues no interest and is unsecured and due on demand. As of September 30, 2009 the related party payable is $25,600.

Lincoln Mining Corp

(An Exploration Stage Company)

Notes to the Condensed Financial Statements

Note 5 – 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 $61,354 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.

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.

Note 5 – Going Concern (continued)

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.

Item 2.

Management's Discussion and Analysis or Plan of Operation

This Management's Discussion and Analysis or Plan of Operation and other parts of this quarterly report on Form 10-Q contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “intends,” “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those set forth below under “Certain Risk Factors.” We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

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.

Results of Operations

Comparison of the three months ended September 30, 2009 and 2008

There was no revenues generated during the three months ended, September 30, 2009 or in three months ended, September 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 decreased 15% during the three months ended September 30, 2009 compared to 2008. The 15% decrease is primarily due to lower operating and administration expense, as well as, lower professional fees . We expect total expenses to be approximately 15% higher during the 2010 fiscal year, primarily as a result of obligatory reporting cost, research and development cost.

Cash Flow

During the three months ended September 30, 2009 cash was primarily used to fund operations. We had a net increase in cash of $190 during the three months ended September 30, 2009 as compared to September 30, 2008. See below for additional discussion and analysis of cash flow.


		For the three months ended September 30,
		2009		2008

Net cash provided by (used in) operating activities	$	(11,310)	$	(2,139)
Net cash used in investing activities		-		-
Net cash provided by financing activities		11,500		2,000

Net Change in Cash	$	190	$	(139)

During the three months ended September 30, 2009, net cash used in operating activities was $11,310, compared to net cash used in operating activities of $2,139 during the three months ended September 30, 2008.

As discussed herein we realized a net loss from operations of $6,456 during the three months ended September 30, 2009, compared to $7,611 during the three months ended September 30, 2008.

During the three months ended September 30, 2009, net cash provided by financing activities used $11,500 from a related party, compared to $2,000 for the three months ended September 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.

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 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Management has evaluated the effectiveness of our internal control over financial reporting (ICFR) as of September 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 September 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 September 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 2008 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 2008 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 2008 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 2008 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.

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 September 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 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 3.

Defaults Upon Senior Securities

None

Item 4.

Submission of Matters to a Vote of Security Holders

None

Item 5.

Other Information

None

Item 6.

Exhibits

Exhibits. The following exhibits are included as part of this Quarterly 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.

Dated: November 11, 2009

By: /s/ John Pulos

John Pulos, President, Acting

Chief Financial Officer