UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 2005.
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
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Commission File Number 333-111656
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GOLDSTRIKE INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada Applied For
(State or other jurisdiction of (IRS Employer Identification No.)
-------------------------------- ---------------------------------
incorporation or organization)
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1055 West Hastings Street, Suite 1980
Vancouver, British Columbia, Canada V6E 2E9
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 604-688-8002
---------------------------
None
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ X ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 3,300,000 Shares of $0.001 par value
Common Stock outstanding as of August 24, 2005.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Balance Sheets
(In U.S. Dollars)
-----------------------------------------------------------------------------------------------------------
June 30, December 31,
ASSETS 2005 2004
---------------- ---------------
Current Assets (Unaudited) (Audited)
Cash $ 1,043 $ 7,399
-----------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS $ 1,043 $ 7,399
===========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 6,335 $ 630
Loan from related party (Note 7) 10,000 -
-----------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 16,335 630
===========================================================================================================
Stockholders' Equity
Capital Stock
Authorized:
75,000,000 common shares at $0.001 par value
Issued and fully paid
3,300,000 common shares
par value 3,300 3,300
additional paid-in capital 28,250 28,250
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31,550 31,550
Deficit, accumulated during the exploration stage (46,842) (24,781)
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TOTAL STOCKHOLDERS' EQUITY (15,292) 6,769
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,043 $ 7,399
===========================================================================================================
Going Concern: Note 1
Approved on Behalf of the Board:
"Ken Cai" , President and Chief Executive Officer and Director
---------------------------
"Jeff Yenyou Zheng" , Secretary and Treasurer and Chief Financial
--------------------------- Officer and Director
The Accompanying Notes are an Integral Part of These Financial Statements
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Statements of Operations
(In U.S. Dollars)
(Unaudited)
---------------------------------------------------------------------------------------------------------------------------------
From Date
of Inception
On June 9, Six Months Three Months
2003 to Ended Ended
June 30, June 30, June 30,
--------------------------------- --------------------------------
2005 2005 2004 2005 2004
------------- ---------------- --------------- --------------- ---------------
Mineral Property Expenses $ 8,754 $ - $ - $ - $ -
---------------------------------------------------------------------------------------------------------------------------------
General and Administration Expenses
Audit fees 8,061 5,675 600 5,675 -
Bank charges 1,556 82 652 22 14
Consulting fees 428 428 - - -
Incorporation costs 751 - - - -
Legal fees 11,406 4,167 - 1,367 -
Office costs 1,346 - 626 - -
Transfer agent and filing fees 13,844 11,548 1,083 10,794 442
Loss on foreign exchange 696 161 515 161 -
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38,088 22,061 3,476 18,019 456
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Total Expenses 46,842 22,061 3,476 18,019 456
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Net Loss for the Period $ 46,842 $ 22,061 3,476 $ 18,019 456
=================================================================================================================================
Loss per Share
Basic and Diluted $ (0.01) $ (0.00) $ (0.01) $ (0.00)
=================================================================================================================================
Weighted Average Number of Common Shares Outstanding
Basic and Diluted 3,300,000 3,300,000 3,300,000 3,300,000
=================================================================================================================================
The Accompanying Notes are an Integral Part of These Financial Statements
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Statement of Retained Earnings (Deficit)
(In U.S. Dollars)
(Unaudited)
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From Date
of Inception
On June 9, Six Months Three Months
2003 to Ended Ended
June 30, June 30, June 30,
--------------------------------- --------------------------------
2005 2005 2004 2005 2004
------------- ---------------- --------------- --------------- ---------------
Retained Earnings (Deficit)
beginning of period $ - $ (24,781) $ (19,380) $ (28,823) $ (22,400)
Net Loss for the Period (46,842) (22,061) (3,476) (18,019) (456)
---------------------------------------------------------------------------------------------------------------------------------
Retained Earnings (Deficit)
end of period $ (46,842) $ (46,842) $ (22,856) $ (46,842) $ (22,856)
=================================================================================================================================
The Accompanying Notes are an Integral Part of These Financial Statements
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Statement of Cash Flows
(In U.S. Dollars)
(Unaudited)
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From Date
of Inception
On June 9, Six Months Three Months
2003 to Ended Ended
June 30, June 30, June 30,
--------------------------------- --------------------------------
2005 2005 2004 2005 2004
------------- ---------------- --------------- --------------- ---------------
Cash Provided by (Used for)
Operating Activities
Net loss for the period $ (46,842) $ (22,061) $ (3,476) $ (18,019) $ (456)
Item not requiring use of cash
Shares issued for mineral
property expenses 50 - - - -
Changes in non-cash working capital items
Share subscription receivable - - 626 - -
Account receivable - - (5,000) - (5,000)
Accounts payable & accrued liabilities 6,335 5,705 (7,389) 5,705 -
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Net Cash Provided by (Used for)
Operating Activities (40,457) (16,356) (15,239) (12,314) (5,456)
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Investing Activities - - - - -
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Financing Activities
Capital stock subscribed for cash 31,500 - - - -
Loan from related party 10,000 10,000 (500) 10,000 (500)
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Net Cash Provided by (Used for)
Financing Activities 41,500 10,000 (500) 10,000 (500)
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Cash increase (decrease)
During the Period 1,043 (6,356) (15,739) (2,314) (5,956)
Cash, Beginning of Period - 7,399 20,033 3,357 10,250
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Cash, End of Period $ 1,043 $ 1,043 $ 4,294 $ 1,043 $ 4,294
=================================================================================================================================
The Accompanying Notes are an Integral Part of These Financial Statements
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Statement of Stockholders' Equity
For the Period From Date of Inception on June 9, 2003 to June 30, 2005
(In U.S. Dollars)
(Unaudited)
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Price Number of Additional Total Retained Total
Per Common par Paid-in Capital Earnings Shareholders'
Share Shares Value Capital Stock (Deficit) Equity
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6/30/2003 Issued for mineral properties 50,000 $ 50 $ 50 $ 50
8/8/2003 Issued for cash $0.008 3,000,000 3,000 21,000 24,000 24,000
9/30/2003 Issued for cash $0.03 250,000 250 7,250 7,500 7,500
Net loss for the period from date
of inception to December 31, 2003 (19,380) (19,380)
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2003 3,300,000 3,300 28,250 31,550 (19,380) 12,170
Net loss for the year ended
December 31, 2004 (5,401) (5,401)
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Balance, December 31, 2004 3,300,000 3,300 28,250 31,550 (24,781) 6,769
Net loss for the six month period ended
June 30, 2005 (22,061) (22,061)
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Balance, June 30, 2005 3,300,000 $3,300 $ 28,250 $31,550 $ (46,842) $ (15,292)
=================================================================================================================================
The Accompanying Notes are an Integral Part of These Financial Statements
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 1. ORGANIZATION AND NATURE OF BUSINESS
Goldstrike Inc. ("the Company") was incorporated on June 9, 2003 under
the Company Act of the State of Nevada, U.S.A. to pursue opportunities
in the field of mineral exploration. June 9, 2003 is also the inception
date of the Company.
Going Concern
These financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of
America applicable to a going concern which assume that the Company
will realize its assets and discharge its liabilities in the normal
course of business. The Company has incurred losses since inception of
$46,842 to June 30, 2005 and has working capital deficit of $15,292 as
at June 30, 2005. These factors create doubt as to the ability of the
Company to continue as a going concern. Realization values may be
substantially different from the carrying values as shown in these
financial statements should the Company be unable to continue as a
going concern. Management is in the process of identifying sources for
additional financing to fund the ongoing development of the Company's
business.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
These financial statements have been prepared in accordance with
Accounting Principles Generally Accepted in the United States
("USGAAP").
Exploration stage company
Goldstrike is an exploration stage company as it does not have an
established commercial deposit and is not in the production stage.
Use of estimates
The preparation of financial statements in conformity with USGAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Cash
Cash consists of cash on deposit with the Company's bankers.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and
between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statement at currently
enacted income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or settled as
prescribed in FASB Statement No. 109, Accounting for Income Taxes. As
changes in tax laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.
Compensated absences
Employees of the corporation are entitled to paid vacations, sick days
and other time off depending on job classification, length of service
and other factors. It is impractical to estimate the amount of
compensation for future absences, and accordingly, no liability has
been recorded in the accompanying financial statements. The
corporation's policy is to recognize the costs of compensated absences
when paid to employees.
Net profit per share
Goldstrike adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings per
share. Basic earnings per share is computed by dividing net income
available to common shareowners by the weighted average number of
common shares outstanding for the period. Diluted earnings per share
reflects the potential dilution that could occur if securities or other
contacts to issue common stock were exercised or converted into common
stock. In accordance with FASB 128, any anti-dilutive effects on net
loss per share are excluded.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Disclosure about fair value of financial instruments
Goldstrike has financial instruments, none of which are held for
trading purposes. Goldstrike estimates that the fair value of all
financial instruments at March 31, 2005, as defined in FASB 107, does
not differ materially from the aggregate carrying values of its
financial instruments recorded in the accompanying balance sheet. The
estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies.
Considerable judgment is required in interpreting market data to
develop the estimates of fair value, and accordingly, the estimates are
not necessarily indicative of the amounts that the Company could
realize in a current market exchange.
Concentration of credit risk
Financial instruments that potentially subject Goldstrike to a
significant concentration of credit risk consists primarily of cash
which is not collateralized. Goldstrike limits its exposure to credit
loss by placing its cash with high credit quality financial
institutions.
Long-lived assets
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amount of the asset in question may not be recoverable.
This standard did not have a material effect on the Company's results
of operations, cash flows or financial position in these financial
statements.
Other Comprehensive Income
There is no other comprehensive income to June 30, 2005.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Foreign currency translation
The accounts of Goldstrike are translated into US Dollars on the
following basis:
o Monetary assets and liabilities are translated at the current
rate of exchange.
o The weighted average exchange rate for the period is used to
translate revenue, expenses, and gains or losses from the
functional currency to the reporting currency.
o Gains or losses on remeasurement are recognized in current net
income.
o Gains or losses from foreign currency transactions are recognized
in current net income.
o Fixed assets are measured at historical exchange rates that existed
at the time of the transaction.
o Depreciation is measured at historical exchange rates that existed
at the time the underlying related asset was acquired.
o There are no cumulative currency translation adjustments to June 30,
2005.
Stock-based Compensation
SFAS No. 123, "Accounting for stock-based compensation" permits the use
of either a "fair value based method" or the "intrinsic value method"
defined in Accounting Principles Board Opinion 25, "Accounting for
stock issued to employees" (APB 25) to account for stock-based
compensation arrangements.
Companies that elect to use the method provided in APB25 are required
to disclose pro forma net income and pro forma earnings per share
information that would have resulted from the use of the fair value
based methods. The Company has elected to continue to determine the
value of stock-based compensation arrangements with employees under the
provisions of APB 25. No pro forma disclosures have been included with
the accompanying financial statements as there was no pro forma effect
to the Company's net loss or net loss per share.
General and Administration Expenses
General and administration expenses are recorded on an accrual basis as
incurred.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Mineral property acquisition costs and deferred exploration
expenditures
a) Mineral property acquisition cost are capitalized in accordance
with FAS-141 subject, however to impairment pursuant to FAS-144.
Exploration costs and mine development costs to be incurred,
including those to be incurred in advance of commercial
production and those incurred to expand capacity of proposed
mines, are expensed as incurred while Goldstrike is in the
exploration stage. Mine development costs to be incurred to
maintain production will be expensed as incurred. Depletion
and amortization expense related to capitalized mineral
properties, exploration costs and mine development costs will be
computed using the units-of-production method based on proved and
probable reserves.
b) FAS-141 states that the total carrying amount of mineral rights
should be reported as a separate component of property, plant,
and equipment on the face of the financial statements or in the
notes to the financial statements. Impairment is defined in
FAS-144 as the condition that exists when the carrying amount of a
long-lived asset exceeds its fair value. An impairment loss is
recognized only if the carrying amount of a long-lived asset is
not recoverable and exceeds its fair value. The Company reviews
the carrying value of the mineral property for impairment whenever
events and circumstances indicate that the carrying value of
an asset may not be recoverable from the estimated future cash
flows expected to result from its use and eventual disposition.
In cases where undiscounted expected future cash flows are less
than the carrying value, an impairment loss is recognized equal to
an amount by which the carrying value exceeds the fair value of
assets. The factors considered by management in performing this
assessment include current operating results, trends, and
prospects, as well as the effects of obsolescence, demand,
competition, and other economic factors.
c) Where properties are disposed of, the sales proceeds are, firstly,
applied as a recovery of mineral property acquisition costs, and
secondly, as a gain or loss recorded in current operations.
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 3. MINERAL PROPERTIES
As at June 30, 2003, Goldstrike signed a Mineral Property Sale
Agreement with Joseph Eugene Leopold Lindinger ("Eugene"), whereby
Goldstrike acquired a 100% undivided interest in the BIZ Properties
(BIZ1, BIZ2, BIZ6 and BIZ7, (Tenure Number 366276, 369518, 369719 and
370056), located in the Kamloops Mining Division, in the Province of
British Columbia, Canada, and Goldstrike agrees to the following terms
and conditions:
a) Pay to Eugene $3,584 and issue to Eugene 50,000 common shares
(issued) at the price of $0.001 per share for $50 on execution of
this agreement, for a total of $3,634.
b) Within the 120 day period after the effective date of June 30,
2003, pay $2,514 to Eugene to complete an assessable exploration
work program of sufficient value in order to maintain the property
for at lease one year past the current claim expiry date. Within
90 days past the current claim expiry date of November 1, 2003,
pay an additional $2,286 for the remainder of the completed work
program and a completed assessment report.
c) Pay all applicable claim maintenance recording fees as part of the
property maintenance requirements.
d) Expenses related to this property, including the abovementioned
expenses, total $8,754 from date of inception.
Note 4. INCOME TAXES
There is a loss of $46,842 carried forward that may be applied
towards future profits. The Company does not have any income tax
liabilities during the current year and, accordingly, no income taxes
are recorded. The potential income tax benefits associated with
losses incurred by the Company have not been recorded in the accounts
as future taxation as they are offset by valuation reserves due to
uncertainty of utilization of tax losses.
The income tax effect of temporary differences comprising the
deferred tax assets and deferred tax liabilities on the accompanying
consolidated balance sheets is a result of the following:
June 30
------------------------------------
2005 2004
-------------- ---------------
Deferred tax assets $ 15,926 $ 7,771
Valuation allowance $ (15,926) $ (7,771)
-------------- ---------------
Net deferred tax assets $ - $ -
============== ===============
GOLDSTRIKE INC.
(A Nevada Corporation)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2005
(In U.S. Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Note 4. INCOME TAXES (Cont'd)
A reconciliation between the statutory federal income tax rate and
the effective income rate of income tax expense for the quarters
ended June 30, 2005 and June 30, 2004 is as follows:
2005 2004
-------------- ---------------
Statutory federal income tax rate $ 15,926 $ 7,771
Valuation allowance $ (15,926) $ (7,771)
-------------- ---------------
Effective income tax rate $ - $ -
============== ===============
Note 5. FINANCIAL INSTUMENTS
Goldstrike's financial instruments consist of cash and accounts
payable and accrued liabilities and loan from related party. It is
management's opinion that Goldstrike is not exposed to significant
interest, currency or credit risks arising from these financial
instruments. The fair value of these financial statements
approximates their carrying values.
Note 6. PENSION AND EMPLOYMENT LIABILITIES
Goldstrike does not have liabilities as at June 30, 2005, for
pension, post-employment benefits or post-retirement benefits.
Goldstrike does not have a pension plan.
Note 7. RELATED PARTY TRANSACTIONS
During the current quarter ended June 30, 2005, a loan of $10,000 was
received from a related party. This loan bears no interest, is
unsecured, and has no specific terms of repayment.
Forward-Looking Statements
--------------------------
This Form 10-QSB includes "forward-looking statements" within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements are based on management's current expectations and are
subject to a number of factors and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements.
All statements other than historical facts included in this Form, including
without limitation, statements under "Plan of Operation", regarding our
financial position, business strategy, and plans and objectives of management
for the future operations, are forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from our expectations include, but are not limited to, market
conditions, competition and the ability to successfully complete financing.
Item 2. Plan of Operation
--------------------------
In July 2005, we retained P & L Geological Services ("P&L") of Lac Le Jeune,
British Columbia, to conduct the recommended first phase of exploration on the
Goldstrike property located approximately 29 kilometers south-southeat of Blue
River in north central British Columbia.
Based on its review and sampling of the Goldstrike property, P&L advised us as
follows:
1. work to date have indicated that surface rock exposures known as the Bizar
showing contain narrow veins that contain anomalous gold values;
2. attempts to drill under the Bizar showing were unsuccessful at intersecting
any significant mineralization;
3. other bedrock and float exposures on the property were previously
investigated for their mineral potential. Bedrock and float sampling
indicates that low gold values are present within the host rocks. Drilling
of two areas of anomalous bedrock and float geochemical features were
unsuccessful at intersecting any significant mineralization;
4. rock samples submitted by P&L did not return value of significance for
any metals of interest; and
5. the property can be considered at the early stage of exploration. There are
no adjoining properties of significance located near to the Goldstrike
property.
From the previous work performed on the Goldstrike property, and from property
reconnaissance and sampling by P&L, indications are that the property does not
host readily available aeras of significant mineralization for follow-up
exploration. P&L further states that there are many properties available to us
within British Columbia that might be ranked at a higher level of potential.
Based on its review of P&L's review of the Goldstrike property, our Board of
Directors has decided not to conduct any further exploration on these mineral
claims. We may consider bringing in a joint venture partner to provide funding
for additional exploration on the property. However, we cannot provide investors
with any assurance that we will be able to locate a joint venture partner who
will assist us in funding the exploration of the Goldstrike property.
Management intends to review other potential resource and non-resource assets
for acquisition.
We anticipate spending the following over the next 12 months on administrative
fees:
* $5,000 on legal fees
* $5,000 on accounting and audit fees
* $1,000 on EDGAR filing fees
* $500 on Transfer Agent fees
* $10,000 on general administration costs
Total expenditures over the next 12 months are therefore expected to be
approximately $21,500.
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 twelve
months. We do not have any arrangements in place for any future equity
financing.
Results Of Operations For Period Ending June 30, 2005
We did not earn any revenues during the period ending June 30, 2005. We incurred
operating expenses in the amount of $22,061 for the six-month period ended June
30, 2005. These operating expenses were comprised of transfer agent and filing
fees of $11,548, audit fees of $5,675, legal fees of $4,167, consulting fees of
$428, loss on foreign exchange of $161 and bank charges of $82.
At June 30, 2005, we had $1,043 in cash on hand and liabilities totalling
$16,335.
We have not generated any revenue since inception and are dependent upon
obtaining financing to pursue exploration activities. For these reasons, our
auditors believe that there is substantial doubt that we will be able to
continue as a going concern.
Critical Accounting Policies
----------------------------
Our financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America. Preparing financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions which affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the balance sheet dates, and the recognition of revenues and
expenses for the reporting periods. These estimates and assumptions are affected
by management's application of accounting policies.
Mineral Properties
We charge all of our mineral property acquisition and exploration costs to
operations as incurred. If, in the future, we determine that a mineral property
in which we have an interest can be economically developed on the basis of
established proven and probable reserves, we will capitalize the costs incurred
to develop the property. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve.
Item 3 Controls and Procedures
------------------------------
Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures as of
June 30, 2005. This evaluation was conducted by Dr. Ken Cai and Dr. Yenyou
Zheng, our chief executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to disclose in the reports we file
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.
Limitations on the Effective of Controls
Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs. These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control. A design
of a control system is also based upon certain assumptions about potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based upon their evaluation of our controls, Dr. Ken Cai and Dr. Yenyou Zheng,
our chief executive officer and principal accounting officer, have concluded
that, subject to the limitations noted above, the disclosure controls are
effective providing reasonable assurance that material information relating to
us is made known to management on a timely basis during the period when our
reports are being prepared. There were no changes in our internal controls that
occurred during the quarter covered by this report that have materially
affected, or are reasonably likely to materially affect our internal controls.
PART II- OTHER INFORMATION
--------------------------
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
None.
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 and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
We did not file any current reports on Form 8-K during the period.
SIGNATURES
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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.
August 24, 2005
Goldstrike Inc.
/s/ Dr. Ken Cai
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Dr. Ken Cai, President