Attached files

file filename
EX-32 - CERTIFICATION - BEESTON ENTERPRISES LTDexhibit32.htm
EX-31 - CERTIFICATION - BEESTON ENTERPRISES LTDexhibit31.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


FORM 10-K


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF1934


FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010


BEESTON ENTERPRISES LTD.

----------------------------

(Name of registrant as specified in its charter)


Nevada

005-80181

88-04360717

State or other jurisdiction of incorporation

Commission File Number

IRS Identification No.


1685 H Street, #219

Blaine, WA 98230-5110

(Address of principal executive offices)


Registrant’s telephone number: (877) 208-6141



Securities registered under Section 12(b) of the Act:


None


Securities registered under Section 12(g) of the Act:


Title of Class:

Common Stock


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[  ]  Yes

[X]  No


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section15(d) of the Act.

[X]  Yes

[  ]  No


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [X] No [_]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[  ] Yes  [  ] No (Not required by smaller reporting company)


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K.  [X]


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


Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ] (Do not check if a smaller reporting company)

Smaller reporting company

[X]



Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  [   ] Yes

[ X ] No



The Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of June 30, 2010:  $ 293,796


Number of shares of Common Stock, $0.001 par value per share, of the registrant outstanding as of December 31, 2010: 94,773,093.


DOCUMENTS INCORPORATED BY REFERENCE

No documents are incorporated herein by reference.


 




TABLE OF CONTENTS


Item

Description

PART I

1

Business

1A

Risk Factors

1B

Unresolved Staff Comments

2

Property

3

Legal Proceedings

4

[Removed and Reserved]

 

PART II

5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

6

Selected Financial Data

7

Management’s Discussion and Analysis of Financial Condition and Results of Operation

7A

Quantitative Qualitative Disclosures About Market Risk

8

Financial Statements and Supplementary Data

9

Changes in and Disagreement With Accountants on Accounting and Financial Disclosure

9A

Controls and Procedures

9B

Other Information

 

PART III

10

Directors, Executive Officers, and Corporate Governance

11

Executive Compensation

12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

13

Certain Relationships and Related Transactions, and Director Independence

14

Principal Accountant Fees and Services

PART IV

15

Exhibits, Financial Statement schedules

SIGNATURES





PART I.

ITEM 1.  BUSINESS


Business Development


Beeston Enterprises Ltd. (“Beeston” or the “Company”) was incorporated on July 12, 1999, in the State of Nevada.  Beeston has not been in bankruptcy or receivership proceedings, and has not undergone any material reclassification, merger or consolidation.


We originally intended to establish ourselves as a Western Canadian based medical diagnostic imaging service provider. However, based on a review of the  business climate in the private medical service sector in Canada, we chose to move our business in a new direction.  During the second half of 2006, we began acquiring interests in mining properties located in British Columbia, Canada.  Accordingly, we have changed our business plan to one of mineral exploration and development.  


Current Business


At present, we are an exploration stage company.  An exploration stage company is engaged in the search of mineral properties in an effort to locate mineral deposits that can be developed to the stage of a commercially viable producing mine.  We currently own a 100% interest in ten mineral claims, comprising over 4,826 hectares, known as the “Ruth Lake Property” located approximately 25 kilometres from Lac La Hache, British Columbia, Canada.  We had owned a total of nineteen mineral claims in this area; however, we reduced our holdings in this area to the current ten mineral claims in October, 2010.  Prior to this, we had also obtained an option to purchase three additional mineral claims, comprising approximately 1,500 hectares, known as the “Bluff Lake Property” located approximately 8 kilometres to the North West of our “Ruth Lake Property”.  Our interests in the Ruth Lake Property and the Bluff Lake Property were both acquired from Candorado Operating Company Ltd., a British Columbia corporation trading on the TSX Venture Exchange (Trading Symbol “CDO”). We have since terminated our option to purchase the Bluff Lake Property and are currently considering the acquisition of additional mineral properties.


Mineral exploration is best conducted where there are large areas of high mineral potential, where mineral rights can be obtained under terms which are reasonable and with long term certainty of title, and where political and tax regimes are known to be relatively favorable and stable.  Accordingly, all of our interests in mineral properties are located within the Quesnel Trough, a well known geological belt containing an assemblage of volcanic sedimentary and intrusive rocks of Upper Jurassic age, which extends from Washington State north to central British Columbia.  This belt is known for hosting skarn and porphyry copper and copper-gold deposits. Title to our interest in mineral claims, like all titles to mineral claims in British Columbia, are located and recorded by means of an on-line e-commerce system known as Mineral Title Online.  This system allows mineral claims to be acquired or transferred using the Internet and results in a more accurate and secure interest in mineral claims.  As for the mining industry in British Columbia, the province is currently experiencing a slowdown in mineral exploration.  This decrease in mineral exploration is due to the current decline in the demand for mineral resources.  However, as the demand for mineral resources begins to rise, mineral exploration in the province will again increase in response to such demand.  The mining industry in Canada, and in particular the Province of British Columbia, is well established and respected, with an infrastructure capable of supporting all forms of mining activity from small scale prospecting to large scale mining operations, and a stable political environment which not only




supports the mining industry but ensures it is properly regulated in regard to such matters as health and safety and environmental concerns.


The mining industry as a whole is highly fragmented in that there are numerous prospectors, exploration companies and mine producers.  We are a very small exploration stage company that would be considered a minor participant in the mining industry.  We do not compete directly with anyone for the exploration of our interests in mineral properties as we hold all interest and/or rights to explore these properties.  Readily available commodities markets exist in Canada and around the world for the sale of gold, copper and other minerals.  Therefore, should our exploration and development ever progress to the level of a producing mine, we will likely be able to sell any minerals we are able to recover.  This exploration program was to have involved further soil and rock sampling.


Our plan of operation, which is described in more detail under Item 7 herein, is to carry out exploration work on our mineral properties, either by carrying out our own exploration program or by participation in some form of joint venture or option arrangement with other entities involved in mineral exploration.  All such exploration shall be for the purpose of determining whether the mining claims comprising our mineral property holdings contain any commercially viable mineral deposits of copper or gold.  There can be no determination that any commercially viable mineral deposits exist on any of our mining claims until the appropriate exploration work has been performed.


There is no assurance that a commercially viable mineral deposit exists on any of the mineral properties in which we have an interest.  Mineral property exploration is typically performed in phases.  Commencing from the initial phase of exploration work, each subsequent phase of exploration work is recommended by a geologist based on the results of the last completed phase of exploration. Even if we complete exploration programs on our mineral properties and are successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling, geochemical, engineering and other studies before we will know if we have a commercially viable mineral deposit.


We carried out exploration on both the Bluff Lake and Ruth Lake Properties. Based on the results of our initial exploration programs, management, in consultation with our geologist, Mr. Warner Gruenwald, had decided to proceed further with its exploration on both of these properties.  Phase two of the work program planned for the Bluff Lake Property was to have consisted of a $165,000 CAD exploration program involving trenching and drilling.  We had intended to carry out this exploration program in late spring 2008.  A smaller work program of approximately $35,000 CAD was also planned for the summer of 2008 on the Ruth Lake Property.  This exploration program was to have involved further soil and rock sampling.  However, we were unable to raise the necessary funds to cover the costs of these planned exploration programs.  As a result, we were unable to complete our exploration program on the Bluff Lake Property and subsequently turned the exploration program over to Candorado and terminated our option to purchase from Candorado.  We did not carry out any exploration program on the Ruth Lake Property in 2008, but have maintained our interest in these mineral claims by payment of the maintenance fees in cash in lieu of the conduct of exploration work.  In an effort to carry out exploration on the numerous mining claims that comprise the Ruth Lake Property, we entered into option agreements with other exploration stage mining companies which cover a large portion of these mining claims.  The particulars of these various option agreements are set forth under Item 2. Properties.  It is our intent to raise the funds necessary to continue our exploration of the Ruth Lake Property, as well as to acquire additional mineral properties for the purpose of conducting exploration for gold deposits.   





ITEM 1A.  RISK FACTORS


No applicable.


ITEM 1B.  UNRESOLVED STAFF COMMENTS


None.


ITEM 2.  PROPERTIES


On September 12, 2006, we entered into an agreement (the “Mineral Claim Purchase Agreement”) with Candorado Operating Company Ltd. (“Candorado”), an unrelated third party, pursuant to which we acquired a 100% interest in 19 mineral claims, totaling in excess of 9,200 hectares, upon the payment of the purchase price of $50,000 CAD on September 15, 2006.  Under the terms of the agreement we are required to pay a royalty to Candorado of 2% of “net smelter returns”, as that term is defined in the Mineral Claim Purchase Agreement, on any production from the Ruth Lake Property.  In the event that we did not maintain any of the mineral claims comprising the Ruth Lake Property in good standing with the Mineral Titles Branch in British Columbia, Canada for a period of one year from each anniversary date of the purchase of the claims, by either carrying out the minimum required assessment work or paying the prescribed assessment fee in lieu of performing assessment work for each such claim, Candorado could have paid the assessment fee within 30 days of the date required for such payment.  We would have then have had the option of either reimbursing Candorado for the assessment fees paid to maintain any of the mineral claims comprising the Ruth Lake Property and retaining ownership of these mineral claims, or abandoning the mineral claims and transferring ownership thereof back to Candorado.  These mining claims were not being maintained for a period of at least one year in advance of the anniversary date of purchase, and Candorado has not exercised its right to pay the maintenance fees and take them over.  As a result of such waiver, the Company is no longer required to keep these mining claims in good standing for at least one year, and has no further obligation to Candorado, other than the original royalty interest.   


Subsequent to the acquisition of the Ruth Lake Property, we entered into an agreement (the “Option Agreement”) with Candorado dated December 15, 2006.  Under the terms of this Option Agreement, we had the right to acquire up to a 60% interest in three mineral claims, comprising approximately 1,550 hectares, currently owned by Candorado.  These three mineral claims are known as the “Bluff Lake Property” and are located approximately 8 kilometers to the North West of our Ruth Lake Property.  We paid $5,000 CAD to Candorado at the time of signing the Option Agreement and could have acquired a 50% interest in the Bluff Lake Property by paying $45,000 CAD to Candorado on or before January 31, 2007, and by carrying out a $200,000 CAD exploration program thereon by December 15, 2007.  We could have acquired a further 10% interest in the Bluff Lake Property by carrying out an additional $250,000 CAD exploration program thereon by December 15, 2008.  In the event we acquired an interest in the Bluff Lake Property, we further agreed with Candorado that at the request of either party, both parties would negotiate a joint venture agreement for the further exploration and development of the Bluff Lake Property.  We could terminate the Option Agreement upon giving thirty (30) days notice to Candorado.  Candorado could also terminate the Option Agreement by giving us notice of failure on our part to pay any amount when due or perform any exploration program within the time provided under the Option Agreement and such failure continued for thirty (30) days after such notice.





Due to labor and equipment shortages in the industry in 2007, we were limited to completing phase one of the two phased exploration work program of approximately $200,000 CAD that was planned for the Bluff Lake Property.  As a result, pursuant to the terms of the Mineral Claim Purchase Agreement, we obtained an extension of the time period to complete the required $200,000 CAD exploration program to June 30, 2008.  This extension of the time period was formalized under an agreement (the “Amending Agreement”) entered into by the Company and Candorado on October 29, 2007.


Based on the results from phase one of the exploration program, a $165,000 CAD work program was planned as phase two of the exploration program.  Phase two of the exploration program was commenced in June, 2008, and involved road construction, diamond drilling and in-fill soil sampling.  However, due to labor shortages in the industry, we were unable to complete all of phase two of the exploration program within the extended time period and we were granted a further extension of the time period in which to complete the balance of phase two of the exploration program by Candorado to September 30, 2008.  This latter extension was set forth in an agreement dated June 29, 2008, further amending the Option Agreement between the Company and Candorado. The majority of phase two of the exploration program had been completed; however, completion of the exploration work was suspended due to a lack of funding.


Despite its best efforts, the Company was unable to raise the necessary funds to complete phase two of its exploration program on the Bluff Lake Property within the extended time period.  As a result, pursuant to an agreement dated October 3, 2008, the Company agreed to terminate its Option Agreement (as amended) with Candorado and its right thereunder to acquire various interests in the Bluff Lake Property and Candorado agreed to assume all responsibility and liability for phase two of the Company’s exploration program on the Bluff Lake Property.   


On January 18, 2007, Beeston entered into an agreement (the “Kranti Option Agreement”) with Kranti Resources, Inc., (“Kranti”) a start up mining company, whereby we granted Kranti an option to acquire one of the mining claims that comprise the Ruth Lake Property.  Kranti could acquire the mining claims by payment to Beeston of $20,000 U.S. at the time of entering into the Option Agreement plus carrying out an exploration program of $175,000 CAD over a period of four years.  In the event that Kranti acquired the mineral claim, it would be required, upon it selling any minerals from the mineral claim, to pay a royalty of 2% of “net smelter returns”, as that term is defined in the Kranti Option Agreement, to Candorado (as a prior owner), which can be paid out for $1,000,000 CAD, and a further royalty of 2% of net smelter returns to Beeston, which can be paid out for $2,000,000 CAD.  Kranti would also be responsible for maintaining the mineral claim in good standing during the currency of the Kranti Option Agreement.  Kranti could terminate the Kranti Option Agreement upon thirty days notice and Beeston, upon notice of default of any obligations by Kranti, could terminate the Kranti Option Agreement if such default continued for thirty days.


Again, due to the labor shortages experienced in the industry in 2007, Kranti was delayed in obtaining the assay results of the soil and rock sampling it carried out under its exploration program on the mining claim optioned from the Company.  As a result, at the request of Kranti, we extended the date for the completion of the exploration work required to be performed by Kranti within the first year of the Kranti Option Agreement.  The extension was for a reasonable short period of time and was sufficient to allow Kranti to obtain and report on its assay results.  Subsequent to December 31, 2008, Kranti requested a further extension of time for completion of the $25,000 exploration work that was required to be performed under the Kranti Option Agreement by January 18, 2009.  On January 16, 2009, Beeston entered into an agreement with Kranti extending the time period for the performance of this exploration work until June 30,




2009, in consideration of Kranti granting Beeston control over the allocation of the credits resulting from mineral exploration carried out by Kranti on the mining claim optioned from the Company. Beeston subsequently granted Kranti a number of extensions for the completion of mineral exploration work within the time periods provided under the Kranti Option Agreement due to Kranti’s inability to raise funds.  On June 22, 2009, December 30, 2009, and most recently on February 11, 2010, Beeston entered into separate agreements with Kranti extending the date of completion of various expenditures required to be completed by Kranti under the terms of the Kranti Option Agreement in consideration of Kranti agreeing to various increases in the amount of expenditures to be incurred on exploration work under the Kranti Option Agreement totaling $100,000.  We anticipated that Kranti would be able to meet these exploration requirements within the extended time periods.  However, as of June 30, 2010, Kranti was in default of its obligations for the further exploration and development of the mineral claim under option from Beeston.  On July 1, 2010, we delivered a notice to Kranti advising of its default of the work requirements under the Option Agreement and that it had 30 days from the date of receipt of the notice to meet these work requirements or the Option Agreement and the option of the mineral claim granted thereunder would terminate.  On August 5, 2010, Kranti remained in default and the Option Agreement was terminated.


On September 24, 2009, the Company entered into an agreement (the “USA Option Agreement”) with USA Uranium Corp. (“USA Uranium”) under which the Company granted USA Uranium an option to acquire an undivided 50% interest in nine mineral claims that are part of the Company’s Ruth Lake Property, which mineral claims total in excess of 4,300 hectares, in consideration of the issuance of 37,000,000 common shares of USA Uranium to the Company. These mineral claims are subject to a two percent net smelter royalty which can be paid out for the sum of $1,000,000(CDN).  USA Uranium can earn an undivided 50% interest in these mineral claims by carrying out a $50,000 (CDN) exploration and development program on these mineral claims on or before September 24, 2010, plus an additional $250,000 (CDN) exploration and development program on these mineral claims on or before September 25, 2011.  In the event that USA Uranium acquires an interest in these mineral claims, the Company and USA Uranium have further agreed, at the request of either party, to negotiate a joint venture agreement for the further exploration and development of these mineral claims.


As part of the agreement between the Company and USA Uranium, on September 24, 2009, the Company entered into an agreement with Brian Smith, a shareholder of the Company, under which Mr. Smith agreed, inter alia, to subordinate, and upon USA Uranium acquiring an undivided 50% interest in the Claims, to release his right to a first floating charge over the assets of the Company granted under the two convertible debentures previously issued to Mr. Smith by the Company as it relates to the undivided 50% interest in the Claims to be acquired by USA Uranium.  In consideration of Mr. Smith agreeing, inter alia, to the subordination and release of his right to a first floating charge as aforesaid, the Company agreed to amend the provisions of the two convertible debentures issued to Mr. Smith by the Company by reducing the share conversion and share purchase warrant prices and increasing the number of share purchase warrants provided thereunder.  In the case of the convertible debenture issued for US dollars, the share conversion and share purchase warrant prices were reduced from $0.02(US) to $0.0075(US) and the number of share purchase warrants were increased from 6,333,850 to 16,890,267, and in the case of the convertible debenture issued for CND dollars, the share conversion and share purchase warrant prices were reduce from $0.025(CND) to $0.008(CND) and the number of share purchase warrants were increased from 5,004,000 to 15,637,500.

 

On September 25, 2009, the Company entered into an agreement (the “Mariposa Option Agreement”) with Mariposa Resources, Ltd (“Mariposa”) under which the Company granted Mariposa an option to acquire an undivided 50% interest in eight mineral claims that are part of




the Company’s Ruth Lake Property, which mineral claims total in excess of 3,900 hectares.  Mariposa can earn an undivided 50% interest in these mineral claims by the issuance of 1,000,000 common shares of Mariposa to the Company within six months of the date of signing of the agreement, the completion of a $50,000 (CDN) exploration and development program on these mineral claims on or before September 25, 2010, plus an additional $200,000 (CDN) exploration and development program on these mineral claims on or before September 25, 2011.  In the event that Mariposa acquires an interest in these mineral claims, the Company and Mariposa have further agreed, at the request of either party, to negotiate a joint venture agreement for further exploration and development of these mineral claims. These mineral claims are subject to a two percent net smelter royalty, which can be paid out for the sum of $1,000,000 (CDN).


As part of the agreement between the Company and Mariposa, on September 24, 2009, the Company entered into an agreement with Brian Smith, a shareholder of the Company, under which Mr. Smith agreed, inter alia, to subordinate, and upon Mariposa acquiring an undivided 50% interest in the Claims, to release, his right to a first floating charge over the assets of the Company granted under the two convertible debentures previously issued to Mr. Smith by the Company as it relates to the undivided 50% interest in the Claims to be acquired by Mariposa.  In consideration of Mr. Smith agreeing, inter alia, to the subordination and release of his right to a first floating charge as aforesaid, the Company agreed to amend the provisions of the two convertible debentures issued to Mr. Smith by the Company by reducing the share conversion and share purchase warrant prices and increasing the number of share purchase warrants provided thereunder.  In the case of the convertible debenture issued for US dollars, the share conversion and share purchase warrant prices were reduced from $0.02(US) to $0.0075(US) and the number of share purchase warrants were increased from 6,333,850 to 16,890,267, and in the case of the convertible debenture issued for CND dollars, the share conversion and share purchase warrant prices were reduce from $0.025(CND) to $0.008(CND) and the number of share purchase warrants were increased from 5,004,000 to 15,637,500.


On March 24, 2010, the Company entered into an agreement with Mariposa extending the date for the payment of shares of its common stock under the option agreement with Beeston for an additional three months in consideration of Mariposa increasing its work requirement on the mineral claims it optioned from Beeston.  The Company entered into another agreement with Mariposa on June 24, 2010, under which Beeston granted Mariposa a further extension for the payment of shares of its common stock and for the completion of its initial exploration and development as required under the option agreement with Beeston until December 31, 2010, in consideration for an increase in the number of shares payable thereunder.  On November 3, 2010, due to the failure of Lithium (“Mariposa”) to maintain the mining claims under option, they were allowed to lapse.  Beeston has since been able to reclaim four of the eight mining claims originally under option to Lithium (“Mariposa”).  On November 30, 2010 Mariposa merged with its wholly owned subsidiary “Lithium Exploration Group, Inc.” (“Lithium”), which subsidiary was incorporated solely for the change of name.  As of December 31, 2010 Lithium (formerly “Mariposa”) was in default of payment of a total of 1,500,000 shares of its common stock and of its obligation to perform $100,000 CND of exploration and development work on the optioned mining claims as part payment of the option exercise price and is indebted to Beeston in the amount of $22,851 (CAD) related to the mining claim maintenance fees and re-claiming fees paid by Beeston on behalf of Lithium (formerly “Mariposa).  Lithium (formerly “Mariposa”) has since terminated its option agreement with Beeston, by notice dated February 14, 2011.  The Company is currently pursuing Lithium (formerly “Mariposa”) in regard to these outstanding debts, the loss of four mining claims and the ongoing maintenance requirements for the reclaimed mining claims.  




On September 24, 2010, USA Uranium was in default of its exploration work requirement under its option agreement with Beeston.  Subsequent to the default, the Company entered in discussions with USA Uranium regarding its default as well as its inability to cover the on-going property maintenance costs as required under its option agreement with Beeston and what efforts or other consideration, if any, USA Uranium was willing to undertake or provide as a result thereof.  On October 26, 2010 the Company and USA Uranium entered into an agreement pursuant to which the parties agreed to the issue of shares of the common stock of USA Uranium to Beeston in satisfaction and settlement of the default and the outstanding debt.  USA Uranium is to issue 26, 956,120 common shares in satisfaction of the exploration work for which it was in default and a further 23,043,880 common shares in settlement of its outstanding debt for the payment of on-going property maintenance payments made on its behalf by Beeston.  The parties also agreed to reduce the number of mining claims covered by the option agreement between them from nine claims to four claims in consideration of USA Uranium agreeing to issue 75,000,000 common shares to Beeston.  On November 2, 2010, USA Uranium allowed the four claims that remained under option to it from Beeston to lapse.  These four mining claims were reclaimed by Beeston at a cost of $1,064 CDN which amount is due and owing to Beeston by USA Uranium.

In Canada, all lands and minerals initially rest in the Federal and Provincial Governments in the name of Her Majesty, and the rights to the lands and minerals have been acquired by private individuals under Crown Grants.  Early in the history of Canada the practice of reserving the minerals from the Crown Grants of land became an established practice and eventually this practice became law under legislation.  The result is that the Crown is the largest mineral owner in Canada, both as the fee simple owner of Crown lands and through mineral reservations in Crown Grants.  Under the Canadian Constitution, minerals located within a province vest in that province.  In the case of our interests in mineral properties, that is the Province of British Columbia.


In British Columbia, most of the minerals are owned by the Province.  Rights to explore and develop these minerals are obtained as a form of tenure issued by the Province of British Columbia, which is recorded in the Mineral Titles Office as a mineral claim.  Mineral claims are defined as a “chattel” under the Mineral Tenure Act of British Columbia and are not an interest in land, but rather, only carry with them the right to enter upon the mineral claim land for the purpose of exploration for minerals and developing any minerals found thereon up to the point of a producing mine.  


At such time as the exploration and development carried out upon a mineral claim has progressed to the stage of a mineable mineral deposit, the mineral claim holder can apply to the Miners Titles Office for the grant of a lease of the property comprising the area of the mineral deposit find.  Mineral leases can be up to a 30 year term, and are renewable.  A mining lease increases the mineral claim holders rights in the land contained in the mineral claim and is considered an interest in the land.  


The mineral claims comprising our Ruth Lake Property have been located and recorded pursuant to the Mineral Tenure Act of the Province of British Columbia.  As the owner of the mineral claims comprising the Ruth Lake Property, we and our optionees have the right to explore and develop these mineral claims and recover all of the minerals contained within the surface boundaries of these properties and continuing vertically downward.


Under the Mineral Tenure Act, mineral claims can only be located and recorded by residents of Canada.  In order to comply with that requirement, we could either have the title to our mineral properties held “in trust” for us by one of our directors or officers residing in British Columbia,




or we could create a wholly owned subsidiary company in British Columbia to be the registered owner of our mineral properties.  To avoid the cost of creating and maintaining a wholly owned subsidiary company, we have chosen to register the claims comprising the Ruth Lake Property in the name of our President, who holds them in trust for us. In the event we find that a commercially viable mineral deposit on any of our mineral claims, we will form a wholly owned subsidiary company in British Columbia, and our President will transfer registered title to such wholly owned subsidiary company.   


The Ruth Lake Property is located approximately 25 kilometers east of the Town of Lac La Hache or approximately 60 kilometers north-east of the Town of 100 Mile House.  The area can be reached via the Forest Grave/Canim Lake Road just to the north of 100 Mile House or by a network of logging roads and tracks which extend east of Lac La Hache.  From the Canim Lake Road, 500 Road branches to the north 7 kilometers to the south of Ruth Lake Park and passes through the east centre of the claims and from this road a network of logging roads accesses most of the property.


The Ruth Lake Property is situated within the geological Quesnel Terrane, also known as the Quesnel Trough.  This geological area hosts the Mount Polley, Mount Milligan and Lorraine alkalic copper gold deposits to the north of our properties and the Rayfield River, Afton-Ajax and Copper Mountain mineral deposits to the south.  The GWR Resources Inc. Lac La Hache property is within approximately 5 kilometers to the west of our Ruth Lake Property.  


All of the mineral claims comprising the Ruth Lake Property are unencumbered.  There are no native land claims that affect title to our various interests in mineral claims.  There is no insurance covering any of our properties and we believe that no insurance is necessary since the mining properties are unimproved and contain no buildings or plant and equipment and our office equipment is of marginal value.


Beeston does not have any investments or interests in any real estate. Beeston also does not invest in real estate mortgages, nor does Beeston invest in securities of, or interests in, persons primarily engaged in real estate activities.


ITEM 3.

LEGAL PROCEEDINGS  


The Company is not involved in any legal proceedings.

ITEM 4.

[REMOVED AND RESERVED]


PART II


ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.


The Company’s common stock trades on the OTC Bulletin Board under the symbol BESE.  The following table shows the high and low market prices for each quarter for the past three years.


Quarter Ending

High

Low

12/31/2010

$0.0065

$0.0027

09/30/2010

$0.0065

$0.0017

06/30/2010

$0.0065

$0.025

03/31/2010

$0.008

$0.006

12/31/2009

$0.02

$0.01

09/30/2009

$0.02

$0.01






06/30/2009

$0.05

$0.02

03/31/2009

$0.06

$0.02

12/31/2008

$0.01

$0.015

09/30/2008

$0.17

$0.05

06/30/2008

$0.19

$0.17

03/31/2008

$0.40

$0.10


At the present time, there are no assets available for the payment of dividends.  The Company does not anticipate paying any dividends in the next twelve months.


The Articles of Incorporation currently authorize the issuance of 500,000,000 shares of common stock, with a par value of $0.001.  The holders of the Shares: (a) have equal ratable rights to dividends from funds legally available therefore, when, as, and if declared by the Board of Directors of the Company; (b) are entitled to share ratably in all of the assets of the Company available for distribution upon winding up of the affairs of the Company; (c) do not have preemptive subscription or conversion rights and there are no redemption or sinking funds applicable thereto; and (d) are entitled to one non-cumulative vote per share on all matters on which shareholders may vote at all meetings of shareholders. These securities do not have any of the following rights: (a) cumulative or special voting rights; (b) preemptive rights to purchase in new issues of Shares; (c) preference as to dividends or interest; (d) preference upon liquidation; or (e) any other special rights or preferences.  In addition, the Shares are not convertible into any other security.  There are no restrictions on dividends under any loans, other financing arrangements or otherwise.  See a copy of the Articles of Incorporation, and any amendment thereto, and Bylaws of the Company, attached as Exhibits to the Company’s previously filed SB-2.  As of December 31, 2010, the Company had 94,773,093 shares of common stock outstanding.


Non-Cumulative Voting.


The holders of Shares of Common Stock of the Company do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding Shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose.  In such event, the holders of the remaining Shares will not be able to elect any of the Company's directors.  



Share Purchase Warrants


At December 31, 2010, 42,225,667 share purchase warrants, having a share purchase price of $0.003(U.S.), were outstanding under a convertible debenture issued on April 9, 2009 and 41,700,000 share purchase warrants, having a share purchase price of $0.003(CAD), were outstanding under a convertible debenture also issued on April 9, 2009.  In addition, 22,100,000 share purchase warrants, having a share purchase price of $0.003(U.S.), were outstanding under a convertible debenture issued on June 4, 2010 and 16,000,000 share purchase warrants, having a share purchase price of $0.003(CAD), were outstanding under a convertible debenture also issued on June 4, 2010.  No share purchase warrants were exercised as of December 31, 2010.  See Item 7 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations for details.


Share Purchase Option


On April 9, 2010, all of the debt of $126,677(U.S.) under a convertible debenture issued on April 9, 2009 (“U.S.$ Debenture”) was converted into common stock of the Company at a conversion rate of $0.0075(U.S.) per share, at the option of the holder of the convertible debenture. The




Company, at its option, also converted all of the interest payable under this convertible debenture into common stock of the Company at the same conversion rate as for this debt.  In addition, on April 9, 2010, all of the debt of $125,100(CAD) under a convertible debenture issued on April 9, 2009 (“CAD$ Debenture”) was converted into common stock of the Company at a conversion rate of $0.008(CAD) per share, at the option of the holder of the convertible debenture.  The Company, at its option, also converted all of the interest payable under this convertible debenture at the same conversion rate as for this debt.   See Item 7 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations for details.    


At December 31, 2010, all or part of the debt of $66,300(U.S.) under a convertible debenture issued on June 4, 2010 (“U.S.$ Second Debenture”)can be converted into common stock of the Company at a conversion rate of $0.003(U.S.) per share, at the option of the holder of the convertible debenture, and the Company can, at its option, convert all or part of the interest payable under this convertible debenture into common stock of the Company at the same conversion rate as for this debt.  In addition, all or part of the debt of $48,000(CAD) under a convertible debenture issued on June 4, 2010 (“CAD$ Second Debenture”) can be converted into common stock of the Company at a conversion rate of $0.003(CAD) per share, at the option of the holder of the convertible debenture, and the Company can, at its option, convert all or part of the interest payable under this convertible debenture at the same conversion rate as for this debt.  No share conversion options were exercised as of December 31, 2010.  See Item 7 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations for details.


Dividends.


The Company does not currently intend to pay cash dividends.  The Company's proposed dividend policy is to make distributions of its revenues to its stockholders when the Company's Board of Directors deems such distributions appropriate.  Because the Company does not intend to make cash distributions, potential shareholders would need to sell their shares to realize a return on their investment.  There can be no assurances of the projected values of the shares, nor can there be any guarantees of the success of the Company. A distribution of revenues will be made only when, in the judgment of the Company's Board of Directors, it is in the best interest of the Company's stockholders to do so.  The Board of Directors will review, among other things, the investment quality and marketability of the securities considered for distribution; the impact of a distribution of securities on its customers, joint venture associates, management contracts, other investors, financial institutions, and the company's internal management, plus the tax consequences and the market effects of an initial or broader distribution of such securities.


ITEM 6.  SELECTED FINANCIAL DATA


Not applicable


ITEM 7.

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


This section includes a number of forward looking statements that reflect our current views with respect to future events and financial performance.  Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events.  You should not place undue certainty on these forward looking statements, which apply only as of the date of this report.  These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.





Beeston is an exploration stage company with limited operations, limited revenue, limited financial backing and few assets, which consist mainly of mineral properties that for the most part have had limited exploration to date.  Our initial plan of operation was to build a business providing medical diagnostic imaging services for individuals in Western Canada.  Our customers would have been individuals who were prepared to pay for the services they receive, as well as individual clients of the provincial medical insurance providers, workers’ compensation boards, auto insurance carriers and specialty insurance providers.  We believed at the time that there was an opportunity to provide these services through private clinics that would supplement those being provided by a government funded and administered health service that was constantly operating under pressure to provide such services on a timely basis.  Despite our efforts in this regard, we were unable to implement this business plan.  We have also undergone management changes.  A number of our original directors and officers are no longer with the Company, and we are currently endeavoring to replace some of the personnel.  As part of this reorganization, the Board of Directors decided to explore opportunities in areas other than those contained in the original business plan.


We believed that the growing demand for the production of natural resources presents an area of opportunity for developing companies.  Accordingly, in September, 2006, we acquired a large tract of mineral claims located in the Province of British Columbia, Canada, referred to collectively as the “Ruth Lake Property”, for the purpose of carrying out exploration and development on this mineral property.  There is no guarantee of locating a deposit of some mineral product that could result in a producing mine.  However, we are of the opinion that the location of the mining property is such as to warrant its acquisition and for us to undertake a program of exploration on the mineral property.  


In our pursuit of other mining properties of interest in the same area as our current mineral claim holdings, we were able to enter into another agreement under which we were granted an option to acquire an interest in certain mineral claims, referred to collectively as the “Bluff Lake Property”, that are proximate to our previously acquired Ruth Lake Property.  Pursuant to the terms of this Option Agreement, we could obtain up to a sixty percent (60%) interest in these mineral claims through the payment of cash and the performance of exploration work upon the optioned claims over a two year period.  Upon our acquiring a minimum interest of fifty percent (50%) in the optioned mineral claims, either party to the option agreement could then require participation of the other party in the further exploration and development of the optioned mineral claims pursuant to a joint venture. The Option Agreement relating to option of the Bluff Lake Property and the Mineral Claim Purchase Agreement for the acquisition of the Ruth Lake Property, are described in more detail in Item 2 Properties.


The terrain in the area in which our mineral properties are located is well forested with rolling hills, and elevations ranging from 915-1525 meters.  The climate is generally dry with a warm summer and a cold winter.  Precipitation ranges from 42-62 centimeters per year with up to 30 centimeters occurring as snow.  While some exploration work such as trenching and drilling could be carried out all year long, generally, exploration in the area is limited to an eight month period running from April to October.   


Accommodations as well as supplies and equipment are available at the Towns of Lac La Hache or 100 Mile House.  Electricity lines run up to the boundaries of the mineral properties, however, most power requirements can be provided by the use of on site generators.  Competition and unforeseen limited sources of supplies and manpower in the industry could result in occasional spot shortages of supplies, such as dynamite, and certain equipment such as bulldozers,




excavators and drilling equipment that may be needed to conduct exploration as well as skilled manpower to conduct exploration.   


As our directors and officers have no professional training or technical credentials in the field of geology and specifically in the areas of exploring, developing and operating mining properties, we need to retain the services of various professionals and technicians in the mining industry to provide such expertise.  Accordingly, we have, and will continue to, retain the services of geologists and engineers to advise and assist us in the exploration of our acquired interest in mineral claims.


In addition to being near to our previously acquired mineral claims, the optioned claims had already received a significant amount of exploration work, the results of which have been made available to us. Based on the exploration work previously carried out on the optioned mineral claims, our management believed that these mineral claims were of sufficient merit to warrant a more advanced work program of exploration.


The mining industry in British Columbia is well regulated.  We are required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in Canada, generally, and in British Columbia specifically.  The early stages of exploration can generally be carried out without any permitting or notification to any government body or agency as it is deemed “low-disturbance/low-impact” by the British Columbia Department of Energy, Mines and Petroleum Resources (“BCDM”).  In the more advanced stages of exploration involving mechanized trenching or diamond drilling – a Plan of Operation will need to be filed with the BCDM.  This plan will detail the extent, location and amount of surface disturbance for the trenching and/or drilling.  A bond will also have to be obtained in the amount of the cost of reclaiming the anticipated surface disturbance.  Usually the reclamation process entails filling in and smoothing the surface of trenching sites, clean up and removal of any work material, and seeding native grass/plants at the sites of any disturbance.  We were required to make a $2,500 CAD security deposit under the permit we applied for and obtained in regard to the exploration work planned for the phase two of our exploration program on the Bluff Lake Property.  In the event any trees larger than six inches in diameter need to be cut down, a permit will also have to be obtained from the British Columbia Ministry of Forests.  The cost of obtaining the BCDM or Forestry permits is nominal (less than $100 CAD).  The bond required by the BCMD is returned (with interest) upon proper clean up of the exploration site.  In the event that a mineral exploration program should evolve to the point where its purpose is the determination of the existence of a commercially viable mineral deposit, various other government acts, regulation and rules come into effect.  None of the exploration programs carried out on our properties to date have had any such purpose.  All exploration activity in British Columbia must be carried out in compliance with the Health, Safety and Reclamation Code for Mines in British Columbia.


In the quest for copper-gold mineralization, potassium and magnetic alteration is commonly used as exploration vectors.  In regard to the Bluff Lake Property and the Ruth Lake Property, an airborne radiometric and magnetic geophysical survey was recently completed over the area where these properties are located under a partnership program involving a number of the exploration companies having mineral properties in the area, Geological Survey of Canada and Geoscience B.C.  The results of this survey have been given to the participating exploration companies and were released to the general public in April, 2007.  The survey results for the Bluff Lake Property were previously made available to us by Candorado, who was one of the participating exploration companies.





A preliminary review of the survey results showed several potassium anomalies, which could be indicative of potassium alteration.  On the southern portion of the Bluff Lake Property, fracture controlled potassic alteration and copper mineralization had also been noted.  Other copper showings existed elsewhere on the property.  Previous mineral explorations in this area had also delineated areas of anomalous copper in soils in the property.  However, no significant amount of drilling had been done.  We retained the services of Warner Gruenwald, P. Geo. to provide us with an interpretation of the existing geological information on the Bluff Lake Property and recommendations for further exploration of the property.  To assist him in this matter, Mr. Rob Shives, formerly the head of the Radiation Division of the Geological Survey of Canada, was retained to conduct a detailed review of the airborne geophysical survey and existing ground data.  Mr. Shives’ review defined eight target areas for ground work.  


Based on the information provided by Mr. Shives, Mr. Gruenwald developed a two phased $200,000 exploration program.  Phase one of the exploration program entailed reconnaissance grids and sampling on the targets identified by Mr. Shives as well as some general prospecting, rock sampling and Mapping.  The cost of phase one of the exploration program was $44,641 CAD.  Sampling of one target area southeast of Bluff Lake yielded an east-southeast trending cooper-in-soil anomaly nearly 500 metres long and at least 150 metres wide.  This anomaly appeared to be open to the east and west and coincides with a zone of weathered monzonitic intrusive rocks that differ markedly from the intrusive rocks elsewhere on the property.


Due to labor and equipment shortages in the industry, we were limited to completing phase one of our exploration program in 2007.   Under the terms of our Mineral Claim Purchase Agreement with Candorado, we were granted an extension of the time period in which to complete a total of $200,000 CAD in exploration expenditures on the Bluff Property to June 30, 2008.  This latter extension was set forth in an agreement dated October 29, 2007, amending the Option Agreement between the Company and Candorado.


Based on the results from phase one of the exploration program, a $165,000 CAD work program was planned as phase two of the exploration program to test the cooper anomaly.  Phase two of the exploration program was commenced in June, 2008, and involved road construction, diamond drilling and in-fill soil sampling.  However, we were unable to complete all of phase two of the exploration program within the extended time period and we were granted a further extension of the time period in which to complete the balance of phase two of the exploration program by Candorado to September 30, 2008.  This latter extension was set forth in an agreement dated June 29, 2008, further amending the Option Agreement between the Company and Candorado. The majority of phase two of the exploration program was completed; however, completion of the exploration work was suspended due to a lack of funding.  Despite its best efforts, the Company was unable to raise the necessary funds to complete phase two of its exploration program on the Bluff Lake Property within the extended time period.  As a result, pursuant to an agreement dated October 3, 2008, the Company agreed to terminate its Option Agreement (as amended) with Candorado and its right thereunder to acquire various interests in the Bluff Lake Property and Candorado agreed to assume all responsibility and liability for phase two of the Company’s exploration program on the Bluff Lake Property.   


The Ruth Lake Property has not received as much exploration as the Bluff Lake Property.  What prior exploration has taken place on or near this property has provided indications that the area has the potential to host a copper-gold deposit or a molybdenite deposit.  Prior to retaining the services of Mr. Gruenwald, we had Mr. Marvin Mitchell, P. Eng., prepare a preliminary report on the Ruth Lake Property to provide us with a basis for further exploration of this large tract of mineral claims.  As a result of the limited amount of exploration work preformed in this area, Mr. Mitchell recommended an initial exploration program of approximately $50,000 CAD




involving the taking of soil geochemical samples on a regional grid with fill in samples where indicated by anomalous values.  These samples would then be assayed for various elements and the results would provide a basis for a more concentrated exploration program within the property.  


Following the release of the previously mentioned airborne radiometric and magnetic geophysical survey of the Ruth Lake Property, Mr. Shives was also retained to conduct a detailed review of the newly acquired airborne geophysical data for the property.  The geophysical review identified five target areas worthy of investigation for alkalic cooper-gold porphyry deposits.  Each target area was then explored by geochemical soil sampling and prospecting under the supervision of Mr. Gruenwald.  Anomalous cooper-in-soil was detected near the edge of one target area and cooper mineralization was sighted along a newly constructed logging road near this area.  In addition to the results of the exploration program, historic assessment reports relating to the southern part of the property reported sporadic molybdenite-in-soil geochemical anomalies over a north-south length of 750 metres.  Molybdenite and small amounts of chalcopyrite were described as disseminations and fracture fillings in altered, silicified and locally quartz veined granite float and bedrock.  While some drilling was performed, there are no records of results.  Based on the results of our initial exploration program and the historic data on the property, a $35,000 CAD exploration program was planned for the Ruth Lake Property for the summer of 2008.  However, due to a lack of funding, this exploration program was initially postponed until the following year. As a result of the optioning of most of the Ruth Lake Property in 2009, exploration by the Company on the Ruth Lake Property has now been postponed pending the outcome of any exploration carried out on the Ruth Lake Property under these option agreements.

 

As the owner of the mineral claims comprising the Ruth Lake Property, we have the exclusive right to the minerals contained within the surface boundaries and continuing vertically down, and the right to explore, develop and mine the mineral claims for such minerals.  These rights granted to owners of mineral claims are obtained as a form of tenure.  To maintain our tenure in good standing, a prescribed dollar amount of exploration and development work must be performed and an assessment report detailing such exploration and development filed with the Mineral Titles Office annually.  A cash payment of the prescribed dollar amount of exploration and development work may be made in lieu of performing such exploration and development work.   


The annual dollar value of the exploration and development work required to be undertaken on a recorded claim in British Columbia is $4.00 CAD per hectare in years 1 through 3, followed by an $8.00 CAD per hectare per year thereafter.  We have filed assessment reports based on the exploration work we carried out on our mineral properties in 2007.  The cost of these exploration programs covered the annual assessment fees for all of our interest in mineral properties.  To date we have filed assessment work of $48,230 CAD on the Ruth Lake Property.  Kranti has paid cash of $1,914 CAD in lieu of filing assessment work plus filed a further $26,075 CAD in assessment work on our optioned mineral claim.   


Since the delay in commencing our work program planned for the Ruth Lake Property for 2008, we have maintained our interest in this property to date by paying the monthly cash in lieu of exploration and development work required to keep the property in good standing.  As a result of our optioning most of the mineral claims comprising the Ruth Lake Property to two junior mining companies in September, 2009, the optionees under these two option agreements are now responsible for maintaining these mining claims in good standing.  To the extent required, it is our intention to continue to make the monthly maintenance payments for any mineral claim that is not part of the two option agreements.  





In order to cover the maintenance costs for the Ruth Lake Property plus general operating expenses, we will require funding of approximately $75,000 CAD for the next twelve month period.  We are also continuing our efforts to acquire additional mining properties or the right to acquire an interest in additional mining properties.  We also hope to raise an additional $225,000 CAD to facilitate the acquisition of additional mining properties or an interest in such other mining properties and the exploration and development of such acquisitions or interest in mining properties.  We intend to raise the required funds by means of the sale of securities currently held by the Company, upon these securities becoming tradable, as well as by debt and/or equity funding.  


From time to time, our officers and directors have loaned us the funds necessary to acquire our interests in the mineral properties and to cover our ongoing operating expenses.  One of our shareholders, Brian Smith, has provided funding to Beeston in the form of various non-interest demand loans.  However, interest on these loans has been imputed at the rate of 6% per annum and is reported in our financial statements as additions to interest expense and contributed capital.  In consideration of Mr. Smith deferring payment of his various outstanding loans to the Company, on April 9, 2009, the Company issued two convertible debentures to Mr. Smith to secure payment of these loans as well as other funds previously paid on behalf of the Company by Mr. Smith. One convertible debenture is for $126,677.00 (U.S.) (the “U.S.$ Debenture”) and the other is for $125,100.00 (CAD) (the “CAD$ Debenture”).  The term of each of the debentures is three (3) years and each debenture earns interest at 12% per annum, calculated and payable annually.  The debt under each of the debentures is secured by a first “floating charge” over the undertaking and all property and assets of the Company.   


Each of the debentures permits the holder, at his option, during the terms of the debentures, to convert all or part of the debt represented by the debentures into common stock of the Company at a conversion rate of $0.02(U.S.) per share for the U.S.$ Debenture, and at a conversion rate of $0.025(CAD) per share for the CAD$ Debenture.  The Company is also permitted, at its option, to pay any accrued interest under either debenture in the form of common stock, also at the same conversion rates that are permitted for the holder of the respective debentures.


In further consideration for Mr. Smith entering into the debenture agreements, the Company attached share purchase warrants to each of the debentures.  There are 6,333,850 share purchase warrants attached to the U.S.$ Debenture and 5,004,000 share purchase warrants attached to the CAD$ Debenture.  These share purchase warrants grant the holder, over the term of the debentures, the right to purchase one share of common stock of the Company for each share purchase warrant at a purchase price of $0.02(U.S.) per share under the U.S.$ Debenture and at a purchase price of $0.025(CAD) per share under the CAD$ Debenture.  To date, no debt has been converted to shares and no warrants have been exercised under either of these debentures.  


On September 24, 2009, Beeston entered into an agreement with Mr. Smith amending both the US$ Debenture and the CAD$ Debenture issued to Mr. Smith.  In consideration of Mr. Smith agreeing, inter alia, to the subordination and release of his right to a first floating charge over the mineral claims optioned to each of USA Uranium and Mariposa, respectively, upon either such company acquiring a fifty percent in and to their respective optioned mineral claims, the Company agreed to amend the provisions of the two convertible debentures issued to Mr. Smith by the Company by reducing the share conversion and share purchase warrant prices and increasing the number of share purchase warrants provided thereunder.  In the case of the US$ Debenture, the share conversion and share purchase warrant prices were reduced from $0.02(US) to $0.0075(US) and the number of share purchase warrants were increased from 6,333,850 to 16,890,267, and in the case of the CAD$ Debenture, the share conversion and share purchase warrant prices were reduce from $0.025(CND) to $0.008(CND) and the number of share




purchase warrants were increased from 5,004,000 to 15,637,500. The September 24, 2009 transaction increasing the number of warrants was considered a substantial modification of the debt agreement and accordingly a loss of extinguishment of debt of $344,026 was recorded.


On April 9, 2010 the annual interest on the first year of the three year term of each of the US$ Debenture and the CAD$ Debenture became due.  Pursuant to the terms of both debentures, the Company exercised its option to pay the interest then due by the issuance of shares.  As a result, 3,903,332 common shares of the Company were issued in satisfaction of the interest payable.  Immediately following the election by the Company to issue shares in payment of interest, Mr. Smith assigned his interest in and to the debentures and associated warrants to others and in turn the holders of the US$ Debenture and the CAD$ Debenture elected for the payment of the debt then due and owing thereunder in shares of the Company.  This resulted in a further 32,527,761 common shares of the Company being issued in satisfaction of the debt under both of the US$ Debenture and the CAD$ Debenture.  


On June 1, 2010, as incentive to the holders of both the U.S.$ Debenture and the CAD$ Debenture to exercise the share purchase warrants granted thereunder, Beeston and the holders of the U.S.$ Debenture and the CAD$ Debenture agreed to exchange each of the U.S.$ Debenture and the CAD$ Debenture for share warrant purchase agreements which provide for a reduction in the share purchase warrant prices and an increase in the number of share purchase warrants granted thereunder.  In the case of the debenture issued in exchange for the U.S.$ Debenture, the share purchase warrant price is reduced from $0.0075(U.S.) to $0.003(U.S.) and the number of share purchase warrants is increased from 16,890,267 to 42,225,667, and in the case of the debenture issued in exchange for the CAD$ Debenture, the share purchase warrant price is reduce from $0.008(CAD) to $0.003(CAD) and the number of share purchase warrants is increased from 15,637,500 to 41,700,000.  On August 30, 2010 the share purchase warrant agreements were exchanged for Warrant Certificates.  None of the warrants have been converted into common shares.


Since the issue of the debentures on April 9, 2009, Mr. Smith has provided the Company with additional funding and on June 4, 2010, the Company issued two convertible debentures to Mr. Smith to secure payment of these loans as well as other funds previously paid on behalf of the Company by Mr. Smith. One convertible debenture is for $66,300 (U.S.) (the “Second U.S.$ Debenture”) and the other is for $48,000 (CAD) (the “Second CAD$ Debenture”).  The term of each of the debentures is three (3) years and each debenture earns interest at 12% per annum, calculated and payable annually.  The debt under each of the debentures is secured by a first “floating charge” over the undertaking and all property and assets of the Company that are not currently the subject of ongoing contracts with independent third parties.


Each of the debentures permits the holder, at his option, during the terms of the debentures, to convert all or part of the debt represented by the debentures into common stock of the Company at a conversion rate of $0.003(U.S.) per share for the Second U.S.$ Debenture, and at a conversion rate of $0.003(CAD) per share for the Second CAD$ Debenture.  The Company is also permitted, at its option, to pay any accrued interest under either debenture in the form of common stock, also at the same conversion rates that are permitted for the holder of the respective debentures.


In further consideration for Mr. Smith entering into the debenture agreements, the Company attached share purchase warrants to each of the debentures.  There are 22,100,000 share purchase warrants attached to the Second U.S.$ Debenture and 16,000,000 share purchase warrants attached to the Second CAD$ Debenture.  These share purchase warrants grant the holder, over the term of the debentures, the right to purchase one share of common stock of the Company for




each share purchase warrant at a purchase price of $0.003(U.S.) per share under the Second U.S.$ Debenture and at a purchase price of $0.003(CAD) per share under the Second CAD$ Debenture.  On August 30, 2010 the Second U.S.$ Debenture and the Second CAD$ Debenture were exchanged for debenture agreements with separate detachable Warrant Certificates. To date, no debt has been converted to shares and no warrants have been exercised under either of these debentures.  


In an effort to reduce its current debt load, on September 13, 2010, the Company sold a total of 23,623,160 shares of USA Uranium Corp (“USAU”) owned by the Company to Mr. Smith for the sum of $23,623 or $0.001 per share, the par value of the shares.  Payment for the shares was by way of set-off against loans and other advances of money made by Mr. Smith to the Company.  The shares of USAU are currently not trading and the securities have been written off by the Company on its books.


Mr. Smith has since provided the Company with additional funding not secured by debentures, in the form of various non-interest demand loans as well as other advances of money, in the amount of $9,415 as of December 31, 2010.  We have no agreement with any of our officers and directors for the provision of additional funding.


In our efforts to further the exploration and development of our large tract of acquired mineral claims, we have continuously reviewed the possibility of participating in some form of joint venture or option arrangement with other entities on a portion of our mineral claim holdings.  As of this date, we have managed to option out a large portion of the numerous mineral claims that comprise the Ruth Lake Property.  The optioning of these mineral claims has not only provided for the maintenance and the further exploration and development of these mineral claims, but in some cases, has also provided us with operating funds in the form of cash, and in other cases, has provided us with a potential source of operating funds in the form of securities issued to Beeston by the optioning companies.


In January, 2007, Beeston entered into an agreement with Kranti, under which we granted that company an option to acquire a mineral claim comprising part of the Ruth Lake Property from by the payment of cash and the performance of a series of work programs over a period of four years.  Upon acquisition of the mineral claim by Kranti, it will be required to pay a certain royalty to Beeston and the prior owner of the mineral claims based on a percentage of any net smelter returns derived from the mineral claim.  Kranti is also required to keep the mineral claim in good standing during the option period.  The Kranti Option Agreement is described in more detail in Item 2 Properties.


In September, 2009, the Company entered into separate agreements with USA Uranium and Lithium (formerly “Mariposa”), both junior mining companies, under which we granted each company an option to acquire a fifty percent (50%) interest in and to certain mineral claims comprising part of the Ruth Lake Property, which options may be exercised through the payment of common shares to Beeston and the performance of exploration work upon their respective optioned claims over a two year period.  Upon either company acquiring a fifty percent (50%) interest in their respective optioned mineral claims, either it or Beeston could require participation of the other in the further exploration and development of the optioned mineral claims pursuant to a joint venture. USAU and Lithium (formerly “Mariposa”) will each be responsible for maintaining their respective optioned mineral claims in good standing.  To the extent that either USA Uranium or Lithium (formerly “Mariposa”) fail to maintain these optioned mineral claims in good standing, under the terms of the aforesaid option agreements, Beeston can pay the appropriate mineral claims maintenance fees required to keep these optioned mineral claims in good standing and such payments will be deemed to be loans made by Beeston




to either USA Uranium or Lithium (formerly “Mariposa”), as the case may be, which loans are to be repayable immediately.  


In October, 2010, the Company re-negotiated its option agreement with USA Uranium.  Under the terms of the amended option agreement, Beeston agreed to accept common shares in the stock of USA Uranium in settlement of the debt due at that time and for the exploration work required to be performed during the first year of the option agreement.  USA Uranium also agreed to issue shares to Beeston in consideration of Beeston agreeing to release USA Uranium of its obligations under the option agreement in relation to five of the nine mining claims that had been optioned to USA Uranium by Beeston. See Item 2. Properties for more details.


On November 3, 2010, Lithium (formerly “Mariposa”) failed to maintain the eight mining claims under option to it by Beeston and they were allowed to lapse.  Beeston was subsequently able to re-claim four of the eight mining claims.  On December 31, 2010 Lithium (formerly “Mariposa”) was in default of the requirements to issue 1,500,000 shares of it common stock to Beeston and to perform $100,000(CAD) in exploration work on the optioned claims.  Lithium (formerly “Mariposa”) has since terminated its option agreement with Beeston, by notice dated February 14, 2011.  Beeston is currently in discussions with Lithium (formerly “Mariposa”) regarding these outstanding debts, the loss of four mining claims and the ongoing maintenance requirements for the reclaimed mining claims.  

 

As of December 31, 2010, USA Uranium and Mariposa are indebted to the Company in the amounts of $1,064(CAD) and, $22,851(CAD), respectively, in regard to maintenance fees paid by Beeston and the related re-claiming costs incurred by Beeston for the mining claims that were allowed to lapse and subsequently re-claimed by Beeston.  The USA Option Agreement and the Mariposa Option Agreement are described in more detail in Item 2. Properties.  


Our current facilities will be sufficient for our current operations up until the time Beeston is able to establish a mining operation.


On April 7, 2009, the Company increased its authorized capital stock from a single class of 100,000,000 shares of common stock, par value $0.001, to a single class of 500,000,000 shares of common stock, par value $0.001.  There was no concurrent increase in the issued and outstanding shares of the Company. This increase of its authorized capital stock will facilitate the Company’s ability to pursue additional equity funding in the future.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


Not applicable.


ITEM 8.  FINANCIAL STATEMENTS


Included herewith are the following financial statements:

















BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009






























BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS



            Page

Report of Independent Registered Public Accounting Firm

1

  

Balance Sheets as of December 31, 2010 and 2009

2

  

Statements of Operations for the Years Ended December 31, 2010

  and 2009 (with cumulative totals since Inception, July 12, 1999)

3


Statement of Changes in Stockholders’ Equity (Deficit)

         From July 12, 1999 (Inception) to December 31, 2010

4    

       

         

Statements of Cash Flows for the Years Ended December 31, 2010

 

   and 2009 (with Cumulative Totals Since Inception)

5

         

         

Notes to Financial Statements

6








































REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of

Beeston Enterprises Ltd.


We have audited the accompanying balance sheets of Beeston Enterprises Ltd. (the “Company”) as of December 31, 2010 and 2009, and the related statements of operations, stockholders' deficit, and cash flows for each of the two years in the period ended December 31, 2010.  The Company’s management is responsible 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 standards established by 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes 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 the Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the two years ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred substantial accumulated deficits and operating losses. These issues lead to substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.



/s/ Friedman LLP

East Hanover, New Jersey

April 13, 2011




BEESTON ENTERPRISES LTD.

(AN EXPLORATION STAGE COMPANY)

BALANCE SHEETS

DECEMBER 31, 2010 AND 2009


ASSETS

 

 

 

 

 

 

 

 

 

2010

 

2009

Current Assets

 

 

 

 

 

  Cash and cash equivalents

 

 

 $                  108

 

 $        6,183

  Other receivable

 

 

                22,897

 

           9,344

  Prepaid expenses and deposits

 

 

                       -   

 

           3,241

  Prepaid consulting

 

 

                12,233

 

         49,440

  Marketable securities

 

 

                       -   

 

       315,000

 

 

 

 

 

 

    Total Current Assets

 

 

                35,238

 

       383,208

 

 

 

 

 

 

TOTAL ASSETS

 

 

 $             35,238

 

 $    383,208

 

 

 

   

 

   

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current Liabilities

 

 

 

 

 

  Accounts payable

 

 

 $             28,638

 

 $      13,500

  Notes payable to stockholder

 

 

                  9,415

 

         80,954

  Option liability

 

 

                12,233

 

         49,440

      Total Current Liabilities

 

 

                50,286

 

       143,894

 

 

 

 

 

 

Long Term Debt

 

 

 

 

 

  Convertible debentures, related party

 

 

              122,295

 

       227,670

     Total Long Term Debt

 

 

              122,295

 

       227,670

 

 

 

 

 

 

      Total Liabilities

 

 

              172,581

 

       371,564

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

  Common stock, par value $.001, 500,000,000 shares authorized and

 

 

 

 

 

    94,773,093 and 58,342,000 shares, respectively, issued and outstanding

 

 

                94,773

 

         58,342

  Additional paid-in capital  

 

 

           1,518,459

 

       548,261

  Other accumulated comprehensive gain

 

 

                      -

 

       202,342

  Deficit accumulated during the development and exploration stages

 

 

            (1,750,575)

 

      (797,301)

 

 

 

 

 

 

      Total Stockholders' Equity (Deficit)

 

 

            (137,343)

 

         11,644

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 $             35,238

 

 $    383,208




The accompanying notes are an integral part of these financial statements


2



BEESTON ENTERPRISES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

 (WITH CUMULATIVE TOTALS SINCE INCEPTION)


 

 

 

 

Cumulative Totals

 

 

 

 

July 12, 1999 to

 

 

2010

 

2009

 

December 31, 2010

REVENUE

 

 

 

 

 

 

    Sale of mining claims

 $           5,000

 

 $       103,600

 

 $                131,889

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

     Speculative mining expenses

            25,285

 

            22,398

 

385,503

 

     Consulting

            37,207

 

            37,166

 

74,372

 

     Professional fees

            45,899

 

            34,302

 

220,309

 

     Administrative expenses

              9,263

 

            20,737

 

113,440

 

     Depreciation

                      -

 

                      -

 

3,806

 

       Total Operating Expenses

          117,654

 

          114,603

 

                   797,430

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

         (112,654)

 

           (11,003)

 

                  (665,541)

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

    Interest, net

           (17,650)

 

           (25,648)

 

                    (54,283)

 

    Foreign currency transaction loss

           (16,419)

 

                      -

 

                    (16,419)

 

    Loss from debt extinguishment

         (495,300)

 

         (344,026)

 

                  (839,326)

 

    Loss on modification of warrants

         (207,651)

 

                      -

 

                  (207,651)

 

    Loss on marketable securities

         (103,600)

 

                      -

 

                  (103,600)

 

    Release of exploration cost liability

                    -   

 

                      -

 

                   136,245

 

      Total Other Income (Expense)

      (840,620)

 

         (369,674)

 

               (1,085,034)

 

 

 

 

 

 

 

NET LOSS

 $   (953,274)

 

 $      (380,677)

 

 $            (1,750,575)

 

 

 

 

 

 

 

ACCUMULATED OTHER COMPREHENSIVE

 

 

 

 

 

 

INCOME (LOSS)

 

 

 

 

 

 

    (Loss)/Gain on marketable securities

        (211,400)

 

211,400

 

-

 

    Cumulative currency translation adjustment

              9,058

 

           (21,597)

 

                        -

 

       Total Other Comprehensive Income (Loss)

        (202,342)

 

          189,803

 

                        -

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 $   (1,155,616)

 

 $      (190,874)

 

 $            (1,750,575)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER BASIC AND DILUTED SHARES

 $            (0.01)

 

 $            (0.01)

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON

 

 

 

 

 

    SHARES OUTSTANDING

84,991,594

 

58,342,000

 

 



The accompanying notes are an integral part of these financial statements


3



BEESTON ENTERPRISES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FROM JULY 12, 1999 (INCEPTION) TO DECEMBER 31, 2010


 

               Common Stock

Additional

Accumulated

Deficit accumul-

Stockholders'

 

Shares

 

Amount

Paid-in Capital

Other Compre-

ated during the ex-

Equity (Deficit)

 

 

 

 

 

hensive Income

ploration stages

 

 

 

 

 

 

(Loss)

 

 

July 12, 1999 (Inception)

                    -   

 

                   -   

                        -   

 

                            -   

                       -   

Issuance of common stock for cash,

 

 

 

 

 

 

 

September 9, 1999

       1,700,000

 

 $           1,700

 $                   -     

 $                   -   

 $                       -     

 $               1,700

Net loss

                    -   

 

                   -   

                        -   

 

                     (1,700)

                (1,700)

   Balance, December 31, 1999

       1,700,000

 

              1,700

                        -   

 

                     (1,700)

                       -   

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

 

                            -   

                       -   

   Balance, December 31, 2000

       1,700,000

 

              1,700

                        -   

 

                     (1,700)

                       -   

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

 

                            -   

                       -   

   Balance, December 31, 2001

       1,700,000

 

              1,700

                        -   

 

                     (1,700)

                       -   

 

 

 

 

 

 

 

 

Issuance of common stock for cash,

 

 

 

 

 

 

 

December 30, 2002

       3,375,000

 

              3,375

                 30,375

 

                            -   

                33,750

Net loss

                    -   

 

                   -   

                        -   

 

                     (9,242)

                (9,242)

   Balance, December 31, 2002

       5,075,000

 

              5,075

                 30,375

 

                   (10,942)

                24,508

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

 

                   (29,673)

              (29,673)

   Balance, December 31, 2003

       5,075,000

 

              5,075

                 30,375

 

                   (40,615)

                (5,165)

 

 

 

 

 

 

 

 

Issuance of common stock for cash,

 

 

 

 

 

 

 

December 20, 2004

          750,000

 

                 750

                 74,250

 

                            -   

                75,000

Net loss

                    -   

 

                   -   

                        -   

 

                   (30,738)

              (30,738)

   Balance, December 31, 2004

       5,825,000

 

              5,825

               104,625

 

                   (71,353)

                39,097

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

 

                   (25,912)

              (25,912)

  Balance, December 31, 2005

       5,825,000

 

              5,825

               104,625

                      -   

                   (97,265)

                13,185

 

 

 

 

 

 

 

 

10 for 1 forward split, July 17, 2006

     52,425,000

 

            52,425

               (52,425)

 

                            -   

                       -   

Net loss

                    -   

 

                   -   

                        -   

 

                   (92,174)

              (92,174)

Forgiveness of interest on notes payable

                    -   

 

                   -   

                   2,299

                      -   

                            -   

                  2,299

Other accumulated comprehensive loss

 

 

 

 

                 2,072

 

                  2,072

  Balance, December 31, 2006

     58,250,000

 

            58,250

                 54,499

                 2,072

                 (189,439)

              (74,618)

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

                      -   

                 (157,810)

            (157,810)

Forgiveness of interest on notes payable

                    -   

 

                   -   

                   7,124

                      -   

                            -   

                  7,124

Other accumulated comprehensive loss

                    -   

 

                   -   

                        -   

             (10,223)

                            -   

              (10,223)

  Balance, December 31, 2007

     58,250,000

 

            58,250

                 61,623

               (8,151)

                 (347,249)

            (235,527)

 

 

 

 

 

 

 

 

Issuance of common stock for cash,

 

 

 

 

 

 

 

July 9, 2008

            92,000

 

                   92

                 62,468

                      -   

                            -   

                62,560

Net loss

                    -   

 

                   -   

                        -   

                      -   

                   (69,375)

              (69,374)

Forgiveness of interest on notes payable

                    -   

 

                   -   

                 11,188

                      -   

                            -   

                11,188

Other accumulated comprehensive loss

                    -   

 

                   -   

                        -   

               20,690

                            -   

                20,689

  Balance, December 31, 2008

     58,342,000

 

            58,342

               135,279

               12,539

                 (416,624)

            (210,464)

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

                      -   

                 (380,677)

            (380,677)

Forgiveness of interest on notes payable

                    -   

 

                   -   

                   4,434

                      -   

                            -   

                  4,434

Amortization of consulting options

                    -   

 

                   -   

                 24,720

                      -   

                            -   

                24,720

Fair value of warrants issued

                    -   

 

                   -   

               383,828

                      -   

                            -   

              383,828

Other accumulated comprehensive

 

 

 

 

 

 

 

   income (loss)

                    -   

 

                   -   

                        -   

             189,803

                            -   

              189,803

  Balance, December 31, 2009

     58,342,000

 

            58,342

               548,261

             202,342

                 (797,301)

                11,644

 

 

 

 

 

 

 

 

Net loss

                    -   

 

                   -   

                        -   

                      -   

              (953,274)

         (953,274)

Forgiveness of interest on notes payable

                    -   

 

                   -   

                   1,659

                      -   

                            -   

                  1,659

Amortization of consulting options

                    -   

 

                   -   

                 37,207

                      -   

                            -   

                37,207

Conversion of notes and interest liability

     36,431,093

 

            36,431

               204,758

                      -   

                            -   

              241,189

Exchange of debt for notes and warrants

                   -   

 

                   -   

               495,300

                      -   

                            -   

              495,300

Modification of warrant terms

                   -   

 

                   -   

               207,651

                      -   

                            -   

              207,651

Exchange of non-trading shares for debt

                   -   

 

                   -   

                 23,623

                      -   

                            -   

                23,623

Other accumulated comprehensive

 

 

 

 

 

 

 

   income (loss)

                   -   

 

                   -   

                        -   

                 (202,342)

                            -   

           (202,342)

  Balance, December 31, 2010

     94,773,093

 

 $         94,773

 $         1,518,459

 $                    -

 $           (1,750,575)

 $         (137,343)



The accompanying notes are an integral part of these financial statements


4



BEESTON ENTERPRISES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

(WITH CUMULATIVE TOTALS SINCE INCEPTION)


 

 

 

 

 

 

Cumulative Totals

 

 

 

 

 

 

July 12, 1999 to

 

 

2010

 

2009

 

December 31, 2010

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

   Net loss

 

 $   (953,274)

 

 $      (380,677)

 

 $               (1,750,575)

   Adjustments to reconcile net loss to net cash provided by

 

 

 

 

 

 

     (used in) operating activities

 

 

 

 

 

 

     Depreciation

 

                      -

 

                      -

 

                          3,806

     Mineral rights for stock

 

                      -

 

         (103,600)

 

                     (103,600)

     Amortization of prepaid consulting

 

            37,207

 

            24,720

 

                        61,927

     Loss on marketable securities

 

          103,600

 

                      -

 

                      103,600

     Loss on debt extinguishment

 

          495,300

 

          344,026

 

                      839,326

     Loss on modification of warrants

 

          207,651

 

                      -

 

                      207,651

     Gain (loss) on foreign currency translations

 

             9,058

 

           (21,597)

 

                                 -

     Interest forgiven by shareholder

 

              1,659

 

              4,434

 

                        26,704

     Accrued interest on convertible debentures

 

            16,147

 

            21,584

 

                        37,731

     Bad debt

 

              1,066

 

                      -

 

                          1,066

  Changes in assets and liabilities

 

 

 

 

 

 

     Prepaid expenses and deposits

 

              3,241

 

                (558)

 

                                  -

     Other receivable

 

           (14,619)

 

             (9,344)

 

                       (23,963)

     Accounts payable

 

            15,138

 

           (12,664)

 

                        28,638

 

 

 

 

 

 

 

     Net cash used in operating activities

 

           (77,826)

 

         (133,676)

 

                     (567,689)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITES

 

 

 

 

 

 

     Acquisition of equipment

 

                      -

 

                      -

 

                         (3,806)

 

 

 

 

 

 

 

       Net cash used in investing activities

 

                      -

 

                      -

 

                         (3,806)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITES

 

 

 

 

 

 

     Sale of common stock

 

                      -

 

                      -

 

                      173,010

     Proceeds from notes and loans payable to stockholders

 

71,751

 

          139,789

 

                      398,593

 

 

 

 

 

 

 

       Net cash provided by financing activities

 

            71,751

 

          139,789

 

                      571,603

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN

 

 

 

 

 

 

    CASH AND CASH EQUIVALENTS

 

             (6,075)

 

              6,113

 

                             108

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS -

 

 

 

 

 

 

    BEGINNING OF PERIOD

 

              6,183

 

                   70

 

                                  -

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

 

 $              108

 

 $           6,183

 

 $                          108

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

   During the year, cash was paid for the following:

 

 

 

 

 

 

     Income taxes

 

 $                 -   

 

 $                 -   

 

 $                             -   

     Interest

 

 $                 -   

 

 $                 -   

 

 $                             -   

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITY:

 

 

 

 

 

 

   Forgiveness of interest on stockholder notes payable to additional

 

 

 

 

 

 

     paid-in capital

 

 $           1,659

 

 $           4,434

 

 $                     26,704

   Exchange of notes and loans for debentures

 

 $       112,294

 

 $       206,898

 

 $                   319,192

   Options issued for prepaid consulting services

 

 $                 -   

 

 $         74,160

 

 $                     74,160

   Warrants issued as part of converted debentures

 

 $                 -   

 

 $       383,828

 

 $                   383,828

   Payment of notes to stockholder for non-trading securities

 

 $         23,623

 

 $                 -   

 

 $                     23,623




The accompanying notes are an integral part of these financial statements


5



BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 1-

ORGANIZATION AND BASIS OF PRESENTATION


Beeston Enterprises Ltd., “the Company,” was incorporated on July 12, 1999 under the laws of the State of Nevada.  At present, we are an exploration stage company engaged in the search of mineral deposits that can be developed to a state of a commercially viable producing mine.  We currently own a 100% interest in ten mineral claims comprising 4,826.46 hectares, known as the “Ruth Lake Property” located approximately 25 kilometers from Lac La Hache, British Columbia, Canada.  The claims are in good standing until November 2, 2011.  Our interest in the Ruth Lake Property was  acquired from Candorado Operating Company, Ltd., a British Columbia corporation trading on the TSX Venture Exchange (Trading Symbol “CDO”).  


Going Concern


The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.  The Company has had recurring losses, large accumulated deficits, is dependent on the shareholder to provide additional funding for operating expenses, is in the exploration stage, and has no recurring revenues. These items raise substantial doubt about the Company’s ability to continue as a going concern.  


In view of these matters, realization of the assets of the Company is dependent upon the Company’s ability to meet its financial requirements and the success of future operations.


The management of the Company plans to raise additional funds through shareholders’ loans, issuance of stock, and other capital transactions.


These financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue its existence.


NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



9






BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)


Cash and Cash Equivalents


Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase.


Revenue Recognition


Revenue will be recognized when the following conditions are met:  persuasive evidence of an arrangement exists; delivery has occurred in accordance with the terms of the arrangement; the price is fixed or determinable; and collectability is reasonable assured.


Income Taxes


The Company utilizes Accounting Standards Codification (ASC) 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.


The Company accounts for income taxes in accordance with generally accepted accounting standards.  Federal, state and local income tax returns for years prior to 2007 are no longer subject to examination by tax authorities.


In June 2006, the Financial Accounting Standards Board issued Interpretation no. ASC 740-10, Accounting for Uncertainty in Income Taxes.  ASC 740-10 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with generally accepted accounting standards. Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods.


To date, the adoption of this interpretation has not impacted the Company’s financial condition, results of operations, or cash flows.


The tax effect of temporary differences, primarily net operating loss carryforwards, gave rise to the Company's deferred tax asset which are fully reserved.

10






BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)


Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. Because of the current uncertainty of realizing the benefit of the tax carry forward, a valuation allowance equal to the tax benefit for deferred taxes has been established. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period.


Net Loss Per Share of Common Stock


All dilutive securities were not included in the calculation of dilutive earnings per share because the effect would be anti-dilutive when the Company has incurred a loss from operations.  The Company has potentially dilutive securities, if there were earnings, in its convertible notes, warrants, and options as detailed below.



    2010               2009


Convertible debentures                                                    38,100,000    32,527,767

Options

                    200,000         200,000

Warrants

             122,025,667    32,527,767

_________    _________

Total

             160,325,667    65,255,534

 


Year Ended December 31,

    2010               2009

Net Loss

           $      (953,274)   $ (380,677)


Weighted Average common shares

outstanding (basic)       

84,991,594      58,342,000

Options

  -                      -

Warrants

  -                      -

_________    _________

Weighted Average common shares

outstanding (diluted)    

 84,991,594     58,342,000

   

  





11








BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)


Fair Value of Financial Instruments


The carrying amount reported in the balance sheet for cash and cash equivalents, accounts payable and accrued expenses approximates fair value because of the immediate or short-term maturity of these financial instruments.  The carrying amount reported for notes payable approximates fair value because, in general, the interest on the underlying instruments fluctuates with market rates.



NOTE 3 -

NOTES AND LOANS PAYABLE TO STOCKHOLDERS


The Company has borrowed funds for working capital purposes from stockholders of the Company by issuing notes and unsecured loans.  The notes are payable on demand and are non- interest bearing.  $112,084 worth of notes and loans were exchanged for convertible debentures and warrants as discussed in Note 4.


On September 13, 2010 a stockholder accepted 23,623,160 shares of USA Uranium (USAU) stock which the Company had received in exchange for mineral rights and subsequently expensed its total carrying value because the issuing company had lost its listing and was no longer trading.  The par value of the shares, $23,623, was offset against notes and loans totaling that amount as Additional Paid-in Capital for forgiveness of related-party debt.  There were notes and loans payable to stockholders of $9,415 and $80,954, respectively, as of December 31, 2010 and 2009.


Interest on notes is imputed currently at the rate of 6% per annum as additions to interest expense and contributed capital.  













12








BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009



NOTE 4 -

CONVERTIBLE DEBENTURES AND WARRANTS

 

Convertible Debentures-April 9, 2009


On April 9, 2009 the Company issued two convertible debentures to the President of the Company as replacement for prior loans made to the Company on promissory notes and other funds previously paid on behalf of the Company.  One debenture is for $126,677 USD and the other for $125,100 CAD.  The term of each debenture is three years and each debenture earns interest at 12% per annum, calculated and payable annually.  Each debenture is secured by a first “floating charge” over the undertaking and all property and assets of the Company.


During the term of the debentures the holder may, at his option convert all or part of the debt to common shares at a conversion rate of $.02 USD per share for the USD debenture or $.025 CAD for the CAD debenture.  The Company is also permitted to pay any accrued interest in the form of common shares at the same conversion rates.


Attached to each debenture were warrants to purchase additional shares at the same exercise prices specified for the conversion features.  There were 6,332,850 share purchase warrants attached to the USD debenture and 5,004,000 share purchase warrants attached to the CAD debenture.  Exercise of the warrants is limited to holders whose percentage of the total stock of the Company would not exceed 10% upon exercise.  Both issues of warrants expire on April 9, 2012.


On September 24, 2009, in consideration for the holder agreeing to surrender his “floating charge” in order to facilitate the granting of option rights on certain mineral properties of the Company, the conversion rate on the debentures and warrants was changed to $0.0075 (US) for the USD-denominated debentures and $0.008 (CAD) for the CAD-denominated debentures.  The reduction in the exercise price increased the potential shares on conversion from 6,333,850 to 16,890,267 for the USD-denominated debentures and from 5,004,000 to 15,637,500 for the CAD-denominated debentures.  The potential shares from the warrants similarly increased.  


On April 9, 2010 the USD-denominated debenture of $126,677 and the CAD-denominated debenture of $125,100 (Valued at $106,111 USD) were converted to 32,527,761 shares of common stock .


Also on April 9, 2010, 3,903,332 shares of stock were issued in payment of $8,401 accrued interest and $1,008 related cumulative currency translation was recognized as expense.




13







BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 4 -

CONVERTIBLE DEBENTURES AND WARRANTS (CONTINUED)


On June 1, 2010 the terms of the warrants were amended.  The number of warrants associated with the USD-denominated debenture increased from 16,890,267 to 42,225,667 based on a revised exercise price of $.003 USD.  The number of warrants associated with the CAD-denominated debenture increased from 15,637,500 to 41,700,000 based on a revised exercise price of $.003 CAD and fair value of the stock on April 9, 2010 of $0.051.  The expiration date was changed from April 9, 2012 to June 1, 2013.


Convertible Debentures-June 4, 2010


On June 4, 2010 the Company issued two convertible debentures to a shareholder of the Company as replacement for prior loans made to the Company on promissory notes and other funds previously paid on behalf of the Company.  One debenture is for $66,300 USD and the other for $48,000 CAD (valued at $48,096 USD as of December 31, 2010).  The term is three years and each debenture earns interest at 12% per annum, calculated and payable annually.  Each debenture is also secured by a first “floating charge” over the undertaking and all property and assets of the Company. The accrued interest is $7,899 at December 31, 2010.


During the term of the debentures the holder may, at his option, convert all or part of the debt to common shares at a conversion rate of $.003 per share for the USD and CAD debentures.  The Company is also permitted to pay any accrued interest in the form of common shares at the same conversion rates.


Attached to each of the new debentures were warrants to purchase additional common shares at the same prices specified for the conversion feature.  There were 22,100,000 share purchase warrants attached to the USD debenture and 16,000,000 share purchase warrants attached to the CAD debenture.  Exercise of warrants is limited to holders whose percentage of the total stock of the Company would not exceed 10% upon exercise.  Both issues of warrants expire on June 4, 2013.


A loss from debt extinguishment due to the June 4, 2010 restructuring was recognized.  The fair value of the conversion feature  was $190,500 and the value of attached warrants was $304,800 for a total loss from debt extinguishment of $495,300.  Also, a warrant for warrant exchange was executed to separate the warrants from the debentures.  The exchange resulted in an increase in value of the warrants for an added loss from debt extinguishment of $207,651.






14








BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 5 -

PURCHASE OF MINERAL CLAIMS


On September 12, 2006 the Company purchased speculative mineral claims in Canada for $50,000 CAD which is collectively described as the “Ruth Lake Property” .  The expense was recognized as $44,811 USD.  The Company is obligated to pay any fees and assessments to maintain the claims.  The Company is obligated to pay the vendor a royalty of 2% of net smelter returns.  The royalty may be reduced to 1% by payment of $500,000 CAD ($501,002 USD as of December 31, 2010) or eliminated entirely by payment of $1,000,000 CAD ($1,002,004 USD as of December 31, 2010). As of December 31, 2010 the Company owns and still maintains a portion of the Ruth Lake Property.


NOTE 6 -

SALE OF MINERAL RIGHTS


Kranti Resources, Inc.

On January 18, 2007 the Company entered into an agreement with Kranti Resources, Inc., “Kranti,” to grant Kranti an option to acquire one of the Company’s mining claims  upon the payment of $20,000 USD, payable at the time of entering  into the agreement.  In addition, a performance of a program for development and exploration on the mineral property totaling $175,000 CAD over a four-year period, with amounts to be completed by each anniversary.  Upon exercise of the option to purchase Kranti would assume a  2% royalty of net smelter returns payable to the original owner of the mining claim  and would receive a payout right of $1,000,000 CAD.  Additionally, Kranti would assume a 2% royalty obligation to the Company, based on net smelter returns, with a payout of $2,000,000 CAD.


Kranti failed to carry out the exploration work due by the second anniversary date of the option agreement so the Company amended the agreement on January 16, 2009 to allow Kranti an extension of time to June 30, 2009 to meet these exploration requirements.  On June 22, 2009 the Company entered into a Second Amending Agreement which extended the date for completion of the exploration work required for the second anniversary of the option agreement to December 31, 2009, in consideration of Kranti agreeing to increase exploration work required under the option agreement by $50,000 CAD to $225,000 CAD.  On December 30, 2009 the Company and the optionee entered into a Third Amending Agreement extending the due date for completion of the second anniversary work requirements to June 30, 2010 and increasing the overall exploration work obligation by another $25,000 CAD, for a total commitment of $250,000 CAD.  The Company and Kranti executed a Fourth Amending Agreement dated February 11, 2010 extending the due date for the exploration work to be carried out by the third anniversary date to December 31, 2010, in consideration of Kranti agreeing to carry out an additional $25,000 CAD in exploration and development work or payments in lieu of work, bringing the total commitment to $275,000 CAD.  On July 1, 2010 the Company gave notice to Kranti that it was in default of the second anniversary work requirement under the option agreement with the

15







BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 6 -

SALE OF MINERAL RIGHTS (CONTINUED)


Kranti Resources, Inc. (Continued)

 Company.  Kranti had 35 days from the notice date to meet the requirements or the Option Agreement and the option represented would terminate.  On August 5, 2010, Kranti remained in default and the option agreement was terminated.


USA Uranium Corp.

On September 24, 2009 the Company entered into an option agreement with a junior mining company, USA Uranium Corp., “USAU,” granting it an option to acquire a 50% interest in nine mining claims upon payment, in the form of stock of USAU, valued at $103,600 on September 24, 2009, and the performance of a program of development and exploration on the mineral property totaling $300,000 CAD over a two-year period, with amounts to be completed at each anniversary.  Upon exercise of the option to purchase, USAU would assume a 2% royalty on net smelter returns payable to the original owner of the claims and would receive the payout right of $1,000,000 CAD.  If the option were exercised, the optionee and the Company could enter into a joint venture for exploration and development.  If the optionee were to fail to meet the maintenance requirements, whether through the failure to perform exploration work on the mining claims or the payment of cash in lieu thereof, the Company may pay the required fees in lieu of exploration work and recover from USAU.


As of December 31, 2010 the Company has incurred expense of $23,044 CAD for maintenance payment reimbursements due.  On October 26, 2010 the Company entered into an agreement with USAU wherein the Company agreed to accept 23,043,880 shares of USAU stock, in exchange for the $23,044 CAD tenure reimbursements which had been fully recognized as a bad debt.  The Company also agreed to accept 26,956,120 shares of USAU stock in satisfaction the amount of $26,956 CAD being the balance of the exploration program of $50,000 CAD for which USAU was in default less a credit of $23,044 CAD given to USAU by Beeston for settlement of tenure maintenance paid by Beeston on behalf of USAU.  USAU also agreed to pay the Company 75,000,000 common shares at a price equal to the par value of the common stock of USAU, in consideration of Beeston agreeing to reduce the number of mining claims under option to USAU from nine claims to four claims, thereby reducing USAU’s maintenance costs.  All CAD$ amounts were deemed to be at par with the US$ under the terms of the agreement and all shares were issued at a price equal to the par value of the common stock of $0.001. On November 2, 2010, USAU allowed the four mining claims that remained under option to USAU from Beeston to lapse.  These four mining claims were reclaimed by Beeston at a cost of $1,064 CAD ($1, 066 USD) which is due from USAU.  The parcels reclaimed are free of tenure payment obligations until November 2, 2011.  As of December 31, 2010, none of the additional shares of USAU were received and the USAU shares have been delisted.  Due to doubt about USAU’s ability to perform and the absence of a value for its shares, the Company has created a bad debt reserve for the USAU debt of $1,066 and reduced the carrying value of USAU shares to $0.

16






BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 6 -        SALE OF MINERAL RIGHTS (CONTINUED


Mariposa Resources Ltd.

On September 25, 2009 the Company entered into an agreement with another junior mining company, Mariposa Resources Ltd., “Mariposa,” granting it an option to acquire a 50% interest in eight mining claims comprising its mineral property rights upon the payment, in the form of Mariposa stock, payable within six months of the date of signing the option agreement (By March 24, 2010) and the performance of a program of exploration and development on the mineral property totaling $250,000 CAD over a two-year period, with amounts to be completed by each anniversary.  Upon exercise of the option to purchase, Mariposa will assume a 2% royalty on net smelter returns payable to the original owner of the claims and will receive the payout right of $1,000,000 CAD.  If the option is exercised, Mariposa and the Company may enter into a joint venture for exploration and development.  If Mariposa were to fail to meet the maintenance requirements, whether for failure to perform exploration work on the mining claims or the payment in lieu of cash thereof, the Company may pay the required fees in lieu of exploration work and recover from Mariposa.  As of December 31, 2010 the Company has recorded a receivable of $22,897 due from Mariposa as reimbursement for maintenance payments it has made on Mariposa’s behalf.  


On March 24, 2010 the due date for payment of the shares under the Company’s option agreement dated September 25, 2009 was extended to June 24, 2010 in consideration of Mariposa agreeing to perform an additional $50,000 CAD of exploration and development work on the optioned mining claims.  On June 24, 2010 the Company entered into a further amending agreement extending the due date for payment of its stock and for the completion of the initial $50,000 CAD exploration and development program to December 31, 2010, in consideration of Mariposa agreeing to an increase in the number of its shares to be received from 1,000,000 shares to 1,500,000 shares.


As of December 31, 2010 the Company had not received the 1,500,000 shares of Mariposa stock and had incurred $22,851 CAD reimbursable costs, valued at $22,897 USD, for which reimbursement is due from Mariposa.  On November 2, 2010 all eight of the claims covered by the agreement lapsed for failure to pay maintenance fees.  The Company reclaimed four of the nine mining claims, which four mining claims are now free of tenure obligations until November 2, 2011.


Okana Ventures, Inc.


On August 9, 2010 the Company, as optionor, entered into an Agreement to sell a partially developed mineral claim in British Columbia, Canada.  The optionee, Okana Ventures, Inc., “Okana,” is a company of which the Company’s President

is also the President.  Okana can acquire title to the claim by payment of $2,500 USD upon signing the Agreement and another $2,500 USD by August 31, 2010

17








BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 6 -

SALE OF MINERAL RIGHTS (CONTINUED)


Okana Ventures, Inc. (Continued)


and by carrying out a $200,000 CAD program of exploration and development ($200,401 USD as of December 31, 2010).  Okana had paid the initial $5,000 as of August 31, 2010, reported as a sale of mineral rights.  The exploration and development program consists of incurring exploration and development expense according to the following schedule:


     By August 31, 2011:  $25,000 CAD

     By August 31, 2012:  $25,000 CAD additionally

     By August 31, 2013:  $50,000 CAD additionally and

     By August 31, 2014:  $100,000 CAD additionally to complete the purchase.


Upon fulfillment of the exploration and developmental program, Okana assumes an obligation to pay a royalty of 2% of net smelter returns to the original owner of the claim, with an option to reduce the royalty to 1% upon payment of $500,000 CAD or to eliminate the royalty by payment of $1,000,000 CAD.  Additionally, Okana assumes an obligation to pay an identical 2% royalty and payout opportunity to the Company.  


NOTE 7 -

MARKETABLE SECURITIES


On September 24, 2009 the Company entered into an option agreement with a junior mining company, USA Uranium Corp. (“USAU”), granting it an option to acquire a 50% interest in nine mining claims upon payment, in the form of stock of USAU, valued at $315,000 on December 31, 2009.


As of December 31, 2010, the USAU shares received by the Company have been delisted.  Due to doubt about USAU’s ability to perform and the absence of a value for its shares, the Company reduced the carrying value of USAU shares to $0.

          

NOTE 8 -

STOCKHOLDERS’ EQUITY (DEFICIT)


Common Stock


As of December 31, 2010 and 2009 the Company has 500,000,000 shares of common stock authorized and 94,773,093 and 58,342,000, respectively, issued and outstanding.






18







BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 8 -

STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)


Common Stock (Continued)


The following details the stock transactions for the Company:


On April 7, 2009 the Directors, with shareholder approval, increased the single class of common stock authorized from 100,000,000 to 500,000,000 with no change in the $.001 per share par value.


On April 9, 2010 conversion of debentures increased the number of shares outstanding by 32,527,761.  Payment of accrued interest in the form of stock added 3,903,332 shares.


NOTE 9 -

PRIVATE PLACEMENT MEMORANDUM


On July 12, 2010 the Board of Directors authorized a new Private Placement Memorandum (Second PPM) offering 30,000,000 units, priced at $.005 USD per unit.  Each offered unit is comprised of one share of Beeston common stock and two warrants, with one warrant (“Warrant A”) being exercisable into one share of the Company’s common stock for a period of one year from the closing date of this private placement offering at a price of $.0055 and one warrant (“Warrant B”) being exercisable into one share of the Company’s common stock for a period of one year and six months from the closing date of this private placement offering at a price of $.006.  The Second PPM expires January 12, 2011 unless extended.


NOTE 10 -

FAIR VALUE MEASUREMENTS


On January 1, 2008, the Company adopted ASC Topic 820, “Fair Value Measurements”. ASC 820 defines fair value, provides a consistent framework for measuring fair value under Generally Accepted Accounting Principles and expands fair value financial statement disclosure requirements.  ASC 820’s valuation techniques are based on observable and unobservable inputs.  Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions.  


ASC 820 classifies these inputs into the following hierarchy:


Level 1 Inputs-  Quoted prices for identical instruments in active markets.


Level 2 Inputs-  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.


19








BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 10 -

FAIR VALUE MEASUREMENTS (CONTINUED)


Level 3 Inputs- Inputs with primarily unobservable value drivers.


The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2010:


Assets

Level 1        Level 2        Level 3        Total

 

Cash                            $ 108           $     -             $      -      $    108

 

Total Assets

               108                  -

            -              108

  ====          ====           ======     =====

Notes payable                    -                                     9,415        9,415

Convertible debentures    -                                   122,295     122,295            

 

Total Liabilities                -                                   131,710     131,710

 =====       ======         ======     ======


The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2009:


Assets

Level 1        Level 2        Level 3        Total

 

Cash                            $ 6,483       $     -             $      -        $ 6,483

 

Total Assets

              6,483               -

            -           6,483

  ====          ====           ======     =====

Notes payable                   -                                    80,954       80,954          

Convertible debentures    -                                   227,670     227,670                 

 

Total Liabilities                -                                   308,624     308,624

 =====       ======         ======     ======






20







BEESTON ENTERPRISES LTD.

 (AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009


NOTE 11 -

LONG TERM DEBT MATURITY SCHEDULE


The Company has long term debt in the form of convertible debentures which become due for payment, in the form of cash or Company stock, in three years.  The debentures were valued at $122,295 as of December 31, 2010.  The five-year long- term debt maturity schedule is as follows:

2011

$       - 0 –                     

2012

         - 0 –                     

2013

     122,295

2014

         - 0 –

2015

         - 0 -


NOTE 12 -

SUBSEQUENT EVENTS


On January 12, 2011 the Second Private Placement Memorandum, mentioned above in Note 8, lapsed with no shares sold under the memorandum.


On November 30, 2010, Mariposa Resources Ltd., the second junior mining company optionee mentioned above in Note 6, changed its name to Lithium Exploration Group, Inc., “Lithium.”  As of December 31, 2010 Lithium was in default of payment of a total of 1,500,000 shares of its common stock to Beeston and of its obligation to perform $100,000 CAD of exploration and development work on the optioned mining claims as part payment of the option exercise price under its option agreement with the Company.  Lithium is also indebted to Beeston in the amount of $22,851.11 CAD, valued at $22,897 USD, related to the mining claim maintenance fees and re-claiming fees paid by Beeston on behalf of Lithium.  Lithium has since terminated its option agreement with Beeston, by notice dated February 14, 2011.  The Company is currently pursuing Lithium in regard to the collection of the outstanding debts, the loss of four mining claims and the ongoing maintenance requirements for the reclaimed mining claims.  


 










21      








ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


There have been no disagreements of any kind with the Company’s Independent Auditors.


ITEM 9AT.  CONTROLS AND PROCEDURES


Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.


Our evaluation of internal control over financial reporting includes using the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.  The internal controls for the Company are provided by executive management’s review and approval of all transactions.


Based on the current internal controls employed by the Company, the Company concludes that, as of December 31, 2010, a material weakness exists in the Company’s internal control procedures, in that one individual who, as an officer and director of the Company, has sole access and authority to receive cash and make cash disbursements.


This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation requirements by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.


Changes in internal controls over financial reporting  


There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.



ITEM 9B.  OTHER INFORMATION


During the fourth quarter of the fiscal year ended December 31, 2010, there was no information required to be reported on Form 8K which was not previously reported.


PART III


ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


The names, ages, and respective positions of the directors, officers, and significant employees of the Company are set forth below.  







Name

Age

Position

Date of Election or Appointment

Michael Upham

55

Director, President, Secretary, Treasurer, CEO, CFO

June/July,2009


Michael Upham


Michael Upham was appointed a member of the Board of Director on June 10, 2009 and the president, secretary, treasurer, chief executive officer and chief financial officer of the Company on July 1, 2009.  Mr. Upham was a past director of Beeston Enterprises Ltd., a position he held from September 1999 to May 2005, when he resigned to become an officer and director of Okana Ventures, Inc., a development stage company, which positions he still holds.  Mr. Upham has been in the retail sales and marketing sector for over 35 years.  He was manager of Jack Fraser’s, a Canadian men’s clothing chain, having worked his way up to a management level during his term with the company from 1971 to 1977.  In 1978, Mr. Upham joined the sales staff at Finns Clothiers, where he worked as senior sales representative until 1985.  In 1986, he became district sales manager for Playtex Canada Ltd.  Mr. Upham left Playtex Canada Ltd. in 1996 to become district sales manager for Imperial Tobacco Company Limited, a position he held until his retirement in 2009.  Mr. Upham is prepared to devote 20% of his time, or approximately eight hours per week, to our operations.

 

Beeston's director and executive officer has not been involved, during the past five years, in any bankruptcy proceedings, conviction or criminal proceedings; has not been subject to any order, judgment, or decree, not subsequently reversed or suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and has not been found by a court of competent jurisdiction, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.


There have been no changes in the procedures by which security holders may recommend nominees to the Company’s Board of Directors.


The Board of Directors does not currently have a standing audit committee.


Significant Employees


Beeston has no significant employees other than the officers and directors described above, whose time and efforts are being provided to Beeston without compensation.


Compliance with Section 16(a) of the Exchange Act.


The Company is not aware of a director or officer who is delinquent in their reporting under Section 16(a) of the Exchange Act.


Code of Ethics


Beeston has not adopted a Code of Ethics at this time.







ITEM 11.  EXECUTIVE COMPENSATION.


(a) Mr. Upham received directors fees totaling $12,000 during the period of June15, 2009 to December 15, 2009.  No officer or director of Beeston received any remuneration in the form of salaries and/or allowances during 2009 and 2010.


(b) There are no annuity, pension or retirement benefits proposed to be paid to officers, directors, or employees of the corporation in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the corporation or any of its subsidiaries.


(c) No remuneration is proposed to be paid in the future directly or indirectly by the corporation to any officer or director under any plan that presently exists.


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


As of December 31, 2010, Beeston had no compensation plans in effect under which equity securities are authorized for issuance.


Following is a table showing security ownership of certain beneficial owners, as well as management of the Company.  Unless otherwise noted, address of record for each shareholder is #200 – 1687 West Broadway, Vancouver, B.C., V6J 1X2.  Unless otherwise noted, each shareholder is the direct owner of his or her shares.


Title of Class

Name and Address of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Class

N/A

 

 

 

 


There are currently no authorization plans in effect.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


Other than as set forth in Item 7, there are no relationships, transactions, or proposed transactions to which the registrant was or is to be a party, in which any of the named persons set forth in Item 404 of Regulation SK had or is to have a direct or indirect material interest.


None of the directors qualify as independent directors.


ITEM14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.


1.

Audit Fees:  Aggregate fees billed for each of the last two (2) fiscal years for professional services rendered by the principal accountant for the audit of the annual financial statements and review of financial statements included on Form 10-Q:  


2010:

$28,150

2009:

$17,000







2.

Audit-Related Fees:  Aggregate fees billed in each of the last two (2) fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported previously.


2010:

$6,500

2009:

$6,200


3.

Tax Fees:  Aggregate fees billed in each of the last two (2) fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

  

2010:

$0

2009:

$0


4.

All Other Fees:  Aggregate fees billed in each of the last two (2) fiscal years for products and services provided by the principal accountant, other than the services previously reported.


2010:

$0

2009:

$0


5.

Audit Committee Pre-Approval Procedures.  The Board of Directors has not, to date, appointed an Audit Committee.







PART IV


ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES


Exhibit No.

Document

Location

3.1

Articles of Incorporation

Previously Filed

3.2

Amendment to Articles

Previously Filed

3.3

Bylaws

Previously Filed

31

Rule 13a-14(a)/15d-14(a) Certifications

Included

32

Section 1350 Certifications

Included



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



BEESTON ENTERPRISES LTD.


Date:



        /s/ Michael Upham                               


            Michael Upham,

            President, CEO



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



/s/ Michael Upham

 

Michael Upham,

 

President, Treasurer, CEO, CFO,  Director

 

Date:  April 13, 2011