Medinah Minerals (MDMN)

[Hurricane_Rick]

Veblen,

WHERE ARE THE NOTES TO THE FINANCIAL STATEMENTS?

What specific notes do you believe are missing? In both of the quarterlies there are 9 notes appended to the end of the report. The Annual has 10 notes. From what I've read, they all seem to be referenced accordingly.

For example, here are the notes from the recent quarterly:

MEDINAH MINERALS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE QUARTER ENDING JUNE 30, 2017

Note 1 – Business and History

The Company was incorporated October 6, 1989 under the laws of the State of Nevada as Medinah Energy, Inc. In 2001, it changed its name to Medinah Mining, Inc. and in 2008 to Medinah Minerals, Inc. (Medinah). The Company was previously in the business of acquiring, exploring and developing mining properties. On May 16, 2016 Medinah completed an agreement for the sale of substantially all its mining properties to AURYN Mining Chile SpA (AURYN) in exchange for 25,000,000 shares of AURYN. Medinah has ceased its mining operations and is essentially a company holding stock in private or public companies.

Note 2 – Accounting Policies

• The Company uses the accrual accounting method as required by Generally Accepted Accounting Principles.
• The Company has no depreciable assets, so there is no depreciation or depreciation policy.
• The Company considers that "cash and cash equivalents" is composed of cash on hand, demand deposits, and time deposits with less than ninety days to maturity.
• The Company has significant operating loss carry-forwards available to apply against future taxable earnings. However, there is no deferred tax asset because any future benefit is considered to be impaired by the Company's history of unprofitability.
• The Company rarely has bad debts. Consequently, there is no allowance for doubtful accounts, and any bad debts expense is the result of specific accounts being written off.
• The Company has recorded its investment in AURYN at the lower of cost or market. See Note 3 below.

Note 3 – Investments

AURYN is a privately-owned company presently exploring the Altos de Lipangue historical mining district located approximately 30 kilometers northwest of Santiago, Chile. After consolidating Medinah’s mining claims, AURYN now owns and controls over 10,500 hectares of mining claims at the Altos de Lipangue Area. Medinah owns a 26.516% interest in AURYN after payment of Director Fees by stock (see note 6).

As a private company, there is no established market for the valuation of AURYN stock. AURYN has no defined Proven or Probable Reserves, nor does it have any formal Inferred, Indicated, or Measured Mineral Resources. On February 15, 2017 AURYN issued a capital call to its shareholders. For Medinah to meet this cash call it is incurring a debt of $1,648,140. For accounting purposes Medinah has chosen to assign a value to its AURYN stock equal to its debt for these shares.

Other Investments – The Company owns 9,950,000 shares of American Sierra Gold Corp. (AMNP) and 9,600,000 shares of Cerro Dorado, Inc. (CDCH). Both are publically traded companies and have been valued at their market value based on exchange trading. No discount has been taken for the relative size of the holdings compared to any illiquidity of trading. The stock values have been adjusted to reflect the market value at the end of the period. Excess values at the beginning of the period have been reflected as a prior period adjustment (See note 9). At the end of December 2016, the Company owned a 15% interest in Compañía Nuoco Mining Chile S.C.M. (NUOCO). However, during the 1st quarter of 2017 the company sold that interest to AURYN for 645,000 shares of AURYN.

Furthermore, the company expects to receive shares in the following companies as a result of recent legal settlements:

• Cerro Dorado, Inc. (CDCH) – 19,300,000 shares.
• American Sierra Gold Corp. (AMNP) – 1,700,000 shares.

Once these shares are received, they will be cancelled and re-issued in the Company’s name and reported on a subsequent financial statement.

Note 4 – Long-Term Debt

Loans from Stockholders represent funds advanced by a previous Board of Director member to assist in funding litigation in which the Company is involved. The loan has no specific repayment terms. On February 15, 2017 AURYN informed its shareholders of AURYN’s plan to capitalize its debt by issuing a capital call to its shareholders. Any shareholders unable to meet the capital call would retain their current shares but be diluted in their overall position.

On April 15, 2017, Medinah signed an agreement to finance Medinah’s portion of the raised capital. The basic terms of the agreement are as follows.

• AURYN Holdings Corporation will cover the payment of $1,648,140 that Medinah owes to AURYN.
• Medinah pledged its shares in AURYN as collateral against the loan.
• The loan will be a 0% interest loan payable in full on December 31, 2021.
• The loan payment date can be extended upon the agreement of both parties.
• Should the shares held as collateral become publicly traded, the loan will convert to an interest
only balloon note with a four-year term and a simple interest rate of 4% annually.
• Until the loan is paid in full, the shares remain as collateral securing the debt.
• If AURYN sells or transfers its rights to any other party and Medinah receives shares in another entity because of the sale or transference, the new shares that Medinah receives will serve as the collateral for the term of the loan, effectively replacing the shares in AURYN.

Note 5 – Preferred Stock

In 2012, the company created a class of preferred stock with preferential terms. As of June 30, 2017, 1,690,000 shares of this class remain outstanding.

Note 6 – Directors Fees

The Board of Directors passed a resolution on March 1, 2017, to compensate Board Members and Corporate Officers with a total of 1,000,000 shares of AURYN stock. That compensation is for corporate governance through the anticipated existence of the Corporation. The entire amount has been expensed (at the reported value) in Q1-2017 even though a portion is for future services.

Note 7 – Commitments and Contingencies

The Company was involved in several legal disputes and still remains party to one. In addition, the length and nature of the share issuance discrepancies mentioned above in “Disclosure Warnings” leaves the Company open to further litigation. As such, the Company is at risk of expending a significant portion of its resources on litigation. The Company has no other commitments or contingencies of which it is aware.

Note 8 – Change in Accounting Principal

Previously, exploration expenditures related to mining properties were capitalized and deferred to be recovered from future operations. Now the Company is electing to expense those costs in the period incurred until there is persuasive evidence that the exploration costs are economical and will contribute to the Companies planned operations. In previous financial statements those capitalized costs contributed to the carrying value of the AURYN stock in valuing a non-cash exchange. Now that stock valuation is assigned a value equal to Medinah’s debt for the shares (See note 3). Prior financial statements have not been restated to reflect this change in accounting principal.

Note 9 – Prior Period Adjustments

As disclosed in Note 7 above, the Company was involved in litigation with a previous Company executive who violated a subsequent fiduciary responsibility. The Company is unable to access prior financial records and is unable to account for the existence or proper disposition of Company assets held under that individual’s care. Additionally, the carrying value of investments held by the Company were not reflected at their market value in previous financial presentations.

The value of these assets has been reduced, along with a purported debt obligation to that individual. The Company cannot determine the timing of when these issues arose but is confident most of the financial impact was in a prior period. These matters and disputes have been reflected to the best of management’s ability, as a prior period adjustment in the current financial statements. The previous financial statements have not been restated.