x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
NEVADA
|
||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employee Identification No.)
|
Large Accelerated Filer o
|
Accelerated Filer o
|
|
Non-Accelerated Filer o (Do not check if a smaller reporting company)
|
Smaller Reporting Company x
|
Item 1.
|
Consolidated Financial Statements
|
F-1 to F-11
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
1
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
10
|
Item 4.
|
Controls and Procedures
|
10
|
Item 1
|
Legal Proceedings
|
11
|
Item 1A.
|
Risk Factors
|
11
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
11
|
Item 3.
|
Defaults Upon Senior Securities
|
11
|
Item 4.
|
Mine Safety Disclosures
|
12
|
Item 5.
|
Other Information
|
12
|
Item 6.
|
Exhibits
|
12
|
SIGNATURE
|
13
|
●
|
“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;
|
●
|
“SEC” refers to the United States Securities and Exchange Commission;
|
●
|
“Securities Act” refers to the Securities Act of 1933, as amended;
|
Item 1.
|
Financial Statements
|
PAGE
|
- F-2
|
CONSOLIDATED BALANCE SHEETS AS OF MAY 31, 2013 (UNAUDITED) AND AS OF AUGUST 31, 2012 (AUDITED).
|
PAGE
|
- F-3
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED MAY 31, 2013 AND 2012 (UNAUDITED).
|
PAGE
|
- F-4
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE NINE MONTHS ENDED MAY 31, 2013 AND 2012 AND FOR THE PERIOD JUNE 5, 2003 (INCEPTION) TO MAY 31, 2013 (UNAUDITED).
|
PAGE
|
- F-5
|
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MAY 31, 2013 AND 2012 AND FOR THE PERIOD JUNE 5, 2003 (INCEPTION) TO MAY 31, 2013 (UNAUDITED).
|
PAGE
|
- F-6 to F-11
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
|
May 31,
2013
(Unaudited)
|
August 31,
2012
(Audited)
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash
|
$
|
236,354
|
$
|
11,191
|
||||
Prepaid and sundry
|
7,746
|
11,129
|
||||||
Total Current Assets
|
244,100
|
22,320
|
||||||
Long Term Assets
|
||||||||
Mineral property claims
|
3,410,225
|
133,108
|
||||||
Equipment
|
804
|
958
|
||||||
Total Long Term Assets
|
3,411,029
|
134,066
|
||||||
Total Assets
|
$
|
3,655,129
|
$
|
156,386
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
27,931
|
$
|
32,539
|
||||
Convertible notes payable
|
-
|
111,330
|
||||||
Total Liabilities
|
27,931
|
143,869
|
Stockholders' Equity
|
||||||||
Capital stock, $0.001 par value; Authorized 200,000,000; Issued and outstanding 32,864,627 as at May 31, 2013 (August 31, 2012 - 7,420,109)
|
32,865
|
59,361
|
||||||
Additional paid-in capital
|
5,701,564
|
1,731,010
|
||||||
Shares to be issued
|
75,000
|
-
|
||||||
Accumulated other comprehensive loss
|
(9,820
|
)
|
(9,540
|
)
|
||||
Deficit accumulated during the development stage
|
(2,172,411
|
)
|
(1,768,314
|
)
|
||||
Total Stockholders' Equity
|
3,627,198
|
12,517
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
3,655,129
|
$
|
156,386
|
For The Three Months Ended
May 31,
2013
|
For The Three Months Ended
May 31,
2012
|
|||||||
EXPENSES
|
||||||||
Professional fees
|
246,296
|
87,400
|
||||||
Exploration
|
40,179
|
2,277
|
||||||
Advertising and promotion
|
4,659
|
51
|
||||||
Telecommunications
|
1,789
|
1,067
|
||||||
Rent and occupancy costs
|
10,663
|
1,937
|
||||||
Office and general
|
5,175
|
3,510
|
||||||
Interest and bank charges
|
1,125
|
1,993
|
||||||
Depreciation
|
48
|
62
|
||||||
TOTAL OPERATING EXPENSES
|
309,934
|
98,297
|
||||||
LOSS FROM CONTINUING OPERATIONS
|
(309,934
|
)
|
(98,297
|
)
|
||||
Foreign exchange loss
|
-
|
(128
|
) | |||||
Gain on disposal of subsidiary
|
-
|
137,000
|
||||||
Forgiveness of advances to subsidiary
|
-
|
(137,000
|
) | |||||
LOSS FROM CONTINUING OPERATIONS BEFORE TAX
|
(309,934
|
)
|
(98,425
|
)
|
||||
Income tax
|
-
|
-
|
||||||
LOSS FROM CONTINUING OPERATIONS AFTER TAX
|
(309,934
|
)
|
(98,425
|
)
|
||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
|
-
|
-
|
||||||
NET LOSS
|
$
|
(309,934
|
)
|
$
|
(98,425
|
)
|
||
OTHER COMPREHENSIVE LOSS FROM CONTINUING OPERATIONS
|
||||||||
Foreign currency translation adjustment
|
(35
|
)
|
270
|
|||||
TOTAL COMPREHENSIVE LOSS
|
$
|
(309,969
|
)
|
$
|
(98,695
|
)
|
||
NET LOSS PER SHARES - BASIC AND DILUTED
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
|
32,687,996
|
6,939,193
|
For The Nine Months Ended
May 31,
2013
|
For The Nine Months Ended
May 31,
2012
|
For The Period From Inception
(5 June 2003)
to May 31,
2013
|
||||||||||
EXPENSES
|
||||||||||||
Professional fees
|
356,721
|
174,044
|
1,355,050
|
|||||||||
Exploration net of recovery
|
2,050
|
17,077
|
117,773
|
|||||||||
Advertising and promotion
|
6,855
|
2,577
|
16,036
|
|||||||||
Telecommunications
|
4,765
|
3,575
|
15,398
|
|||||||||
Rent and occupancy costs
|
14,513
|
5,812
|
25,373
|
|||||||||
Office and general
|
10,650.
|
3,866
|
23,868
|
|||||||||
Interest and bank charges
|
8,389
|
2,873
|
18,658
|
|||||||||
Depreciation
|
154
|
-
|
274
|
|||||||||
TOTAL OPERATING EXPENSES
|
404,097
|
209,824
|
1,572,430
|
|||||||||
LOSS FROM CONTINUING OPERATIONS
|
(404,097
|
)
|
(209,824
|
)
|
(1,572,430
|
)
|
||||||
Interest and other (expenses) income
|
-
|
(254
|
)
|
11,821
|
||||||||
Impairment of mineral property claims
|
-
|
-
|
(451,870
|
)
|
||||||||
Impairment of convertible note receivable
|
-
|
-
|
(23,621
|
)
|
||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE TAX
|
(404,097
|
)
|
(210,078
|
)
|
(2,036,100
|
)
|
||||||
Income tax
|
-
|
-
|
-
|
|||||||||
LOSS FROM CONTINUING OPERATIONS AFTER TAX
|
(404,097
|
)
|
(210,078
|
)
|
(2,036,100
|
)
|
||||||
LOSS FROM DISCONTINED OPERATIONS, NET OF TAX
|
-
|
(3,742
|
)
|
(136,311
|
)
|
|||||||
NET LOSS
|
$
|
(404,097
|
)
|
$
|
(213,820
|
)
|
$
|
(2,172,411
|
)
|
|||
OTHER COMPREHENSIVE LOSS FROM CONTINUING OPERATIONS
|
||||||||||||
Foreign currency translation adjustment
|
(280
|
)
|
1,111
|
(9,820
|
)
|
|||||||
TOTAL COMPREHENSIVE LOSS
|
$
|
(404,377
|
)
|
$
|
(212,709
|
)
|
(2,182,231
|
)
|
||||
NET LOSS PER SHARES - BASIC AND DILUTED
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
|
17,453,520
|
6,879,440
|
For The Nine Months Ended
May 31,
2013
|
For The Nine Months Ended
May 31,
2012
|
For The Period From Inception
(June 5, 2003)
to May 31,
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net loss
|
$
|
(404,097
|
)
|
$
|
(221,013
|
)
|
$
|
(2,172,411
|
)
|
|||
Less: Loss from discontinued operations, net of tax expense
|
-
|
3,742
|
136,311
|
|||||||||
Loss from continuing operations
|
(404,097
|
)
|
(217,271
|
)
|
(2,036,100
|
)
|
||||||
Items not affecting cash
|
||||||||||||
Depreciation
|
154
|
-
|
274
|
|||||||||
Accretion expense on convertible notes payable
|
13,670
|
804
|
19,300
|
|||||||||
Accrued interest on convertible notes payable
|
3,274
|
3,274
|
||||||||||
Impairment of mineral property claims
|
-
|
-
|
451,870
|
|||||||||
Impairment of convertible note receivable
|
-
|
-
|
23,621
|
|||||||||
Loss on disposal of assets
|
-
|
-
|
2,762
|
|||||||||
Issuance of common stock for services
|
187,500
|
18,000
|
306,500
|
|||||||||
Issuance of common stock for rental
|
-
|
-
|
3,500
|
|||||||||
Write off of deferred offering costs
|
-
|
-
|
120,000
|
|||||||||
Change in prepaid and sundry
|
3,383
|
(3,752
|
)
|
(7,746
|
)
|
|||||||
Change in accounts payable and accrued liabilities
|
(4,608
|
)
|
5,319
|
27,931
|
||||||||
Net cash used in operating activities from continuing operations
|
(200,724
|
)
|
(196,900
|
)
|
(1,084,814
|
)
|
||||||
Net cash used in operating activities from discontinued operations
|
-
|
(2,502
|
)
|
(114,257
|
)
|
|||||||
CASH FLOWS USED IN OPERATING ACTIVITIES
|
(200,724
|
)
|
(199,402
|
)
|
(1,199,071
|
)
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Acquisition of mineral property claims
|
(82,117
|
)
|
(14,978
|
)
|
(97,095
|
)
|
||||||
Disposition of equipment
|
-
|
-
|
4,462
|
|||||||||
Acquisition of equipment
|
-
|
(1,130
|
)
|
(30,124
|
)
|
|||||||
CASH FLOWS USED IN INVESTING ACTIVITIES
|
(82,117
|
)
|
(16,108
|
)
|
(122,757
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Convertible notes receivable
|
-
|
-
|
(21,978
|
)
|
||||||||
Proceeds from convertible note payable
|
-
|
112,500
|
141,040
|
|||||||||
Repayment of convertible notes payable
|
-
|
(3,939
|
)
|
(163,550
|
)
|
|||||||
Advances (to) from a related party
|
(2,939
|
) |
125,000
|
|||||||||
Issuance of common stock, net of commissions
|
508,284
|
57,878
|
1,484,165
|
|||||||||
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
|
508,284
|
163,500
|
1,564,677
|
|||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(280
|
)
|
1,050
|
(6,495
|
)
|
|||||||
NET INCREASE (DECREASE) IN CASH
|
225,163
|
(50,960
|
)
|
236,354
|
||||||||
CASH, BEGINNING OF PERIOD
|
11,191
|
86,876
|
-
|
|||||||||
CASH, END OF PERIOD
|
$
|
236,354
|
$
|
35,916
|
$
|
236,354
|
||||||
NON CASH INVESTING AND FINANCING ACTIVITES
|
||||||||||||
Issuance of common stock for mineral property claims
|
$
|
3,195,000
|
20,000
|
|||||||||
Convertible debt converted to common stock
|
$
|
128,274
|
-
|
1.
|
ORGANIZATION AND NATURE OF OPERATIONS
|
2.
|
BASIS OF PRESENTATION
|
3.
|
GOING CONCERN
|
4.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
5.
|
DISCONTINUED OPERATIONS
|
6.
|
CONVERTIBLE NOTES PAYABLE
|
6.
|
CONVERTIBLE NOTES PAYABLE (continued)
|
7.
|
MINERAL CLAIMS
|
7.
|
MINERAL CLAIMS (continued)
|
8.
|
RELATED PARTY TRANSACTIONS
|
9.
|
CAPITAL STOCK
|
10.
|
CONTINGENCIES AND COMMITMENTS
|
●
|
After spending a total amount of $2,500,000 on the property, $250,000 and an additional 125,000 shares of the Company’s common stock shall be delivered to the selling group.
|
●
|
After spending a total amount of $5,000,000 on the property, a further $250,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group.
|
●
|
If a feasibility study is put in place an additional $250,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group.
|
●
|
If a bankable feasibility is put in place a further $500,000 and 250,000 shares of the Company’s common stock shall be delivered to the selling group.
|
10.
|
CONTINGENCIES AND COMMITMENTS (continued)
|
●
|
After spending a total amount of $1,000,000 on the property, $50,000 and an additional 125,000 shares of the Company’s common stock shall be delivered to the selling group.
|
●
|
After spending a total amount of $2,500,000 on the property, a further $100,000 and 250,000 shares of the Company’s common stock shall be delivered to the selling group.
|
●
|
After spending a total amount of $5,000,000 on the property, a further $150,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group.
|
12.
|
SUBSEQUENT EVENT
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Position
|
Cost per day
|
|||
Sr. consultant - QP services
|
$
|
1000
|
||
Project manager – i.t. geologist
|
$
|
600
|
||
Student geologist
|
$
|
450
|
||
Geologist assistant
|
$
|
350
|
Work
|
Quantity
|
Unit
|
Unit Cost
|
Total
|
|||||||||||||||
Compilation of the EM Input (SDBJ) and Dighem (2007) anomalies (location of anomalies and interpretation)
|
$
|
10,000
|
|||||||||||||||||
Line cutting (cut every 100 m and picketed every 25 m) on the main coincident Mag and EM anomalies. Provision of 125 km
|
125
|
km
|
$
|
550
|
$
|
68,750
|
|||||||||||||
Ground geophysics, EM (MaxMin) and Mag
|
125
|
km
|
$
|
350
|
$
|
43,750
|
|||||||||||||
Geology and prospecting on the cut lines and on the north part of the property (including room and board, transportation, etc.)
|
$
|
100,000
|
|||||||||||||||||
Stripping, trenching and sampling, all inclusive
|
$
|
50,000
|
|||||||||||||||||
Drilling on the target to be defined ($225/m, all inclusive)
|
2,000
|
m
|
$
|
225
|
$
|
460,000
|
|||||||||||||
Report update, NI 43-101 and for statutory purposes
|
$
|
10,000
|
|||||||||||||||||
Contingency, estimated at 10%
|
|||||||||||||||||||
TOTAL PHASE I
|
$
|
805,750
|
|||||||||||||||||
Phase II
|
|||||||||||||||||||
Provision of 5,000 m of drilling to test the targets defined during Phase I
|
5,000
|
m
|
$
|
225
|
$
|
1,125,000
|
|||||||||||||
Report update, NI 43-101 and for statutory purposes
|
$
|
12,000
|
|||||||||||||||||
Contingency, estimated at 10%
|
$
|
113,700
|
|||||||||||||||||
TOTAL PHASE II
|
$
|
1,250,700
|
|||||||||||||||||
TOTAL PHASE I AND II
|
$
|
2,056,450
|
Final Report - Job No: 12-338-08679-01
|
|||||||||||||||||||
Sample
|
Au
|
Ag
|
Ce
|
Hf
|
La
|
Hg
|
Hg
|
Hg
|
Al
|
As
|
Ba
|
Be
|
Bi
|
Ca
|
Cd
|
Co
|
Cr
|
Cs
|
Cu
|
Designation
|
ppb
|
ppm
|
ppm
|
ppm
|
ppm
|
ppb
|
ppm
|
ppb
|
%
|
ppm
|
ppm
|
ppm
|
ppm
|
%
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
Au-1AT-AA
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
Hg-AR-OR-CVAA
|
Hg-AR-TR-CVAA
|
Hg-AR-TR-CVAA
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
|
RMR-01
|
<5
|
0.27
|
6.83
|
<0.1
|
6.1
|
28.16
|
28160
|
0.24
|
1.5
|
618
|
3.22
|
<0.01
|
0.07
|
0.05
|
0.6
|
308
|
0.28
|
2
|
|
RMR-02
|
<5
|
0.41
|
47.47
|
<0.1
|
26.7
|
0.11
|
108
|
4.47
|
12.6
|
305
|
7.76
|
0.87
|
0.33
|
0.19
|
1
|
150
|
5.17
|
7.6
|
|
RMR-03
|
<5
|
0.39
|
83.04
|
0.1
|
52.9
|
0.15
|
147
|
4.9
|
6.1
|
174
|
5.65
|
<0.01
|
0.32
|
0.17
|
0.9
|
159
|
4.08
|
5.3
|
|
RMR-04
|
13
|
0.12
|
22.53
|
<0.1
|
15.6
|
19.53
|
19525
|
0.79
|
14.9
|
580
|
0.74
|
1.21
|
0.11
|
0.2
|
1
|
260
|
1.3
|
7.5
|
|
RMR-05
|
<5
|
0.21
|
2.57
|
2.5
|
1.6
|
68.5
|
68502
|
0.17
|
<0.2
|
726
|
0.59
|
<0.01
|
0.06
|
0.1
|
1
|
531
|
0.24
|
2.2
|
|
RMR-06
|
<5
|
0.14
|
0.31
|
1.1
|
0.5
|
327116
|
>100
|
>100000
|
0.07
|
<0.2
|
41
|
1.07
|
<0.01
|
0.02
|
0.07
|
2.6
|
626
|
0.07
|
2.5
|
RMR-07
|
<5
|
0.1
|
23.18
|
0.6
|
15.9
|
5.12
|
5120
|
1.33
|
39.5
|
820
|
1.25
|
0.98
|
0.18
|
0.22
|
<0.1
|
239
|
1.01
|
5.2
|
|
RMR-08
|
<5
|
0.44
|
4.83
|
2.7
|
2.9
|
311326
|
>100
|
>100000
|
0.3
|
1.4
|
644
|
0.16
|
<0.01
|
0.05
|
0.17
|
2.3
|
520
|
0.24
|
3.8
|
RMR-09
|
<5
|
0.32
|
82.42
|
5.8
|
46.5
|
10.23
|
10229
|
8.91
|
4.7
|
903
|
4.14
|
1.76
|
1.42
|
0.17
|
3.1
|
26
|
5.13
|
14.4
|
|
RMR-10
|
8
|
0.23
|
6.96
|
<0.1
|
3.6
|
84.94
|
84943
|
0.37
|
16
|
2004
|
1.13
|
0.8
|
0.11
|
0.42
|
0.5
|
314
|
0.86
|
5.1
|
|
RMR-11
|
<5
|
0.37
|
64.77
|
2.5
|
36
|
19.74
|
19740
|
4.37
|
8.3
|
891
|
3.07
|
1.03
|
0.47
|
0.44
|
0.6
|
39
|
4.71
|
10.3
|
|
RMR-12
|
<5
|
0.26
|
3.51
|
0.3
|
2.4
|
276411
|
>100
|
>100000
|
0.2
|
<0.2
|
400
|
0.18
|
1.28
|
0.04
|
0.12
|
1.3
|
722
|
0.29
|
3.1
|
RMR-13
|
<5
|
0.05
|
1.57
|
1.6
|
1.3
|
0.72
|
721
|
0.42
|
<0.2
|
152
|
<0.05
|
<0.01
|
0.15
|
0.06
|
0.5
|
77
|
0.76
|
0.6
|
|
RMR-14
|
7
|
0.26
|
116.99
|
2.1
|
54.8
|
6.76
|
6758
|
5.08
|
25.3
|
1274
|
0.56
|
<0.01
|
0.11
|
0.07
|
0.2
|
70
|
1.13
|
7.1
|
|
RMR-15
|
<5
|
0.53
|
61.74
|
6.4
|
32.1
|
4.21
|
4212
|
6.08
|
19.1
|
1654
|
0.41
|
<0.01
|
0.53
|
<0.02
|
1.2
|
25
|
2.5
|
40.3
|
|
RMR-16
|
6
|
0.87
|
58.16
|
3.8
|
31.7
|
0.22
|
220
|
6.51
|
5.3
|
75
|
10.43
|
<0.01
|
0.29
|
0.2
|
0.6
|
123
|
9.27
|
5.8
|
|
RMR-17
|
<5
|
0.8
|
68.43
|
3.4
|
34.5
|
0.14
|
137
|
5.25
|
5.8
|
469
|
7.4
|
<0.01
|
0.24
|
0.12
|
0.4
|
148
|
5.76
|
3.9
|
|
RMR-18
|
<5
|
0.87
|
32.35
|
4.2
|
17.7
|
0.14
|
145
|
5.45
|
6.6
|
1103
|
7.64
|
3.11
|
0.31
|
0.13
|
0.7
|
179
|
5.1
|
4.6
|
Final Report - Job No: 12-338-08679-01
|
|||||||||||||||
Sample
|
Fe
|
Ga
|
Ge
|
In
|
K
|
Li
|
Mg
|
Mn
|
Mo
|
Na
|
Nb
|
Ni
|
P
|
Pb
|
Re
|
Designation
|
%
|
ppm
|
ppm
|
ppm
|
%
|
ppm
|
%
|
ppm
|
ppm
|
%
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
|
RMR-01
|
0.82
|
1.68
|
<0.05
|
<0.01
|
0.04
|
3.6
|
0.04
|
69
|
1.49
|
0.03
|
<0.1
|
6.1
|
45
|
3.2
|
<0.002
|
RMR-02
|
2.3
|
15.56
|
0.09
|
0.07
|
2.68
|
61.1
|
0.12
|
308
|
1.86
|
1.78
|
13.2
|
4.4
|
409
|
43.8
|
0.024
|
RMR-03
|
1.28
|
15.92
|
0.26
|
0.04
|
3.16
|
26.4
|
0.04
|
163
|
2.83
|
1.92
|
15.5
|
4.1
|
633
|
29.2
|
0.026
|
RMR-04
|
2.14
|
3.82
|
0.12
|
0.03
|
0.26
|
2.2
|
0.04
|
116
|
2.14
|
0.04
|
4.1
|
4.3
|
315
|
16.9
|
0.009
|
RMR-05
|
1.03
|
1.3
|
0.17
|
<0.01
|
0.05
|
1.1
|
0.02
|
102
|
0.71
|
0.03
|
7.1
|
8.6
|
63
|
3.6
|
<0.002
|
RMR-06
|
1.26
|
0.43
|
0.5
|
<0.01
|
0.03
|
0.6
|
<0.01
|
79
|
0.4
|
0.01
|
<0.1
|
9
|
22
|
<0.5
|
0.004
|
RMR-07
|
6.37
|
5.05
|
0.6
|
0.07
|
0.44
|
2.3
|
0.13
|
90
|
5.81
|
0.03
|
3.5
|
4
|
391
|
13.3
|
0.01
|
RMR-08
|
1.28
|
1.39
|
0.3
|
<0.01
|
0.06
|
2.2
|
0.03
|
205
|
0.93
|
0.02
|
7.6
|
8
|
64
|
3.7
|
0.005
|
RMR-09
|
3.03
|
18.22
|
0.31
|
0.07
|
1.37
|
21.5
|
0.98
|
315
|
0.23
|
0.8
|
8.4
|
4.9
|
544
|
21.1
|
0.019
|
RMR-10
|
6.38
|
5.34
|
1.66
|
0.06
|
0.11
|
1.3
|
0.03
|
64
|
4.14
|
0.02
|
3.7
|
4
|
179
|
34.7
|
0.01
|
RMR-11
|
2.44
|
13.11
|
0.35
|
0.09
|
1.15
|
13.1
|
0.49
|
97
|
3.56
|
0.35
|
12.8
|
1.4
|
478
|
29.1
|
0.008
|
RMR-12
|
2.73
|
1.87
|
0.41
|
0.01
|
0.06
|
1.9
|
0.02
|
107
|
2.5
|
0.03
|
3.6
|
10.1
|
108
|
33
|
0.007
|
RMR-13
|
0.51
|
1.16
|
0.08
|
<0.01
|
0.11
|
0.5
|
0.03
|
60
|
0.45
|
0.03
|
<0.1
|
1.9
|
32
|
13.8
|
0.006
|
RMR-14
|
1.71
|
15.32
|
0.32
|
0.09
|
0.42
|
10.8
|
0.01
|
23
|
4.82
|
0.11
|
12.5
|
1.4
|
1013
|
23.9
|
0.01
|
RMR-15
|
4.95
|
19.53
|
0.16
|
0.13
|
0.42
|
8.1
|
0.89
|
129
|
0.91
|
0.12
|
16.6
|
2.1
|
281
|
21.8
|
0.016
|
RMR-16
|
1.49
|
21.83
|
0.33
|
0.07
|
4.09
|
51.5
|
0.07
|
127
|
1.74
|
2.83
|
35.8
|
3.3
|
281
|
54.8
|
0.025
|
RMR-17
|
1.2
|
17.08
|
0.35
|
0.17
|
3.48
|
46
|
0.12
|
123
|
2.34
|
1.89
|
34.1
|
4.1
|
185
|
49.9
|
0.017
|
RMR-18
|
1.09
|
16.94
|
0.26
|
0.18
|
3.3
|
36.9
|
0.17
|
90
|
3.27
|
2.01
|
38.6
|
4.3
|
182
|
52.7
|
0.012
|
Final Report - Job No: 12-338-08679-01
|
||||||||||||||||||
Sample
|
Sb
|
Sc
|
S
|
Se
|
Rb
|
Sn
|
Sr
|
Ta
|
Te
|
Th
|
Ti
|
Tl
|
U
|
V
|
W
|
Y
|
Zn
|
Zr
|
Designation
|
ppm
|
ppm
|
%
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
%
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
ppm
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
50-4A-UT
|
|
RMR-01
|
1.45
|
0.2
|
0.034
|
<1.0
|
0.3
|
3.3
|
25
|
1.06
|
<0.05
|
2.7
|
0.034
|
0.49
|
16.6
|
6
|
<0.1
|
8.8
|
<2
|
24.9
|
RMR-02
|
1.71
|
1.3
|
0.011
|
2.5
|
190.1
|
6.6
|
40.4
|
0.74
|
<0.05
|
20.7
|
0.046
|
1.45
|
14.4
|
26
|
<0.1
|
80.8
|
135
|
26.2
|
RMR-03
|
<0.05
|
1.1
|
0.021
|
2.5
|
175.7
|
5.1
|
29.2
|
0.54
|
<0.05
|
21.4
|
0.047
|
<0.02
|
25.5
|
10
|
<0.1
|
73.9
|
54
|
26
|
RMR-04
|
0.98
|
3.3
|
0.386
|
<1.0
|
9.4
|
1.6
|
72.9
|
<0.05
|
<0.05
|
5.2
|
0.279
|
0.11
|
9.3
|
40
|
<0.1
|
13
|
3
|
53.2
|
RMR-05
|
2.76
|
1.5
|
0.025
|
<1.0
|
0.4
|
1.3
|
16.5
|
0.16
|
<0.05
|
0.4
|
0.089
|
1.54
|
12.4
|
4
|
<0.1
|
3.9
|
<2
|
164.2
|
RMR-06
|
3.98
|
1.4
|
0.012
|
3.2
|
<0.1
|
0.6
|
3.7
|
<0.05
|
<0.05
|
<0.2
|
0.12
|
0.58
|
13.3
|
3
|
<0.1
|
0.8
|
<2
|
100.3
|
RMR-07
|
3.78
|
5.2
|
0.3
|
<1.0
|
11.4
|
1.5
|
126.5
|
<0.05
|
<0.05
|
6.3
|
0.234
|
0.14
|
4.3
|
197
|
<0.1
|
28.9
|
4
|
117.3
|
RMR-08
|
1.9
|
3.1
|
0.036
|
1.6
|
1.3
|
1.9
|
23.4
|
0.52
|
<0.05
|
1.3
|
0.153
|
0.73
|
6.2
|
10
|
<0.1
|
5
|
<2
|
172.2
|
RMR-09
|
<0.05
|
10.7
|
0.366
|
1.8
|
97.9
|
3
|
253.7
|
0.17
|
<0.05
|
11.3
|
0.39
|
1.26
|
4
|
54
|
<0.1
|
40.5
|
91
|
300.4
|
RMR-10
|
3.6
|
7.4
|
0.111
|
6.5
|
4.5
|
2
|
77.4
|
<0.05
|
<0.05
|
8.2
|
0.317
|
0.68
|
17.8
|
89
|
<0.1
|
29.4
|
5
|
59.9
|
RMR-11
|
<0.05
|
4.5
|
1.098
|
<1.0
|
46.2
|
4.1
|
163.8
|
0.57
|
<0.05
|
11.4
|
0.408
|
2.08
|
3.2
|
39
|
<0.1
|
17.9
|
69
|
183.4
|
RMR-12
|
3.98
|
2.6
|
0.027
|
<1.0
|
1.8
|
1.1
|
12.5
|
<0.05
|
<0.05
|
1.4
|
0.229
|
0.68
|
8.3
|
36
|
<0.1
|
5.6
|
<2
|
61.6
|
RMR-13
|
<0.05
|
3.5
|
0.01
|
<1.0
|
1.2
|
1
|
31.5
|
<0.05
|
<0.05
|
0.4
|
0.13
|
0.23
|
7.7
|
5
|
<0.1
|
3.1
|
3
|
179.1
|
RMR-14
|
<0.05
|
6.9
|
0.837
|
2.1
|
5.3
|
3.6
|
535.4
|
0.47
|
<0.05
|
18.1
|
0.187
|
1.27
|
6.8
|
33
|
<0.1
|
29.8
|
7
|
108.7
|
RMR-15
|
<0.05
|
6.3
|
0.341
|
<1.0
|
26.4
|
3.5
|
71.7
|
0.2
|
<0.05
|
14.3
|
0.249
|
1.03
|
4.4
|
48
|
<0.1
|
42.1
|
81
|
320.8
|
RMR-16
|
<0.05
|
1
|
0.017
|
2.9
|
309.1
|
12.8
|
18.7
|
2.12
|
<0.05
|
34.2
|
0.048
|
3.45
|
7.4
|
11
|
<0.1
|
78.5
|
88
|
77.9
|
RMR-17
|
<0.05
|
0.5
|
0.017
|
1.8
|
245.4
|
10.7
|
35.9
|
1.48
|
<0.05
|
30.1
|
0.039
|
2.46
|
8.6
|
13
|
0.2
|
70.5
|
81
|
77.1
|
RMR-18
|
1.84
|
0.7
|
0.036
|
<1.0
|
219.2
|
18.7
|
58.6
|
2.18
|
<0.05
|
33
|
0.043
|
2.24
|
8.2
|
9
|
0.7
|
34.4
|
44
|
95.1
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
-
|
Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties, namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures.
|
-
|
Maintenance of Current Accounting Records – We may from time to time fail to maintain our records that in reasonable detail accurately and fairly reflect the transactions of the Company. This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions.
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-
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Application of GAAP – We did not maintain effective internal controls relating to the application of generally accepted accounting principles in accounting for transactions in a foreign currency.
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Item 1.
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Legal Proceedings.
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Item 1A.
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Risk Factor
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities.
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information.
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Item 6.
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Exhibits
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1+
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Certification of Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS**
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XBRL Instance Document
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101.SCH**
|
XBRL Taxonomy Extension Schema Document
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101.CAL**
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB**
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE**
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XBRL Taxonomy Extension Presentation Linkbase Document
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+
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In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.
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*
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Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
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Rimrock Gold Corp.
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||
By:
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/s/ Jordan Starkman
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Jordan Starkman
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||
President and Secretary
(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)
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||
Date: July 22, 2013
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Rimrock Gold Corp.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
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Dated: July 22, 2013
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/s/ Jordan Starkman
|
President and Secretary
|
|
(Principal Executive Officer and Principal Financial Officer)
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1.
|
Such Quarterly Report on Form 10-Q for the quarter ended May 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
The information contained in such Quarterly Report on Form 10-Q for the quarter ended May 31, 2013, fairly represents in all material respects, the financial condition and results of operations of Rimrock Gold Corp.
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Dated: July 22, 2013
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/s/ Jordan Starkman
|
President and Secretary
|
|
(Principal Executive Officer and Principal Financial Officer)
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Significant Accounting Policies (Policies)
|
9 Months Ended |
---|---|
May 31, 2013
|
|
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | The Company’s management has evaluated all the recently issued accounting pronouncements through the filing date of these consolidated financial statements and does not believe that they will have a material effect on the Company’s consolidated financial position and results of operations. |
Development Stage Entities | The Company is considered to be in the exploration stage as defined in Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has devoted substantially all of its efforts to business planning and development by means of raising capital for operations. The Company has also not realized any significant revenues. Among the disclosures required by ASC 915 are that the Company's consolidated financial statements be identified as those of a exploration stage company, and that the consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows disclose activity since the date of the Company's inception. |
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (USD $)
|
3 Months Ended | 9 Months Ended | 120 Months Ended | ||
---|---|---|---|---|---|
May 31, 2013
|
May 31, 2012
|
May 31, 2013
|
May 31, 2012
|
May 31, 2013
|
|
EXPENSES | |||||
Professional fees | $ 246,296 | $ 87,400 | $ 356,721 | $ 174,044 | $ 1,355,050 |
Exploration | 40,179 | 2,277 | 2,050 | 17,077 | 117,773 |
Advertising and promotion | 4,659 | 51 | 6,855 | 2,577 | 16,036 |
Telecommunications | 1,789 | 1,067 | 4,765 | 3,575 | 15,398 |
Rent and occupancy costs | 10,663 | 1,937 | 14,513 | 5,812 | 25,373 |
Office and general | 5,175 | 3,510 | 10,650 | 3,866 | 23,868 |
Interest and bank charges | 1,125 | 1,993 | 8,389 | 2,873 | 18,658 |
Depreciation | 48 | 62 | 154 | 274 | |
TOTAL OPERATING EXPENSES | 309,934 | 98,297 | 404,097 | 209,824 | 1,572,430 |
LOSS FROM CONTINUING OPERATIONS | (309,934) | (98,297) | (404,097) | (209,824) | (1,572,430) |
Foreign exchange loss | (128) | ||||
Gain on disposal of subsidiary | 137,000 | ||||
Forgiveness of advances to subsidiary | (137,000) | ||||
Interest and other (expenses) income | (254) | 11,821 | |||
Impairment of mineral property claims | (451,870) | ||||
Impairment of convertible note receivable | (23,621) | ||||
LOSS FROM CONTINUING OPERATIONS BEFORE TAX | (309,934) | (98,425) | (404,097) | (210,078) | (2,036,100) |
Income tax | |||||
LOSS FROM CONTINUING OPERATIONS AFTER TAX | (309,934) | (98,425) | (404,097) | (210,078) | (2,036,100) |
LOSS FROM DISCONTINED OPERATIONS, NET OF TAX | (3,742) | (136,311) | |||
NET LOSS | (309,934) | (98,425) | (404,097) | (213,820) | (2,172,411) |
OTHER COMPREHENSIVE LOSS FROM CONTINUING OPERATIONS | |||||
Foreign currency translation adjustment | (35) | 270 | (280) | 1,111 | (9,820) |
TOTAL COMPREHENSIVE LOSS | $ (309,969) | $ (98,695) | $ (404,377) | $ (212,709) | $ (2,182,231) |
NET LOSS PER SHARES - BASIC AND DILUTED | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 | |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 32,687,996 | 6,939,193 | 17,453,520 | 6,879,440 |
Discontinued Operations
|
9 Months Ended | ||
---|---|---|---|
May 31, 2013
|
|||
Discontinued Operations [Abstract] | |||
DISCONTINUED OPERATIONS |
On May 11, 2012, the Company entered into a stock purchase agreement with Jordan Starkman, Chief Executive Officer and the director of the Company, pursuant to which, Mr. Starkman acquired all of the issued and outstanding common shares of the Company’s wholly-owned subsidiary Pay By The Day Company Inc. (“PBTD”). Upon sale of PBTD, no gain or loss was recognized since PBTD had limited transactions.
The operating results and cash flows of PBTD are reflected as discontinued operations in the consolidated financial statements for all periods presented. Although net earnings are not affected, the Company has reclassified the results from the discontinued operations in the comparative periods presented.
|
Subsequent Event (Details)
|
Mar. 01, 2013
|
Jun. 01, 2013
Subsequent Event [Member]
|
---|---|---|
Subsequent Event (Textual) | ||
Common stock units issued for consulting services | 3,500,000 | 1,250,000 |
Organization and Nature of Operations
|
9 Months Ended | ||
---|---|---|---|
May 31, 2013
|
|||
Organization and Nature of Operations and Basis of Presentation [Abstract] | |||
ORGANIZATION AND NATURE OF OPERATIONS |
Rimrock Gold Corp., formerly Tucana Lithium Corp., Oteegee Innovations Inc. and Pay By The Day Holdings Inc., (the “Company” or “Rimrock”) was incorporated in August 2007 in the State of Nevada. On January 24, 2013, the Company filed a certificate of amendment to amend the articles of incorporation with the Nevada Secretary of State changing the Company’s name to Rimrock Gold Corp.
On February 11, 2013, the Company acquired interests in three prospective gold exploration properties known as the Rimrock Property, West Silver Cloud and Pony Spur, located in northeast Nevada (the “Acquired Properties”). The Acquired Properties are comprised of almost 2,000 acres of land and are located on or in close proximity to the Carlin Trend and Midas Trend. The Company acquired these interests through the issuance of 17,800,000 shares of its common stock in exchange for 100% of the shares in Rimrock Mining, Inc., a Nevada corporation. Rimrock Mining, Inc. holds the interests in the properties and otherwise has nominal net assets. The Company accounted for this transaction as an asset acquisition.
As a condition to closing of the Merger Agreement, on February 11, 2013 the Company effected a 1-for-8 reverse split of the issued and outstanding shares of the common stock. As a result, the issued and outstanding shares of common stock decreased from 66,435,908 shares to 8,304,488 shares.
Concurrent with the acquisition, the Company completed a private placement with unrelated investors for total gross proceeds of $502,000. The Company issued 2,510,000 common stock at a purchase price of $0.20 per share, each with one warrant to purchase common stock at an exercise price of $0.30 per share.
On May 3, 2013, the Company acquired interest in an exploration epithermal bonanaza gold-silver property in Nevada, known as the Silver Cloud Property (the “Silver Cloud Property”). The acquisition includes (i) certain properties that compress 522 unpatented mining claims totaling 4,467 mining claims (the “Mining Claims”), and (ii) a lease agreement dated June 1, 1999 between Geologix USA as successor to Teck Resources Inc., and Carl Pescio and Janet Pescio in respect of those Mining Claims held by Pescio (the “Pescio Lease”). In consideration for the Mining Claims and the Pescio Lease, the Company shall issue 500,000 shares of its common stock to Geologix Explorations Inc., a British Columbia Company.
Up to this date the Company’s main exploration target was for lithium deposits at the Abigail Lithium Property located in the James Bay, Quebec region of Canada. The Company continues its plans to explore these properties.
The Company operates under the web-site address www.rimrockgold.com.
|
Going Concern
|
9 Months Ended | ||
---|---|---|---|
May 31, 2013
|
|||
Going Concern [Abstract] | |||
GOING CONCERN |
These consolidated financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing. The Company is actively seeking financing to fully execute the next phase of the Company’s exploration campaign and future acquisitions. Any capital raised will be through either a private placement or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital. The Company believes it can satisfy minimum cash requirements for the next twelve months with either an equity financing, convertible debenture or if needed, loans from shareholders.
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these consolidated financial statements.
The consolidated financial statements do not include any 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 in existence. |
Convertible Notes Payable
|
9 Months Ended | ||
---|---|---|---|
May 31, 2013
|
|||
Convertible Notes Payable [Abstract] | |||
CONVERTIBLE NOTES PAYABLE |
On May 16, 2012, the Company issued a one-year convertible note payable in the amount of $125,000. The convertible note payable matures in twelve months, is unsecured, bears interest at 4% per annum and interest accrues and is payable in cash upon maturity or repayment of the principal prior to the date of maturity, provided that the elected conversion to common shares does not occur. At any time or times on or before May 16, 2013, the note holder shall be entitled to convert any portion of the outstanding and unpaid amount, including accrued interest, into fully paid and non-assessable shares of common stock at a conversion price of $0.2 per common share. In accordance with ASC 470-20, Debt with Conversions and Other Options, the Company segregated the liabilities component of the instrument from the equity component. The liability component was measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the convertible note payable. Upon issuance, the Company estimated the fair value of the liability component of the 4% convertible note payable, assuming a 10% non-convertible borrowing rate, to be $118,200. The difference between the fair value of liability component and principal amount was $6,800. This amount was recorded as a debt discount and as an increase to additional paid-in capital as of the issuance date. The discount is being accreted to interest expense over the term to maturity. Accretion expense of $4,817 was recognized for the nine months ended May 31, 2013 (2012 – Nil) and is presented within interest expense on the consolidated statement of operations.
The Company paid $12,500 in commissions related to raising the above mentioned proceeds which were reduced from the liability component of the debentures and are being amortized over the term to maturity. Accretion expense of $8,854 was recognized for the nine months ended May 31, 2013 (2012 – Nil) and is presented within professional fees on the consolidated statement of operations.
On January 9, 2013, the $125,000 convertible note payable including accrued interest of $3,274 were converted into 641,370 shares of common stock at price of $0.20 per share.
|
Recent Accounting Pronouncements
|
9 Months Ended | ||
---|---|---|---|
May 31, 2013
|
|||
Recent Accounting Pronouncements [Abstract] | |||
RECENT ACCOUNTING PRONOUNCEMENTS |
The Company’s management has evaluated all the recently issued accounting pronouncements through the filing date of these consolidated financial statements and does not believe that they will have a material effect on the Company’s consolidated financial position and results of operations. |