UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarter period ended October 31, 2014
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For
the transition period from to
Commission
File number 333-145879
TNX
MAVERICK, CORP.
(Exact
name of registrant as specified in its charter)
Nevada |
|
74-3207964 |
(State
or other jurisdiction of
incorporation or organization) |
|
(IRS
Employer
Identification No.) |
573
Monroe Blvd, Painesville, OH 42077
(Address
of principal executive offices)
(216)
408-9423
(Registrant’s
telephone number)
N/A
(Former
name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting
company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company”
Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ] |
Accelerated
filer [ ] |
|
|
Non-accelerated
filer [ ] (Do not check if a small reporting company) |
Small reporting
company [X] |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PROCEDING FIVE YEARS
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 after the distribution of securities subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
July 10,
2015: 45,105,000 common shares
Table
of Contents
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
The
accompanying balance sheets of TNX Maverick, Corp. at October 31, 2014 (with comparative figures as at July 31, 2014) and the
statement of operations for the three months ended October 31, 2014 and 2013; and the statement of cash flows for the three months
ended October 31, 2014 and 2013 have been prepared by the Company’s management in conformity with accounting principles
generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring
nature.
Operating
results for the three months ended October 31, 2014 are not necessarily indicative of the results that can be expected for the
year ending July 31, 2015.
TNX
Maverick, Corp.
BALANCE
SHEETS
| |
October
31, 2014 | | |
July
31, 2014 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
CURRENT ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Cash | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Total Current Assets | |
| - | | |
| - | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’
DEFICIENCY | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
| |
| | | |
| | |
Accounts payable and
accrued interest | |
$ | 151,029 | | |
$ | 145,425 | |
Promissory Note Payable | |
| 21,500 | | |
| 21,500 | |
Convertible Notes Payable | |
| 116,000 | | |
| 116,000 | |
| |
| | | |
| | |
Total Current Liabilities | |
| 288,529 | | |
| 282,925 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
| | | |
| | |
| |
| | | |
| | |
STOCKHOLDERS’ DEFICIENCY | |
| | | |
| | |
Common stock 500,000,000 shares authorized, at $0.001 par value; 45,105,000 shares issued and outstanding as of
October 31 and July 31, 2014 | |
| 45,105 | | |
| 45,105 | |
Capital in excess of par value | |
| 333,245 | | |
| 333,245 | |
Accumulated Deficit | |
| (666,879 | ) | |
| (661,275 | ) |
| |
| | | |
| | |
Total Stockholders’ Deficiency | |
| (288,529 | ) | |
| (282,925 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these interim condensed financial statements.
TNX
Maverick, Corp.
STATEMENTS
OF OPERATIONS
(Unaudited)
For
three months ended October 31, 2014 and 2013
| |
Three
month ended October
31, 2014 | | |
Three
months ended October
31, 2013 | |
| |
| | |
| |
REVENUES | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
EXPENSES | |
| | | |
| | |
General and administrative | |
| 2,000 | | |
| 2,000 | |
| |
| | | |
| | |
TOTAL EXPENSES | |
| 2,000 | | |
| 2,000 | |
| |
| | | |
| | |
OTHER EXPENSES | |
| | | |
| | |
Interest expense | |
| 3,604 | | |
| 3,540 | |
| |
| | | |
| | |
NET LOSS FROM
OPERATIONS | |
$ | 5,604 | | |
$ | 5,540 | |
| |
| | | |
| | |
NET LOSS PER COMMON SHARE | |
| | | |
| | |
| |
| | | |
| | |
Basic and diluted | |
$ | 0.00 | | |
$ | 0.00 | |
| |
| | | |
| | |
WEIGHTED AVERAGE OUTSTANDING SHARES | |
| | | |
| | |
Basic and diluted | |
| 45,105,000 | | |
| 45,105,000 | |
The
accompanying notes are an integral part of these interim condensed financial statements.
TNX
Maverick, Corp.
STATEMENTS
OF CASH FLOWS
(Unaudited)
For
the three months ended October 31, 2014 and 2013
| |
Three
months ended October
31, 2014 | | |
Three
months ended October
31, 2013 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES:
| |
| | | |
| | |
| |
| | | |
| | |
Net loss | |
$ | (5,604 | ) | |
$ | (5,540 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | | |
| | |
| |
| | | |
| | |
Changes in accounts payable | |
| 5,604 | | |
| 5,540 | |
| |
| | | |
| | |
Net cash (used in) operating activities | |
| - | | |
| -
| |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
| |
| | | |
| | |
Net cash (used in) investing activities | |
| - | | |
| - | |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES:
| |
| | | |
| | |
| |
| | | |
| | |
Net cash (used in) provided by financing activities | |
| - | | |
| - | |
| |
| | | |
| | |
Net (Decrease) Increase in Cash | |
| - | | |
| - | |
| |
| | | |
| | |
Cash at Beginning of Period | |
| - | | |
| - | |
| |
| | | |
| | |
CASH AT END OF PERIOD | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURE OF NONCASH
FINANCIAL ACTIVITIES | |
| | | |
| | |
The
accompanying notes are an integral part of these interim condensed financial statements.
TNX
Maverick, Corp.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
October
31, 2014
1. ORGANIZATION
The
Company, TNX Maverick, Corp. was incorporated under the laws of the State of Nevada on January 18, 2007 with the authorized capital
stock of 300,000,000 shares at $0.001 par value. On April 30, 2008, the Secretary of State for Nevada approved an amendment to
the Articles of Incorporation where the total number of shares of common stock was increased to 500,000,000 shares of common stock
with a par value of $0.001 per share. The Company was organized for the purpose of acquiring and developing mineral properties.
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Methods
The Company
recognizes income and expenses based on the accrual method of accounting.
Dividend
Policy
The Company
has not yet adopted a policy regarding payment of dividends.
Basic
and Diluted Net Income (loss) Per Share
Basic
net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted
net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding
as if shares had been issued on the exercise of the common share rights unless the exercise becomes anti-dilutive and then the
basic and diluted per share amounts are the same. As of October 31, 2014 and 2013, the Company has 116,000,000 of common stock
equivalents outstanding, calculated using the if-converted method.
Income
Taxes
The
Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities
are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against
deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.
Foreign
Currency Translations
Part
of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the
exchange rate in effect at the time, and therefore, no gain or loss from the translation is recognized. The functional currency
is considered to be US dollars.
Revenue
Recognition
Revenue
is recognized on the sale and delivery of a product or the completion of a service provided.
Advertising
and Market Development
The company
expenses advertising and market development costs as incurred.
TNX
Maverick, Corp.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
October
31, 2014
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial
Instruments
The
carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.
Estimates
and Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial
statements.
Impairment
of Long-lived Assets
The
Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17 if events or
circumstances indicate that their carrying amounts might not be recoverable. When the Company determines that an impairment analysis
should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5,
Impairment or Disposal of Long-Lived Assets.
Mineral
Property Acquisition and Exploration Costs
Mineral
property acquisition costs are initially capitalized when incurred. These costs are then assessed for impairment when factors
are present to indicate the carrying costs may not be recoverable. Mineral exploration costs are expensed when incurred.
Statement
of Cash Flows
For
the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months
or less to be cash equivalents.
Environmental
Requirements
At
the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any
future cost cannot be made.
Reclassifications
Certain
prior period amounts have been reclassified to conform with current period presentation.
TNX
Maverick, Corp.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
October
31, 2014
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent
Accounting Pronouncements
In
June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial
reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments
in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities.
The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement
for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder
equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the
entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other
entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted
this standard.
In
May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition
standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard
eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based
approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting
periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted
for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this
pronouncement, however it believes that there will be no material effect on the consolidated financial statements.
In
June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service
Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service
period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation —
Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation
cost would be recognized over the required service period, if it is probable that the performance condition will be achieved.
The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods.
Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner
consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.
We
have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof
that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new
pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles
will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability
of any standard is subject to the formal review of our financial management and certain standards are under consideration.
3. CONVERTIBLE
NOTES PAYABLE
On
July 31, 2012, the Company entered into a settlement agreement with creditors resulting in a $40,000 convertible promissory note.
The note has a 10% per annum interest rate and a maturity date of July 31, 2013. The note is currently in arrears and is due and
payable on demand. The note is convertible into shares of the Company’s common stock at a conversion price of $0.001. Accrued
interest on the convertible note is $9,000 ($8,000 July 31, 2014).
On
July 31, 2012 the Company entered into a settlement agreement with creditors resulting in a $76,000 convertible promissory note.
The note has a 10% per annum interest rate and a maturity date of July 31, 2013. The note is currently in arrears and is due and
payable on demand. The note is convertible into shares of the Company’s common stock at a conversion price of $0.001. Accrued
interest on the convertible note is $17,100 ($15,200 – July 31, 2014).
TNX
Maverick, Corp.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
October
31, 2014
4. NOTE
PAYABLE
The Company
has received $21,500 under a promissory note agreement with a third party. Per the note agreement, interest of $7,336 was accrued
through October 31, 2014. and has been disclosed on the Balance
sheets Accounts Payable and Accrued Interest.
5.
GOING CONCERN
The
Company will need additional working capital to service its debt and to develop the mineral claims acquired, which raises substantial
doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding, and long term financing, which will enable the Company to operate for the coming
year.
6. INCOME
TAXES
The Company’s
deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating
Loss):
Period Ended | | |
Estimated NOL Carry-Forward $ | | |
NOL expires | | |
Estimated Tax Benefit from NOL $ | | |
Valuation Allowance from NOL Benefit $ | | |
Net Tax Benefit | |
| | |
| | |
| | |
| | |
| | |
| |
2007 | | |
| 22,659 | | |
| 2027 | | |
| 7,704 | | |
| (7,704 | ) | |
| - | |
2008 | | |
| 57,226 | | |
| 2028 | | |
| 19,456 | | |
| (19,456 | ) | |
| - | |
2009 | | |
| 36,149 | | |
| 2029 | | |
| 12,291 | | |
| (12,291 | ) | |
| - | |
2010 | | |
| 24,511 | | |
| 2030 | | |
| 8,334 | | |
| (8,334 | ) | |
| - | |
2011 | | |
| 229,394 | | |
| 2031 | | |
| 77,994 | | |
| (77,994 | ) | |
| - | |
2012 | | |
| 103,503 | | |
| 2032 | | |
| 35,191 | | |
| (35,191 | ) | |
| - | |
2013 | | |
| 164,675 | | |
| 2033 | | |
| 55,990 | | |
| (55,990 | ) | |
| | |
2014 | | |
| 23,158 | | |
| 2034 | | |
| 13,994 | | |
| (13,994 | ) | |
| - | |
Total | | |
| 661,275 | | |
| | | |
| 230,954 | | |
| (230,954 | ) | |
| - | |
The
total valuation allowance as of October 31, 2014 was $230,954.
As
of October 31, 2014 and 2013, the Company has no unrecognized income tax benefits. The Company’s policy for classifying
interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or
penalties have been recorded during the period ended October 31, 2014, and 2013 and no interest or penalties have been accrued
as of October 31, 2014 and 2013.
The
tax years from 2009 and forward no tax returns have been filed and they remain open to examination by federal and state authorities
due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service
or any other taxing authorities.
7.
SUBSEQUENT EVENTS
On
April 6, 2015, the Company has entered into a Letter of Intent whereby it will sign a definitive agreement to acquire 100% of
Flex Mining Ltd. through the issuance of 2,000,000 restricted shares, a $10,000 promissory note payable within six months to the
owners of Flex Mining Ltd., and by a capital expenditure of up to $1,000,000 over three years on the Big Monty Claims. Flex Mining
Ltd. owns 100% of six claims named the Big Monty Claims in the historic Abitibi Greenstone Belt. This earn-in agreement is subject
to the Company reverse splitting the shares on the basis of one new share for every 200 existing shares and changing the name
of the Company to Gold Lakes Corp.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Corporate
Organization and History within the Last Three years
We
were incorporated under the laws of the State of Nevada on January 18, 2007 under the name TNX Maverick, Corp. We do not have
any subsidiaries or affiliated companies. Since our default have defaulted on payments to keep the ownership in the Lucky Thirteen
Claim intact. Consequently, we have lost our interest in the Lucky Thirteen Claim entirely.
We
have not been involved in any bankruptcy, receivership or similar proceedings since inception nor have we been party to a reclassification,
merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business. We have no
intention of entering into a corporate merger or acquisition.
Business
Development since Inception
There
is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation.
We are a pre-exploration stage company and have not generated any revenues from our exploration activities. Further, we have not
generated any revenues since our formation on January 18, 2007. We cannot guarantee we will be successful in our exploration activities.
Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
To
become profitable and competitive, we first complete our acquisition of the Big Monty Claims or resurrect our ownership interest
in the Lucky Thirteen Claim by making the requisite payments; or we must find an alternate mining claim. We must obtain equity
or debt financing to provide the capital required implement our phased exploration program. We have no assurance that financing
will be available to us on acceptable terms. If financing is not available on satisfactory terms, we will be unable to commence,
continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution
to existing shareholders.
Our
auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have
not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must
raise cash from other sources. Our only other source for cash at this time is investments by others in the Company.
To
meet our need for cash we must raise additional capital. We will attempt to raise additional money through a private placement,
public offering or through loans. We have discussed this matter with our officers and directors. However, our officers and directors
are unwilling to make any commitments to loan us any money at this time. At the present time, we have not made any arrangements
to raise additional cash. We require additional cash to continue operations. Such operations could take many years of exploration
and would require expenditure of very substantial amounts of money, money we do not presently have and may never be able to raise.
If we cannot raise it we will have to abandon our planned exploration activities and go out of business.
We
estimate we will require $215,903 in cash over the next twelve months. For a detailed breakdown refer to “Liquidity and
Capital Reserves”. In addition cash will be required to cover the phase one cost of completing the exploration work for
the Big Monty Claims during that period is estimated at $67,500; and, if required the phase two costs estimated at $186,000.
Comparison
of the Operating Results for the three months ended October 31, 2014 to October 31, 2013
Expense | |
Reference | | |
3
months ended Oct.
31, 2014 | | |
3
months ended Oct.
31, 2013 | |
Accounting and auditing | |
| (i) | | |
| 2,000 | | |
| 2,000 | |
Bank charges and interest | |
| (ii) | | |
| 3,604 | | |
| 3,540 | |
TOTAL EXPENSES | |
| | | |
| 5,604 | | |
| 5,540 | |
Auditing
and accounting expense represents the cost of the preparation of the financial statements for Q1.
Interest
is the cost of the convertible debt at 10% and the promissory note at 10%.
Balance
Sheets
Total
cash and cash equivalents, as of October 31, 2014 and July 31, 2014 was $Nil. Our working capital deficiency as at October 31,
2014 was a $288,529 and as of July 31, 2014, $282,925.
Total
stockholders’ deficiency as of October 31, 2014 was $288,529 and $282,925 as at July 31, 2014. Total shares outstanding
as at October 31, 2014 and July 31, 2014 was 45,105,000.
Our mineral
properties are a letter of intent to acquire the:
Big Monty
Claims
We
have entered into a letter of intent to enter into an earn-in agreement to earn a 100% interest in the Big Monty Claims.
The
Big Monty Claims consist of the following 6 mining claims in Northern Ontario:
Mining
Claim # | | |
# of 16HA
Claim Units | | |
# of Hectares | | |
# of Acres | |
4256641 | | |
| 16 | | |
| 256 | | |
| 633 | |
4256642 | | |
| 16 | | |
| 256 | | |
| 633 | |
4256644 | | |
| 6 | | |
| 96 | | |
| 237 | |
4256645 | | |
| 9 | | |
| 144 | | |
| 356 | |
4256646 | | |
| 11 | | |
| 176 | | |
| 435 | |
4256647 | | |
| 12 | | |
| 192 | | |
| 475 | |
| | |
| 70 | | |
| 1,120 | | |
| 2,768 | |
Location
and Access
The
Big Monty Claims is located approximately 70 kilometers (44 miles) north of Kirkland Lake, Ontario, and 68 kilometers east of
Timmins, Ontario (42 miles). It is located approximately 10 kilometers (6 miles) east of Matheson, Ontario. The area covered by
the Claim is an active mineral exploration and development region with plenty of heavy equipment and operators available for hire.
Both Kirkland Lake and Timmins can provide all necessary amenities and supplies including, fuel, helicopter services, hardware,
drilling companies and assay services. Access to our Claim is via major highway east of Matheson. No water is required for the
purposes of our planned exploration work. No electrical power is required at this stage of exploration. Any electrical power that
might be required in the foreseeable future could be supplied by gas powered portable generators.
The
claim’s terrain is rugged with mountain forests growth throughout.
Property
Geology
Bedrock
outcrops were found to be generally rare across all of the claims. This was due to vegetation and glacial till. Portions of the
claims have been logged in recent years; particularly the northern portion of claim 4256645 and claims 4256646 and 4256647. However
the logged areas have re-vegetated with first generation plants (grasses, pines, scrub oaks, sumac, etc.) making it difficult
to find bedrock exposures. Also a significant portion of the claims area is covered with a veneer of glacial till of varying thicknesses.
The till is described as a fine to medium grain arkosic sand with occasional pebble and gravel size clasts. This till dominates
claims area south of the North Branch of the Porcupine-Destor Fault. The available bedrock outcrops are primarily found on claims
4255645, 4255646 and 4255647 due to recent logging and the glacial till being locally thinner at these claims. The observed bedrock
is a massive fine-grained mafic volcanic rocks intruded with mafic rock characterized by pillow structures. Also observed was
a northwest/southeast dike on claim 4255646. The dike rock is described as a medium-grain with visible feldspars and slightly
magnetic. Finally, accessory minerals of pyrite and possible arsenopyrite were observed in several rocks. The general geochemistry
is indicating the collect rocks are mafic being rich in iron and magnesium with low silica by weight. No significant concentrations
of precious, base or rare earth elements were detected in the collected rocks. A belt of volcanic rocks, of the Savura Volcanic
Group, underlies the property. These volcanic rocks are exposed along a wide axial zone of a broad complex. The presence of these
rocks is on our property is relevant to us as gold mineralization, at the nearby (approximately 20 miles to the west of our claim)
Nasoata Gold Mine, a past producer of gold in commercial quantities, is generally concentrated within extrusive volcanic rocks
(of the Savura Volcanic Group) on the walls of large volcanic caldera.
The
Big Monty Claims are located approximately 6 miles east of the town of Matheson (2,410 population)
Previous
Exploration
On
October 28, 2013, G3 - Gauvreau GeoEnvironmental Group Inc. prepared 2013 Claims Assessment Report. The work performed as part
of the claims assessment necessary for the Big Monty Property to maintain the claims in good standing following the guidelines
set forth by the Ontario Ministry of Northern Development and Mines (MNDM). The Big Monty Property is a northwest to southeast
group of seven claims on Crown Land located west and south of Trollope Lake in Frecheville Township as illustrated on Figure 1.
The claim numbers are the following: 4256641, 4256642, 4256644, 4256645, 4256646 and 4256647.
The
assessment work for the claims is divided into three tasks:
1) Field
Study performing geologic mapping and sampling
2) Magnetic
Survey interpretation, and
3) Georeferencing.
The
Big Monty claims were staked in September and October of 2010. These claims are geologically located in the Abitibi greenstone
province. Structurally the claims lie along the central sector of the north branch of the Porcupine-Destor Fault. This Fault divides
the claim’s lithostratographic assemblages north and south. The northern half of the claims has been mapped as Stoughton-Roquemaure
Assemblage (27.25 to 27.20 Ma) (1). The southern and up side of the Fault has been mapped as the as the Kidd-Munro Assemblage
(27.18 to 27.10 Ma) (1). The Stoughton-Roquemaure Assemblage is characterized by komatiitic basalt and low to high-Mg komatiite
intrusives. Spinifex-textured and pillowed komatiites are common (2) while the Kidd-Monro Assemblage is described as assemblage
as ultramafic and mafic, tholeiitic, metavolcanic rocks with minor high-silica rhyolite (1).
In
the 2012 assessment period, an aerial magnetic survey was conducted on the Big Monty claims. The results from aerial magnetic
survey produced a residual magnetic intensity map and a first vertical derivative of the residual magnetic intensity map. No corresponding
geologic interpretation of the aerial magnetic survey was completed during that assessment period.
Field
Study
A
field study was performed beginning October 7 through October 11 and October 22, 2013. The purpose of the field study, where possible,
was to complete the following:
|
● |
geological
mapping, |
|
|
|
|
● |
grab/hand
rock sampling, |
|
|
|
|
● |
geochemical
sampling, |
|
|
|
|
● |
structural
mapping (faults, joints, fractures, etc.), and |
|
|
|
|
● |
GPS
locating of control points including claim corner posts and claim boundaries. |
Nine
rock samples were collected from various bedrock outcrops during the field study. These samples were submitted to an Agat Laboratories
in Sudbury, Ontario for chemical analyses.
The
field geological mapping and chemical analysis data is used to tie the aerial magnetometer survey to observable and mapable bedrock
conditions along with structures the Porcupine-Destor Fault Zone.
Aerial
Magnetometer Survey Interpretation
The
interpretation of the aerial magnetic survey interpretation was conducted using the data collected in the field. The results from
aerial magnetic survey produced a residual magnetic intensity map and a first vertical derivative of the residual magnetic intensity
map. The reader is reminded that a magnetic field has a direction or vector. Residual magnetic intensity is the remnant magnetic
field before the rock has cooled below the Curie point and the magnetic field has been removed (3). This magnetism can be in any
direction. The residual magnetic intensity is not only the magnetism from the first cooling event but the residual magnetism can
be affected but subsequent events (magmatic or hydrothermal intrusion) that will affect the magnetic minerals in that formation.
The
first vertical derivative of the residual magnetic intensity emphasizes near surface features by mathematically removing the inclination
and declination of the field from the data. The transformed data views the same geologic structures as the residual magnetic intensity
map, but with the magnetic pole’s field induced vertical. The first vertical derivative is calculated by measuring the magnetic
field simultaneously at two points vertically above each other and dividing the difference in the magnetic intensities by the
distance between the two points. Figure 3 illustrates the residual magnetic intensity. The north branch of the Porcupine-Destor
Fault is the dividing line between high and low magnetic intensity.
The
magnetic intensity decreases to the southwest of the Fault. Correspondingly, the magnetic intensity is elevated on the claims
northeast of the Fault. Interestingly, off set movement of the low magnetic intensity to the northeast is illustrated by the faults
labeled 2 and 3 movement to the northeast. The low magnetic intensity located in the southeastern part of the Big Monty claims
can be interpreted to be the lack of magnetic minerals which may possibly be due to an underlying felsic intrusive body. The mafic
dike on claim 4255646 was expected to have a clear magnetic signature especially considering the rock sample collected from the
dike was slightly magnetized and had the highest iron concentration however no geometric magnetic signature mimicking the dike
was observed.
As
with the residual magnetic intensity map, areas of north of the Porcupine-Destor Fault illustrate relatively higher general magnetic
intensity than areas south of the Fault, and the southwestern portion of claim 4256641 is also an area of low magnetic intensity.
Five near circular areas of elevated magnetic intensity are interpreted along or paralleling to the Northern Branch of the Porcupine-
Destor Fault in claims 4256641, 4256642 and 4256645. These features are interpreted to be intrusions characterized by rocks with
significant magnetic minerals. The relationship of the intrusions to the Fault can be interpreted as these intrusions having been
injected into the Fault.
Georeferencing
MNDM
requires the claims to be in spatially correct location. Georeferencing was planned as part of the field study following the MNDM
guidelines. During the Field Study each claim corner was found using a GPS. Unfortunately no claims post were found at or surrounding
these GPS locations. A request for extension has been filed to complete the georeferencing and re-posting of the claims.
Proposed
Exploration Work – Plan of Operation
The
ultimate goal of the assessment work is to identify locations of where to drill for precious metals. To achieve that goal from
the available data, various assumptions must be made regarding the interpretation for the potential of mineralization. For example,
if the assumption is that gold will be associated with quartz/felsic intrusions then the southwestern corner of claim 4256640
represents a reasonable target area. If it is further assumed that mineralization is associated with fault structures then the
northeast trending Faults 3 and 4 should be focus areas for potential exploration locations.
However
if the mineralization is associated with massive sulfide intrusions then the five elevated magnetic areas associated with the
Fault are potential targets. Massive sulfides are usually associated with pyrite which is only slightly magnetic. The mineralization
may be associated with pyrhhotite and magnetite which are common in sulfide intrusives. It should be noted that two of the elevated
magnetic intensity areas are located at junction points between the Branch of the Porcupine-Destor Fault and the northeastern
trending faults. The junction locations are ideal for intrusives and are recommended drilling locations.
Consequently,
the proposed field work will be a phased exploration program to properly evaluate the potential of the Big Monty Claims.
We must conduct exploration to determine what minerals exist on our property and whether they can be economically extracted
and profitably processed. We plan to proceed with exploration of the Big Monty Claims by drilling the quartz/felsic intrusion
as well as testing further the five elevated magnetic areas associated with the fault in order to begin determining the potential
for discovering commercially exploitable deposits of gold on our claim.
We
have not discovered any ores or reserves on the Big Monty Claims. Our planned work is exploratory in nature.
The
goal of phase 1 is to utilize the current data base for the project, (an airborne mag survey and a brief geologic review done
in 2013) to develop possible drill targets seeking precious and base metals on the 7 claims comprising the Monty Project.
The
existing knowledge of geology and structure is insufficient to spot drill targets at this time. Only 9 rock samples were taken
and none found more than trace values in precious or base metals. A problem was lack of outcrop, limiting knowledge of the actual
rock types, including structure and geology. 10 outcrops were found and the geological evaluation was minimal. The report does
not indicate that rock fabric or strike and dip of features was performed.
The
Porcupine-Destor fault system is believed to run generally East-West through the property with numerous North East-South West
cross faults providing several possible intersecting structural features which could possibly host economic mineralization.
Phase
1 will revisit outcrops for mapping and recording attitudes and fabric. Outcrop exposure will be attempted by stripping moss and
vegetation from shallowly covered areas. This same effort will assess access for drill equipment, and determine if additional
geophysics, either airborne or ground, would be valuable in determining more precisely the strike and dip of the major structures.
Competitive
Factors
The
mining industry is highly fragmented. We are competing with many other exploration companies looking for gold. We are among the
smallest exploration companies in existence and are an infinitely small participant in the mining business which is the cornerstone
of the founding and early stage development of the mining industry. While we generally compete with other exploration companies,
there is no competition for the exploration or removal of minerals from our claims. Readily available markets exist for the sale
of gold. Therefore, we will likely be able to sell any gold that we are able to recover, in the event commercial quantities are
discovered on the Big Monty Claims. There is no ore body on the Big Monty Claims.
Government
Regulation
Exploration
activities are subject to various national and provincial laws which govern prospecting, development, mining, production, exports,
taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances
and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental
statutes and the regulations passed there under in Ontario and Canada.
Environmental
Regulation
Our
exploration activities are subject to various federal, provincial and local laws and regulations governing protection of the environment.
These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business
in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material
compliance with applicable laws and regulations. Changes to current local, state or federal laws and regulations in the jurisdictions
where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are
unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could
render certain exploration activities uneconomic.
Employees
Initially,
we intend to use the services of subcontractors for labor exploration work on our claim. At present, we have no employees as such
although our officer and director devotes a portion of their time to the affairs of the Company. Our officer and director does
not have an employment agreement with us. We presently do not have pension, health, annuity, insurance, profit sharing or similar
benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any employee.
As
indicated above we will hire subcontractors on an as needed basis. We have not entered into negotiations or contracts with any
of potential subcontractors. We do not intend to initiate negotiations or hire anyone until we are nearing the time of commencement
of our planned exploration activities.
There
are no permanent facilities, plants, buildings or equipment on our mineral claim.
Mineralization
No
mineralization has been reported for the area of the property but structures and shear zones affiliated with mineralization on
adjacent properties pass through it.
Exploration
Previous
exploration work has not included any attempt to drill the structure on Big Monty Claims. Records indicate that no detailed exploration
has been completed on the property.
Adjacent
Properties
The
adjacent properties are cited as examples of the type of deposit that has been discovered in the area and are not major facets
to this report.
Planned
Exploration Program
Description of Phase 1 Expenses | |
Cost | |
Air travel | |
$ | 3,000 | |
Fees for field crews for 3 weeks | |
| 24,000 | |
Transportation | |
| 2,000 | |
Equipment rental | |
| 6,000 | |
Ground transportation (ATV rental) | |
| 1,500 | |
Sampling and assaying | |
| 6,000 | |
Trenching and possible short-hole drilling | |
| 25,000 | |
TOTAL PHASE ONE | |
$ | 67,500 | |
If phase
1 is successful, and time/weather is acceptable drilling can be commenced:
Description of Phase 2 Expenses | |
Cost | |
Ground/air geophysics over fault zones | |
$ | 30,000 | |
Fees for field crews for 2 months | |
| 48,000 | |
Drilling 3,300 meter holes if warranted | |
| 108,000 | |
TOTAL PHASE TWO | |
$ | 186,000 | |
| |
| | |
TOTAL FOR PHASES ONE AND TWO | |
$ | 253,500 | |
There
are no permanent facilities, plants, buildings or equipment on the Big Monty Claims.
We
intend to complete the exploration work on the Big Monty Claims. No exact date has been determined for the commencement of exploration
work on the Big Monty Claims.
Particularly
since we have a limited operating history, no reserves and no revenue, our ability to raise additional funds might be limited.
If we are unable to raise the necessary funds, we would be required to suspend Siga’s operations and liquidate our company.
There
are no permanent facilities, plants, buildings or equipment on the Big Monty Claims.
Trends
We
are in the pre-explorations stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable
future unless we place a property in production. We are unaware of any known trends, events or uncertainties that have had, or
are reasonably likely to have, a material impact on our business or income, either in the long term of short term, other than
as described in this section or in ‘Risk Factors’ on page 5.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations, including the discussion on liquidity and capital
resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
On an ongoing basis, management re-evaluates its estimates and judgments.
The
going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable
future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business.
Certain conditions, discussed below, currently exist which raise substantial doubt upon the validity of this assumption. The financial
statements do not include any adjustments that might result from the outcome of the uncertainty.
Liquidity
and Capital Resources
As
of October 31, 2014 our total assets were $Nil and our total liabilities were $288,529.
Not
including the cost of completing the exploration phase of our Lucky Thirteen Claim, our non-elective expenses over the next twelve
months, are expected to be as follows:
Expense | |
Ref. | | |
Estimated Amount | |
| |
| | |
| |
Accounting and audit | |
| (i)
| | |
$ | 15,500 | |
Edgar filing fees | |
| (ii)
| | |
| 6,000 | |
Filing fees – Nevada; Securities of State | |
| (ii)
| | |
| 375 | |
Office and general expenses | |
| (iv)
| | |
| 43,000 | |
Estimated expenses for the next twelve months | |
| | | |
| 64,875 | |
| |
| | | |
| | |
Account payable as at October 31, 2014 | |
| | | |
| 151,028 | |
Cash required for the next twelve months | |
| | | |
$ | 215,903 | |
We
will have to continue to prepare consolidated financial statements for submission with the various 10-K and 10-Q as follows:
Period | |
Form | | |
Accountant | | |
Auditor | | |
Amount | |
| |
| | |
| | |
| | |
| |
October 31, 2014 | |
| 10-Q
| | |
| 1,500 | | |
| 1,500 | | |
| 3,000 | |
January 31, 2014 | |
| 10-Q
| | |
| 1,500 | | |
| 1,500 | | |
| 3,000 | |
April 30, 2014 | |
| 10-Q
| | |
| 1,500 | | |
| 1,500 | | |
| 3,000 | |
July 31, 2014 | |
| 10-K
| | |
| 3,000 | | |
| 3,500 | | |
| 6,500 | |
Estimated total | |
| | | |
$ | 7,500 | | |
$ | 8,000 | | |
$ | 15,500 | |
We
will be required to file the annual Form 10-K estimated at $250 and the three Form 10-Qs at $250 each for a total cost of $1,000.
Additional Form 8-K should cost an additional $1,000. The conversion costs to XBLR is estimated at $4,000.
(iii)
|
Filing fees in
Nevada |
To
maintain the Company in good standing in the State of Nevada an annual fee of approximately $375 has been paid to the Secretary
of State.
We
have estimated a cost of approximately $25,000 for photocopying, printing, fax and delivery, travel, transfer agent and entertainment.
Director Fees total $1,500 per month or $18,000. Total Office and General is estimated to be $43,000.
Our
future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately
to generate future profitable operations or income from investments. As of October 31, 2014, we have not generated revenues, and
have experienced negative cash flow from operations. We may look to secure additional funds through future debt or equity financings.
Such financings may not be available or may not be available on reasonable terms.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
Market
Information
There
are no common shares subject to outstanding options, warrants or securities convertible into common equity of our Company.
The
number of shares subject to Rule 144 is 23,925,000 Share certificates representing these shares have the appropriate legend affixed
on them.
There
are no shares being offered to the public other than indicated in our effective registration statement and no shares have been
offered pursuant to an employee benefit plan or dividend reinvestment plan.
While
our shares are traded on the OTCBB. Although the OTCBB does not have any listing requirements per se, to be eligible for quotation
on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K. Securities already quoted
on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do
not make their filing during that time.
In
the future our common stock trading price might be volatile with wide fluctuations. Things that could cause wide fluctuations
in our trading price of our stock could be due to one of the following or a combination of several of them:
●
|
our
variations in our operations results, either quarterly or annually; |
|
|
● |
trading
patterns and share prices in other exploration companies which our shareholders consider similar to ours; |
|
|
● |
the
exploration results on the Big Monty Claims, and |
|
|
● |
other
events which we have no control over. |
In
addition, the stock market in general, and the market prices for thinly traded companies in particular, have experienced extreme
volatility that often has been unrelated to the operating performance of such companies. These wide fluctuations may adversely
affect the trading price of our shares regardless of our future performance. In the past, following periods of volatility in the
market price of a security, securities class action litigation has often been instituted against such company. Such litigation,
if instituted, whether successful or not, could result in substantial costs and a diversion of management’s attention and
resources, which would have a material adverse effect on our business, results of operations and financial conditions.
Trends
We
are in the exploration stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable
future. We are unaware of any known trends, events or uncertainties that have had, or are reasonably likely to have, a material
impact on our business or income, either in the long term of short term, as more fully described under ‘Risk Factors’.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
We
carried out an evaluation, under the supervision and with the participation of our management, including our principal executive
officer and principal financial officer, of the effectiveness of the design of our disclosure controls and procedures (as defined
by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of July 31, 2014 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation,
our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are not
effective as of July 31, 2014 as a result of material weaknesses in internal controls over financial reporting. A material weakness
is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected
on a timely basis. Our management, on behalf of the Company, has considered certain internal control procedures as required by
the Sarbanes-Oxley (“SOX”) Section 404 A which accomplishes the following:
Internal
controls are mechanisms to ensure objectives are achieved and are under the supervision of the Company’s Chief Executive
Officer and Chief Financial Officer, being Bob Hogarth. Good controls encourage efficiency, compliance with laws and regulations,
sound information, and seek to eliminate fraud and abuse.
These
control procedures provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Internal
control is “everything that helps one achieve one’s goals - or better still, to deal with the risks that stop one
from achieving one’s goals.”
Internal
controls are mechanisms that are there to help the Company manage risks to success.
Internal
controls is about getting things done (performance) but also about ensuring that they are done properly (integrity) and that this
can be demonstrated and reviewed (transparency and accountability).
In
other words, control activities are the policies and procedures that help ensure the Company’s management directives are
carried out. They help ensure that necessary actions are taken to address risks to achievement of the Company’s objectives.
Control activities occur throughout the Company, at all levels and in all functions. They include a range of activities as diverse
as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation
of duties.
As
of October 31, 2014, the management of the Company assessed the effectiveness of the Company’s internal control over financial
reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance
on conducting such assessments. Management concluded, during the quarter ended October 31, 2014, internal controls and procedures
were not effective to detect the inappropriate application of US GAAP rules. Management realized there are deficiencies in the
design or operation of the Company’s internal control that adversely affected the Company’s internal controls which
management considers to be material weaknesses.
In
the light of management’s review of internal control procedures as they relate to COSO and the SEC the following were identified:
● |
The
Company’s Audit Committee does not function as an Audit Committee should since there is a lack of independent directors
on the Committee, |
|
|
● |
The
Company has limited segregation of duties which is not consistent with good internal control procedures. |
|
|
● |
The
Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of
the Directors and any staff to be hired in the future. This lack of a written internal control procedurals manual does not
meet the requirements of the SEC or good internal control. |
|
|
● |
There
are no effective controls instituted over financial disclosure and the reporting processes. |
Management
feels the weaknesses identified above, being the latter three, have not had any effect on the financial results of the Company.
Management will have to address the lack of independent members on the Audit Committee and identify an “expert” for
the Committee to advise other members as to correct accounting and reporting procedures.
The
Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds
to do so. By appointing independent members to the Audit Committee and using the services of an expert on the Committee will greatly
improve the overall performance of the Audit Committee. With the addition of other Board Members and staff the segregation of
duties issue will be address and will no longer be a concern to management. By having a written policy manual outlining the duties
of each of the officers and staff of the Company will facilitate better internal control procedures.
Management
will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal
controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements
or improvements, as necessary and as funds allow.
ITEM
4T. CONTROLS AND PROCEDURES
There
were no changes in TNX’s internal controls over financial reporting during the three months period ending October 31, 2014
that have materially affected, or are reasonably likely to material affect, TNX’s internal control over financial reporting.
PART
11 – OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
There
are no legal proceedings to which TNX is a party or to which the Valolo Gold Claim or the Lucky Thirteen Claim is subject, nor
to the best of management’s knowledge are any material legal proceedings contemplated.
ITEM
1A. RISK FACTORS
Risks
Associated with our Company:
1.
|
Because
our auditors have issued a going concern opinion and because our officers and directors will not loan any money to us, we
may not be able to achieve our objectives and may have to suspend or cease exploration activity. |
Our
auditors’ report on our 2014 financial statements expressed an opinion that substantial doubt exists as to whether we can
continue as an ongoing business for the next twelve months. Because our officers and directors are unwilling to commit to loan
or advance capital to us, we believe that if we do not raise additional capital through the issuance of treasury shares, we will
be unable to conduct exploration activity and may have to cease operations and go out of business.
2.
|
Because
the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not
contain any reserves, and any funds spent on exploration will be lost. |
Because
the probability of an individual prospect ever having reserves is extremely remote, in all probability our prospective properties,
the Big Monty Claims, does not contain any reserves, and any funds spent on exploration will be lost. If we cannot raise further
funds as a result, we may have to suspend or cease operations entirely which would result in the loss of our shareholders’
investment.
3.
|
We
lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend
or cease exploration activity or cease operations. |
We
were incorporated in 2007, have not yet conducted any exploration activities and have not generated any revenues. We have an insufficient
exploration history upon which to properly evaluate the likelihood of our future success or failure. Our net loss from inception
to October 31, 2014, the date of our most recent unaudited financial statements, is $666,879. Our ability to achieve and maintain
profitability and positive cash flow in the future is dependent upon
|
*
|
Our
ability to locate a profitable mineral property |
|
|
|
|
* |
Our
ability to locate an economic ore reserve |
|
|
|
|
* |
Our
ability to generate revenues |
|
|
|
|
* |
Our
ability to reduce exploration costs. |
Based
upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated
with the research and exploration of our mineral property. We cannot guarantee we will be successful in generating revenues in
the future. Failure to generate revenues will cause us to go out of business.
4. |
We
have no known ore reserves. Without ore reserves we cannot generate income and if we cannot generate income we will have to
cease exploration activity which will result in the loss of our shareholders’ investment. |
We
have no known ore reserves. Even if we find gold mineralization we cannot guarantee that any gold mineralization will be of sufficient
quantity so as to warrant recovery. Additionally, even if we find gold mineralization in sufficient quantity to warrant recovery,
we cannot guarantee that the ore will be recoverable. Finally, even if any gold mineralization is recoverable, we cannot guarantee
that this can be done at a profit. Failure to locate gold deposits in economically recoverable quantities will mean we cannot
generate income. If we cannot generate income we will have to cease exploration activity, which will result in the loss of our
shareholders’ investment.
5.
|
If
we don’t raise enough money for exploration, we will have to delay exploration or go out of business, which will result
in the loss of our shareholders’ investment. |
We
estimate that, with funding committed by our management combined, we do not have sufficient cash to continue operations for twelve
months even if we only carry out Phase I of our planned exploration activity on the Big Monty Claims. We need to raise additional
capital to undertake Phase I. We may not be able to raise additional funds. If that occurs we will have to delay exploration or
cease our exploration activity and go out of business which will result in the loss of our shareholders’ entire investment
in our Company.
6.
|
Because
we are small and do not have much capital, we must limit our exploration and as a result may not find an ore body. Without
an ore body, we cannot generate revenues and our shareholders will lose their investment. |
Any
potential development of and production from our exploration property depends upon the results of exploration programs and/or
feasibility studies and the recommendations of duly qualified engineers and geologists. Because we are small and do not have much
capital, we must limit our exploration activity unless and until we raise additional capital. Any decision to expand our operations
on our exploration property will involve the consideration and evaluation of several significant factors including, but not limited
to:
●
|
Costs
of bringing the property into production including exploration preparation of production feasibility studies, and construction
of production facilities; |
|
|
●
|
Availability
and cost of financing; |
|
|
●
|
Ongoing
costs of production; |
|
|
●
|
Market
prices for the minerals to be produced; |
|
|
●
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Environmental
compliance regulations and restraints; and |
|
|
●
|
Political
climate and/or governmental regulations and controls. |
Such
programs will require very substantial additional funds. Because we may have to limit our exploration, we may not find an ore
body, even though our property may contain mineralized material. Without an ore body, we cannot generate revenues and our shareholders
will lose their entire investment in our Company.
We
may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend
exploration activity.
Competition
and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies and certain equipment
such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with
any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials as and when we
are able to raise the requisite capital. If we cannot find the products and equipment we need, we will have to suspend our exploration
plans until we do find the products and equipment we need.
7.
|
Because
our officers and directors have other outside business activities and may not be in a position to devote a majority of their
time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions
of exploration . |
Our
one officer, our President will be devoting only 15% of his time, approximately 24 hours per month, to our business. As a consequence
of the limited devotion of time to the affairs of our Company expected from management, our business may suffer. For example,
because our officers and directors have other outside business activities and may not be in a position to devote a majority of
their time to our exploration activity, our exploration activity may be sporadic or may be periodically interrupted or suspended.
Such suspensions or interruptions may cause us to cease operations altogether and go out of business.
8. |
Because
mineral exploration and development activities are inherently risky, we may be exposed to environmental liabilities. If such
an event were to occur it may result in a loss of your investment. |
The
business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately
developed into production. At present, the Big Monty Claims, does not have a known body of commercial ore. Unusual or unexpected
formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability
to obtain suitable or adequate machinery, equipment or labor are other risks involved in extraction operations and the conduct
of exploration programs. We do not carry liability insurance with respect to our mineral exploration operations and we may become
subject to liability for damage to life and property, environmental damage, cave-ins or hazards. Previous mining exploration activities
may have caused environmental damage to the Big Monty Claims. It may be difficult or impossible to assess the extent to which
such damage was caused by us or by the activities of previous operators, in which case, any indemnities and exemptions from liability
may be ineffective. If the Big Monty Claims is found to have commercial quantities of ore, we would be subject to additional risks
respecting any development and production activities. Most exploration projects do not result in the discovery of commercially
mineable deposits of ore.
9. |
No
matter how much money is spent on our Mineral Claim, the risk is that we might never identify a commercially viable ore reserve.
|
No
matter how much money is spent over the years on the Big Monty Claims, we might never be able to find a commercially viable ore
reserve. Over the coming years, we could spend a great deal of money on the Big Monty Claims without finding anything of value.
There is a high probability the Big Monty Claims do not contain any reserves so any funds spent on exploration will probably be
lost.
10. |
Even
with positive results during exploration, the Mining Claims might never be put into commercial production due to inadequate
tonnage, low metal prices or high extraction costs. |
We
might be successful, during future exploration programs, in identifying a source of minerals of good grade but not in the quantity,
the tonnage, required to make commercial production feasible. If the cost of extracting any minerals that might be found on the
Big Monty Claims is in excess of the selling price of such minerals, we would not be able to develop the Big Monty Claims. Accordingly
even if ore reserves were found on the Big Monty Claims, without sufficient tonnage we would still not be able to economically
extract the minerals from the Big Monty Claims in which case we would have to abandon the Big Monty Claims and seek another mineral
property to develop, or cease operations altogether.
Risks
Associated with owning our Shares:
11. |
We
anticipate the need to sell additional treasury shares in the future meaning that there will be a dilution to our existing
shareholders resulting in their percentage ownership in the Company being reduced accordingly. |
We
expect that the only way we will be able to acquire additional funds is through the sale of our common stock. This will result
in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced. The magnitude
of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.
12. |
We
have settled liabilities of the Company by entering into Convertible Debentures and Settlement Agreements which have a significant
dilution effect on our shareholders. |
We
have entered into Convertible Debentures Agreements with our creditors which could result in the issuance of 116,000,000 additional
shares. This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is
reduced. Further agreements could be entered into.
13. |
Because
our securities are subject to penny stock rules, you may have difficulty reselling your shares. |
Our
shares are “penny stocks” and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional
sales practice requirements on broker/dealers who sell the Company’s securities including the delivery of a standardized
disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and,
furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination
and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices
could adversely affect a shareholder’s ability to dispose of his stock.
Forward
Looking Statements
In
addition to the other information contained in this Form 10-K, it contains forward-looking statements which involve risk and uncertainties.
When used in this Form 10-K, the words “may”, “will”, “expect”, “anticipate”,
“continue”, “estimate”, “project”, “intend”, “believe” and similar
expressions are intended to identify forward-looking statements regarding events, conditions and financial trends that may affect
our future plan of operations, business strategy, operating results and financial position. Readers are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result could differ
materially from the results expressed in or implied by these forward-looking statements as a result of various factors, many of
which are beyond our control. Any reader should review in detail this entire Form 10-K including financial statements, attachments
and risk factors before considering an investment.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There has
been no change in our securities since the fiscal year ended July 31, 2014.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have
been no matters brought forth to the securities holders to vote upon during this quarter.
ITEM
5. OTHER INFORMATION
CHRISTOPHER
VALLOS was appointed as sole director of the Company on September 3, 2014, and subsequently made the Chief Executive Officer,
Chief Financial Officer, President, and Secretary-Treasurer of the Company on that date.
Mr.
Vallos has been the Director of Finance and Marketing for NYC Marketing since 2010. NYC Marketing is a national investor relation
and marketing firm that provides comprehensive customized services for publicly traded companies. Mr. Vallos responsibilities
included corporate finance, budgeting, forecasting, and business analysis. Prior to joining NYC Marketing, Mr. Vallos was a product
manager at Steris Corporation for 3 years.
Board
of Directors
Below
is a description of the Audit Committee of the Board of Directors. The Charter of the Audit Committee of the Board of Directors
sets forth the responsibilities of the Audit Committee. The primary function of the Audit Committee is to oversee and monitor
the Company’s accounting and reporting processes and the audits of the Company’s financial statements.
Our
audit committee is comprised of Christopher Vallos, our President and Chairman of the Audit Committee whom is not independent.
Christopher Vallos cannot be considered an “audit committee financial expert” as defined in Item 401 of Regulation
S-B. .
Apart
from the Audit Committee, the Company has no other Board committees.
Since
inception on January 18, 2007, our Board has conducted its business entirely by consent resolutions and has not met, as such.
ITEM
6. EXHIBITS
Exhibits
The following
exhibits are included as part of this report by reference:
3
|
Corporate
Charter (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration
No. 333-145879) |
|
|
3 (i) |
Articles
of Incorporation (incorporated by reference from Siga’s registration Statement on Form SB-2 filed on September 5, 2007,
Registration No. 333-145879) |
|
|
3 (ii) |
By-laws
(incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration
No. 333-145879) |
|
|
4
|
Stock
Specimen (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September 5, 2007, Registration |
|
|
10.1 |
Transfer
Agent and Registrar Agreement (incorporated by reference from Siga’s Registration Statement on Form SB-2 filed on September
5, 2007, Registration No. 333-145879) |
|
|
10.2 |
Corporate
Acquisition Agreement between Siga, Touchstone Ventures Ltd, and Touchstone Precious Metals, Inc dated September 24, 2010
(incorporated by reference from Siga’s Form 10K for the year ended July 31, 2010) |
|
|
10.3 |
Letter
Agreement dated May 15, 2010 between Peter Osha and Touchstone Precious Metals, Inc. regarding the Option to Purchase the
Lucky Thirteen Claim from Peter Osha. (incorporated by reference from Siga’s Form 10K for the year ended July 31, 2010) |
|
|
10.4 |
Extension
Agreement dated October 14, 2010 between Peter Osha, Touchstone Ventures Ltd, Touchstone Precious Metals Inc., and Siga Resources
Inc. (incorporated by reference from Siga’s Form 10Q for the Quarter ended October 31, 2010) |
|
|
10.5 |
Property
Acquisition and Royalty Agreement dated January 16, 2011 between Siga Resources Inc. and Peter Osha (incorporated by reference
from Siga’s Form 10Q for the Quarter ended January 31, 2011) |
|
|
10.6 |
Joint
Venture Agreement dated May 12, 2011 between Big Rock Resources Ltd. and Siga Resources Inc. regarding the development of
the Lucky Thirteen Claim. (incorporated by reference from Siga’s Form 8K filed May 14, 2011). |
|
|
10.7 |
Letter
of Intent dated June 14, 2011 between Montana Mining Company and Siga Resources Inc. regarding the acquisition of the Big
Bear Claims 1-9 located in San Bernardino County, California (incorporated by reference from Siga’s Form 8K filed June20,
2011). |
|
|
10.8 |
Revised
Acquisition Agreement dated July 7, 2011 between Montana Mining Company and Siga Resources Inc. regarding the acquisition
of the Big Bear Claims 1-9 located in San Bernardino County, California (incorporated by reference from Siga’s Form
8K filed July 12, 2011). |
|
|
10.9 |
Joint
Venture Agreement dated July 22, 2011 between Bentall Fairview Resources Ltd.. and Siga Resources Inc. regarding the development
of the Big Bear Claims. (incorporated by reference from Siga’s Form 8K filed July 22, 2011). |
|
|
10.10 |
Property
Acquisition and Royalty Agreement dated September 20, 2011 between Siga Resources Inc. and Laguna Finance Ltd. regarding the
acquisition of the Moutauban Gold Tailing Claims located in near Quebec City, Canada (incorporated by reference from Siga’s
Form 8K filed September 28, 2011) . |
|
|
31 |
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Christopher Vallos
|
|
|
32 |
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Christopher Vallos
|
|
|
33-0 |
XBRL
Report |
SIGNATURES
Pursuant
to the requirements 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.
|
TNX
Maverick, Corp. |
|
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(Registrant)
|
|
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|
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By: |
/s/
CHRISTOPHER VALLOS |
|
|
Christopher Vallos |
|
|
Chief Executive
Officer Chief Financial Officer, President and Director |
|
|
|
|
Date:
July 17, 2015 |
Exhibit
31.1 and 31.2
Rule
13a-14(a) 15(d)-14(a) Certification
By
Chief Executive Officer and Chief Financial Officer
I, Christopher
Vallos, certify that:
|
1. |
I have reviewed this Form
10-Q of TNX Maverick, Corp. (the “small business issuer”); |
|
|
|
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2. |
Based on my knowledge,
this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the
statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
|
|
|
|
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 small business issuer as of, and for, the periods presented
in this report; |
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|
|
4. |
The small business issuer’s
other certifying officer(s) 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 small business issuer and have: |
|
|
|
|
|
(a) |
Designed
such disclosure controls and procedures, or cause such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the small business issuer, 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) |
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 small business issuer’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report
based on such evaluation; and |
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(d) |
Disclosed
in this report any changes in the small business issuer’s internal control over financial reporting that occurred during
the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s
internal control over the financial reporting; and |
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5. |
The small business issuer’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financing reporting,
to the small business issuer’s auditors and the audit committee of the small business issuer’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 small business issuer’s ability to record, process, summarize and report
financial information; and |
|
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|
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|
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(b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the small business
issuer’s internal control over financial reporting. |
Date: July
17, 2015
By: |
/s/
CHRISTOPHER VALLOS |
|
|
Christopher Vallos |
|
|
Chief
Executive Officer Chief Financial Officer, President and Director |
Exhibit
32.1 and 32.2
CERTIFICATE
PURSUANT TO
18
U.S.C. SECTION 1350
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report (the “Report”) on the Form 10-Q of TNX Maverick, Corp. (the “Company”)
for the three months ended October 31, 2014, as filed with the Securities and Exchange Commission on the date hereof, I, Christopher
Vallos, Chief Executive Officer, Chief Financial Officer, President and Director, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
a.
The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934, as amended;
and
b.
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operation
of the Company.
Date:
July 17, 2015
By: |
/s/
CHRISTOPHER VALLOS |
|
|
Christopher Vallos |
|
|
Chief
Executive Officer Chief Financial Officer, President and Director |