Notes to the Unaudited Condensed Consolidated
Financial Statements
NOTE 1 – ORGANIZATION
Next Graphite, Inc. (the “Company”) was
incorporated in Nevada on September 26, 2012 under the name Zewar Jewellery, Inc. and is a development-stage entity. The Company's
current business plan is to engage in the mining business developing graphite properties located in Namibia. The Company is based
in Carson City, Nevada
On November 14, 2013, the Company consummated transactions
pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) dated November 14, 2013 by and among the Company
and the stockholders of African Graphite, Inc., a private Nevada corporation (“AGI” and the “AGI Stockholders”)
whereby AGI Stockholders transferred 100% of the outstanding shares of common stock of AGI held by them, in exchange for an aggregate
of 8,980,047 newly issued shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”).
On November 14, 2013, AGI entered into a Stock Purchase
Option Agreement (the “Option Agreement”) with NMC Corp., a corporation organized under the laws of the Province of
Ontario, Canada (“NMC”), whereby NMC granted to AGI an option to purchase 90 ordinary shares, par value one Namibian
dollar per share, of Gazania Investments Two Hundred and Forty Two (Proprietary) Limited, a corporation organized under the laws
of the Republic of Namibia ("Gazania"), representing 90% of the issued and outstanding shares of Gazania, for $240,000.
NMC had entered into an option agreement dated March 29, 2013, as amended on November 4, 2013 (the “Centre Agreement”),
with Centre for Geoscience Research CC (formerly known as “Industrial Minerals and Rock Research Centre CC”), a company
organized under the laws of the Republic of Namibia ("Centre"), whereby Centre agreed to transfer to Gazania 100% undivided
interest in the exclusive prospecting license No. 3895 known as AUKAM originally issued to Centre by the government of the Republic
of Namibia on April 4, 2011 and renewed on April 4, 2013 (the “License”). The License grants the right to conduct prospecting
operations, bulk sampling and pilot production in the license area called AUKAM located in southern Namibia in the Karas Region
within the Betaine district. The license area covers about 49,127 hectares. The only mine in Namibia which has produced graphite
is situated in the license area. The transfer of the License to Gazania was approved by the Ministry of Mines and Energy of the
Republic of Namibia on February 25, 2014.
Under the Option Agreement, AGI was required to pay
to NMC $90,000 as an advance payment to be credited towards the purchase price of the Gazania shares. The Company made the advance
payment on November 14, 2013. The balance of the purchase price in the amount of $150,000 was paid by AGI upon exercise of the
option that was completed on March 14, 2014. As a result, Gazania became a direct 90% owned subsidiary of the Company.
The Company acquired the remaining 10% ownership of
Gazania for $15,000 in the third quarter of 2015. As a result, Gazania became a direct 100% owned subsidiary of the Company.
NOTE 2 – GOING CONCERN
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America,
which contemplates continuation of the Company as a going concern. The Company has incurred approximately $4,805,285 in operating
deficit since its inception, and has generated no operating revenue, which could raise substantial doubt about the Company’s
ability to continue as a going concern.
In view of these matters, realization of the
assets of the Company is dependent upon the Company’s ability to meet its financial requirements through equity financing
and the success of future operations. These unaudited condensed consolidated financial statements do not include adjustments relating
to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue in existence.
NOTE 3 – BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated
financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United
States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q.
In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments,
including normal recurring adjustments, considered necessary to present fairly the financial position, the results of operations
and comprehensive income (loss) and cash flows of the Company for the periods presented. These unaudited condensed consolidated
financial statements and notes hereto should be read in conjunction with the financial statements and notes thereto for the year
ended December 31, 2015 included in the Company’s Form 10-K filed on April 14, 2016. The operating results or
cash flows for the interim periods presented herein are not necessarily indicative of the results to be expected for any other
interim period or the full year.
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Use of Estimates
The preparation of
the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results
could differ materially from those estimates.
Revenue Recognition, Deferred Revenue and Customer
Deposits
The Company recognizes revenue in accordance with ASC
605, “Revenue Recognition,” when persuasive evidence of an arrangement exists, the price is fixed or determinable,
collection is reasonably assured and delivery of products has occurred or services have been rendered. The Company did not have
product sales for the years ended December 31, 2015 and 2014.
The Company received customer deposit for potential
usage of Company’s license in the amount of $85,481 and $60,491 as of June 30, 2016 and December 31, 2015, respectively.
Income Taxes
Provisions for income taxes are based on taxes
payable or refundable and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities
and their reported amounts in the financial statements and tax operating loss carry forwards. Deferred tax assets and liabilities
are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets
and liabilities are adjusted through the provision for income taxes. Assets and liabilities are established for uncertain tax positions
taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not”
threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are
included as a component of general and administrative expense.
Basic and Diluted Loss per Common Share
Basic loss per common share amounts are computed
by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per
share amounts are computed assuming the issuance of common stock for potentially dilutive common stock equivalents.
Fair Value of Financial Instruments
The carrying amounts reported in the balance
sheets for accounts payable, and related party payables approximate fair value because of the immediate or short-term maturity
of these financial instruments. The carrying amounts reported for convertible notes payable approximate fair value based on the
value of the common stock into which the notes are convertible. The carrying amounts reported for notes payable approximate fair
value because the underlying instruments are at interest rates that approximate current market rates.
ASC 820 defines fair value as the price that
would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions
that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires
an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to
the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:
|
●
|
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
●
|
Level 2 – Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.
|
|
●
|
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
Financial instruments include cash, accounts
payable and accrued expenses and other current liabilities. The carrying amounts of cash, accounts payable and accrued expenses
and other current liabilities approximate their fair value due to the short term maturities of these instruments.
The Company has Level 3 financial instrument,
an embedded derivative liability (beneficial conversion feature) that is recorded at fair value on periodic basis. The embedded
derivative is evaluated under the hierarchy of ASC 480-10, ASC Paragraph 815-25-1 and ASC Subparagraph 815-10-15-74 addressing
embedded derivatives. The fair value of such Level 3 financial instrument is estimated using the Black-Scholes option pricing model.
The foregoing Level 3 financial instrument has certain provisions which qualifies to be classified as a liability under ASC 815.
As of June 30, 2016, the following table represents
the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
53,715
|
|
As of December 31, 2015, the following table
represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
107,690
|
|
Recent Accounting Pronouncements
In March 2016, the
Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09,
Compensation – Stock
Compensation
(Topic 718)
: Improvements to Employee Share-Based Payment Accounting
. This ASU is intended to simplify
several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of
awards as either equity or liabilities, and classification on the statement of cash flows. The provisions of this ASU are effective
for years beginning after December 15, 2016. Early application is permitted. The Company is currently evaluating the impact of
this ASU.
In February 2016, the FASB issued ASU 2016-02,
Leases
(Topic 842). This ASU would require lessees to recognize the following for all leases (with the exception of short-term
leases) at the commencement date; (i) a lease liability, which is a lessee’s obligation to make lease payments arising from
a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right
to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged under the amendments
of this ASU. The provisions of this ASU are effective for years beginning after December 15, 2018. The Company is currently evaluating
the impact of this ASU.
In August 2014, the FASB issued ASU No. 2014-15,
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
. This ASU establishes specific
guidance to an organization’s management on their responsibility to evaluate whether there is substantial doubt about the
organization’s ability to continue as a going concern. The provisions of ASU 2014-15 are effective for interim and annual
periods beginning after December 15, 2016. This ASU is not expected to have an impact on the Company’s financial position,
results of operations or cash flows.
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers
(Topic 606). The objective of ASU 2014-09 is to clarify the principles for recognizing
revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue
issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets;
and providing more useful information to users of financial statements through improved revenue disclosure requirements. On August
12, 2015, the FASB issued ASU No. 2015-14, deferring the effective date by one year for ASU No. 2014-09. The provisions of ASU
No. 2014-09 will be effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted for
annual periods beginning after December 15, 2016. The Company is currently evaluating the impact of this standard on its financial
position, results of operations and cash flows.
NOTE 5 –
ACCOUNTS PAYABLE
As of June 30, 2016 and December 31, 2015, the Company’s
accounts payable was primarily made up of professional fees.
NOTE 6 – NOTES PAYABLE
The Company had the following notes payable
as of June 30, 2016 and December 31, 2015:
Issuance Date
|
|
Maturity Date
|
|
Interest
Rate
|
|
|
June 30,
2016
(unaudited)
|
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 10, 2015
|
|
February 9, 2016
|
|
|
5.0
|
%
|
|
$
|
24,000
|
|
|
$
|
24,000
|
|
March 31, 2015
|
|
September 30, 2015
|
|
|
7.0
|
%
|
|
|
10,000
|
|
|
|
10,000
|
|
December 3, 2015
|
|
February 29, 2016
|
|
|
10.0
|
%
|
|
|
29,000
|
|
|
|
29,000
|
|
December 23, 2015
|
|
September 29, 2016
|
|
|
10.0
|
%
|
|
|
20,500
|
|
|
|
20,500
|
|
March 2, 2016
|
|
September 29, 2016
|
|
|
10.0
|
%
|
|
|
13,500
|
|
|
|
-
|
|
March 2, 2016
|
|
September 29, 2016
|
|
|
10.0
|
%
|
|
|
15,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
$
|
112,000
|
|
|
$
|
83,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Original issuance discount
|
|
|
|
|
|
|
|
|
(1,517
|
)
|
|
|
(7,333
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
$
|
110,483
|
|
|
$
|
76,167
|
|
The notes payable with the maturity date that
has matured at the time the financial statements are issued continued to accrue interest and no default penalties were incurred.
Interest expense for notes payable amounted to $16,619 and $0 for the quarters ended June 30, 2016 and 2015.
NOTE 7 – NOTES PAYABLE –
RELATED PARTY
The Company had the following related party
notes payable as of June 30, 2016 and December 31, 2015:
Description
|
|
Issuance Date
|
|
Maturity Date
|
|
Interest Rate
|
|
|
June 30, 2016
(unaudited)
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael J. Doron
|
|
July 8, 2015
|
|
September 8, 2015
|
|
|
7.0
|
%
|
|
$
|
2,500
|
|
|
$
|
2,500
|
|
Charles C. Bream III
|
|
July 8, 2015
|
|
September 8, 2015
|
|
|
7.0
|
%
|
|
|
2,500
|
|
|
|
2,500
|
|
Charles C. Bream III
|
|
August 24, 2015
|
|
November 23, 2015
|
|
|
7.0
|
%
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
Interest expense for notes payable amounted
to $403 and $0 for the quarters ended June 30, 2016 and 2015.
NOTE 8 –
CONVERTIBLE NOTES PAYABLE
The Company issued convertible notes payable.
The outstanding balance and any accrued interest is due on maturity date or when the cash is available to repay the notes payable.
Under the agreement, the notes can be convertible at the holder’s discretion into common shares of the Company’s stock
at a 25% discount to the price at the date of exercise.
The Company’s convertible notes payable
is as follows:
Convertible Note
|
|
Issuance Date
|
|
Maturity Date
|
|
Interest Rate
|
|
|
Original Borrowing
|
|
|
Balance at June 30, 2016
(unaudited)
|
|
|
Balance at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1
|
|
October 2, 2014
|
|
December 31, 2015
|
|
|
5.0
|
%
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
Note 2
|
|
June 10, 2015
|
|
March 13, 2016
|
|
|
8.0
|
%
|
|
$
|
28,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Note 3
|
|
December 23, 2015
|
|
September 23, 2016
|
|
|
8.0
|
%
|
|
$
|
21,000
|
|
|
$
|
21,000
|
|
|
$
|
21,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,000
|
|
|
|
121,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Discount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,483
|
)
|
|
|
(9,333
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
115,517
|
|
|
$
|
111,667
|
|
The convertible notes with the maturity date
that has matured at the time the financial statements are issued continued to accrue interest and no default penalties were incurred.
No convertible notes were converted as of June 30, 2016 and up to the date the financial statements are issued.
The Company adopted the provisions of FASB ASC
Topic 815, “Derivatives and Hedging” (“ASC 815”) (previously EITF 07-5, “Determining Whether an Instrument
(or an Embedded Feature) is Indexed to an Entity’s Own Stock”), as the convertible note agreement contained certain
provision that the convertible note failed to pass the “fixed for fixed” criteria of ASC815, the conversion feature
of the convertible debt should have to be bifurcated and recorded separately until the conversion date.
Based on ASC 815, the Company determined that
the convertible debt contained embedded derivatives and full-ratchet provision which the Company valued the embedded derivative
using the Black-Scholes method. The following table represents fair value of embedded derivative movement from the date of issuance
to June 30, 2016:
Embedded Derivative Liabilities
|
|
Fair Value at Date of Issuance
|
|
|
Changes in Fair Value
|
|
|
Fair Value at June 30,
2016
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Note 1 – Issued in 2014
|
|
$
|
70,334
|
|
|
$
|
(37,001
|
)
|
|
$
|
33,333
|
|
Note 2 – Issued in 2015
|
|
$
|
20,000
|
|
|
$
|
(20,000
|
)
|
|
$
|
-
|
|
Note 3 – Issued in 2015
|
|
$
|
21,000
|
|
|
$
|
(618
|
)
|
|
$
|
20,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
(57,619
|
)
|
|
$
|
53,715
|
|
As
a result of initial recording of derivative liability of $41,000 for convertible notes issued in 2015 with proceeds of $49,000
the Company recorded debt discount of $30,500 at the date of issuance of convertible note payable for issuances occurred in 2015.
The Company recorded additional debt discount of $10,500 in June 2015 to true up the debt discount balance. The original debt
discount amount of $30,500 should have been recorded as $41,000. The Company accretes debt discount of $41,000 for convertible
notes issued in 2015 and $70,334 for convertible note issued in 2014 over the life of the convertible note. The Company recorded
accretion of $7,000 and $0 for the three months ended on June 30, 2016 and 2015 which is recorded as interest expense.
The
following table represents fair value of embedded derivative movement from the date of issuance to December 31, 2015:
Embedded Derivative Liabilities
|
|
Fair Value at Date of Issuance
|
|
|
Changes in Fair Value
|
|
|
Fair Value at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Note 1 – Issued in 2014
|
|
$
|
70,334
|
|
|
$
|
5,856
|
|
|
$
|
76,190
|
|
Note 2 – Issued in 2015
|
|
$
|
20,000
|
|
|
$
|
(20,000
|
)
|
|
$
|
-
|
|
Note 3 – Issued in 2015
|
|
$
|
10,500
|
|
|
$
|
21,000
|
|
|
$
|
31,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
6,856
|
|
|
$
|
107,690
|
|
As a result of initial recording of derivative
liability of $30,500 for convertible notes issued in 2015 with proceeds of $49,000 the Company recorded debt discount of $30,500
at the date of issuance of convertible note payable for issuances occurred in 2015. The Company accretes debt discount of $30,500
for convertible notes issued in 2015 and $70,334 for convertible note issued in 2014 over the life of the convertible note. Interest
incurred for the three months ended on June 30, 2016 and 2015 was $0 and $1,251 (excluding debt discount accretion of $17,583
which is also recorded as interest expense).
NOTE 9 – PROVISION FOR INCOME TAXES
The Company recognizes the tax effects of transactions
in the year in which such transactions enter into the determination of net income regardless of when reported for tax purposes.
Deferred taxes are provided in the financial statements under FASB 740-10-65-1 to give effect to the temporary differences which
may arise from differences in the bases of fixed assets, depreciation methods and allowances based on the income taxes expected
to be payable in future years. Minimal development stage deferred tax assets arising as a result of net operating loss carry-forwards
have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.
The Company recognizes interest accrued relative to
unrecognized tax benefits in interest expense and penalties in operating expense. During the period from August 28, 2013 (inception)
to June 30, 2016, the Company recognized no income tax related interest and penalties. The Company had no accruals for income
tax related interest and penalties at June 30, 2016.
NOTE 10 -
STOCKHOLDERS’
DEFICIT
As of June 30, 2016 the Company had (i) 100,000,000
Common shares authorized with a par value of $.0001 per share, of which 50,411,443 shares were issued and outstanding, and (ii)
25,000,000 shares of preferred stock, par value $.0001 per share, authorized, none of which was issued and outstanding. 8,980,047
shares of Common Stock have been issued to founders, of which, 400,016 shares were issued to the President and director as part
of their consulting agreements. The shares were valued at par for a value of $898.
NOTE 11 – RESTRICTED COMMON SHARES
In May 20, 2014, the Company approved future
issuances of performance based restricted common shares to the following employees and outside consultants. The Company accounts
the issuances of restricted common shares, as defined by ASC 718,
Compensation—Stock Compensation
, in accordance
with ASC 718. The restricted common shares will be issued upon completion of certain tasks or deliverables and contain certain
exercise price with no expiration period.
A summary of the status of the Company’s restricted common
shares is presented below:
|
|
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted
Average
Remaining
Contractual
Life
(in Years)
|
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding at December 31, 2014
|
|
|
1,760,000
|
|
|
$
|
0.17
|
|
|
|
N/A
|
|
|
$
|
246,400
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Superseded
by May 28 Stock Warrants
|
|
|
1,760,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2015
|
|
|
-
|
|
|
$
|
-
|
|
|
|
N/A
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2016
|
|
|
-
|
|
|
$
|
-
|
|
|
|
N/A
|
|
|
$
|
-
|
|
Vested at June 30, 2016
|
|
|
-
|
|
|
$
|
-
|
|
|
|
N/A
|
|
|
$
|
-
|
|
The aggregate intrinsic value in the preceding
table represents the total pre-tax intrinsic value, based upon the Company’s closing stock price of $0.017 as of June 30,
2016, which would have been received by the share option award holders had all share option award holders exercised their share
option awards as of that date.
The stock warrants issued is presented
below:
Date
Issued
|
|
Exercise
Price
|
|
|
Number
of Shares
|
|
|
Weighted
Average Remaining Contractual Life
|
Expiration
date
|
|
|
|
|
|
|
|
|
|
|
|
|
May 28, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
2,720,000
|
|
|
4.66 years
|
May 27, 2020
|
May 28, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
25,000
|
|
|
4.66 years
|
May 27, 2020
|
June 16, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
2,000,000
|
|
|
4.72 years
|
June 15, 2020
|
July 8, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
25,000
|
|
|
4.77 years
|
July 7, 2020
|
July 8, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
25,000
|
|
|
4.77 years
|
July 7, 2020
|
August 24, 2015 (Issued in lieu of restricted common stock)
|
|
$
|
0.11
|
|
|
|
10,000
|
|
|
4.90 years
|
August 23, 2020
|
February 1, 2016
|
|
$
|
0.003
|
|
|
|
10,000
|
|
|
4.92 years
|
January 31, 2021
|
February 9, 2016
|
|
$
|
0.004
|
|
|
|
10,000
|
|
|
4.92 years
|
February 28, 2021
|
Total warrants at June 30, 2016
|
|
|
|
|
|
|
4,825,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The initial
fair value of the new warrants issued on for services in 3rd
quarter, 2015 was estimated
at an aggregate value of $635. The initial fair value of the new warrants issued on for services in 1
st
quarter, 2016
was estimated at an aggregate value of $5,449. All warrants are vested and exercisable immediately.
NOTE 12 – COMMITMENTS AND CONTINGENCIES
The Company is subject
to various legal proceedings from time to time as part of its business. As of June 30, 2016, the Company was not currently party
to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes
would have a material adverse effect on its business, financial condition and results of operations.
NOTE 13 –SUBSEQUENT EVENTS
As
previously reported in the Company’s Form 10-K filed on April 14, 2016, in February of 2016, the Company received a Conditional
Renewal of its exclusive prospecting license EPL 3895 from the Namibian Ministry of Mines and Energy. In May of 2016, the Company
received Formal Renewal of its exclusive prospecting license EPL 3895 from the Namibian Ministry of Mines and Energy. The license
renewal is set to expire in April of 2017.
ASC 855, “Subsequent
Events. ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. During these periods, other than as set forth above,
the Company did not have any material recognizable subsequent events required to be disclosed other than those disclosed in this
note to the financial statements as of and for quarter ended June 30, 2016.