See notes to the unaudited condensed consolidated interim
financial statements.
See notes to the unaudited condensed consolidated interim
financial statements.
See notes to the unaudited condensed consolidated interim
financial statements.
See notes to the unaudited condensed consolidated interim
financial statements.
1.
|
NATURE OF BUSINESS, BASIS OF PRESENTATION AND GOING
CONCERN
|
White Mountain Titanium Corporation,
through its subsidiaries, (collectively, the Company) is in the business of
exploring for titanium deposits or reserves on its Cerro Blanco mining
concessions. The Company is an exploration stage company and its principal
business is to advance exploration and development activities on the Cerro
Blanco rutile (titanium dioxide) Property (Cerro Blanco) located in Region III
of northern Chile.
The accompanying condensed consolidated
interim financial statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at June 30, 2016 and for the period then ended have
been made. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with United States (US) accounting
principles generally accepted in the United States of America (US GAAP) have
been condensed or omitted. These unaudited condensed consolidated interim
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Companys December 31,
2015, Annual Report on Form 10-K filed with the US Securities and Exchange
Commission (SEC) on March 28, 2016. The organization and business of the
Company, accounting policies followed by the Company, other than the recently
adopted accounting pronouncements discussed below and other information are
contained in the notes to the Companys audited consolidated financial
statements for the year ended December 31, 2015 filed as part of the Companys
December 31, 2015 Annual Report on Form 10-K. The results of operations for the
period ended June 30, 2016 are not necessarily indicative of the operating
results for the full year.
These condensed consolidated interim
financial statements have been prepared by management on the basis of US GAAP
applicable to a going concern, which assumes the Company will continue to
operate for the foreseeable future and will be able to realize its assets and
discharge its liabilities in the normal course of operations. The Company has an
accumulated deficit of $61,106,733 at June 30, 2016 (December 31, 2015 -
$59,653,661), has not yet commenced revenue-producing operations, and has
significant expenditure requirements to continue to advance its exploration and
development activities on the Cerro Blanco property. Management intends to raise
additional capital through stock issuance to finance operations. However, there
is no assurance that management will be successful in its future financing
activities.
2.
|
SIGNIFICANT ACCOUNTING
POLICIES
|
Convertible debentures
Convertible debentures and warrants are
bifurcated between debt component and equity component based on the relative
fair values of the debt and warrants, the conversion component of the debt
component is then fair valued and accounted for as additional discount to the
debt component and is treated as a derivative liability and fair valued every
balance sheet date, the resulting discount to the debt component is amortized
over the term of the debt using the effective interest rate method.
The following accounting pronouncements
were adopted by the Company:
7
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
During the period, the Company adopted
update No. 2015-02
Consolidation (Topic 810) Amendments to the Consolidated
Analysis.
The amendments in this Update affect reporting entities that are
required to evaluate whether they should consolidate certain legal entities. All
legal entities are subject to reevaluation under the revised consolidation
model. Specifically, the amendments:
|
1.
|
Modify the evaluation of whether limited partnerships and
similar legal entities are variable interest entities (VIEs) or voting
interest entities
|
|
|
|
|
2.
|
Eliminate the presumption that a general partner should
consolidate a limited partnership
|
|
|
|
|
3.
|
Affect the consolidation analysis of reporting entities
that are involved with VIEs, particularly those that have fee arrangements
and related party relationships
|
|
|
|
|
4.
|
Provide a scope exception from consolidation guidance for
reporting entities with interests in legal entities that are required to
comply with or operate in accordance with requirements that are similar to
those in Rule 2a-7 of the
Investment Company Act of 1940
for
registered money market funds.
|
The amendments in this Update are
effective for fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2015.
The adoption of this standard had no
effects on the Companys condensed consolidated interim financial statements.
During the current year, the Company
adopted FASB Update No. 2014-12
CompensationStock 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
consensus of the FASB Emerging Issues Task Force). The adoption of this standard
had no effects on the Companys condensed consolidated interim financial
statements.
In April 2015, the FASB issued ASU No.
2015-03, InterestImputation of Interest (Subtopic 835-30): Simplifying the
Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 requires debt
issuance costs to be presented in the balance sheet as a direct deduction from
the carrying value of the associated debt liability, consistent with the
presentation of a debt discount. Prior to the issuance of the standard, debt
issuance costs were required to be presented in the balance sheet as an asset.
ASU 2015-03 is effective for fiscal years, and interim periods within those
years, beginning after December 15, 2015. The adoption of this standard had no
effects on the Companys condensed consolidated interim financial statements.
In August 2014, the FASB issued Update
No. 2014-15
Presentation of Financial Statements Going Concern (Subtopic
205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a
Going Concern
. The amendments in the Update provide guidance on managements
responsibility to disclose conditions or events that raise substantial doubt
about an entitys ability to continue as a going concern. The Update requires
management also to discuss plans to mitigate the conditions or events and if the
plans will alleviate the substantial doubt by considering the probability of
implementation of the plans and mitigation effect of the plans. The new
requirements are effective for annual periods ending after December 15, 2016.
The adoption of this standard is not expected to have significant effects on the
Companys condensed consolidated interim financial statements.
8
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
(continued)
|
In February 2016, the FASB issued ASU
No. 2016-02, Leases (Topic 842). The core principle of the standard is that a
lessee should recognize the assets and liabilities that arise from leases. A
lessee should recognize in its statement of financial position a liability to
make lease payments (the lease liability) and a right-of-use asset representing
its right to use the underlying asset for the lease term. The Company will be
required to adopt the new standard in the first quarter of 2019. The Company is
currently evaluating the impact this new standard will have on its financial
statements.
3.
|
FINANCIAL INSTRUMENTS AND
RISKS
|
|
(a)
|
The Company has classified its financial instruments as
follows:
|
Cash as held-for-trading
Receivables as refundable deposits and receivables
Accounts payable
and accrued liabilities as other financial liabilities
Convertible Note
as other financial liabilities
Derivative Liabilities as held for
trading
The carrying amounts of the Companys
cash, receivables and accounts payables and accrued liabilities approximate
their respective fair values due to the short maturities of these instruments.
The Companys Convertible Note is classified as other financial liabilities and
is carried at amortized cost. The fair value of the Convertible Note
approximates its face value. The three levels of the fair value hierarchy are
described below:
|
|
Level 1 - quoted prices (unadjusted) in active
markets for identical assets or liabilities;
|
|
|
Level 2 - inputs other than quoted prices
included in Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices); and
|
|
|
Level 3 - inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
|
The following table summarizes the
fair value by level at June 30, 2016 and December 31, 2015 for assets and
liabilities measured at fair value on a recurring basis:
June 30, 2016
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cash
|
$
|
1,157,252
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,157,252
|
|
Derivative Instruments
|
$
|
-
|
|
$
|
798,338
|
|
$
|
-
|
|
$
|
798,338
|
|
December 31, 2015
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Cash
|
$
|
396,878
|
|
$
|
-
|
|
$
|
-
|
|
$
|
396,878
|
|
9
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
3.
|
FINANCIAL INSTRUMENTS AND RISKS
(continued)
|
Credit risk is the risk that a
counterparty to a financial instrument will fail to discharge its contractual
obligations.
The Company mitigates credit risk by
maintaining its cash with high credit quality US, Chilean and Chinese financial
institutions.
Liquidity risk is the risk that the
Company will encounter difficulty in satisfying financial obligations as they
become due. The Company manages its liquidity risk by forecasting cash flows
required for operations and anticipated investing and financing activities. The
Companys cash at June 30, 2016 and December 31, 2015 totaled $1,157,252 and
$396,878, respectively. At June 30, 2016 and December 31, 2015, the Company had
accounts payable and accrued liabilities of $131,445, and $135,354,
respectively, all of which fall due in the next fiscal quarter. The Company has
a Convertible Note for principal amount of $2,000,000 which is due on March 16,
2018.
Market risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate due to changes in market prices.
Market risk comprises three types of risk: interest rate risk, foreign currency
risk and other price risk.
|
(a)
|
To the extent that payments made or received on the
Companys monetary assets and liabilities are affected by changes in the
prevailing market interest rates, the Company is exposed to interest rate
cash flow risk. The Companys Convertible Note is not exposed to interest
rate cash flow risk as it bears a fixed interest rate.
|
|
|
|
|
(b)
|
To the extent that changes in prevailing market interest
rates differ from the interest rate in the Companys monetary assets and
liabilities, the Company is exposed to interest rate price
risk.
|
The Companys cash consists of cash
held in bank accounts. Due to the short-term nature of this financial
instrument, fluctuations in market interest rates do not have a significant
impact on estimated fair values and on cash flows associated with the interest
income.
The convertible notes have a fixed
rate of 7% (note 6) the Company is not exposed to interest cash-flow risk as
fluctuations on market rates do not impact the Companys cash-flows.
10
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
3.
|
FINANCIAL INSTRUMENTS AND RISKS
(continued)
|
|
(ii)
|
Foreign currency risk
|
|
|
|
|
|
The Company is exposed to foreign currency risk to the
extent expenditures incurred or funds received and balances maintained by
the Company are denominated in currencies other than the US dollar
(primarily Chilean pesos (CLP), Chinese yuan (RMB), and Hong Kong
dollars (HKD)). As at June 30, 2016, the Company has net monetary
liabilities of $26,976 (December 31, 2015 - net monetary liabilities of
$44,693) denominated in CLP, net monetary assets of $1,413 (December 31,
2015 - $7,678) denominated in HKD, and net monetary assets of $39,148
(December 31, 2015 - $152,095) denominated in RMB.
|
|
|
|
|
|
As at June 30, 2016, the Companys sensitivity analysis
suggests that a change in the absolute rate of exchange in CLP, RMB and
HKD by 10% will not have a material effect on the Companys business,
financial condition and results of operations.
|
|
|
|
|
|
The Company has not entered into any foreign currency
contracts to mitigate this risk.
|
|
|
|
|
(iii)
|
Other price risk
|
|
|
|
|
|
Other price risk is the risk that the fair value or
future cash flows of a financial instrument will fluctuate due to changes
in market prices, other than those arising from interest rate risk or
foreign currency risk. The Company is not exposed to other price
risk.
|
4.
|
PROPERTY AND EQUIPMENT
|
|
|
|
June 30,
2016
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Cost
|
|
|
Amortization
|
|
|
Net
|
|
|
Land held for future
development
|
$
|
146,636
|
|
$
|
-
|
|
$
|
146,636
|
|
|
Vehicles
|
|
129,439
|
|
|
124,924
|
|
|
4,515
|
|
|
Office furniture and fixtures
|
|
175,048
|
|
|
96,687
|
|
|
78,361
|
|
|
Office equipment
|
|
33,574
|
|
|
25,136
|
|
|
8,438
|
|
|
Computer equipment
|
|
7,553
|
|
|
7,553
|
|
|
-
|
|
|
Computer software
|
|
68,995
|
|
|
68,995
|
|
|
-
|
|
|
Field equipment
|
|
154,150
|
|
|
141,279
|
|
|
12,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
715,395
|
|
$
|
464,574
|
|
$
|
250,821
|
|
|
|
|
December 31,
2015
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Cost
|
|
|
Amortization
|
|
|
Net
|
|
|
Land held for future
development
|
$
|
146,636
|
|
$
|
-
|
|
$
|
146,636
|
|
|
Vehicles
|
|
129,439
|
|
|
117,590
|
|
|
11,849
|
|
|
Office furniture and fixtures
|
|
175,048
|
|
|
81,779
|
|
|
93,269
|
|
|
Office equipment
|
|
33,574
|
|
|
22,818
|
|
|
10,756
|
|
|
Computer equipment
|
|
7,553
|
|
|
7,553
|
|
|
-
|
|
|
Computer software
|
|
68,995
|
|
|
68,995
|
|
|
-
|
|
|
Field equipment
|
|
154,150
|
|
|
130,244
|
|
|
23,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
715,395
|
|
$
|
428,979
|
|
$
|
286,416
|
|
11
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
Cerro Blanco
On September 5, 2003, the Company,
through its wholly-owned Chilean subsidiary, White Mountain Chile, entered into
a purchase agreement with Compañía Contractual Mineral Ojos del Salado (Ojos
del Salado), a wholly-owned Chilean subsidiary of Phelps Dodge Corporation, to
acquire a 100% interest in nine exploration mining concessions, collectively
known as Cerro Blanco. Cerro Blanco is located in Region III of northern Chile,
approximately 39 kilometers, or 24 miles, west of the city of Vallenar.
Consideration for the purchase, including legal fees, was $651,950.
The purchase agreement covering Cerro
Blanco was originally entered into between Ojos del Salado and Dorado Mineral
Resources NL (Dorado) on March 17, 2000. Under that agreement, Dorado
purchased the mining exploitation concessions from Ojos del Salado for
$1,000,000, of which $350,000 was paid. A first mortgage and prohibitions
against entering into other contracts regarding mining concessions without the
prior written consent of Ojos del Salado had also been established in favor of
Ojos del Salado. On September 5, 2003, White Mountain Chile assumed Dorados
obligations under the purchase agreement, including the mortgage and
prohibitions, with payment terms as described above.
La Martina
As a result of regional exploration
carried out in January 2013, a new rutile prospect named La Martina has been
discovered and staked in the Atacama, or Region III, geographic region of
northern Chile. La Martina, which is located approximately 45 kilometres
southwest of the city of Vallenar and 17 kilometres southwest of the Cerro
Blanco project, consists of six registered exploration concessions. Concession
fees and other costs incurred in staking the property have been expensed.
Ownership in mineral properties
involves certain inherent risks due to the difficulties of determining the
validity of certain claims as well as the potential for problems arising from
the frequently ambiguous conveyance history characteristic of mineral
properties. The Company has investigated ownership of its mineral properties,
and to the best of its knowledge, ownership of its interests is in good
standing. At present, the Company has determined that it has no material asset
retirement obligations (AROs).
12
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
Exploration expenditures incurred by
the Company during the six months ended June 30, 2016 and 2015 were as follows:
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Assaying
|
$
|
-
|
|
$
|
1,123
|
|
|
Concession fees
|
|
76,620
|
|
|
72,330
|
|
|
Environmental
|
|
-
|
|
|
248,507
|
|
|
Equipment rental
|
|
4,247
|
|
|
6,383
|
|
|
Geological consulting fees
|
|
24,433
|
|
|
33,371
|
|
|
Site costs
|
|
314,024
|
|
|
296,719
|
|
|
Transportation
|
|
4,399
|
|
|
19,632
|
|
|
|
|
|
|
|
|
|
|
Exploration expenditures for
period
|
$
|
423,723
|
|
$
|
678,065
|
|
On March 16, 2016, the Company and its
wholly-owned subsidiary Sociedad Contractual Minera White Mountain Titanium
Corporation entered into a loan agreement and issued a 7% Senior Convertible
Promissory Note to the lender for a total of $2,000,000 (the Convertible
Note).
The Convertible Note has a maturity
date of March 16, 2018 and bears simple interest of 7% per annum on the unpaid
principal amount until the principal amount is repaid in full.
The Convertible Note is convertible
into shares of the Companys Series A Preferred Stock (Series A Shares) at the
rate of $0.12 per share, par value of $0.001 per share. Except for the right to
elect one director, the Series A Shares have the same voting rights as Common
Stockholders and are convertible into Common Stock at conversion price of $0.12
per share. The Convertible Note will automatically convert into Series A
Preferred Stock if the Company successfully raises an additional $8,000,000, the
proceeds of which are allocated for certain qualified milestones relating to the
Cerro Blanco project, or if the Company secures a water off-take agreement for
its proposed desalination plant with volume and price components that are
mutually satisfactory to both the Company and the lender. In addition, the
Company issued to the lender 100 shares of Series A Preferred Stock with a
$0.001 par value and warrants to purchase 8,333,333 shares of Common Stock at
price of $0.30 per share until March 16, 2019. An amount of $12 was recognized
for the preferred share issuance which has been recognized as a derivative
liability.
In the event of default, the interest
rate increases to 25% per annum. Subject to certain exceptions, the Convertible
Note is senior to any other indebtedness of the Company.
The fair value of the liability
component was determined using present value of expected cash-flows. The
conversion component of the Convertible Note was classified as a derivative
liability. The estimated fair value of the derivative liability component was
valued using the Black-Scholes option model using the following assumptions:
volatility of 145.14%, expected term of 2 years, discount rate of 1.13% and
dividend yield of 0%. The warrants were classified as equity and were recorded
as additional paid in capital at their estimated fair value using the
Black-Scholes option model using the following assumptions: volatility of
131.93%, expected term of 3 years, discount rate of 1.13% and dividend yield of
0%.
13
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
Based on the valuation of the
instruments, the proportionate allocation of fair values of the Convertible Note
on initial recognition was allocated to the debt component as $748,591, the
derivative liability component as $845,809 and the warrants component as
$405,600.
The derivative component was further
revalued at June 30, 2016 resulting in a gain on derivative liability of $47,471
and an ending balance of $798,338. The derivative liability component was
revalued using the following assumptions: volatility of 147.71%, expected term
of 1.71 years, discount rate of 1.13% and dividend yield of 0%.
$133,395 of accretion expense was
recognized using the effective interest rate during the six months ended June
30, 2016. The debt component as at June 30, 2016 is $881,986.
(a) Common stock
During the six months ended June 30,
2016, no common stock was issued.
(b) Preferred stock
During the period ended June 30, 2016,
the Company designated 19,000,100 shares of Series A preferred stock with a par
value of $0.001 per share. Each share of preferred stock is convertible into one
common share at any time at the holders option, at a conversion of $0.12 per
share subject to the adjustments to the conversion ratio. The adjustment to the
conversion price of these preferred shares is based on the lowest of the share
price of any common shares issued, the exercise price of any options granted or
reprised, or any preferred shares issued after the issuance of these preferred
shares.
The preferred stock is unlisted,
non-retractable and non-redeemable. The preferred stockholders were entitled to
the number of votes equal to the number of whole shares of common stock into
which the preferred stock is convertible. The preferred stockholders are further
entitled to the same dividends and distributions as the common stockholders.
In connection with the issuance of the
Convertible Note (
Note 6
), 100 shares of Series A Preferred Stock, $0.001
par value, were issued to the note holder.
(c) Stock options
The Company has a stock option plan,
adopted in 2005, and a stock option/stock issuance plan, adopted in 2010, which
has been replaced by a stock incentive plan adopted in June 2015 (individually,
the 2005 Plan, the 2010 Plan, and the 2015 Plan, respectively, and,
collectively, the Plans). Under the Plans, the Company is authorized to grant
options to executive officers and directors, employees and consultants of the
Company. The 2005 Plan was originally authorized to grant 3,140,000 shares, and
the 2015 Plan was originally authorized to grant 4,641,040 shares, which amount
is increased at the end of each year to represent 10% of the total number of
shares of Common Stock outstanding on the last trading day in December of the
immediately preceding calendar year, less 3,949,500 shares. Effective January 1,
2016, the 2015 Plan authorized shares automatically increased to 5,661,944
shares. The terms of any stock options granted under the 2005 Plan may not
exceed five years and the exercise price of any stock option granted may not be
discounted below the maximum discount permitted under the policies of the
Toronto Stock Exchange. The terms of any stock options granted under the 2015
Plan may not exceed ten years and the exercise price of any stock option plan is
fixed by the plan administrator.
14
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
7.
|
CAPITAL STOCK
(continued)
|
(c) Stock options (continued)
The Company originally also adopted a
management compensation pool for the benefit of officers, directors and
employees of the Company. The pool consists of 1% of the outstanding shares at
the end of each year. The shares granted under the compensation pool program are
issued under the 2015 Plan.
The following table represents
service-based stock option activity during the six months ended June 30, 2016
and the year ended December 31, 2015:
|
|
|
June 30,
2016
|
|
|
December 31,
2015
|
|
|
|
|
Number of
|
|
|
Weighted Average
|
|
|
Number of
|
|
|
Weighted Average
|
|
|
|
|
Shares
|
|
|
Exercise Price
|
|
|
Shares
|
|
|
Exercise Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding - beginning of
period
|
|
1,375,000
|
|
$
|
0.45
|
|
|
1,225,000
|
|
$
|
0.55
|
|
|
Granted
|
|
-
|
|
$
|
-
|
|
|
300,000
|
|
$
|
0.45
|
|
|
Expired /Cancelled
|
|
-
|
|
$
|
-
|
|
|
(150,000
|
)
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding and exercisable end of period
|
|
1,375,000
|
|
$
|
0.45
|
|
|
1,375,000
|
|
$
|
0.45
|
|
As at June 30, 2016 and December 31,
2015, the following stock options were outstanding:
|
|
|
Exercise
|
|
|
June 30,
|
|
|
December 31,
|
|
|
Expiry Date
|
|
Price
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 2, 2017
|
$
|
0.45
|
|
|
375,000
|
|
|
375,000
|
|
|
December 31, 2017
|
$
|
0.45
|
|
|
1,000,000
|
|
|
1,000,000
|
|
|
|
|
|
|
|
1,375,000
|
|
|
1,375,000
|
|
The shares under option at June 30,
2016 had an intrinsic value of $nil (December 31, 2015 - $nil) and a weighted
average remaining contractual life of 1.41 (December 31, 2015 1.94) years.
(d) Stock-based compensation
During the six months ended June 30,
2016, $17,950 (2015 - $48,919) was recognized as stock-based compensation for
amortization of shares of common stock issuable upon the market performance of
the Companys stock. The remaining unamortized balance of $93,104 (2015 -
$166,929) will be amortized through July 2019.
15
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
7.
|
CAPITAL STOCK
(continued)
|
(e) Warrants
On March 16, 2016, the Company issued
warrants to purchase 8,333,333 shares of Common Stock, in connection with the
Convertible Note (
Note 6
). Each whole warrant is exercisable at $0.30 per
share until March 16, 2019.
Stock purchase warrant activity for the
period ended June 30, 2016 and the year ended December 31, 2015 is as follows:
|
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
Number
|
|
|
Average
|
|
|
Number
|
|
|
Average
|
|
|
|
|
of Warrants
|
|
|
Exercise Price
|
|
|
of Warrants
|
|
|
Exercise Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding - beginning of year
|
|
35,362,585
|
|
$
|
0.34
|
|
|
21,487,585
|
|
$
|
0.55
|
|
|
Issued
|
|
8,333,333
|
|
|
0.30
|
|
|
13,875,000
|
|
|
0.35
|
|
|
Expired
|
|
(5,048,299
|
)
|
|
0.30
|
|
|
-
|
|
|
|
|
|
Outstanding
|
|
38,647,619
|
|
$
|
0.34
|
|
|
35,362,585
|
|
$
|
0.34
|
|
As at June 30, 2016 and December 31,
2015, the following warrants were outstanding:
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
Expiry Date
|
|
Exercise Price
|
|
|
2016
|
|
|
2015
|
|
|
April 30, 2016
|
$
|
0.30
|
|
|
-
|
|
|
1,770,328
|
|
|
April 30, 2016
|
$
|
0.30
|
|
|
-
|
|
|
910,534
|
|
|
April 30, 2016
|
$
|
0.30
|
|
|
-
|
|
|
2,367,437
|
|
|
December 31, 2017
|
$
|
0.30
|
|
|
5,714,286
|
|
|
5,714,286
|
|
|
December 31, 2017
|
$
|
0.65
|
|
|
600,000
|
|
|
600,000
|
|
|
December 31, 2018
|
$
|
0.35
|
|
|
4,500,000
|
|
|
4,500,000
|
|
|
December 31, 2018
|
$
|
0.35
|
|
|
5,625,000
|
|
|
5,625,000
|
|
|
December 31, 2018
|
$
|
0.35
|
|
|
13,875,000
|
|
|
13,875,000
|
|
|
March 16, 2019
|
$
|
0.30
|
|
|
8,333,333
|
|
|
-
|
|
|
|
|
|
|
|
38,647,619
|
|
|
35,362,585
|
|
Potentially dilutive securities not
included in diluted weighted average shares outstanding include shares
underlying 1,375,000 in outstanding options and 38,647,619 in outstanding
warrants.
16
WHITE MOUNTAIN TITANIUM CORPORATION
|
Notes to Condensed Consolidated Interim Financial
Statements
|
Six months ended June 30, 2016
|
(Unaudited -
Expressed in US dollars)
|
The Company entered into a lease
agreement for office premises in China that commenced July 1, 2014 and expires
June 30, 2021. The total lease payment pursuant to the agreement is $584,018, of
which the remaining balance at June 30, 2016 is $375,440. In June 2016, the
Company reached an agreement with the landlord to terminate the lease on August
2, 2016 with a loss of a deposit of $14,000.
17