ITEM 1. FINANCIAL STATEMENTS
SIMLATUS CORP.
(FORMERLY KNOWN AS GRID PETROLEUM CORP.)
(A Development Stage Company)
Consolidated Financial Statements
(Unaudited)
(Expressed in US dollars)
Financial Statement Index
Consolidated Balance Sheets (unaudited)
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F-1
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Consolidated Statements of Operations (unaudited)
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F-2
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Consolidated Statements of Cash Flows (unaudited)
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F-3
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Notes to the Consolidated Financial Statements (unaudited)
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F-4 to F-25
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SIMLATUS CORP.
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(FORMERLY KNOWN AS GRID PETROLEUM CORP.)
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(A DEVELOPMENT STAGE COMPANY)
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CONSOLIDATED BALANCE SHEETS
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June 30,
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March 31,
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|
|
2016
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|
|
2016
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ASSETS
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|
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Current Assets
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|
|
|
|
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Cash
|
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$
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13,301
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|
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$
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2,226
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|
Inventories
|
|
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202,050
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|
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204,856
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Total Current Assets
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215,351
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|
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207,082
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|
|
|
|
|
|
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Due from related party
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16,653
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|
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16,653
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Oil & gas properties, net
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|
|
-
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|
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7,026,666
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Deposit on intangible asset, net
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|
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5,671,047
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|
|
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5,972,311
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TOTAL ASSETS
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$
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5,903,050
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$
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13,222,712
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LIABILITIES
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Current Liabilities:
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|
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Accounts payable
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$
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48,432
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$
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22,215
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Customer deposits
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19,729
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|
-
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Due to related party
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62,582
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72,807
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Notes payable, net of discount
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943,964
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|
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2,337,859
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Notes payable, interest
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121,207
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|
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373,728
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Derivative liabilities
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1,068,305
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995,645
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Stockholder loans
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181,251
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162,500
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Other short-term liabilities
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6,250,000
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|
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6,250,000
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Total Current Liabilities
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8,695,470
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10,214,753
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Long term debt
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19,108
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-
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Total Liabilities
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$
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8,714,578
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$
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10,214,753
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STOCKHOLDERS' EQUITY
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Preferred stock, $0.001 par value 20,000,000 shares authorized
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Series A: 10,000,000 shares authorized
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1,519,500 shares issued and outstanding at June 30, 2016
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1,520
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1,520
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1,519,500 shares issued and outstanding at March 31, 2016
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Series B: 10,000,000 shares authorized
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1
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1
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1,000 shares issued and outstanding at June 30, 2016
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1,000 shares issued and outstanding at March 31, 2016
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Common stock, $0.00001 par value 7,500,000,000 authorized
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45,795
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16,157
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4,579,478,015 shares issued and outstanding at June 30, 2016
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1,615,695,657 shares issued and outstanding at March 31, 2016
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Additional paid in capital
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19,713,472
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19,232,153
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Accumulated other comprehensive loss
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4,144
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4,144
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Deficit accumulated during the development stage
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(123,849
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)
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(123,849
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)
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Deficit accumulated during the exploration stage
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(22,452,611
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)
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(16,122,167
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)
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Total Stockholders' Equity
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(2,811,528
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)
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3,007,958
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$
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5,903,050
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$
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13,222,712
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The accompanying notes are an integral part of these financial statements
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SIMLATUS CORP.
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(FORMERLY KNOWN AS GRID PETROLEUM CORP.)
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(A DEVELOPMENT STAGE COMPANY)
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STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
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For the three months ended
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June 30,
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June 30,
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2016
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2015
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Sales
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$
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5,347
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$
|
-
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Cost of sales
|
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30,948
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-
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Gross profit (loss)
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(25,601
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)
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-
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Operating expenses:
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Consulting
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38,751
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7,500
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Management fees
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-
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30,000
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Professional fees
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16,138
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90,000
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Other G&A expenses
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367,086
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122,925
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Total operating expenses
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421,975
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250,425
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Loss from operations
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(447,576
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)
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(250,425
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)
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Other income/ (expense):
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Debt forgiveness
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63,400
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-
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Change in derivative liability
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73,539
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(3,642
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)
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Interest on convertible notes
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(678,982
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)
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(373,221
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)
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Loss on sale of mineral property
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|
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(5,340,824
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)
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-
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Total other income/expenses
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(5,882,868
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)
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(376,863
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)
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Net Profit (Loss)
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$
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(6,330,444
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)
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$
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(627,288
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)
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Per share information
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Basic, weighted number of common shares outstanding
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88,774,487
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6,898,408
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Net profit (loss) per common share
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(0.0713
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)
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(0.0909
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)
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The accompanying notes are an integral part of these financial statements
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SIMLATUS CORP.
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(FORMERLY KNOWN AS GRID PETROLEUM CORP.)
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(A DEVELOPMENT STAGE COMPANY)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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For the three months ended
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June 30,
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2016
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|
2015
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Operating Activities:
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|
|
|
|
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Net profit (loss) in exploration stage
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$
|
(6,330,444
|
)
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$
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(627,288
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)
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Net loss in development stage
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-
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-
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Adjustment to reconcile net loss to net cash used in operating activities
|
|
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|
|
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Change in debt discount
|
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82,596
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307,875
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Change in derivative liabilities
|
|
|
72,660
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|
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3,642
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Depreciation and amortization
|
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301,264
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|
-
|
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Changes in assets and liabilities:
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|
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|
|
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Increase (decrease) in interest payable
|
|
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(252,520
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)
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|
65,346
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Increase (decrease) in accounts payable
|
|
|
26,217
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|
|
|
999
|
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Decrease (increase) in inventories
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2,807
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|
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|
-
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Decrease (increase) in due from related party
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-
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|
170
|
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Decrease (increase) in other short-term liabilities
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-
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|
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-
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Net cash provided by operating activities
|
|
|
(6,097,422
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)
|
|
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(249,257
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)
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Investing Activities:
|
|
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Purchase/disposal of equipment
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|
|
-
|
|
|
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-
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Sale of oil & gas properties
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7,026,666
|
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|
-
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Deposit on intangible asset
|
|
|
-
|
|
|
|
-
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Net cash used in investing activities
|
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7,026,666
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|
|
-
|
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Financing Activities:
|
|
|
|
|
|
|
|
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Bank overdraft
|
|
|
-
|
|
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(39
|
)
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Proceeds from note payable
|
|
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(1,476,491
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)
|
|
|
240,000
|
|
Proceeds from stockholders' loans
|
|
|
18,751
|
|
|
|
7,500
|
|
Due to related party
|
|
|
(10,225
|
)
|
|
|
1,837
|
|
Proceeds from long term debt
|
|
|
19,108
|
|
|
|
-
|
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Proceeds from customer deposits
|
|
|
19,729
|
|
|
|
-
|
|
Issuance of preferred stock
|
|
|
-
|
|
|
|
-
|
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Issuance of common stock
|
|
|
510,957
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
(918,170
|
)
|
|
|
249,299
|
|
Accumulated other comp income
|
|
|
-
|
|
|
|
-
|
|
Net increase/(decrease) in cash
|
|
|
11,074
|
|
|
|
42
|
|
Cash, beginning of period
|
|
|
2,226
|
|
|
|
-
|
|
Cash, end of period
|
|
$
|
13,300
|
|
|
$
|
42
|
|
|
|
|
|
|
|
|
|
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Supplementary disclosure of cash flow information:
|
|
|
|
|
|
|
|
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Forgiveness of shareholders' loan
|
|
|
-
|
|
|
|
-
|
|
Forgiveness of note payable
|
|
|
63,400
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements
|
|
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Description of Business
Simlatus Corporation (the “Company”) was incorporated in the State of Nevada with the name Sunberta Resources Inc. on November 15, 2006. Simlatus Corporation develops, manufactures, markets and owns proprietary advanced broadcast equipment and software and sells this audio and video broadcast equipment worldwide. These systems have been sold worldwide over the past 15 years including some of the major broadcast companies.
On November 16, 2006, the Company acquired all the issued and outstanding shares of Sunberta Resources Inc. (“Sunberta Alberta”) an inactive corporation incorporated in the province of Alberta, Canada on September 19, 2006. The consideration for the acquisition of Sunberta Alberta was 2,000 shares (on a post-split basis) of the Company.
In January, 2007, Sunberta Alberta acquired seven placer claim tenures on southern Vancouver Island, British Columbia, Canada. During the year ended March 31, 2009, the Company abandoned three of the placer claim tenures and decided to abandon the remaining four properties. Between May 31, 2009 and June 14, 2009, the remaining four placer claim tenures expired. The carrying cost of the properties was written off and the operations associated with the properties were treated in the financial statements as discontinued operations in the year ended March 31, 2009. The Company entered the Exploration Stage on March 31, 2009, to seek other opportunities. See also note 2.
On November 18, 2009, the Company changed its name to Grid Petroleum Corp. (formerly known as Sunberta Resources, Inc.).
The Company’s activities to December 31, 2009, were carried on in Alberta and British Columbia, Canada. In February, 2010, operations were carried on in England. In mid-2010 the Company began to focus on its mineral properties in the United States, and activities of the Company thenceforth were controlled from the United States.
On May 14, 2010, the Company acquired from the CEO for nominal consideration all the issued shares of Grid Petroleum Ltd. (“Grid UK”), a company incorporated in January 27, 2010, under the laws of England. The purpose of Grid UK is to maintain bank accounts in the UK as nominee for the Company. Grid UK does not have any assets, liabilities or operations of its own.
On January 20, 2011, the Company entered into a Share Exchange Agreement (the “Agreement”) with a Nevada corporation, Joaquin Basin Resources Inc., (“Seller”), and its stockholders, (“Selling Shareholders”). Pursuant to the provisions of the Agreement, the Company issued to the Selling Shareholders (i) 62,000,000 shares of Company common stock and (ii) 2,076,324 shares of convertible preferred stock, in exchange for the transfer and delivery to the Company by the Selling Shareholders of the 62,000,000 shares of common stock issued by the Seller, which were all of the issued and outstanding securities of the Seller. As a result of the related transaction on February 1, 2011, the Seller became a wholly owned subsidiary of the Company. The issue of preferred stock was delayed until February 2012. None of the parties to the Agreement is a related person.
On May 23, 2012, we executed an agreement to acquire a 10% percent working interest, 7.5% net revenue interest, from a third party interest holder of the Garcia #3 well in Jim Wells County, Texas. The Company agreed to purchase the working interest for $300,000, payable in convertible promissory note with Direct Capital, convertible into 0.001 shares of the Company’s common stock. The convertible promissory note was executed on May 23, 2012.
On October 1, 2013 the Company executed a Convertible Promissory Note for $384,000 for oilfield management and industry support for the Company’s expansion efforts into California, Texas, and Oklahoma. Additional support has been is being provided on an ongoing basis for evaluation into North Dakota and Colorado for future expansion efforts. The note represents a monthly fee of $16,000 per month for the last 24 months of work provided to the company.
On March 9, 2016, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with RJM and Associates, LLC, a California limited liability company (“RJM”); thereby, acquiring Intellectual Property referred to as “Media IP” and inventory consisting of finished products and raw materials and supplies. RJM will assign the Media IP asset and inventories and provide “Know-How” that will enable the Company to launch a Broadcast Equipment and Digital Media Product Line, together valued at Six Million Two Hundred Fifty Thousand Dollars ($6,250,000). As consideration for the Media IP and the “Know -How”, the Buyer shall issue, or cause to be issued, $5,000,000 of Restricted Common Stock (PAR $.00001) Ninety (90) days from the date of this agreement and $1,250,000 of Preferred Series-A Shares of a GRPR Preferred Stock; (PAR $.001). The value of restricted common shares will be the closing price of the stock as of 90 days from this agreement. The maturity date for the restricted common shares will be 60 months from the date of this agreement.
On March 25, 2016, the Company approved a name change to Simlatus Corporation, stock symbol SIML, which was executed on April 4, 2016. The new name change better described the Company’s new business and new revenues in selling commercial broadcast equipment on a global basis. Simlatus Corporation develops, manufactures, markets and owns proprietary advanced broadcast equipment and software and sells this audio and video broadcast equipment worldwide. These systems have been sold worldwide over the past 15 years including some of the major broadcast companies.
The Company, respectively, owns R&D digital media/augmented reality products currently in development to develop a strategic technology roadmap which will enable the company to expand into high-growth digital television and over-the-top (OTT) markets. These products are being developed to serve a market segment that is presently being strongly embraced by consumers and is forecasted, by some of the most widely recognized tech companies in the world, as becoming a multi-billion dollar market in the very near future. The new products include “SocialCast AR”, Augmented Reality, and Virtual Reality Content Server. The target technologies include Virtual Reality, Augmented Reality, Audio/Video Codecs, Audio Content Recognition, and OTT API Integration into Key Platforms. The Market Analysis and IP Portfolio will include new patents specifically developed for these products and owned by the Company.
Principles of Consolidation
The consolidated financial statements include accounts of the current Company and the previous oil & gas operations. All significant inter-company balances and transactions are eliminated.
Cash and Cash Equivalents
Cash and cash equivalents are comprised of cash and highly liquid investments with original maturity dates of less than three months that may not be reported as investments. While the Company may maintain cash and cash equivalents in bank deposit accounts, which at times exceed Federal Deposit Insurance Corporation insured limits, they have not experienced any losses in such accounts.
Management believes it is not exposed to any significant credit risk on cash and cash equivalents.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Broadcast Equipment Products and Support Services
The company sells 55 various products related to the broadcast industry. These products are sold through a global distribution network of audio/video retailers. The company provides a quote for all related product inquiries, and the distributor provides a purchase order to confirm the itemized sale. The company accepts a deposit against the purchase order, and full payment is required prior to shipping/delivery of the product(s). The Company offers a 3-Year Limited Warranty, along with any technical support required for the customer.
Impairment of Long-Lived Assets
The Company periodically analyzes its long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of unamortized balances through measurement of undiscounted operating cash flows in accordance with ASC No. 144,
Property, Plant and Equipment
. If impairment is deemed to exist, it will be written down to its fair value. Fair value is generally determined using a discounted cash flow analysis. As of June 30, 2016, the Company does not believe any adjustment for impairment is required.
Asset Retirement Obligations
The Company has adopted FASB Accounting Standards Codification Topic (“ASC”) No. 410,
Asset Retirement and Environmental Obligations
which requires that the fair value of liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC No. 410 requires a liability to be recorded for the present value of the estimated site restoration costs with a corresponding increase to the carrying amount of the related long-lived asset. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. The Company has not incurred any asset retirement obligations as of June 30, 2016.
Use of Estimates
The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles of United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates.
Loss Per Share
Basic loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period after giving retroactive effect to the reverse stock split affected on July 27, 2015 (see Note 10). Diluted earnings (loss) per share is equal to the basic per share for the three months ended June 30, 2016 and 2015. Common stock equivalents are not included in the loss per share since they are anti-dilutive. All per share amounts have been adjusted for the reverse stock split.
Inventories
Inventories are stated at the lower of cost, computed using the first-in, first-out method and net realizable value. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of June 30, 2016, the Company’s inventories consist primarily of raw materials and supplies rather than finished goods.
Long Lived Assets Including Goodwill and Other Acquired Intangible Assets
The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its acquired intangible assets with definite useful lives over periods from three to seven years.
Fair Value of Financial Instruments
The carrying value of cash, notes payable, and accounts at June 30, 2016 and 2015 reflected in these financial statements approximates their fair value due to the short-term maturity of these financial instruments.
Income Taxes
The Company records deferred taxes in accordance with FASB ASC No. 740,
Income Taxes.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Comprehensive Income
The Company has adopted ASC No. 220, Comprehensive Income. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities.
Recent Accounting Pronouncements
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have a material impact on its results of operations or financial position.
Reclassification
Certain prior year amounts have been reclassified to conform to the current year presentation.
2. GOING CONCERN
These consolidated financial statements have been prepared on a going-concern basis which assumes the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future.
The Company has experienced substantial losses since its inception and has limited business operations, which raises substantial doubt about the Company’s ability to continue as going concern. The ability of the Company to meet its commitments as they become payable, including the completion of acquisitions, exploration and development of oil and gas properties and projects, is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.
The Company does not have sufficient cash to fund its desired research & development objectives for its augmented/virtual reality product development for the next 12 months. The Company has arranged financing as described in Note 5 and intends to draw upon this financing arrangement to fund the research & development project. This financing may be insufficient to fund expenditures or other cash requirements required to complete the product design for the augmented/virtual reality markets. There can be no assurance the Company will be successful in completing any new product development. The Company plans to seek additional financing if necessary in private or public equity offering(s) to secure future funding for operations. There can be no assurance the Company will be successful in raising additional funding. If the Company is not able to secure additional funding, the implementation of the Company’s business plan will be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.
These financial statements do not give effect to adjustments to the amounts and classification to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
3. OIL AND GAS PROPERTIES
On January 20, 2011, the Company purchased, through its subsidiary Joaquin Basin Resources Inc., a 50% working interest (37% net revenue interest) in a mineral lease on 4,000 acres in Kings and Fresno counties in California. The lease was initially recorded at the cost of issuing 62,000,000 common shares. On January 20, 2012, 2,076,000 shares of convertible preferred stock were issued in concluding the Joaquin Basin purchase agreement. The cost of the issue, $4,152,000, was based on the value of preferred stock as if converted to common stock. The total cost, $7,026,666, was supported by a volumetric analysis.
On November 21, 2011, a portion of the interest in the lease was swapped for a future “carry” of exploration costs and administration of the lease. Grid’s 50% working interest (37.5% net revenue interest) was reduced to 30% and 14% respectively. The co-lessee, is the obligor under the agreement. Future exploration costs include the operating “carry” costs of the lease and drilling costs of the first well, named “First Farmin Well.” The exploration costs were valued based on the percentage reduction in net revenue interest. A reduction of $4,825,334 in the value of the Joaquin Basin property was recorded.
Impairment of the California properties from their recorded acquisition values was considered at March 31, 2015 and 2014. Management considered that there were no changes in circumstances that would warrant impairment from the estimated values indicated by independently prepared geological reports.
On October 18, 2013, the Company entered into an Asset Swap Agreement (the “Asset Swap Agreement”) by and amongst the Company, Xploration Inc., a Nevada Corporation (“Xploration”) and Solimar Energy, LLC, a California limited liability company (“Solimar”); thereby, swapping certain land leases as described below, forgiveness of delay rentals and terminating the (a) Kreyenhagen Trend Joint Operating Agreement dated March 1, 2011, between Solimar and Xploration (“Kreyenhagen Trend JOA”), (b) Jacalitos Joint Operating Agreement dated March 1, 2011, between Solimar and Xploration (“Jacalitos JOA”) and the (c) Farmin / Settlement Agreement dated November 3, 2011, between Solimar and Xploration, with an effective date as of September 1, 2013.
Solimar assigned eighty four percent (84%) of its interest in the Bureau of Land Management Lease, serial number: CACA 49877 representing 1,140.62 gross and net landowner acres that is a part of the Kreyenhagen Trend to the Company.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
The Company has oil and gas properties in Wyoming which it does not wish to develop and, accordingly has recorded an impairment in the amount of $85,334 at March 31, 2013.
In connection with an Amendment to an Asset Purchase Agreement dated November 21, 2011, the Company recorded rights to future exploration costs in the amount of $4,825,334 on its balance sheet as of March 31, 2012. The Company recorded a full impairment as of March 31, 2013.
Oil and gas properties are summarized as follows as of March 31, 2016:
|
|
|
|
|
|
Proved
|
|
Unconventional Acreage
|
|
$
|
7,026,666
|
|
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc., whereby Direct Capital Group, Inc., agreed to cancel $1,685,842 in notes payable in exchange for acquired oil and gas leases valued at $7,026,666. The Company recorded a loss on the sale of property of $5,340,824 as of June 30, 2016. Furthermore, Direct Capital Group, Inc., agreed to cancel any further liabilities associated with exploration and development costs and the acquired oil and gas lease of properties in California associated with Direct Capital Group, Inc.; and Direct Capital Group, Inc. agreed to accept the ongoing liabilities of the exploration and development costs and the acquired oil and gas leases.
4. INTANGIBLE ASSETS
On March 9, 2016, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with RJM and Associates, LLC, a California limited liability company (“RJM”); thereby, acquiring Intellectual Property referred to as “Media IP” and inventory consisting of finished products and raw materials and supplies. RJM will assign the Media IP asset and inventories and provide “Know-How” that will enable the Company to launch a Broadcast Equipment and Digital Media Product Line. The total purchase price consideration for these acquisitions was Six Million Two Hundred Fifty Thousand Dollars ($6,250,000), which consisted of inventory at $204,856, and $6,045,144 to acquired intangible asset. The final transactions of the Agreement with be completed after the date of this report.
The Company’s acquired intangible assets with definite useful lives primarily consist of Media IP and “Know-How” and are amortized over a period typically five years. The following table summarizes the components of gross and net intangible asset balances as of June 30, 2016:
|
|
June 30, 2016
|
|
|
|
Gross
|
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Accumulated
|
|
|
Net Carrying
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
Definite-lived and amortizable acquired intangible assets
|
|
$
|
6,045,144
|
|
|
$
|
(374,097
|
)
|
|
$
|
5,671,047
|
|
Total acquired intangible assets
|
|
$
|
6,045,144
|
|
|
$
|
(374,097
|
)
|
|
$
|
5,671,047
|
|
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
5. NOTES PAYABLE
Notes payable comprised as the following:
|
|
June 30,
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2016
|
|
Special Situations
|
|
|
-
|
|
|
|
21,491
|
|
Direct Capital #1
|
|
|
47,121
|
|
|
|
70,671
|
|
Direct Capital #2
|
|
|
311,385
|
|
|
|
330,035
|
|
Direct Capital #3
|
|
|
-
|
|
|
|
360,000
|
|
Direct Capital #4
|
|
|
-
|
|
|
|
360,000
|
|
Direct Capital #5
|
|
|
-
|
|
|
|
240,000
|
|
Direct Capital #6
|
|
|
240,000
|
|
|
|
240,000
|
|
Direct Capital #7
|
|
|
140,000
|
|
|
|
240,000
|
|
Direct Capital #8
|
|
|
-
|
|
|
|
72
|
|
Direct Capital #11
|
|
|
11,000
|
|
|
|
11,000
|
|
Direct Capital #17
|
|
|
16,000
|
|
|
|
16,000
|
|
Direct Capital #18
|
|
|
-
|
|
|
|
23,000
|
|
Direct Capital #20
|
|
|
-
|
|
|
|
45,157
|
|
Direct Capital #21
|
|
|
-
|
|
|
|
80,000
|
|
Direct Capital #22
|
|
|
-
|
|
|
|
80,000
|
|
Direct Capital #23
|
|
|
-
|
|
|
|
80,000
|
|
Direct Capital #24
|
|
|
-
|
|
|
|
80,000
|
|
Direct Capital #25
|
|
|
-
|
|
|
|
80,000
|
|
Direct Capital #26
|
|
|
25,000
|
|
|
|
-
|
|
Direct Capital #27
|
|
|
36,000
|
|
|
|
-
|
|
Syndication Capital #1
|
|
|
-
|
|
|
|
5,000
|
|
Coventry Enterprises #2
|
|
|
-
|
|
|
|
2,114
|
|
LG Capital Funding
|
|
|
26,100
|
|
|
|
29,000
|
|
Blackbridge Capital #1
|
|
|
-
|
|
|
|
2,000
|
|
GW Holdings
|
|
|
42,500
|
|
|
|
46,500
|
|
ARC Capital Ltd
|
|
|
21,625
|
|
|
|
21,625
|
|
Microcap Equity
|
|
|
-
|
|
|
|
4,180
|
|
GHS Investment #1
|
|
|
-
|
|
|
|
12,748
|
|
Southridge Partners
|
|
|
-
|
|
|
|
15,655
|
|
Tide Pool
|
|
|
-
|
|
|
|
14,500
|
|
Anthony Super
|
|
|
24,000
|
|
|
|
23,020
|
|
V2IP LLC #1
|
|
|
-
|
|
|
|
-
|
|
Rockwell Capital #3
|
|
|
-
|
|
|
|
-
|
|
GHS Investment #2
|
|
|
6,146
|
|
|
|
-
|
|
Blackbridge Capital #2
|
|
|
80,400
|
|
|
|
-
|
|
V2IP LLC #2
|
|
|
10,000
|
|
|
|
-
|
|
Carl Ambrose
|
|
|
20,000
|
|
|
|
-
|
|
|
|
$
|
1,057,277
|
|
|
$
|
2,533,768
|
|
Debt discount
|
|
|
(113,313
|
)
|
|
|
(195,909
|
)
|
Notes payable, net of discount
|
|
$
|
943,964
|
|
|
$
|
2,337,859
|
|
Accrued interest
|
|
|
121,207
|
|
|
|
373,728
|
|
|
|
$
|
1,065,171
|
|
|
$
|
2,711,586
|
|
SIMLATUS CORPORATION
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Special Situations Fund One Note
On March 12, 2012, the Company arranged a debt swap under which an Asher Enterprises note for $40,000 was transferred to Special Situations Fund One for the Asher note plus an additional $21,491, for a total of $61,491. On April 4, 2013, the Company transferred $40,000 of the note to Asher Enterprises. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 12, 2012. During the three months ended June 30, 2016 and 2015, the Company accrued $0 and $429 respectively in interest expense.
On September 9, 2012, the Company recorded a derivative liability of $71,218, being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $318 and $144 respectively due to the change in value of the derivative liability during the period.
On April 20, 2016, the Company accepted the request from Special Situations Fund One Inc. to extinguish the note for $21,491 plus accrued interest of $12,754, and the derivative liability amounting to $42,019 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $21,491 respectively, accrued interest of $0 and $11,458 respectively, and a derivative liability of $0 and $21,173 respectively was recorded.
Direct Capital Note #1
On December 31, 2012, the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the amount of $70,671. The promissory note is unsecured, is interest free and is due on demand. The note may be converted at the option of the holder into common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the average of the lowest trading price in the fifteen days prior to the conversion date.”
On December 31, 2012, the Company recorded an initial derivative liability of $94,326 being the fair value of the conversion feature which was determined using the Black-Scholes valuation method. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $5,204 and a loss of $480 due to the change in value of the derivative liability during the period.
On April 27, 2016, the principal balance of $23,550 was reassigned to Rockwell Capital Partners Inc., and the derivative liability amounting to $46,973 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $47,121 and $70,671 respectively and a derivative liability of $87,710 and $127,362 respectively was recorded.
Direct Capital Note #2
On October 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $384,000. The promissory note is unsecured, bears interest at 6% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date shall bear interest at the rate of 12% per annum. During the three months ended June 30, 2016 and 2015, the Company accrued $9,446 and $11,393 respectively in interest expense.
The note may be converted at the option of the holder into common stock of the Company. The conversion price is 70% of the market price, where market price is defined as “the average of the lowest three of the last ten closing trading prices on the OTCBB immediately prior to conversion date.”
On October 31, 2013 the Company recorded a debt discount and derivative liability of $268,330, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $31,303 and a loss of $2,235 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 373,000,000 common shares upon the conversion of principal amount of $18,650. The derivative liability amounting to $26,457 was re-classified to additional paid in capital.
On March 24, 2016, accrued interest of $30,000 was reassigned to Anthony Super. On April 12, 2016, accrued interest of $10,000 was reassigned to V2IP, LLC. On May 13, 2016, accrued interest of $20,000 was reassigned to V2IP, LLC.
At June 30, 2016 and 2015, principal balance of $31,385 and $380,800 respectively, accrued interest of $50,592 and $68,834 respectively, and a derivative liability of $407,944 and $479,481 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #3
On October 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $9,330 and $19,746 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 1, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $360,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $989 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $360,000 plus accrued interest of $103,029 for a total amount of $463,029.
At June 30, 2016 and 2015, principal balance of $0 and $360,000 respectively and accrued interest of $0 and $34,027 respectively was recorded.
Direct Capital Note #4
On January 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $9,330 and $7,180 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On January 1, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $360,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $181,972 respectively was accreted to the statement of operations.
On March 11, 2016, accrued interest of $20,000 was reassigned to Tide Pool Ventures Capital.
On May 19, 2016, Direct Capital Group canceled the assignment with Tide Pool Ventures Capital due to non-payment for the remaining debt. Further, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $360,000 plus accrued interest of $63,204 for a total amount of $423,204.
At June 30, 2016 and 2015, principal balance of $0 and $360,000 respectively, accrued interest of $0 and $14,203 respectively, and a debt discount of $0 and $1,011 respectively, was recorded.
Direct Capital Note #5
On March 31, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 30, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $6,220 and $4,787 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On March 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $119,344 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $240,000 plus accrued interest of $42,319 for a total amount of $282,319.
At June 30, 2016 and 2015, principal balance of $0 and $240,000 respectively, accrued interest of $0 and $4,787 respectively, and a debt discount of $0 and $120,656 respectively, was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #6
On June 30, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 30, 2015. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $13,164 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On June 30, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $0 respectively was accreted to the statement of operations.
On April 28, 2016, accrued interest of $15,886 was reassigned to GHS Investments, LLC.
At June 30, 2016 and 2015, principal balance of $240,000 and $240,000 respectively, accrued interest of $20,121 and $0 respectively, and a debt discount of $0 and $240,000 respectively, was recorded.
Direct Capital Note #7
On September 30, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $9,668 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On September 30, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $0 respectively was accreted to the statement of operations.
On May 3, 2016, the principal amount of $100,000 was reassigned to Blackbridge Capital, LLC.
At June 30, 2016 and 2015, principal balance of $140,000 and $0 respectively and accrued interest of $19,294 and $0 respectively was recorded.
Direct Capital Note #8
On July 31, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $14,072. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $2 and $772 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On July 1, 2015, the principal amount of $14,000 was reassigned to Santa Rosa Resources, Inc.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $72 plus accrued interest of $4,941 for a total amount of $5,013.
At June 30, 2016 and 2015, principal balance of $0 and $14,072 respectively and accrued interest of $0 and $4,927 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #11
On September 30, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $603 and $603 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
At June 30, 2016 and 2015, principal balance of $11,000 and $11,000 respectively and accrued interest of $5,879 and $3,453 respectively was recorded.
Direct Capital Note #17
On March 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $878 and $878 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
At June 30, 2016 and 2015, principal balance of $16,000 and $16,000 respectively and accrued interest of $6,795 and $3,265 respectively, was recorded.
Direct Capital Note #18
On April 30, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $596 and $2,633 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 23, 2015, the principal amount of $25,000 was reassigned to GHS Investments, LLC.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $23,000 plus accrued interest of $15,060 for a total amount of $38,060.
At June 30, 2016 and 2015, principal balance of $0 and $48,000 respectively and accrued interest of $0 and $8,919 respectively was recorded.
Direct Capital Note #19
On July 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $0 and $2,633 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On September 30, 2015, the principal balance of $48,000 was reassigned to Blackbridge Capital, LLC.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $8,919 of accrued interest for a total amount of $8,919.
At June 30, 2016 and 2015, principal balance of $0 and $48,000 respectively and accrued interest of $0 and $6,257 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #20
On October 31, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the note was reassigned to Direct Capital Group, Inc.
During the three months ended June 30, 2016 and 2015, the Company accrued $1,170 and $2,062 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 31, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $48,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $0 and $5,436, respectively was accreted to the statement of operations.
On October 15, 2015, the principal balance of $48,000 and accrued interest of $6,419 was reassigned to Tangiers Investment Group, LLC.
On January 1, 2016, the principal balance of $45,157 and accrued interest of $795 was reassigned back to Direct Capital Group, LLC from Tangiers Investment Group, LLC.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $45,157 plus accrued interest of $4,415 for a total amount of $49,572.
At June 30, 2016 and 2015, principal balance of $0 and $48,000 respectively, and accrued interest of $0 and $3,651 respectively was recorded.
Direct Capital Note #21
On October 31, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 30, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $1,153 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $8,767 and $0 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $80,000 plus accrued interest of $3,818 for a total amount of $83,818.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and debt discount of $0 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #22
On November 30, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $754 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On November 30, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $22,149 and $0 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $80,000 plus accrued interest of $2,893 for a total amount of $82,893.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and debt discount of $0 and $0 respectively was recorded.
Direct Capital Note #23
On December 31, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 30, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $754 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On December 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $40,000 and $0 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $80,000 plus accrued interest of $2,350 for a total amount of $82,350.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and debt discount of $0 and $0 respectively was recorded.
Direct Capital Note #24
On January 31, 2016 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $754 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On January 31, 2016, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $53,626 and $0 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $80,000 plus accrued interest of $1,806 for a total amount of $81,806.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and debt discount of $0 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Direct Capital Note #25
On February 29, 2016 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 31, 2016. Any principal amount not paid by the maturity date shall bear interest at a rate of 22% annum. The Conversion Price shall mean par $.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933
During the three months ended June 30, 2016 and 2015, the Company accrued $754 and $0 respectively in interest expense.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On February 29, 2016, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the three months ended June 30, 2016 and 2015 debt discount of $66,522 and $0 respectively was accreted to the statement of operations.
On May 19, 2016, the Company entered into an agreement with Direct Capital Group, Inc. to extinguish the note for $80,000 plus accrued interest of $1,298 for a total amount of $81,298.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and debt discount of $0 and $0 respectively was recorded.
Direct Capital Note #26
On April 7, 2016, the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the amount of $25,000. The promissory note is unsecured, bears interest at 6% per annum, and matures on October 7, 2016. Any principal amount not paid by the maturity date shall bear interest at the rate of 8% per annum. The note may be converted at the option of the holder into common stock of the Company. The conversion price is 32% of the average closing stock price five days prior to the conversion date.
During the three months ended June 30, 2016 and 2015, the Company accrued $345 and $0 respectively in interest expense.
On April 7, 2016 the Company recorded a debt discount and derivative liability of $78,006, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $4,102 and $0, respectively due to the change in value of the derivative liability during the period. During the three months ended June 30, 2016 and 2015, the debt discount of $11,475 and $0 respectively was accreted to the statement of operations.
At June 30, 2016 and 2015, principal balance of $25,000 and $0 respectively, accrued interest of $345 and $0 respectively, debt discount of $13,525 and $0 respectively, and a derivative liability of $73,904 and $0 respectively was recorded.
Direct Capital Note #27
On May 17, 2016, the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the amount of $36,000. The promissory note is unsecured, bears interest at 6% per annum, and matures on November 17, 2016. Any principal amount not paid by the maturity date shall bear interest at the rate of 8% per annum. The note may be converted at the option of the holder into common stock of the Company. The conversion price is 32% of the average closing stock price five days prior to the conversion date.
During the three months ended June 30, 2016 and 2015, the Company accrued $260 and $0 respectively in interest expense.
On May 17, 2016 the Company recorded a debt discount and derivative liability of $112,245, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $5,823 and $0, respectively due to the change in value of the derivative liability during the period. During the three months ended June 30, 2016 and 2015, the debt discount of $8,609 and $0 respectively was accreted to the statement of operations.
At June 30, 2016 and 2015, principal balance of $36,000 and $0 respectively, accrued interest of $260 and $0 respectively, debt discount of $27,391 and $0 respectively, and a derivative liability of $106,422 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Syndication Capital Note #1
On December 31, 2012, the Company entered into a Convertible Promissory Note with Syndication Capital, LLC, Inc. in the amount of $105,000. The promissory note is unsecured, is interest free and is due on demand. The note may be converted at the option of the holder into common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the average of the lowest three trading price in the ten days prior to the conversion date.” The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
On December 31, 2012, the Company recorded an initial derivative liability of $140,146 being the fair value of the conversion feature which was determined using the Black-Scholes valuation method.
On August 4, 2013, the Company transferred $100,000 of the note to Gel Properties, LLC and recorded a credit to derivative liability of $453,305.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $75 and $34 respectively due to the change in value of the derivative liability during the period.
On April 20, 2016, the Company accepted the request from Direct Capital Group to extinguish the note for $5,000, and the derivative liability amounting to $9,972 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $5,000 respectively and a derivative liability of $0 and $9,011 respectively was recorded.
Coventry Enterprises Note #2
On March 3, 2014, the Company arranged a debt swap under which an Xploration, Inc. note for $4,000 in principal and $46,000 in interest was transferred to Coventry Enterprises, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on March 3, 2015. Any principal amount not paid by the maturity date bears interest at 24% per annum. During the three months ended June 30, 2016 and 2015, the Company accrued $21 and $1,197 respectively in interest expense.
On March 3, 2014 the Company recorded a debt discount and derivative liability of $63,693, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $31 and $126 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 42,282,200 common shares upon the conversion of principal amount of $2,114. The derivative liability amounting to $3,514 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $20,000 respectively, accrued interest of $4,942 and $3,056 respectively, and a derivative liability of $0 and $29,692 respectively, was recorded.
LG Capital Funding Note
On March 3, 2014, the Company arranged a debt swap under which an Xploration, Inc. note for $40,000 was transferred to LG Capital Funding, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on March 3, 2015. Any principal amount not paid by the maturity date bears interest at 24% per annum. During the three months ended June 30, 2016 and 2015, the Company accrued $1,625 and $1,735 respectively in interest expense.
On March 3, 2014 the Company recorded a debt discount and derivative liability of $63,048, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $3,036 and a loss of $197 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 67,699,600 common shares upon the conversion of the principal amount of $2,900 and accrued interest of $485. The derivative liability amounting to $5,785 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $26,100 and $29,000 respectively, accrued interest of $10,937 and $4,554 respectively, and a derivative liability of $48,582 and $52,264 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Blackbridge Capital Note #1
On September 30, 2015, the Company reassigned $48,000 of the principal balance of a Direct Capital Note to Blackbridge Capital, LLC. The original note was issued on July 31, 2014 in the sum of $48,000. The promissory note is unsecured, bears interest at 5% per annum, and matures on February 28, 2016. During the three months ended June 30, 2016 and 2015, the Company accrued $0 and $0 respectively in interest expense.
On September 30, 2015 the Company recorded a debt discount and derivative liability of $96,000, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $1,959 and $0 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued 150,000,000 common shares pursuant to a reset notice and 200,000,000 common shares pursuant to a Settlement and Release Agreement, which settles the outstanding principal balance of $2,000 and accrued interest of $135. The derivative liability amounting to $2,000 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
Blackbridge Capital Note #2
On May 3, the Company reassigned $100,000 of the principal balance of a Direct Capital Note to Blackbridge Capital, LLC. The original note was issued on September 30, 2015 in the sum of $240,000. The promissory note is unsecured, bears interest at 5% per annum, and matures on May 3, 2017. During the three months ended June 30, 2016 and 2015, the Company accrued $652 and $0 respectively in interest expense.
On May 3, 2016, the Company recorded a debt discount and derivative liability of $199,448, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $10,700 and $0 respectively due to the change in value of the derivative liability during the period, and the debt discount of $32,341 and $0 respectively, was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 400,000,000 common shares upon the conversion of the principal amount of $19,600. The derivative liability amounting to $39,093 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $80,400 and $0 respectively, accrued interest of $652 and $0 respectively, debt discount of $67,659 and $0 respectively, and a derivative liability of $149,655 and $0 respectively was recorded.
ARC Capital Ltd Note
On October 2, 2015, the Company reassigned $21,625 of the principal balance and accrued interest of a Direct Capital Note to ARC Capital Ltd. The original note was issued on January 31, 2014 and had a principal balance of $16,000 and accrued interest of $5,625. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 2, 2016. During the three months ended June 30, 2016 and 2015, the Company accrued $431 and $0 respectively in interest expense.
On October 2, 2015 the Company recorded a debt discount and derivative liability of $51,900, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $2,553 and $0 respectively due to the change in value of the derivative liability during the period and debt discount of $120 and $0 respectively was accreted to the statement of operations.
At June 30, 2016 and 2015, principal balance of $21,625 and $0 respectively, accrued interest of $1,289 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $40,252 and $0 respectively was recorded.
GW Holdings Group LLC Note
On October 13, 2015, the Company reassigned $60,411 of the principal balance and accrued interest of a New Venture Attorneys Note to GW Holdings Group LLC. The original note was issued on April 1, 2014 and had a principal balance of $50,000 and accrued interest of $10,411. During the three months ended June 30, 2016 and 2015, the Company accrued $153 and $0 respectively in interest expense.
On October 13, 2015 the Company recorded a debt discount and derivative liability of $159,082, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $4,949 and $0 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 83,050,958 common shares upon the conversion of the principal amount of $4,000 and accrued interest of $153. The derivative liability amounting to $7,985 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $42,500 and $0 respectively, and a derivative liability of $79,109 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Microcap Equity Group LLC Note
On October 15, 2015, the Company reassigned the principal balance and accrued interest of a Direct Capital Group Note to Microcap Equity Group LLC. The original note was issued on December 31, 2013 and had a principal balance of $16,000 and accrued interest of $5,033.
On October 15, 2015 the Company recorded a debt discount and derivative liability of $32,000, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $1 and $0 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 145,040,000 common shares upon the conversion of principal amount of $4,180 and accrued interest of $3,072. The derivative liability amounting to $8,275 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively, was recorded.
GHS Investments LLC Note #1
On October 23, 2015, the Company reassigned $25,000 of the principal amount of a Direct Capital Note to GHS Investments LLC. The original note was issued on April 30, 2014 with a principal balance of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 25, 2016. During the three months ended June 30, 2016 and 2015, the Company accrued $0 and $0 respectively in interest expense.
On October 23, 2015 the Company recorded a debt discount and derivative liability of $76,316, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $201 and $0 respectively due to the change in value of the derivative liability during the period and the debt discount of $4,725 and $0 respectively was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 266,709,600 common shares upon the conversion of the principal amount of $12,748 and accrued interest of $588. The derivative liability amounting to $25,424 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
GHS Investments LLC Note #2
On April 28, 2016, the Company reassigned $15,886 of accrued interest of a Direct Capital Note to GHS Investments LLC. The original note was issued on April 30, 2014 with a principal balance of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 28, 2017. During the three months ended June 30, 2016 and 2015, the Company accrued $100 and $0 respectively in interest expense.
On April 28, 2016 the Company recorded a debt discount and derivative liability of $31,687, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $820 and $0 respectively due to the change in value of the derivative liability during the period and the debt discount of $11,148 and $0 respectively was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 194,800,000 common shares upon the conversion of the principal amount of $9,740. The derivative liability amounting to $19,427 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $6,146 and $0 respectively, accrued interest of $100 and $0 respectively, debt discount of $4,738 and $0 respectively, and a derivative liability of $11,440 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Southridge Partners LP Note
On October 27, 2015, the Company reassigned $30,730 of the principal balance and accrued interest of two Direct Capital Note to Southridge Partners LP. The original notes were issued on July 31, 2013 and August 31, 2013, and had a principal balance of $11,000 and $11,000 respectively and accrued interest of $4,461 and $4,269 respectively. During the three months ended June 30, 2016 and 2015, the Company accrued $0 and $0 respectively in interest expense.
On October 27, 2015 the Company recorded a debt discount and derivative liability of $38,817, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $234 and $0 respectively due to the change in value of the derivative liability during the period.
On April 20, 2016, the Company accepted the request from Direct Capital Group to extinguish the note for $15,655, and the derivative liability of $31,222 was reclassified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, accrued interest of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
Tide Pool Note
On March 11, 2016, the Company reassigned $20,000 of the accrued interest amount of a Direct Capital Note to Tide Pool Ventures Corporation. The original note was issued on January 1, 2015 with a principal balance of $360,000.
On March 11, 2016 the Company recorded a debt discount and derivative liability of $39,725, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a loss of $220 and $0 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 120,000,000 common shares upon the conversion of principal amount of $6,000. The derivative liability amounting to $11,968 was re-classified to additional paid in capital.
On May 11, 2016, the Company accepted the request from Direct Capital Group to extinguish the note for $8,500, and the derivative liability of $16,954 was reclassified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
Anthony Super Note
On March 24, 2016, the Company reassigned $30,000 of the accrued interest amount of a Direct Capital Note to Anthony Super. The original note was issued on October 1, 2013 with a principal balance of $384,000.
On March 24, 2016 the Company recorded a debt discount and derivative liability of $59,572, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On April 1, 2016, the Company recorded a credit of $3,490 to the principal balance, a gain of $23 to change in fair value of the derivative liability and the derivative liability of $10,421 was re-classified to additional paid in capital. These entries made were to correct the conversion price on a conversion completed during the prior quarter.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $2,795 and $0 respectively due to the change in value of the derivative liability during the period.
During the three months ended June 30, 2016 the Company issued an aggregate of 50,200,000 common shares upon the conversion of principal amount of $2,510. The derivative liability amounting to $5,006 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $24,000 and $0 respectively, and a derivative liability of $44,673 and $0 respectively was recorded.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
Rockwell Capital Partners Note #3
On April 27, 2016, the Company reassigned $23,550 of principal of a Direct Capital Note to Rockwell Capital Partners Inc. The original note was issued on December 31, 2012 with a principal balance of $70,671.
On April 27, 2016 the Company recorded a debt discount and derivative liability of $46,973, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $1 and $0 respectively due to the change in value of the derivative liability during the period and the debt discount of $23,550 and $0 respectively was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 471,000,000 common shares upon the conversion of principal amount of $23,550. The derivative liability amounting to $46,972 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
V2IP, LLC Note #1
On April 12, 2016, the Company reassigned $10,000 of accrued interest of a Direct Capital Note to V2IP, LLC. The original note was issued on October 1, 2013 with a principal amount of $384,000.
On April 12, 2016 the Company recorded a debt discount and derivative liability of $19,972, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $16 and $0 respectively due to the change in value of the derivative liability during the period and the debt discount of $10,000 and $0 respectively was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 200,000,000 common shares upon the conversion of principal amount of $10,000. The derivative liability amounting to $19,956 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $0 and $0 respectively, debt discount of $0 and $0 respectively, and a derivative liability of $0 and $0 respectively was recorded.
V2IP, LLC Note #2
On May 13, 2016, the Company reassigned $20,000 of accrued interest of a Direct Capital Note to V2IP, LLC. The original note was issued on October 1, 2013 with a principal amount of $384,000.
On May 13, 2016 the Company recorded a debt discount and derivative liability of $39,891, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the three months ended June 30, 2016 and 2015, the Company recorded a gain of $1,335 and $0 respectively due to the change in value of the derivative liability during the period and the debt discount of $20,000 and $0 respectively was accreted to the statement of operations.
During the three months ended June 30, 2016 the Company issued an aggregate of 200,000,000 common shares upon the conversion of principal amount of $10,000. The derivative liability amounting to $19,942 was re-classified to additional paid in capital.
At June 30, 2016 and 2015, principal balance of $10,000 and $0 respectively, and a derivative liability of $18,614 and $0 respectively was recorded.
Carl Ambrose Note
On June 6, 2016, the Company entered into a promissory note with Carl Ambrose in the amount of $20,000. The note is interest free and is due ninety days from the date of the agreement.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
6. LONG TERM NOTE PAYABLE
Frank Trapp Notes
On April 1, 2016, the Company agreed to allow two promissory notes with Frank Trapp in the total amount of $25,000, previously held by RJM Associates, to be transferred to the Company. The notes were issued on September 18, 2014 and November 3, 2015, and had a principal balance of $10,000 and $15,000 respectively, are due on August 1, 2016 and December 1, 2017, respectively, and are accruing interest at 5% per annum. As of April 1, the total principal and interest balance on the notes was $21,208. During the three months ended June 30, 2016, the Company made payments of $2,100, leaving a balance of $19,208 as of June 30, 2016.
7. DERIVATIVE LIABILITIES
The Company issued financial instruments in the form of convertible notes with embedded conversion features. Some of the convertible notes payable have conversion rates, which are indexed to the market value of the Company’s stock price. During the three months ended June 30, 2016 and 2015, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $528,222 and $0 respectively. During the three months ended June 30, 2016 and 2015, $132,424 and $0 respectively of convertible notes payable principal and accrued interest was converted into common stock of the Company. For the three months ended June 30, 2016 and 2015, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $382,024 and $0 respectively, was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the three months ended June 30, 2016 and 2015, the Company recognized a gain of $73,539 and a loss of $3,642 respectively based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.
These derivative liabilities have been measured in accordance with fair value measurements, as defined by ASC 820. The valuation assumptions are classified within Level 1 and Level 2 inputs. The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above.
The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above
:
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
Balance, beginning of year
|
|
$
|
995,645
|
|
|
$
|
843,376
|
|
Initial recognition of derivative liability
|
|
|
528,222
|
|
|
|
-
|
|
Conversion of derivative instruments to Common Stock
|
|
|
(382,024
|
)
|
|
|
-
|
|
Mark-to-Market adjustment to fair value
|
|
|
(73,539
|
)
|
|
|
3,642
|
|
Balance, end of year
|
|
$
|
1,068,305
|
|
|
$
|
847,018
|
|
These instruments were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation. The instruments do not qualify for hedge accounting, and as such, all future changes in the fair value will be recognized currently in earnings until such time as the instruments are exercised, converted or expire.
8. RELATED PARTY TRANSACTIONS
Related party transaction is not disclosed elsewhere in the consolidated financial statements are as follows:
On September 9, 2015 James Powell announced his resignation as President, Secretary, Treasure, and Director of the Company. There are no known disagreements with Mr. Powell regarding such resignation or any claims the Company may have against him.
On September 9, 2015 Edward Aruda was appointed President, Director, Secretary, and Treasurer of the Company.
On March 9, 2016, Mr. Aruda, tendered his resignation as President, Secretary and Treasurer. Mr. Aruda will remain a Director of the Company. Mr. Aruda’s resignation was not due to any disagreement on any matter relating to the operations, policies, or practices of the Company.
On March 21, 2016, Mr. Aruda, signed an agreement to waive all of his unpaid salary and expenses to date in the amount of $8,000. This debt has been canceled and removed from the financial statements.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited)
The Company is indebted to its former officers as follows:
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
Edward Aruda
|
|
$
|
-
|
|
|
$
|
-
|
|
James Powell
|
|
|
162,500
|
|
|
|
157,500
|
|
Tim DeHererra
|
|
|
-
|
|
|
|
358,459
|
|
|
|
$
|
162,500
|
|
|
$
|
515,959
|
|
The amounts consist of unpaid salary and advances made on behalf of the Company. The loans carry no interest, are unsecured, are due on demand and have no maturity.
During the three months ended June 30, 2016 and 2015, the Company accrued debt to Direct Capital Group of $0 and $240,000 which was converted into convertible debt.
During the three months ended June 30, 2016 and 2015, the Company is indebted to Direct Capital Group for $0 and $36,530 respectively for a total amount due of $62,582.
9. PREFERRED STOCK
On January 25, 2011 the Company filed an amendment to its Nevada Certificate of Designation to create two new series of preferred stock:
Preferred Series A - par value $0.001 - 10,000,000 shares authorized
Preferred Series B - par value $0.001 – 10,000,000 shares authorized
The preferred stock may be converted at will to common stock in the ratio of 0.005 preferred share to one common share.
On January 31, 2012, 2,076,000 shares of Preferred Series A stock were issued in completion of the agreement signed January 20, 2011, wherein the Company acquired100% of the outstanding common stock of Joaquin Basin Resources, Inc., owner of an oil & gas property. There being no market for the shares, they were valued at the prevailing market price of $0.01 for the number of post-conversion shares of common stock. The value, $4,152,000, was assigned to the cost of the Joaquin Basin oil & gas property.
On January 31, 2012, 111,000 shares of Series A Preferred Stock were converted to 22,200,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.
On April 23, 2012, 80,000 shares of Series A Preferred Stock were converted to 16,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.
On August 14, 2012, 328,000 shares of Series A Preferred Stock were converted to 65,600,000 shares of common stock at the conversion ratio of .005 preferred to 1 common, according to the attributes of the preferred stock. The securities exchanged had equal value, resulting in no gain or loss on the transaction.
On October 12, 2012, 125,000 shares of Series A Preferred Stock were converted into 25,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The securities exchanged had equal value, resulting in no gain or loss on the transaction.
On September 20, 2013, 112,500 shares of Series A Preferred Stock were converted to 112,500,000 shares of common stock.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
On July 1, 2015, the Company’s Board of Directors authorized the creation of 1,000 shares of Series B Voting Preferred Stock. The holder of the shares of the Series B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter or action that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series B Voting Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Company’s (i) common stock, and (ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of the Company regarding each and every matter submitted to the shareholders of the Company for approval.
On July 1, 2015, the Company filed a Certificate of Designation with the Nevada Secretary of State creating the 1,000 shares of Series B Voting Preferred Stock
On July 27, 2015, the Company issued 1,000 shares of Series B Voting Preferred Stock to Santa Rosa, representing 100% of the total issued and outstanding shares of the Company’s Series B Voting Preferred Stock.
On March 21, 2016 Mr. DeHererra, agreed to convert all of his outstanding salary and unpaid expenses to Preferred Series A Stock. The Company issued 200,000 shares of Preferred Series A stock to satisfy $358,459 of debt owed to Mr. DeHererra. The stock is locked-up for 24 months.
On April 3, 2016, 1,000 Preferred Stock Series B shares issued to Santa Rosa Resources, Inc. was transferred in equal amounts of 250 shares each to Robert Stillwaugh, Mike Schatz, Gary Tilden and Donna Marie Murtaugh.
As of June 30, 2016, 10,000,000 Series A preferred shares and 10,000,000 Series B preferred shares of par value $0.001 were authorized, of which 1,519,500 Series A shares were issued and outstanding, (1,519,500 shares as of March 31, 2016) and 1,000 Series B shares were issued and outstanding (1,000 shares as of March 31, 2016).
10. COMMON STOCK
Effective January 14, 2008, the Company split its common stock on a twenty-for-one basis. All shareholders as of the record date of January 14, 2008 receive twenty shares of common stock in exchange for each one common share of their currently issued common stock. The authorized, issued and per share information presented is on a post-split basis. On January 14, 2008, the Company’s total paid-in capital was less than the product of the par value per share multiplied by the number of post-split shares outstanding. As a result, the shareholders may have an obligation to make up the shortfall of $7,735 should the shortfall not be otherwise eliminated.
On March 9, 2010, the Company issued 1,250,000 shares pursuant to a subscription at a price of $0.40 per share for total proceeds of $500,000.
On April 5, 2010, the Company cancelled 18,002,000 shares surrendered for cancellation by the former CEO and majority shareholder of the Company pursuant to an agreement effective March 17, 2010.
On May 14 and September 28, 2010, 134,420 and 266,667 shares, respectively, were issued at $0.48 pursuant to a Securities Purchase Agreement. $400,000 cash was realized.
Pursuant to consulting agreements with two advisors, common stock was issued for services:
Date Issued
|
|
Shares
|
|
|
Price Per Share
|
|
Expense
|
December 31, 2010
|
|
|
50,000
|
|
|
$
|
0.82
|
|
Consulting $40,950
|
October 18, 2010
|
|
|
50,000
|
|
|
$
|
0.39
|
|
Consulting $19,500
|
November 15, 2010
|
|
|
150,000
|
s
|
|
$
|
0.39
|
|
Consulting $58,500
|
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
On January 3, 2011, 6,000,000 shares of restricted common stock were issued for services at $0.02 per share; whereby an expense of $93,000 was recorded.
On February 1, 2011, 1,300,000 shares of common stock were issued at $0.05 per share in retirement of debt of $63,471. The loss on the transaction was de minimus.
On February 1, 2011, 62,000,000 shares of common stock were issued at $0.12 per share in exchange for stock of a subsidiary, acquiring an oil and gas property of $7,368,900. See Note 1.
On August 18, 2011, 500,000 shares of common stock were issued at $0.10 per share for consulting. An expense of $15,000 was recorded.
Between August 29 and September 21, 2011, 9,406,149 common shares were issued at $0.01, $0.02 and $0.03 per share in elimination of $55,000 notes payable. A loss of $32,814 was recorded.
Between November 28 and December 8, 2011, 11,295,545 common shares were issued at $0.10, $0.006 and $0.008 per share in elimination of $55,000 notes payable. A loss of $32,814 was recorded.
On December 2, 2011, 12,000,000 shares were issued for consulting at $0.008 per share. An expense of $96,000 was recorded.
On January 1, 2012, 3,198,528 shares were returned to Treasury and cancelled in a preliminary transaction further to a consulting agreement.
Between January 1 and February 8, 2012, 12,815,862 common shares were issued at $0.008, $0.009 and $0.010 per share in elimination of $115,000 notes payable. A loss of $2,803 was recorded.
On February 2, 2012, 1,684,427 shares of common stock were issued at $0.01 per share for consulting. An expense of $16,845 was recorded.
On January 31, 2012, 22,200,000 shares of common stock were issued at $0.01 per share in converting 111,000 shares of Series A preferred stock to common stock. The value of the common stock equated to that of the preferred stock, resulting in no gain or loss on the transaction.
As at March 31, 2012, 1,500,000,000 common shares of par value $0.001 were authorized, of which 201,944,542 were issued and outstanding, (135,241,087 as at March 31, 2011).
On April 23, 2012, 16,000,000 shares of common stock were issued in an exchange for 80,000 of Series A Preferred Stock. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.
On May 17, 2012, 1,514,101 shares of common stock were issued for consulting valued at the closing price on the day of $0.01 per share. An expense of $15,141 was recorded.
On May 23, 2012, 2,500,000 shares of common stock were issued for consulting pursuant to an employment agreement, valued at the closing price on the day of $0.01. An expense of $25,000 was recorded.
On June 11, 2012, 1,000,000 shares of common stock were issued at the closing price of $0.01 pursuant to a loan agreement with Vista Capital Investments. An expense of $10,000 was recorded.
Between July 12 and September 18, 2012, 25,715,010 shares of common stock were issued in the elimination of debt at the uniform price of $0.01. An expense of $164,550 was recorded.
On August 14, 2012, 65,600,000 shares of common stock were issued in an exchange for 328,000 of Series A Preferred Stock. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.
On October 12, 2012, 125,000 shares of Series A Preferred Stock were converted into 25,000,000 shares of common stock at the conversion ratio of .005 preferred to 1 common. The stocks exchanged had equal value, resulting in no gain or loss on the transaction.
From October 1, 2012 to December 31, 2012, the holders of a convertible notes converted a total of $92,600 of principal and interest into 49,508,657 shares of our common stock.
SIMLATUS CORPORATION.
(Formerly known as Grid Petroleum Corp.)
(A Development Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
(
Unaudited
)
From January 1, 2013 to March 31, 2013, the holders of a convertible notes converted a total of $97,920 of principal and interest into 177,789,278 shares of our common stock.
On September 20, 2013, 112,500 Series A preferred shares were converted to 112,500,000 shares of common stock.
From April 1, 2013 to March 31, 2014, the holders of a convertible notes converted a total of $213,540 of principal and $46,266 of interest into 4,218,827,420 shares of our common stock.
From April 1, 2014 to March 31, 2015, the holders of a convertible notes converted a total of $92,844 of principal and interest into 2,001,759,062 shares of our common stock.
On July 27, 2015, the Company, approved the authorization of a 1 for 1,000 reverse stock split of the Company’s outstanding shares of common stock.
On September 17, 2015, 60,000,000 shares of common shares were issued to Right Energy Incorporated pursuant to an agreement.
On October 26, 2015, the Company filed a Certificate of Amendment to change the par value of common stock from $0.001 to $0.00001.
On March 31, 2016, Right Energy, Inc. returned and retired 60,000,000 shares of common stock that was issued on September 17, 2015, pursuant to the ‘Farmout Agreement’ executed on September 14, 2015. The Company agreed to cancel all of the shares and return all of the 60,000,000 shares to the treasury.
From April 1, 2015 to March 31, 2016, the holders of convertible notes converted a total of $231,066 of principal and interest into 1,668,797,249 shares of our common stock.
During the three months ended June 30, 2016, the holders of convertible notes converted a total of $132,424 of principal and interest into 2,963,782,358 share of our common stock.
As of June 30, 2016, 7,500,000,000 common shares of par value $0.00001 were authorized, of which 4,579,478,015 shares were issued and outstanding (1,615,695,657 shares as of March 31, 2016).
11. INCOME TAXES
A reconciliation of income tax expense to the amount computed at the statutory rates is as follows:
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
Operating profit (loss) for the three months ended June 30
|
|
$
|
(6,330,444
|
)
|
|
$
|
(627,288
|
)
|
Average statutory tax rate
|
|
|
34
|
%
|
|
|
34
|
%
|
Expected income tax provisions
|
|
$
|
(2,152,351
|
)
|
|
$
|
(213,278
|
)
|
Unrecognized tax gains (loses)
|
|
|
(2,152,351
|
)
|
|
|
(213,278
|
)
|
Income tax expense
|
|
$
|
-
|
|
|
$
|
-
|
|
The Company has net operating losses carried forward of approximately $22,452,611 for tax purposes which will expire in 2026 if not utilized beforehand.
12. COMMITMENTS
None.