UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
June 30, 2016
[ ]
TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
[ ] to
[ ]
Commission file number
000-54881
LITHIUM EXPLORATION GROUP,
INC.
(Exact name of registrant as specified in its
charter)
Nevada
|
06-1781911
|
(State or other jurisdiction of incorporation or
|
(I.R.S. Employer Identification No.)
|
organization)
|
|
4635 South Lakeshore Drive, Suite 200, Tempe
Arizona
|
85282-7127
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
|
480.641.4790
|
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
|
Name of Each Exchange On Which Registered
|
N/A
|
N/A
|
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par Value
(Title
of class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.
Yes
[ ] No [X]
Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act
Yes
[ ] No [X]
Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the last 90 days.
Yes
[X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.[ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer
[ ]
|
Accelerated
filer
[ ]
|
Non-accelerated filer
[ ]
|
Smaller reporting
company [X]
|
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes [
] No [X]
The aggregate market value of Common Stock held by
non-affiliates of the Registrant on December 31, 2015 was $393,780 based on a
$0.11 average bid and asked price of such common equity, as of the last business
day of the registrants most recently completed second fiscal quarter.
Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.
162,724,024 common shares as of October 13, 2016
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
PART I
This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States Dollars and all references to common
shares refer to the common shares in our capital stock.
As used in this annual report, the terms we, us, our
company, mean Lithium Exploration Group, Inc. a Nevada corporation, our
wholly owned subsidiaries, Alta Disposal Ltd., an Alberta, Canada corporation,
Black Box Energy, Inc., a Nevada corporation, and our 51% owned subsidiary, Alta Disposal Morinville Ltd., an Alberta, Canada
corporation, unless otherwise indicated.
Corporate History
We were incorporated on May 31, 2006 in the State of Nevada
under the name Mariposa Resources, Ltd.. Effective November 30, 2010, we
changed our name to Lithium Exploration Group, Inc., by way of a merger with
our wholly-owned subsidiary Lithium Exploration Group, Inc., which was formed
solely for the change of name.
Our executive offices are located at 4635 South Lakeshore
Drive, Suite 200, Tempe Arizona, 85282-7127, and our telephone number is (480) 641-4790. We
also have an office at 840 6th Ave SW Suite 300, Calgary, Alberta T2P 3E5. The
phone number for our Calgary office is 403-930-1925.
On October 18, 2013, our company, through our then wholly owned
subsidiary, Alta Disposal Ltd. (formerly 1617437 Alberta Ltd.), an Alberta,
Canada corporation, completed the acquisition of 51% of the shares of Blue Tap
Resources Inc. for total payment of CAD$466,547. As of September 30, 2013, CDN
$300,000 (US$294,908) was paid regarding the acquisition. As a result of the
share acquisition, Blue Tap Resources Inc. became a partially owned subsidiary
of our company through our wholly owned subsidiary, Alta Disposal Ltd. On
January 22, 2014, Blue Tap Resources Inc. changed its name to Alta Disposal
Morinville Ltd. Effective September 4, 2015, our company entered into an Asset
Purchase Agreement with Cancen Oil Canada whereby we sold all right, title and
interest of Alta Disposal Morinville Ltd. assets for total purchase price of
CAD$10,000 (approximately USD$7,531.25) .
On August 20, 2013, we entered into a letter of intent with
Tero Oilfield Services Ltd., a private company, pursuant to which Tero agreed to
sell up to 75% of the issued and outstanding common shares of Tero to our
company in exchange for payment in the amount of $1,500,000.
On March 1, 2014, Alta Disposal Ltd., our wholly-owned
subsidiary, entered into a share purchase agreement with Tero and Garry Hofmann,
the sole shareholder of Tero. Pursuant to the agreement, Mr. Hofmann agreed to
sell and we agreed to purchase 50% of the issued and outstanding common shares
of Tero in exchange for an aggregate of CAD$1,000,000. As part of the share
purchase by Alta Disposal, on February 22, 2014, Tero declared a dividend in the
amount of $307,104, payable to Mr. Hofmann by way of a promissory note. As a
result of the share purchase agreement, Tero is now a partially owned (50%)
subsidiary of our company.
Additionally, Alta Disposal, Tero and Mr. Hofmann entered into
an option agreement entitling Alta Disposal to purchase up to an additional 25%
of the issued and outstanding common shares of Tero from Mr. Hofmann exercisable
at a price of $500,000 for a period of one year. We have subsequently sold our
interest in Tero on May 1, 2015 as further described below.
On October 17, 2014, we amended our Articles of Incorporation,
which amendment was filed with the Nevada Secretary of State on October 17,
2014, to increase the authorized capital of our common shares from 500,000,000
common shares, par value $0.001 to 2,000,000,000 common shares, par value
$0.001. Our authorized capital consists of 2,000,000,000 common shares and
100,000,000 preferred shares, all with a par value of $0.001.
On January 19, 2015, we received written consent from our
companys board of directors to effect a reverse stock split of our issued and
outstanding shares of common stock on a basis of 20 old shares of common stock
for 1 new share of common stock. Stockholders of our company originally approved
the reverse stock split on October 14, 2014 at a special meeting. The reverse
split became effective with the Over-the-Counter Bulletin Board at the opening
of trading on February 25, 2015. We were assigned CUSIP number 53680P209
effective February 25, 2015. Our authorized capital was not affected by the
reverse stock split.
On May 1, 2015, our company entered into a share purchase
agreement with an individual and disposed of our 50% interest in Tero in
consideration of $300,000.
On June 22, 2015, in accordance with our articles of
incorporation, our board of Directors has designated 250,000 of our 100,000,000
authorized shares of Preferred Stock as Series A Preferred Stock. The Series
A Preferred Stock, par value $0.001, will rank senior to our common stock,
carrying general voting rights with the common stock at the rate of 62 votes per
share. The Series A Preferred Stock will be deemed cancelled within 1 year of
issuance and are not entitled to share in dividends or other distributions. So
long as any shares of Series A Preferred Stock are outstanding, the
affirmative vote of not less than 75% of those outstanding shares of Series A
Preferred Stock will be required for any change to our Articles of
Incorporation.
On July 9, 2015 our board of directors approved a settlement
agreement dated June 25, 2015 among our company, JDF Capital Inc., and our
wholly owned subsidiary, Alta Disposal Ltd. Previously, pursuant to a General
Security Agreement dated July 22, 2014, JDF Capital Inc. was granted a first
ranking security interest over all current and future assets of Alta Disposal
Ltd. in full guarantee of $708,000 loan to our Company. Pursuant to the
Settlement Agreement, JDF Capital Inc. and its assign, Blue Citi LLC, have
agreed to release and discharge their general security interest in consideration
of the issuance of 130,000 shares of Series A Preferred Stock.
On July 13, 2015 our company's directors approved an increase
to our authorized capital from 2,000,000,000 shares of common stock, par value
$0.001 to 10,000,000,000 shares of common stock, par value of $0.001 per share
and a reverse stock split on a basis of up to 200 old shares of common stock for
one (1) share of common stock. The increase of authorized capital and stock
split was approved by shareholders on July 13, 2015. A Definitive Schedule 14C
was filed with United States Securities and Exchange Commission ("SEC") on
August 6, 2015. On September 9, 2015, we filed with the Nevada Secretary of
State a Certificate of Amendment increasing our authorized capital from 2,000,000,000 shares of common stock, par value $0.001 to 10,000,000,000 shares
of common stock, par value of $0.001 per share. The reverse split became effective with the OTC
Markets at the opening of trading on September 30, 2015. Effective September 30,
2015, our new CUSIP number is 53680P308.
Other than as set out herein, we have not been involved in any
bankruptcy, receivership or similar proceedings, nor have we been a party to any
material reclassification, merger, consolidation or purchase or sale of a
significant amount of assets not in the ordinary course of our business.
Our Current Business
We are corporation engaged principally in the acquisition,
exploration, and development of resource properties.
Disclosure Adjustments for Reverse Stock Split
On January 19, 2015, our board of directors consented to effect
a reverse stock split of our issued and outstanding shares of common stock on a
basis of 20 old shares of common stock for one 1 new share of common stock. The
reverse stock split was reviewed and approved for filing by the FINRA effective
February 25, 2015. Our authorized capital was not affected by the reverse stock
split.
On July 13, 2015, our board of directors consented to effect a
reverse stock split of our issued and outstanding shares of common stock on a
basis of 200 old shares of common stock for 1 new share of common stock. The
reverse stock split was reviewed and approved for filing by the FINRA effective
September 30, 2015. Our authorized capital was not affected by the reverse stock
split.
In this Annual Report and in the accompanying audited financial
statements and notes, the above described reverse splits are reflected
retrospectively in the descriptions of shares and warrants, and their
corresponding issuance and exercise prices, except where otherwise indicated.
Assignment Agreement with Lithium Exploration VIII Ltd.
On December 16, 2010, we entered into an assignment agreement
with Lithium Exploration VIII Ltd. (not related to our company) to acquire an
undivided 100% right, title and interest in and to certain mineral permits
located in the Province of Alberta, Canada. Lithium Exploration VIII and Golden
Virtue Resources Inc. (formerly First Lithium Resources Inc.) (not related to
our company) had entered into an underlying option agreement dated October 6,
2010, which option agreement and interest were assigned to our company.
On December 31, 2012, our company entered into an amending
agreement to amend an original payment requirement of the assignment agreement
of CAD$100,000 due on January 1, 2013 to the following payments:
|
|
CAD$20,000 (USD$20,000) cash payment due on January 1,
2013; and
|
|
|
CAD$80,000 (USD$80,000) by a 15% one year promissory note
starting January 1, 2013.
|
The note was interest free until March 31, 2013. After March
31, 2013, interest accrued on the principal balance then in arrears at the rate
of 15% per annum. Payments were due and payable by December 31, 2013. Further,
at any time, Lithium Exploration VIII and Golden Virtue could elect to convert
the remaining balance of the note and accrued interest into common shares of our
company at 75% of the closing market price of our companys common shares on the
election day.
On July 3, 2013, Lithium Exploration VIII and Golden Virtue
elected to convert the note and accrued interest in the combined aggregate
amount of CAD$83,057.53 (USD$78,743) into common shares of our company. Pursuant
to this election, we issued an aggregate of 239 shares ( on a pre-reverse split
basis) of our common stock at the price of USD$330 per share.
Glottech
On November 8, 2011, we entered into a letter agreement with
Glottech-USA. Pursuant to the terms of the agreement, we were granted an
exclusive license to use and distribute the technology within the Swan Hills
region of Alberta as well as a non-exclusive right to distribute the technology
within Canada.
We previously made the following payments in association with
the production of a working unit of Glottech-USAs technology:
|
|
$25,000 on March 21, 2011 in consideration for entering
into the letter agreement dated March 17, 2011;
|
|
|
$75,000 on May 27, 2011 in consideration for continuance
of the March 17, 2011 agreement; and
|
|
|
$700,000 on May 27, 2011 in consideration for a licensing
and technology payment.
|
As part of the November 8, 2011 agreement, our officer and
director, Alexander Walsh, agreed to provide Glottech-USA with the option, for a
period of 12 months from delivery of the first unit, to acquire 500 shares (of
our common stock currently held by him , for a total price of $4,000 ($1
pre-reverse splits). Additionally, if, for any reason, Mr. Walsh failed to
deliver the 500shares of our common stock to Glottech-USA, we agreed to issue
the shares from treasury.
On June 12, 2012, we filed a complaint against Glottech-USA in
the Court of Common Pleas of Chester County, Pennsylvania, alleging that
Glottech-USA misused our funds and was in breach of our agreements that called
for Glottech-USA to deliver one initial unit of the mechanical ultrasound
technology. We further alleged that Glottech-USA was financially insolvent and
unable to fulfill its promises to us.
On June 12, 2012, we filed a complaint with the Court of Common
Pleas of Chester County, Pennsylvania against Glottech-USA, LLC, Eldredge, Inc.,
and the Eldredge Companies, Inc. Pursuant to an unopposed motion, the Eldredge
parties were dismissed in October of 2012. The complaint initially sought an
order of the Court granting possession of the initial unit.
Effective August 14, 2012, we entered into an option agreement
with GD Glottech International to protect our license and distribution rights in
the event that Glottech-USA became unable to perform and honor its obligations
to us.
Pursuant to the terms of the option agreement, we were required
to provide an initial amount of $150,000 to be held in escrow for the option to
obtain a license on the patent rights, as set forth in the option agreement. On
September 1, 2012, Glottech-USAs license to the technology expired and also on
September 1, 2012, we exercised this option agreement and released the funds to
GD Glottech International.
On October 1, 2012, we entered into a license agreement and a
sales agency agreement with GD Glottech, regarding GD Glottech Internationals
proprietary and patented mechanical ultrasound technology for use in water
purification in the process of separation of salt and other minerals from
lithium bearing brine produced from oil and gas operations. The license
agreement and sales agency agreement expands and replaces all prior agreements
among our company, GD Glottech International and Glottech-USA, LLC regarding our
rights to use and sell the mechanical ultrasound technology, included in our
letter of intent dated November 18, 2011, and our option agreement dated August
14, 2012.
Pursuant to the sales agency agreement we were appointed as
sales agent for the patented mechanical ultrasound technology within Canada. Our
appointment is exclusive within the field of non petro-chemical mining and
non-exclusive in all other fields of use. In consideration of the sales agency
rights, we agreed to issue to GD Glottech International 500 common shares of our
capital stock which obligation has been satisfied through the transfer to GD
Glottech International of 500 shares held by our officer and director, Alexander
Walsh. It was the explicit intention of the parties that this share transfer
fulfills the prior obligations of Alexander Walsh and our company with respect
to the option contemplated in the March and November 2011 agreements with
Glottech-USA.
We will receive a royalty in respect of sales of the technology
secured by us. The term of the initial agreement will be for 5 years with the
possibility of extension if sales targets are achieved.
Pursuant to the license agreement, we obtained the exclusive
right to use the mechanical ultrasound technology within the field of
non-petro-chemical mining within the territory of Canada. We may also sublicense
our rights under the license in respect of one or more units of the technology
to any entity operating within the field of use in which we own or beneficially
own at least a 20% equity interest. GD Glottech International agreed to supply
us with up to 5 technology units per 12-month period from the effective date of
the license term, which will start from the month of delivery of the unit of the
technology. The first unit of the technology provided under the license to be
provided at no additional cost to us and subsequent units shall be subject to a
fee based on the then current retail price of the units. If we sublicense any of
our rights, the term of the applicable license will be for 5 years from the date
the applicable unit is delivered. Pursuant to the license agreement, GD Glottech
International shall provide ongoing technical assistance and training in respect
of our use of the technology at our cost.
In consideration of the license, we will pay to GD Glottech
International a royalty based on the tonnage of water produced by our use of the
technology in accordance with the agreement. A minimum annual royalty will be
applicable. The term of the license agreement shall be for an initial period of
5 years and shall be renewable for additional terms of 5 years provided that we
satisfy the minimum royalty requirements during each period.
GD Glottech Internationals technology is designed to separate
suspended solids from water (brine), which is one step in the process that we
are taking to produce commercially viable minerals. The technology produces
extremely high temperatures, which destroy organic substances such as bacteria
and other toxic agents. We believe that GD Glottech International's technology
can provide lower costs of operation as well as reduced time for site clean-up
than traditional methods of water treatment. We anticipate using this
application to extract dissolved solids like lithium, potassium, and magnesium
from oil field brine. The disposal of produced water (brine) from oil and gas
production in Alberta is a significant environmental issue for the province and
presents a considerable economic issue for producers. We intend to use the
technology on our Valleyview Property in Alberta, in cooperation with oil and
gas producers, to treat and dispose of their produced water while monetizing the
minerals that are contained within that produced water stream that is being
brought to the surface during the oil and gas production process. As we owned the
MAIM (Metals and Industrial Minerals) claims to the minerals on the Valleyview
Property, the minerals contained in their produced water stream fall under our
rights. While we have had discussions with oil and gas consultants and oil
operators regarding their difficulties in treating the brine at some of their
fields, we have no formal agreements in place.
The technical process is based on the use of mechanical
ultrasound generated through the production of a series of cavitations.
Mechanical ultrasound is a machine-produced sound of a frequency above the upper
limit of the normal range of human hearing. Cavitations are the rapid formation
and collapse of bubbles in liquids, caused by the movement of something such as
a propeller or by waves of high-frequency sound. The production of mechanical
ultrasound allows GD Glottech Internationals technology to distill the fluid
stock. Using mechanical ultrasound for distillation has been attempted before,
but the external energy requirement needed to produce the mechanical ultrasound
was far too expensive to make it commercially viable. GD Glottech
Internationals technology uses the energy released during the cavitations in
order to make it commercially viable from an economic perspective. During these
cavitations, a millisecond of energy is released. During this release,
temperatures can reach 5,000 degrees centigrade.
On August 27, 2012, we filed a motion to amend our complaint to
include claims of breach of trust and fiduciary duty, breach of good faith and
fair dealing, breach of contract, conversion of funds, fraud, and the imposition
of a constructive trust. We believe that this action was necessary to protect
our interests against possible misuse of funds by Glottech-USA, LLC and its
principals. We will also seek damages as appropriate.
On October 19, 2012, GD Glottech International moved to
intervene as an interested party in the litigation pending against Glottech-USA.
GD Glottech International cited its role as owner of the patents as a basis for
intervening in the litigation against Glottech-USA. We believe GD Glottech
Internationals entry into the litigation against Glottech-USA is favorable to
our cause in the litigation.
On October 22, 2012, the Court of Common Pleas in Chester
County, Pennsylvania, granted our motion to amend our complaint against
Glottech-USA to add claims for fraud and damages reflective of the malfeasance
which we allege against Glottech-USA and its officers.
On December 12, 2012, GD Glottech International removed the
management of Glottech-USA and appointed itself as the manager of Glottech-USA.
On the same day, Larry Nesbit, Mark Siegel and Ron Fender filed a motion to
dissolve Glottech-USA in Mississippi on the basis that Glottech-USA was unable
to meet its financial obligations and could not finish or deliver the unit to
us.
On December 19, 2012, an attorney purportedly acting on behalf
of Glottech-USA filed a motion in the lawsuit pending in Chester County,
Pennsylvania, seeking possession of the unit. In addition, Glottech-USA filed a
counterclaim seeking possession of the unit.
GD Glottech International immediately filed a motion to quash
Glottech-USAs motion and for sanctions against the law firm that filed the
motion. We also filed a motion, seeking disqualification of the law firm that
purported to represent Glottech-USA on the basis that the new management for
Glottech-USA had fired the law firm and, as such, the law firm no longer had
authority to represent Glottech-USA.
On April 25, 2013, we attended a hearing on the motions pending
in the lawsuit filed in Chester County, Pennsylvania. The Court did not rule on
any of the motions and, instead, stayed the case as to Glottech-USA until
December of 2013 pending the outcome of the lawsuit seeking dissolution of
Glottech-USA. The matter in Pennsylvania is no longer stayed. An attorney
purporting to represent Glottech-USA and the receiver appointed in Mississippi
has filed motions and other documents that may move the matter forward. We have
pending preliminary objections to the counterclaim, including a request for a
determination of which group is in control of Glottech-USA.
Certain members of Glottech-USA continue to pursue dissolution
of the company in Mississippi. The members of Glottech-USA who seek dissolution
have stated in court filings that it is not practicable for Glottech-USA to
continue as an ongoing business. In addition, Sulzer filed suit against
Glottech-USA Texas for unfulfilled obligations.
We do not believe that Glottech-USA has sufficient capital to
continue as an ongoing business. We have provided full consideration to
Glottech-USA and complied with all other agreed upon terms. We believe any
assertions against us to lack merit.
Given pending litigation against Glottech-USA, and the
uncertainties naturally inherent of any litigation (particularly as to outcome
and timing thereof), we have moved to assure continuity of our licensing rights
through entering into, and exercising, the option to contract directly with the
technology inventor and patents owner, GD Glottech International. Thus,
regardless of the outcome of the litigation, or indeed any action or inaction of
Glottech-USA, our interest in the technology is assured.
On December 18, 2015 we withdrew our complaint against
Glottech-USA, LLC filed in the Court of Common Pleas in Chester County,
Pennsylvania. Concurrently, we released Glottech USA, LLC and its former
principals, Mark Seigel, Larry Nesbit and Ron Fender, from any and all claims
related to the complaint.
Subsequent to the litigation in Pennsylvania, Glottech-USA
initiated a legal action for dissolution in Mississippi. The Company was not a
party to the dissolution action in Mississippi. A court-appointed receiver for
Glottech-USA recently approved a previously proposed settlement. The settlement
has been recently approved by the court in Mississippi. The Company believes
that the litigation in Pennsylvania produced positive outcomes that resulted in
the Company's current relationship with the inventors and owners of the
technology previously licensed to Gottech-USA.
Alta Disposal Morinville Ltd. Acquisition
On June 11, 2013, we entered into a letter of intent with Alta
Disposal Morinville Ltd. (formerly Blue Tap Resources Inc.) pursuant to which we
agreed to acquire not less than 51% of the outstanding securities of Alta
Disposal Morinville in consideration of an aggregate investment of $450,000 in
Alta Disposal Morinvilles waste water disposal facility located in Morinville,
Alberta. The closing of the transaction was subject to a number of conditions
precedent, including but not limited to completion of due diligence and the
negotiation of a definitive long form agreement.
On July 29, 2013, in anticipation of the completion of a formal
agreement with Alta Disposal Morinville embodying the terms of the letter of
intent, we entered into a convertible debenture agreement with Alta Disposal
Morinville pursuant to which we agreed to deliver to Alta Disposal Morinville up
to CAD$300,000 (approximately USD$291,000) payable in two installments of
CAD$150,000 deliverable respectively upon execution of the convertible
debenture, and within 5 business days following receipt of regulatory approval
for the re-activation of Alta Disposal Morinvilles waste water disposal
facility. Delivery of the first and second installments totaling CAD$300,000
have been satisfied and the acquisition was finalized as of October 18, 2013.
The funds advanced are secured against all present and future assets and undertakings of Alta Disposal Morinville and are convertible at
our option into a number of common shares of Alta Disposal Morinville equal to
51% of its issued and outstanding voting stock.
Effective August 1, 2013, we entered into a joint venture
agreement with Alta Disposal Morinville pursuant to which our company and Alta
Disposal Morinville will operate certain lands and facilities including a
disposal well in the Morinville area of Alberta.
On October 18, 2013, we completed the acquisition of 51% of the
outstanding securities of Alta Disposal Morinville, pursuant to a letter of
intent with Alta Disposal Morinville dated June 11, 2013. As a result of the
share acquisition, Alta Disposal Morinville is now a partially owned subsidiary
of our company through our wholly owned subsidiary, Alta Disposal Ltd.
In accordance with the letter of intent, we acquired, through
our wholly owned subsidiary, Alta Disposal Ltd., 51% of the outstanding
securities of Alta Disposal Morinville (being 510,000 common shares) in
consideration of an aggregate investment of CDN$466,547 (approximately
USD$453,204) in Alta Disposal Morinvilles waste water disposal facility located
in Morinville, Alberta, where Alta Disposal Morinville holds a 100% working
interest in 17 freehold mineral leases. There are currently two standing natural
gas wells and one disposal well located on the leases, including water disposal
facilities, tanks and equipment. Payment of an initial CDN$300,000 (USD$291,000)
of the CDN$466,547 aggregate investment was made pursuant to a secured
convertible debenture which has been fully converted into common shares of Alta
Disposal Morinville. The Alta Disposal Morinville leases are subject to a 3%
gross overriding royalty held by Mr. Vincent Murphy pursuant to a gross
overriding royalty agreement dated June 30, 2013. The royalty is payable on all
fluids separated, treated, or otherwise enhanced for sale on the lease property.
The acquisition of Alta Disposal Morinville was completed
through our wholly owned subsidiary, Alta Disposal Ltd., which was formed in the
Province of Alberta for the primary purpose of the transaction with Alta
Disposal Morinville. Concurrent with the closing of the acquisition, Alta
Disposal entered into a unanimous shareholders and management agreement (the
Shareholders Agreement) dated October 18, 2013 with Excel Petroleum Ltd.
(which holds 49% of Alta Disposal Morinville) and Alta Disposal Morinville
itself.
Pursuant to the Shareholders Agreement, Alta Disposal may
continue to fund the current capital requirements of Alta Disposal Morinville up
to an aggregate of $420,000 in consideration of additional shares of Alta
Disposal Morinville at the rate of 163,250 shares (equivalent to approximately
5% of Alta Disposal Morinvilles common shares on a diluted basis) for each
$105,000 funded until Alta Disposal holds an aggregate of 70% of Alta Disposal
Morinvilles outstanding common shares. If Alta Disposal elects to fund the
on-going capital requirements of Alta Disposal Morinville beyond the aggregate
of $870,000, any such funds advanced by Alta Disposal will be deemed to be funds
loaned by Alta Disposal to Alta Disposal Morinville on a non-interest bearing,
unsecured bridge loan basis.
Any such funds provided to Alta Disposal Morinville will be
repayable from cash flow generated by Alta Disposal Morinville. Funds loaned
prior to June 30, 2014 will not be due and payable until June 30, 2014 and
thereafter will not be due and payable until at least 6 months following the
date of any such loan.
Other terms of the Shareholders Agreement include:
|
|
the board of directors of Alta Disposal Morinville will
consist of 3 directors including 2 nominees of Alta Disposal and 1 nominee
of Excel.
|
|
|
Alexander Walsh will serve as chairman of the board of
directors, president and chief executive officer of Alta Disposal
Morinville.
|
|
|
Approval of the shareholders holding not less than 60% of
Alta Disposal Morinville shares will be required to remove or appoint
officers of Alta Disposal Morinville.
|
|
|
Unanimous approval of the shareholders will be required
in order to (i) effect capital alterations; (ii) declare dividends except
following the completion of a fiscal year end and on a pro-rata basis to
all shareholders; or (iii) wind-up; dissolve; or reorganize the
corporation or sell or lease substantially all of its assets.
|
|
|
Alta Disposal will otherwise have sole discretion and
authority in respect of any and all management and operational decisions
relating to the corporation.
|
|
|
Each shareholder of Alta Disposal Morinville will have a
right of first refusal to purchase all shares sought to be sold by the
other shareholder.
|
|
|
Customary restrictions on the encumbrance and disposition
of shares.
|
The Shareholders Agreement additionally provides for the
engagement of Valeura Energy Inc. as the operator of Alta Disposal Morinvilles
lands, wells, the facilities, pipelines and disposal wells pursuant to an
operating agreement between Alta Disposal Morinville and Valeura dated July 9,
2013. Valeura was to retain a 10% working interest in Alta Disposal Morinvilles
lands until completion of the initial work on the disposal well project and will
re-convey that interest to Alta Disposal Morinville provided that Alta Disposal
Morinville has paid Valeura a cash payment of $2,500 per month for acting as
operator of the disposal well and the lands and upon payment of an amount of
$10,000 to Valeura upon completion of the project. The disposal well work
program must be mutually approved by Alta Disposal Morinville and Valeura. Alta
Disposal Morinville will be responsible for all costs and expenses relating to
the work program.
Effective September 4, 2015, our company entered into an Asset
Purchase Agreement with Cancen Oil Canada whereby we sold all right, title and
interest of Alta Disposal Morinville Ltd. assets for total purchase price of
CAD$10,000 (approximately USD$7,531.25).
Tero Oilfield Services Ltd. Acquisition (and
Disposition)
On August 20, 2013, we entered into a letter of intent with
Tero Oilfield Services Ltd., a private company, pursuant to which Tero agreed to
sell up to 75% of the issued and outstanding common shares of Tero to our
company in exchange for payment in the amount of $1,500,000.
On March 1, 2014, Alta Disposal Ltd., our wholly-owned
subsidiary, entered into a share purchase agreement with Tero and Garry Hofmann,
the sole shareholder of Tero. Pursuant to the agreement, Mr. Hofmann agreed to
sell and we agreed to purchase 50% of the issued and outstanding common shares
of Tero (the Tero Shares) in exchange for an aggregate of CAD$1,000,000. As
part of the share purchase by Alta Disposal, on February 22, 2014, Tero declared
a dividend in the amount of $307,104, payable to Mr. Hofmann by way of a
promissory note.
Additionally, Alta Disposal, Tero and Mr. Hofmann entered into
an option agreement entitling Alta Disposal to purchase up to an additional 25%
of the issued and outstanding common shares of Tero from Mr. Hofmann exercisable
at a price of $500,000 for a period of one year.
Lastly, Alta Disposal, Tero and Mr. Hofmann entered into a
shareholders agreement concerning any potential financing by the shareholders
of Tero for the benefit of Teros operations. This agreement provides that the
shareholders of Tero, Alta Disposal and Mr. Hofmann, may by unanimous resolution
advance to Tero, upon demand by Tero, such funds as may be determined specified
by unanimous resolution, subject to the agreement.
Tero was a family owned waste disposal company. The waste
disposal facility had been under the same ownership since it began operations in
1997. In 2002, Tero successfully reclassified the original Class II well to a
Class IB disposal well and expanded the capabilities of the facility to handle
solid waste disposal. The facility is located near Wardlow, Alberta and is right
in the heart of the area's oil and gas producers. The nearest competing
commercial disposal companies are 75 kilometers away which presents Teros
facility with a large geographical advantage.
On September 15, 2014, Northern Hunter Energy Inc. entered into
a conveyance agreement with Tero dated June 1, 2014. Pursuant to this agreement,
Northern Hunter Energy will transfer a 10% working interest in certain assets of
the Morinville, Alberta property, which was previously acquired from Valeura, to
Tero effective June 1, 2014 for the sum of $10,000. As of the date of this
report, the transfer has not been completed and the sum of $10,000 has not been
paid.
On May 1, 2015, Alta Disposal entered into a share purchase
agreement with Natel Hofmann and Tero Oilfield Services Ltd. for the sale of the
Tero Shares by Alta Disposal to Ms. Hofmann in consideration of an aggregate of
$300,000. As at April 29, 2015, the purchase price was paid in full.
Loans of Our Company
Since March 2014, our company has received various loans from
unrelated third party that are listed below. These loans are convertible into
shares of our company pursuant to the terms of the loan agreements. In the
descriptions below of the loans, the issuance of common shares pursuant to the
conversion of debt pursuant to convertible promissory notes, and the issuance of
common shares pursuant to the exercise of warrants, transactions are a on a post
reverse stock split basis. These adjustments include our first reverse share
split approved on January 19, 2015 (20 old shares of common stock for one (1)
new share of common stock), and our second reverse stock split approved by our
board of directors on July 13, 2015 (200 old shares of common stock for one (1)
new share of common stock). All the loans, convertible promissory notes, and
warrants include terms that make them subject to the share splits.
Loan Agreements with JDF Capital Inc.
$500,000 Loan from JDF Capital
On March 15, 2014, we entered into a securities purchase
agreement with JDF, pursuant to which JDF provided us with an aggregate
investment of $500,000 in consideration of our issuance of convertible
promissory notes and common share purchase warrants. We issued JDF a 10%
original issue discount convertible promissory note of $550,000 due September
15, 2015 and convertible into common shares on a cashless basis at a price per
share of 35% of the lower of lowest closing bid price of our common shares
during the prior 20 trading days prior to 1) the date of the purchase agreement
or 2) the day of the notice for conversion. The note bears interest, in arrears,
at a rate per annum equal to fifteen percent (15%) accruing on a semi-annual
basis commencing March 15, 2014 in cash or restricted shares of our companys
common stock, par value $0.001 per share at the option of the holder. The fair
value of the note at issuance was $846,154. During the year ended June 30, 2016
and 2015, an interest expense of $Nil and $6,279 respectively, was accrued in
respect of the note.
In addition on March 15, 2014, we issued an aggregate of 4,583
warrants to JDF in consideration for purchasing the note. Subject to
adjustments, these warrants were convertible into common shares at a price of
$240.00 and expire after a term of three years. In the case that after six
months there is no registration statement available for the resale of our common
shares from exercising of these warrants, the warrants may be exercised on a
cashless basis at a price as set out in the warrant. These warrants were
cancelled on September 19, 2016 in consideration for the issuance of a
convertible promissory note pursuant to an Exchange Agreement with JDF Capital
Inc. dated September 19, 2016.
Pursuant to a partial sale and assignment agreement dated
February 27, 2015 among our company, JDF Capital Inc. and River North Equity,
LLC, JDF Capital assigned $100,000 portion of the March 15, 2014 note to River
North Equity.
On March 30, 2015, our directors approved an amendment to the
note. We amended and restated a $50,000 portion of the $550,000 note, into a new
promissory note to LG Capital Funding LLC, in the amount of $50,000 to provide
conversion features equal to 50% of the lowest closing price of the last 20
trading days prior to conversion, as well as 10% per annum interest and become
due and payable one year after the issuance date.
The $400,000 portion of the March 15, 2014 convertible
promissory note held by JDF Capital has been fully converted into shares of our
common stock.
To date, we have issued the following securities in conversion
of the $100,000 portion of the March 15, 2014 convertible promissory note held
by River North Equity:
|
|
On April 23, 2015, we issued 32,360 common shares at a
deemed price of $0.24 per share for promissory note and interest
conversion of $7,766.
|
|
|
On April 28, 2015, we issued 39,303 common shares at a
deemed price of $0.20 per share for promissory note and interest
conversion of $7,860.
|
|
|
On April 30, 2015, we issued 48,584 common shares at a
deemed price of $0.15 per share for promissory note and interest
conversion of $7,288.
|
|
|
On May 5, 2015, we issued 73,637 common shares at a
deemed price of $0.13 per share for promissory note and interest
conversion of $9,573.
|
|
|
On May 8, 2015, we issued 78,892 common shares at a
deemed price of $0.08 per share for promissory note and interest
conversion of $6,311.
|
|
|
On May 13, 2015, we issued 111,138 common shares at a
deemed price of $0.08 per share for promissory note and interest
conversion of $8,891.
|
|
|
On May 15, 2015, we issued 160,565 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion of $11,239.
|
|
|
On May 22, 2015, we issued 166,802 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion of $11,676.
|
|
|
On September 11, 2015, we issued 434,084 common shares at
a deemed price of $0.03 per share for promissory note conversion of
$13,022.
|
|
|
On September 18, 2015, we issued 486,623 common shares at
a deemed price of $0.02 per share for promissory note conversion of
$9,732.
|
On November 11, 2015 the balance note of $6,639 along with
interest of $5,681 totaling to $12,320 was assigned to VES Trust whereas all of
the accompanying warrants remain unconverted and outstanding.
On March 3, 2015, JDF Capital, LG Capital Funding, LLC and our
company agreed to assign an aggregate of $50,000 from the note of JDF Capital to
LG Capital and to amend the conversion price to equal to 50% of the lowest
closing price of the our common stock for the last 20 trading days prior to
conversion, as well as 10% per annum interest. The terms of this note were not
amended in the assignment. As at the date of this report, we have made the
following issuances of common stock in conversion of this convertible note:
|
|
On April 20, 2015, we issued 25,922 common shares at a
deemed price of $0.39 per share for promissory note and interest
conversion of $10,109.
|
|
|
On May 27, 2015, we issued 102,839 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion of $7,198.
|
|
|
On June 3, 2015, we issued issued 222,506 common shares
at a deemed price of $0.04 per share for promissory note and interest
conversion of $8,900.
|
|
|
On June 15, 2015, we issued 218,089 common shares at a
deemed price of $0.04 per share for promissory note and interest
conversion of 8,723.
|
|
|
On May 1, 2015, we issued 53,741 common shares at a
deemed price of $0.15 per share for promissory note and interest
conversion of $8,061.
|
|
|
On July 10, 2015, we issued 201,465 common shares at a
deemed price of $0.04 per share for promissory note and interest
conversion of $7,800.
|
As at the date of this report, there remains no balance
payable pursuant to the note.
$200,000 Loan
from JDF Capital
On March 3, 2014, we entered into a securities purchase
agreement with JDF Capital, Inc., pursuant to which JDF Capital agreed to
provide us with an aggregate investment of $220,000 in consideration of our
issuance of convertible promissory notes and common share purchase warrants.
On March 3, 2014, JDF Capital funded an aggregate investment of
$200,000 to us. Therefore, we issued JDF Capital an original issue discount 10%
convertible promissory note of $220,000 due September 3, 2014 and convertible
into common shares on a cashless basis at a price per share of 50% of the lower
of lowest closing bid price of our common shares during the prior 20 trading
days prior to 1) the date of the purchase agreement or 2) the day of the notice
for conversion. The convertible note was later assigned to Blue Citi, LLC on
March 19, 2014.
During the year ended June 30, 2015, $220,000 (June 30, 2014 -
$Nil) in face value of the note including interest was fully converted to 49,640
(June 30, 2014 - Nil) common shares pursuant to the following issuances of
common shares:
-
On September 3, 2014, we issued 125 common shares at a deemed
price of $40.00 per share for promissory note and interest conversion of $5,000.
-
On September 15, 2014, we issued 1,396 common shares at a
deemed price of $20.20 per share for promissory note and interest conversion of
$28,200.
-
On September 24, 2014, we issued 2,273 common shares at a
deemed price of $11.00 per share for promissory note and interest conversion of
$25,000.
-
On October 2, 2014, we issued 1,136 common shares at a deemed
price of $11.00 per share for promissory note and interest conversion of
$12,500.
-
On October 13, 2014, we issued 2,670 common shares at a deemed
price of $8.80 per share for promissory note and interest conversion of $23,500.
-
On October 20, 2014, we issued 2,778 common shares at a deemed
price of $7.20 per share for promissory note and interest conversion of $20,000.
-
On October 21, 2014, we issued 2,500 common shares at a deemed
price of $6.00 per share for promissory note and interest conversion of $15,000.
-
On October 27, 2014, we issued 5,000 common shares at a deemed
price of $6.00 per share for promissory note and interest conversion of $30,000.
-
On November 4, 2014, we issued 4,348 common shares at a deemed
price of $4.60 per share for promissory note and interest conversion of $20,000.
-
On December 4, 2014, we issued 7,500 common shares at a deemed
price of $2.40 per share for promissory note and interest conversion of $18,000.
-
On December 5, 2014, we issued 6,818 common shares at a deemed
price of $2.20 per share for promissory note and interest conversion of $15,000.
-
On December 8, 2014, we issued 6,667 common shares at a deemed
price of $1.80 per share for promissory note and interest conversion of $12,000.
-
On December 9, 2014, we issued 6,429 common shares at a deemed
price of $1.40 per share for promissory note and interest conversion of $9,000.
There is no outstanding balance payable in respect of the note
as of the date of this report.
In addition on March 3, 2014, we issued an aggregate of 1,000
warrants to JDF Capital in consideration for purchasing the note. Subject to
adjustments, these warrants are convertible into common shares at a price of
$200 and expire after a term of three years. In the case that after six months
there is no registration statement available for the resale of our common shares
from exercising of these warrants, the warrants may be exercised on a cashless
basis at a price as set out in the warrant.
On September 4, 2014, 25 warrants were exercised for 146 of our
common shares at a deemed price of $456 in accordance with the terms of the
agreement.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $140,000 in consideration for the
cancellation of 700 share purchase warrants issued to JDF Capital on
March 3, 2014. The cancelled warrants were exercisable on a cashless basis and
had a fair value of approximately $140,000 upon cancellation. The convertible
promissory note has a maturity dated of September 19, 2017, bears interest of 8%
per year, and is convertible at a price equal to 65% of the lowest closing bid
price of our common stock occurring during the twenty trading days immediately
preceding September 19, 2016, or immediately preceding the notice of conversion.
$600,000 Loan
from JDF Capital
On August 6, 2014, we entered into a securities purchase
agreement with JDF dated July 22, 2014 pursuant to which we issued to JDF a
convertible promissory note in the aggregate principal amount of $708,000, which
amount includes the purchase price of $600,000 plus 18 months prepaid interest
at the rate of 12% per annum. The convertible note has a maturity date of
January 22, 2016 and is convertible in whole or in part into shares of our
common stock at price per share equal to 65% of the lowest reported sale price
of our common shares during the 20 trading days prior to July 22, 2014 ($160.00)
or prior to the applicable conversion date. Our company will have the option to
prepay the note within 60 days subject to a 10% penalty, within the subsequent
60 days subject to a 20% penalty, or anytime thereafter prior to maturity
subject to a 30% penalty. The purchase price of the promissory note is payable
in six installments beginning upon the effective date of the agreement (which
amount has been paid) and monthly thereafter beginning on August 22, 2014. The
promissory note is secured in first position against all assets of our
subsidiary, Alta Disposal Ltd., pursuant to a general security agreement between
Alta Disposal and JDF. On May 19, 2016 JDF Capital Inc. signed an extension of
the maturity of the note due January 22, 2016. The note now matures on January
22, 2017 with the same terms and conditions.
As additional consideration for the proceeds of the convertible
note, we issued to JDF Capital warrants exercisable for 5 years to purchase up
to 4,200 shares of our common stock at an exercise price of $160.00 per share,
subject to cashless exercise provisions.
To date, we have issued the following securities in conversion
of the August 6, 2014 convertible promissory note:
|
|
On June 2, 2015, we issued 144,231 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion $7,500.
|
|
|
On June 5, 2015, we issued 220,000 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion $10,010.
|
|
|
On June 10, 2015, we issued 275,000 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion $12,512.
|
|
|
On July 8, 2015, we issued 125,000 common shares at a
deemed price of $0.04 per share for promissory note conversion of $4,875.
|
|
|
On July 21, 2015, we issued 250,000 common shares at a
deemed price of $0.04 per share for promissory note conversion of $9,750.
|
|
|
On July 29, 2015, we issued 298,269 common shares at a
deemed price of $0.04 per share for promissory note conversion of $11,633.
|
|
|
On September 18, 2015, we issued 475,000 common shares at
a deemed price of $0.03 per share for promissory note conversion of
$12,350.
|
|
|
On March 30, 2016, we issued 450,000 common shares at a
deemed price of $0.14365 per share for promissory note conversion of
$6,464.25
|
|
|
On April 4, 2016 the Company issued 650,000 common shares
at a deemed price of $0.026 per share for promissory note conversion and
interest conversion of $16,900.00.
|
|
|
On April 13, 2016 the Company issued 775,000 common
shares at a deemed price of $0.00975 per share for promissory note
conversion and interest conversion of $7556.25.
|
|
|
On April 19, 2016 the Company issued 850,000 common
shares at a deemed price of $0.00975 per share for promissory note
conversion $8,287.50.
|
|
|
On April 22, 2016 the Company issued 1,100,000 common
shares at a deemed price of $0.00975 per share for promissory note
conversion $10,725.00.
|
|
|
On April 28, 2016 the Company issued 1,500,000 common
shares at a deemed price of $0.0065 per share for promissory note
conversion $9,750.00.
|
|
|
On April 29, 2016 the Company issued 1,700,000 common
shares at a deemed price of $0.00494 per share for promissory note
conversion $8,398.00.
|
|
|
On May 9, 2016 the Company issued 2,500,000
common shares at a deemed price of $0.001625 per share for promissory note
conversion $4,062.50.
|
|
|
On May 11, 2016 the Company issued 3,500,000
common shares at a deemed price of $0.00975 per share for promissory note
conversion $3,412.50.
|
As at the date of this report, $185,314 remains unconverted and
outstanding.
On March 9, 2015, JDF Capital and Blue Citi PR, LLC agreed to
assign an aggregate of $100,000 from the convertible promissory note of JDF
Capital (that was issued by our company) to Blue Citi PR LLC. On June 22, 2016,
Blue Citi, LLC signed an extension of the maturity of the note due January 22,
2016. The note now matures on January 22, 2017 with the same terms and
conditions. As at the date of this report, we have issued the following
securities in conversion of the promissory note:
|
|
On April 22, 2015, we issued 14,793 common shares at a
deemed price of $0.34 per share for promissory note and interest
conversion $5,000.
|
|
|
On April 30, 2015, we issued 45,000 common shares at a
deemed price of $0.17 per share for promissory note and interest
conversion $7.605.
|
|
|
On May 7, 2015, we issued 75,000 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion $6,825.
|
|
|
On May 12, 2015, we issued 89,011 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion $8,100.
|
|
|
On May 13, 2015, we issued 125,000 common shares at a
deemed price of $0.08 per share for promissory note and interest
conversion $9,750.
|
|
|
On April 22, 2016 the Company issued 256,410 common
shares at a deemed price of $0.00975 per share for promissory note
conversion $2,500.00.
|
|
|
On April 28, 2016 the Company issued 1,214,575 common
shares at a deemed price of $0.0076 per share for promissory note
conversion $6,000.00.On April 29, 2016, the Company issued 769,231 common
shares at a deemed price of $0.0065 per share for promissory note
conversion $5,000.00.
|
As at the June 30, 2016, there remains a balance of $10,220
unconverted and payable pursuant to the note. On March 25, 2016 Blue Citi, LLC
agreed to assign an aggregate of $39,000 from the convertible promissory note of
Blue Citi, LLC (that was assigned by JDF Capital) to APG Capital Holdings. As at
the date of this report, we have issued the following securities in conversion
of the promissory note:
-
On April 4, 2016, the Company issued 160,043 common shares at a
deemed price of $0.0126 per share for promissory note conversion and interest
conversion of $2,016.54.
-
On April 5, 2016, the Company issued 227,770 common shares at a
deemed price of $0.011 per share for promissory note conversion and interest
conversion of $2,505.47.
-
On April 7, 2016, the Company issued 267,396 common shares at a
deemed price of $0.0075 per share for promissory note conversion and interest
conversion of $2,005.47.
-
On April 13, 2016, the Company issued 669,222 common shares at
a deemed price of $0.0075 per share for promissory note conversion and interest
conversion of $5,019.17.
-
On April 14, 2016, the Company issued 803,725 common shares at
a deemed price of $0.0075 per share for promissory note conversion and interest
conversion of $6,027.94.
-
On April 19, 2016, the Company issued 1,041,960 common shares
at a deemed price of $0.0075 per share for promissory note conversion $7,744.70.
-
On April 22, 2016, the Company issued 1,140,474 common shares
at a deemed price of $0.0075 per share for promissory note conversion $8,553.56.
-
On May 2, 2016, the Company issued 1,514,380 common shares at a
deemed price of $0.002 per share for promissory note conversion $3,028.76.
As at the June 30, 2016, there remains a balance of $2,286
unconverted and payable pursuant to the note.
On April 19, 2016, JDF Capital agreed to assign an aggregate of
$50,000 from the convertible promissory note of JDF Capital (that was issued by
our company) to Toledo Advisors LLC. As at the date of this report, we have
issued the following securities in conversion of the promissory note:
|
|
On April 20, 2016 the Company issued 750,000 common
shares at a deemed price of $0.0075 per share for promissory note
conversion $5,625.00.
|
|
|
On May 2, 2016 the Company issued 1,000,000 common shares
at a deemed price of $0.002 per share for promissory note conversion
$2,000.00.
|
|
|
On May 3, 2016 the Company issued 2,000,000 common shares
at a deemed price of $0.002 per share for promissory note conversion
$4,000.00.
|
|
|
On May 4, 2016 the Company issued 2,302,321 common shares
at a deemed price of $0.00145 per share for promissory note conversion
$3,338.37.
|
|
|
On May 5, 2016 the Company issued 3,500,000 common shares
at a deemed price of $0.00125 per share for promissory note conversion
$4,375.00.
|
|
|
On May 9, 2016 the Company issued 5,500,000 common shares
at a deemed price of $0.00115 per share for promissory note conversion
$6,325.00.
|
|
|
On May 9, 2016 the Company issued 6,100,000 common shares
at a deemed price of $0.00075 per share for promissory note conversion
$4,575.00
|
|
|
On May 10, 2016 the Company issued 6,600,000 common
shares at a deemed price of $0.00075 per share for promissory note
conversion $4,950.00.
|
|
|
On May 11, 2016 the Company issued 6,000,000 common
shares at a deemed price of $0.00075 per share for promissory note
conversion $4,500.00.
|
|
|
On May 12, 2016 the Company issued 7,900,000 common
shares at a deemed price of $0.0065 per share for promissory note
conversion $5,135.00.
|
|
|
On May 13, 2016 the Company issued 9,717,385 common
shares at a deemed price of $0.00055 per share for promissory note
conversion $5,109.30.
|
On February 1, 2016, JDF Capital agreed to assign an aggregate
of $70,500 from the convertible promissory note of JDF Capital (that was issued
by our company) to Vigere Capital.
On April 1, 2016, JDF Capital agreed to assign an aggregate of
$50,000 from the convertible promissory note of to APG Capital.
As at the June 30, 2016, there remains a balance of $67.00
unconverted and payable pursuant to the note.
Loan Agreement with JMJ Financial
On February 13, 2013, we entered into a securities purchase
agreement with JMJ Financial. Pursuant to the terms of the agreement, our
company will also enter into a convertible promissory note in the principal
amount of $1,100,000 (for consideration of up to $1,000,000), of which $100,000
shall be paid to our company upon closing of the convertible promissory note and
a common stock purchase warrant for the purchase of up to 135 shares of our
common stock at an exercise price of $740 for a period of five years. The
convertible promissory note shall have a maturity date of February 13, 2016. The
remainder of the convertible debenture can be drawn down on by mutual agreement
from JMJ Financial and our company. On July 13, 2016, JMJ Financial signed an
extension of the maturity of the note due February 13, 2016. The note now
matures on October 13, 2016 with the same terms and conditions.
As at the date of this report, we have made the following
issuances of common stock in conversion of the February 13, 2013 note:
|
|
On August 13, 2013, we issued 396 common shares
at a deemed price of $294.00 per share for promissory note and interest
conversion of $116,550.
|
|
|
On November 11, 2013, we issued 347 common shares at a
deemed price of $168.00 per share for promissory note and interest
conversion of $58,275.
|
|
|
On December 4, 2013, we issued 359 common shares at a
deemed price of $162.40 per share for promissory note and interest
conversion of $58,275.
|
|
|
On January 6, 2014, we issued 638 common shares at a
deemed price of $91.28 per share for promissory note conversion of
$58,275.
|
|
|
On February 14, 2014, we issued 500 common shares at a
deemed price of $89.60 per share for promissory note conversion of
$44,800.
|
|
|
On March 3, 2014, we issued 475 common shares at a deemed
price of $89.60 per share for promissory note conversion of $42,613.
|
|
|
On June 10, 2014, we issued 400 common shares at a deemed
price of $85.20 per share for promissory note conversion of $34,000.
|
|
|
On June 27, 2014, we issued 425 common shares at a deemed
price of $74.00 per share for promissory note conversion of $31,450.
|
|
|
On July 16, 2014, we issued 450 common shares at a deemed
price of $74.00 per share for promissory note and interest conversion of
$33,300.
|
|
|
On August 1, 2014, we issued 266 common shares at a
deemed price of $67.00 per share for promissory note and interest
conversion of $17,800.
|
|
|
On September 3, 2014, we issued 750 common shares at a
deemed price of $40.00 per share for promissory note and interest
conversion of $30,000.
|
|
|
On September 11, 2014, we issued 1,400 common shares at a
deemed price of $20.20 per share for promissory note and interest
conversion of $28,275.
|
|
|
|
|
|
On October 22, 2014, we issued 4,750 common shares at a
deemed price of $5.80 per share for promissory note and interest
conversion of $27,550.
|
|
|
On November 6, 2014, we issued 4,975 common shares at a
deemed price of $4.20 per share for promissory note and interest
conversion of $20,895.
|
|
|
On November 19, 2014, we issued 8,500 common shares at a
deemed price of $3.20 per share for promissory note and interest
conversion of $27,200.
|
|
|
On December 10, 2014, we issued 12,075 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $14,490.
|
|
|
On December 17, 2014, we issued 15,425 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $18,510.
|
|
|
On April 22, 2015, we issued 31,000 common shares at a
deemed price of $0.26 per share for promissory note and interest
conversion of $8,060.
|
|
|
On April 24, 2015, we issued 41,500 common shares at a
deemed price of $0.21 per share for promissory note and interest
conversion of $8,715.
|
|
|
On May 8, 2015, we issued 92,500 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion of $6,475.
|
|
|
On May 14, 2015, we issued 132,000 common shares at a
deemed price of $0.06 per share for promissory note and interest
conversion $7,920
|
|
|
On May 27, 2015, we issued 194,500 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion of $9,725.
|
|
|
On June 3, 2015, we issued 225,000 common shares at a
deemed price of $0.04 per share for promissory note and interest
conversion $9,000
|
|
|
On June 11, 2015, we issued 284,000 common shares at a
deemed price of $0.03 per share for promissory note and interest
conversion of $8,520.
|
|
|
On June 16, 2015, we issued 249,500 common shares at a
deemed price of $0.03 per share for promissory note and interest
conversion of $7,485.
|
|
|
On September 15, 2015, we issued 438,000 common shares at
a deemed price of $0.03 per share for promissory note conversion of
$13,140.
|
|
|
On October 28, 2015 we issued 554,000 common shares at a
deemed price of $0.01 per share for promissory note conversion of $5,540.
|
|
|
On March 28, 2016 we issued 600,000 common
shares at a deemed price of $ $0.025 per share for promissory note
conversion of $15,000.
|
|
|
On April 14, 2016 the Company issued 790,000
common shares at a deemed price of $0.007500 per share for promissory note
conversion and interest conversion of $5925.00.
|
|
|
On May 5, 2016 the Company issued 2,000,000
common shares at a deemed price of $0.002 per share for promissory note
conversion $4,000.00.
|
|
|
On May 10, 2016 the Company issued 3,200,000
common shares at a deemed price of $0.000750 per share for promissory note
conversion $2,400.00.
|
As at June 30, 2016, there remains a balance of approximately
$21,908 unconverted and payable pursuant to the note.
Together with the promissory note issued on February 13, 2013,
we issued the following warrants:
|
|
warrants to purchase up to 135 of our common shares at an
exercise price of $740.00 per share expiring February 13, 2018
(exercised);
|
|
|
warrants to purchase up to 66 of our common shares at an
exercise price of $760.00 expiring April 24, 2018 (exercised),
|
|
|
warrants to purchase up to 74 of our common shares at an
exercise price of $672.00 expiring June 4, 2018 (exercised),
|
|
|
warrants to purchase up to 100 of our common shares at an
exercise price of $500.00 expiring June 27, 2018 (exercised),
|
|
|
warrants to purchase up to 84 of our common shares at an
exercise price of $896.00 expiring August 14, 2018 (exercised),
|
|
|
warrants to purchase up to 417 of our common shares at an
exercise price of $240.00 expiring December 10, 2018 (exercised),
|
|
|
warrants to purchase up to 179 shares of our common
shares at an exercise price of $280.00 expiring February 20, 2019 (120
warrants exercised, 59 warrants outstanding);
|
|
|
warrants to purchase up to 952 of our common shares at an
exercise price of $210.00 expiring April 16, 2019 (not exercised).
|
|
|
On April 21, 2016 the Company issued 1,048,416 common
shares at a deemed price of $0.007500 per share pursuant to warrant
exercises.
|
|
|
On April 29, 2016 the Company issued 1,529,480 common
shares at a deemed price of $0.007500 per share pursuant to warrant
exercises.
|
Loan Agreement with JSJ Investments Inc.
On February 23, 2014, we entered into a securities purchase
agreement with JSJ Investments Inc., pursuant to which JSJ Investments provided
our company with an aggregate investment of $100,000 in consideration of our
issuance of convertible promissory notes and common share purchase warrants. We
issued JSJ Investments a convertible promissory note with 12% interest due
August 27, 2014 and convertible into common shares on a cashless basis at a
price of the lower of 50% of the average of the three lowest bids on the 20
trading days before February 27, 2014 or of a notice to convert during the
twenty trading days preceding the delivery of any related conversion notice. On
August 28, 2014, we issued 2,598 common shares at a deemed price of $40.80 per
share in full conversion of the promissory note and interest at face value of
$105,983.
In addition, we issued warrants to purchase an aggregate of 278
common shares of our company to JSJ Investments in consideration for purchasing
the note. Subject to adjustments, these warrants are convertible into common
shares at a price of approximately $360.00 and expire after a term of five
years. In the case that after six months there is no registration statement
available for the resale of our common shares from exercising of these warrants,
the warrants may be exercised on a cashless basis at a price as set out in the
warrant
Loan Agreement with Centaurian Fund
On February 28, 2014, we entered into a securities purchase
agreement with Centaurian Fund, pursuant to which Centaurian provided our
company with an aggregate investment of $50,000 in consideration of our issuance
of convertible promissory notes and common share purchase warrants. We issued
Centaurian a convertible promissory note with 15% interest due August 28, 2014
and convertible into common shares on a cashless basis at a price of the lower
of 50% of the average of the three lowest bids on the 20 trading days before
February 28, 2014 or of a notice to convert during the 20 trading days preceding
the delivery of any related conversion notice. In addition, we issued warrants
to purchase an aggregate of 1,289 common shares of our company to Centaurian in
consideration for purchasing the note. Subject to adjustments, these warrants
are convertible into common shares at a price of $240.00 and expire after a term
of six months. In the case that our common share closing price is greater than
$240.00 per share for two days, the warrants may be exercised on a cashless
basis at a price pursuant to the warrant. The warrants expired unexercised.
On September 4, 2014, JSJ, Centaurian Fund and our company
agreed to assign the note from Centaurian Fund to JSJ Investments and increase
the principal interest of the note to $74,750 with 12% interest.
|
|
On September 10, 2014, we issued 1,684 common shares at a
deemed price of $22.20 per share for promissory note and interest
conversion of $37,375.
|
|
|
On September 16, 2014, we issued 953 common shares at a
deemed price of $21.33 per share for promissory note and interest
conversion of $20,322.
|
|
|
On April 8, 2015, we issued 21,838 common shares at a market price of
$0.85 per share for promissory note and interest conversion of $18,475.
|
As at the date of this report, there remains no balance payable pursuant to the
note.
Loan Agreements with LG Capital Funding, LLC
On February 27, 2014, we entered into another securities
purchase agreement with LG Capital Funding, LLC. Pursuant to which LG Capital
provided our company with an aggregate investment of $75,000 in consideration of
a promissory note carrying interest at the rate of 10% per annum and due March
3, 2016. The promissory note is convertible into common shares of our company at
the investors option at any time after 180 days at a price equal to 50% of the
lowest bids price for the 20 days prior to conversion date subject to various
prescribed conditions. During the year ended June 30, 2015, the full face value
of the note including interest (being $80,145 (June 30, 2014 - $Nil) in the
aggregate) was fully converted to 28,087 common shares pursuant to the following
issuances of common stock:
|
|
On September 29, 2014, we issued 1,512 common
shares at a deemed price of $12.60 per share for promissory note and
interest conversion of $19,050.
|
|
|
On October 27, 2014, we issued 5,502 common
shares at a deemed price of $6.20 per share for promissory note and
interest conversion of $34,113.
|
|
|
On December 11, 2014, we issued 8,473 common
shares at a deemed price of $1.40 per share for promissory note and
interest conversion of $11,862.
|
|
|
On December 17, 2014, we issued 12,600 common
shares at a deemed price of $1.20 per share for promissory note and
interest conversion of $15,120.
|
On March 3, 2015, we entered into a securities purchase
agreement with LG Capital Funding, LLC, pursuant to which LG Capital provided
our company with an aggregate investment of $29,000 in consideration of our
issuance of convertible promissory notes. We issued LG Capital a convertible
promissory note with 10% interest due March 3, 2016 and convertible into common
shares on a cashless basis at a price of 65% of the lowest closing bid price of
our common shares during the prior 20 trading days including the delivery of any
related conversion notice. On July 7, 2016, we signed an extension of the
maturity of the note due March 3, 2016. The note now matures on May 3, 2016 with
the same terms and conditions.
|
|
On September 11, 2015 the Company issued 80,801
common shares at a deemed price of $0.04 per share for promissory note
conversion and interest conversion of $3,151.
|
|
|
On April 6, 2016 the Company issued 490,027
common shares at a deemed price of $0.01807 per share for promissory note
conversion and interest conversion of $8854.79.
|
|
|
On April 11, 2016 the Company issued 575,327
common shares at a deemed price of $0.010985 per share for promissory note
conversion and interest conversion of $6319.97.
|
|
|
On April 18, 2016 the Company issued 819,493 common
shares at a deemed price of $0.010595 per share for promissory note
conversion and interest conversion of $8,682.53.
|
|
|
On April 21, 2016 the Company issued 469,119 common
shares at a deemed price of $0.010595 per share for promissory note
conversion and interest conversion of $4,970.32.
|
As at the date of this report, there remains a balance of $0
unconverted and payable pursuant to the note. During the years ended June 30,
2016 and June 30, 2015, interest expense of $2,430 and $967, respectively, was
accrued in respect of the note.
On September 30, 2015, we entered into a securities purchase
agreement with LG Capital Funding, LLC. Pursuant to the terms of the agreement,
JDF Capital acquired a convertible redeemable promissory note with an aggregate
principal amount $27,000 due on September 30, 2016 which amount includes an
issuance discount of 10% and carries interest at the rate of 10% per annum after
12 months. The note is convertible at the lower of 65% discount of the lowest
trading price for the 20 days prior to conversion date subject to various
prescribed conditions.
|
|
On April 28, 2016 the Company issued 1,007,941 common
shares at a deemed price of $0.0065 per share for promissory note
conversion and interest conversion of $6,552.
|
As at the date of this report, there remains a balance of
$20,800 unconverted and payable pursuant to the note.
Loan Agreement with St. George Investments LLC
On February 28, 2014, we entered into a securities purchase
agreement with St. George Investments LLC, pursuant to which St. George
Investments provided our company with an aggregate investment of $100,000 in
consideration of our issuance of convertible promissory notes and common share
purchase warrants. We issued St. George Investments a convertible promissory
note of $125,500 including 15% prepaid interest due August 28, 2015 and
convertible into common shares on a cashless basis at a price of 50% of the
lower of lowest closing bid price of our common shares during the prior 20
trading days prior to 1) the date of the purchase agreement or 2) the day of the
notice for conversion. As at the date of this report we have made the following
issuances of common stock in conversion of the February 28, 2014 note:
|
|
On September 10, 2014, we issued 385 common shares at a
deemed price of $26.00 per share for promissory note and interest
conversion of $10,000.
|
|
|
On September 23, 2014, we issued 962 common shares at a
deemed price of $13.00 per share for promissory note and interest
conversion of $12,500.
|
|
|
On October 9, 2014, we issued 1,667 common shares at a
deemed price of $9.00 per share for promissory note and interest
conversion of $15,000.
|
|
|
On October 16, 2014, we issued 1,829 common shares at a
deemed price of $8.20 per share for promissory note and interest
conversion of $15,000.
|
|
|
On October 24, 2014, we issued 2,206 common shares at a
deemed price of $6.80 per share for promissory note and interest
conversion of $15,000.
|
|
|
On October 31, 2014, we issued 3,125 common shares at a
deemed price of $4.60 per share for promissory note and interest
conversion of $15,000.
|
|
|
On November 17, 2014, we issued 3,947 common shares at a
deemed price of $3.80 per share for promissory note and interest
conversion of $15,000.
|
|
|
On December 3, 2014, we issued 5,357 common shares at a
deemed price of $2.80 per share for promissory note and interest
conversion of $15,000.
|
|
|
On December 16, 2014, we issued 9,286 common shares at a
deemed price of $1.40per share for promissory note and interest conversion
of $13,000.
|
As at the date of this report, there remains no balance
unconverted and payable pursuant to the note.
In addition, we issued an aggregate of 370 warrants to St.
George Investments in consideration for purchasing the note. Subject to
adjustments, these warrants are convertible into common shares at a price of
$270.00 and expire after a term of five years. As at the date of this report we have made the
following issuances of common stock in full exercise of the February 28, 2014
warrant:
|
|
On March 16, 2015, 141 warrants were exercised for 36,175
of our common shares at a deemed price of $0.64 in accordance with the
terms of the agreement.
|
|
|
On April 16, 2015, we issued 42,417 common shares at a deemed price of
$3.14 per share in the aggregate pursuant to the exercise of 230 warrants.
|
Loan Agreement with Vista Capital Investments, LLC
On February 28, 2014, we entered into a securities purchase
agreement with Vista Capital Investments, LLC, pursuant to which Vista Capital
provided our company with an aggregate investment of $100,000 in consideration
of our issuance of convertible promissory notes and common share purchase
warrants. We issued Vista Capital a convertible promissory note of $110,000 with
12% interest due September 1, 2014 and convertible into common shares on a
cashless basis at a price of the lesser of $300 or 50% of the lowest bid price
of our common shares during the prior 25 consecutive trading days prior the
delivery of any related conversion notice. As at the date of this report, we
have made the following issuances of common stock in full conversion of the
February 28, 2014 note:
|
|
On September 23, 2014, we issued 2,500 common shares at a
deemed price of $11.00 per share for promissory note and interest
conversion of $27,520.
|
|
|
On October 27, 2014, we issued 3,750 common shares at a
deemed price of $5.80 per share for promissory note and interest
conversion of $21,520.
|
|
|
On November 3, 2014, we issued 3,750 common shares at a
deemed price of $4.60 per share for promissory note and interest
conversion of $17,250.
|
|
|
On December 10, 2014, we issued 8,500 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $10,200.
|
|
|
On April 1, 2015, we issued 15,000 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $18,000.
|
|
|
On April 7, 2015, we issued 22,500 common shares at a
deemed price of $1.02 per share for promissory note and interest
conversion of $22,950.
|
|
|
On April 14, 2015, we issued 25,000 common shares at a
deemed price of $0.49 per share for promissory note and interest
conversion of $12,250.
|
|
|
On April 20, 2015, we issued 30,000 common shares at a
deemed price of $0.26 per share for promissory note and interest
conversion of $7,800.
|
|
|
On April 24, 2015, we issued 37,500 common shares at a
deemed price of $0.21 per share for promissory note and interest
conversion of $7,875.
|
|
|
On April 29, 2015, we issued 45,000 common shares at a
deemed price of $0.14 per share for promissory note and interest
conversion of $6,300.
|
|
|
On May 5, 2015 we issued 75,000 common shares at a deemed
price of $0.01 per share for promissory note and interest conversion of
$7,500.
|
|
|
On May 8, 2015, we issued 75,000 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion of $5,250.
|
|
|
On May 13, 2015, we issued 122,357 common shares at a deemed price of $
0.07 for promissory note and interest conversion of $8,565.
|
As at the
date of this report, there remains no balance unconverted and payable pursuant
to the note. In addition, we issued warrants to purchase an aggregate of 2,578
common shares of our company to Vista Capital in consideration for purchasing
the note. Subject to adjustments, these warrants are convertible into common
shares at a price of $240.00 during the period beginning August 28, 2014 and
ending August 28, 2019. In the case that our common share closing price is
greater than $240.00 per share for two days, the warrants may be exercised on a
cashless basis at a price pursuant to the warrant.
On August 20, 2014, we issued an aggregate of 4,528 common
shares at a deemed price of $203.13 per share for the cashless conversion of
warrants issued on February 28, 2014.
Loan Agreement with Union Capital, LLC
On March 3, 2014, we entered into a securities purchase
agreement with Union Capital, LLC, pursuant to which Union provided our company
with an aggregate investment of $50,000 in consideration of our issuance of
convertible promissory notes and common share purchase warrants. We issued Union
a convertible promissory note of $50,000 with 10% interest due March 5, 2015 and
convertible into common shares on a cashless basis at a price per share of 50%
of the lowest closing bid price of our common shares during the prior 20 trading
days including the delivery of any related conversion notice. As at the date of
this report, we have made the following issuances of common stock in conversion
of the March 3, 2014 note:
|
|
On September 8, 2014, we issued 277 common shares at a
deemed price of $38.00 per share for promissory note and interest
conversion of $10,510.
|
|
|
On September 11, 2014, we issued 652 common shares at a
deemed price of $24.20 per share for promissory note and interest
conversion of $15,777.
|
|
|
On September 12, 2014, we issued 717 common shares at a
deemed price of $22.00 per share for promissory note and interest
conversion of $15,781.
|
|
|
On September 15, 2014, we issued 479 common shares at a
deemed price of $22.00 per share for promissory note and interest
conversion of $10,529.
|
As at the date of this report, there remains no balance
unconverted and payable pursuant to the note.
In addition, we issued warrants to purchase an aggregate of 235
common shares of our company to Union in consideration for purchasing the note.
Subject to adjustments, these warrants are convertible into common shares at a
price of $212.00 and expire after a term of five years. In the case that after
six months there is no registration statement available for the resale of our
common shares from exercising of these warrants, the warrants may be exercised
on a cashless basis at a price as set out in the warrant.
Loan Agreement with Iconic Holdings, LLC
On March 3, 2014, we entered into a securities purchase
agreement with Iconic Holdings, LLC, pursuant to which Iconic provides our
company with an aggregate investment of $100,000 in consideration of our
issuance of convertible promissory notes and common share purchase warrants. We
issued Iconic a convertible promissory note of $100,000 with 12% interest due
September 3, 2014 and convertible into common shares on a cashless basis at a
price of 50% of the lower of lowest closing bid price of our common shares
during the prior 20 trading days prior to 1) the date of the purchase agreement
or 2) the day of the notice for conversion. As at the date of this report, we
have made the following issuances of common stock in conversion of the March 3,
2014 note:
|
|
On September 12, 2014, we issued 2,475 common
shares at a deemed price of $20.20 per share for promissory note and
interest conversion of $50,000.
|
|
|
On October 23, 2014, we issued 1,471 common
shares at a deemed price of $6.80 per share for promissory note and
interest conversion of $10,000.
|
|
|
On November 14, 2014, we issued 5,263 common
shares at a deemed price of $3.80 per share for promissory note and
interest conversion of $20,000.
|
|
|
On November 18, 2014, we issued 7,193 common
shares at a deemed price of $3.80 per share for promissory note and
interest conversion of $27,335.
|
As at the date of this report, all interest and principal of
the note has been fully converted.
In addition, we issued an aggregate of 500 warrants to Iconic
in consideration for purchasing the note. Subject to adjustments, these warrants
are convertible into common shares at a price of $200 and expire after a term of
three years. As at the date of this report, we have made the following issuances
of common stock in cashless exercise of the March 3, 2014 warrants:
|
|
On April 14, 2015, we issued 5,385 common
shares at a deemed price of $23.74 per share in full exercise of the
warrants.
|
Loan Agreement with Adar Bays, LLC
On March 3, 2014, we entered into a securities purchase
agreement with Adar Bays, LLC, pursuant to which Adar provided our company with
an aggregate investment of $50,000 in consideration of our issuance of
convertible promissory notes and common share purchase warrants. We issued Adar
a convertible promissory note of $50,000 with 10% interest due March 4, 2015 and
convertible into common shares on a cashless basis at a price per share of 50%
of the lowest closing bid price of our common shares during the prior 20 trading
days including the delivery of any related conversion notice. As at the date of
this report, we have made the following issuances of common stock in conversion
of the March 3, 2014 note:
|
|
On September 4, 2014, we issued 227 common shares at a
deemed price of $44.00 per share for promissory note and interest
conversion of $10,000.
|
|
|
On September 11, 2014, we issued 413 common shares at a
deemed price of $24.20 per share for promissory note and interest
conversion of $10,000.
|
|
|
On September 17, 2014, we issued 354 common shares at a
deemed price of $19.80 per share for promissory note and interest
conversion of $7,000.
|
|
|
On September 23, 2014, we issued 369 common shares at a
deemed price of $12.60 per share for promissory note and interest
conversion of $4,655.
|
|
|
On September 29, 2014, we issued 1,250 common shares at a
deemed price of $12.60 per share for promissory note and interest
conversion of $15,750.
|
|
|
On October 27, 2014, we issued 836 common shares at a
deemed price of $6.40 per share for promissory note and interest
conversion of $5,353.
|
As at the date of this report, there remains no balance
unconverted and payable pursuant to the note.
In addition on March 4, 2014, we issued an aggregate of 235
warrants to Adar in consideration for purchasing the note. Subject to
adjustments, these warrants are convertible into common shares at a price of
$212.00 and expire after a term of five years.
Loan Agreement with Black Mountain Equities, Inc.
On March 3, 2014, we entered into a securities purchase
agreement with Black Mountain Equities, Inc., pursuant to which Black Mountain
provided our company with an aggregate investment of $100,000 in consideration
of our issuance of original issue discount convertible promissory notes and
common share purchase warrants. We issued Black Mountain a convertible
promissory note of $115,000 with 15% prepaid interest due April 1, 2015 and
convertible into common shares on a cashless basis at the lesser price per share
of $240.00 or 50% of the lowest trade price of our common shares during the
prior 20 trading days immediately preceding the delivery of any related
conversion notice.
As at the date of this report, we have made the following
issuances of common stock in conversion of the March 3, 2014 note:
|
|
On October 27, 2014, we issued 5,678 common shares at a
deemed price of 5.80 per share for promissory note and interest conversion
of $32,934.
|
|
|
On December 12, 2014, we issued 18,612 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $22,334.
|
|
|
On March 31, 2015, we issued 20,834 common shares at a
deemed price of $1.20 per share for promissory note and interest
conversion of $25,000.
|
|
|
On May 1, 2015, we issued 105,315 common shares at a
deemed price of $0.16 per share for promissory note and interest
conversion of $16,850.
|
|
|
On May 7, 2015, we issued 90,775 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion of $6,354.
|
|
|
On May 12, 2015, we issued 90,775 common shares at a
deemed price of $0.07 per share promissory note and interest conversion of
$6,354.
|
|
|
On June 4, 2015, we issued 222,791 common
shares at a deemed price of $0.04 per share for promissory note and
interest conversion of $8,911.
|
|
|
On June 11, 2015, we issued 428,933 common
shares at a deemed price of $0.03 per share for promissory note and
interest conversion $12,868.
|
As at the date of this report, there remains no balance
unconverted and payable pursuant to the note.
In addition on March 3, 2014, we issued an aggregate of 417
warrants to Black Mountain in consideration for purchasing the note. Subject to
adjustments, each warrant is convertible into common shares at a price of
$240.00 per share and expire after a term of five years. In the case that our
common share closing price is greater than $240.00 per share for two days, the
warrants may be exercised on a cashless basis at a price pursuant to the
warrant. As at the date of this report, we have made the following issuances of
common stock in full exercise of the March 3, 2014 warrants:
|
|
On August 5, 2014, we issued 5,161 common
shares pursuant to the exercise of warrants at a deemed price of $33.59
per share or $173,367 in the aggregate.
|
|
|
On September 15, 2014, we issued 2,737 common
shares pursuant to the exercise of warrants at a deemed price of $34.12
per share or $93,401 in the aggregate.
|
As at the date of this report, there are no warrants remaining
pursuant to the securities purchase agreement.
Loan Agreement with 514742 B.C. Ltd.
On March 3, 2014, we entered into a securities purchase
agreement with Alta Disposal Ltd., our wholly-owned subsidiary, and 514742 B.C.
Ltd., pursuant to which 514742 B.C. provided Alta Disposal with an aggregate
investment of CAD$330,000 (US$298,518) in consideration of our issuance of
secured promissory notes and common share purchase warrants.
On March 3, 2014, 514742 B.C. funded an aggregate investment of
CAD$333,000 to Alta Disposal. Therefore, Alta Disposal issued 514742 B.C. a
secured promissory note of Alta Disposal CAD$333,000 with 20% interest due June
1, 2014. The note is secured by all present and after acquired property of Alta
Disposal. Effective April 14, 2014, the company paid a total of CAD$346,274
(US$316,355) in principle and interest to settle this debt.
In addition on March 3, 2014, we issued an aggregate 550
warrants to 514742 B.C. in consideration for purchasing the note. Subject to
adjustments, these warrants are convertible into common shares at a price of
$200.00 and expire after a term of three years. In the case that after six
months there is no registration statement available for the resale of our common
shares from exercising of these warrants, the warrants may be exercised on a
cashless basis at a price as set out in the warrant.
Loan Agreement with Cardinal Capital Group, Inc.
On October 31, 2014, we entered into a securities purchase
agreement with Cardinal Capital Group, Inc., pursuant to which Cardinal Capital
provided our company with an aggregate investment of $50,000 in consideration of
our issuance of a convertible promissory note. We issued Cardinal Capital a
convertible promissory note of $59,500 comprised of $6,000 in interest and
$3,500 in legal fees and due in two years. The note is convertible into shares
of our common stock at the lesser of $20.00 or 65% of the lowest trade price of
our common stock during the 20 trading days immediately preceding a conversion
date. As at the date of this report, we have made the following issuances of
common stock in conversion of the October 31, 2014 note:
|
|
On April 30, 2015, we issued 49,000 common shares at a
deemed price of $0.20 per share for promissory note and interest
conversion of $9,800.
|
|
|
On May 1, 2015, we issued 49,000 common shares at a
deemed price of $0.20 per share for promissory note and interest
conversion $9,800.
|
|
|
On May 7, 2015, we issued 49,000 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion $4,459.
|
|
|
On May 11, 2015, we issued 110,000 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion $10,010.
|
|
|
On May 14, 2015, we issued 110,000 common shares at a
deemed price of $0.08 per share for promissory note and interest
conversion $8,580.
|
|
|
On May 27, 2015, we issued 150,000 common shares at a
deemed price of $0.07 per share for promissory note and interest
conversion $9,750.
|
|
|
On June 2, 2015, we issued 150,000 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion $7,800.
|
|
|
On June 15, 2015, we issued 165,154 common shares at a
deemed price of $0.04 per share for promissory note and interest
conversion $6,441.
|
As at the date of this report, there remains no balance
unconverted and payable pursuant to the note.
Loan Agreement with InLight Capital Partners, LLC.
On August 22, 2014, we entered into a securities purchase
agreement with InLight Capital Partners, LLC, pursuant to which InLight Capital
provided our company with an aggregate investment of $100,000 in consideration
of our issuance of a convertible promissory note and warrants to purchase common
shares of our company with an aggregate exercise price of $120,500. The note was
funded by InLight Capital in the amount of $100,000 and shall include $20,500 in
respect of pre-paid interest calculated in advance at the rate of 12% per annum
for 18 months plus expenses of the Purchaser. InLight Capital delivered to us
funds in the amount of $50,000 on the effective date and $50,000 on September
19, 2014. On July 27, 2016, InLight Capital Partners, LLC signed an extension of
the maturity of the note due February 23, 2016. The note now matures on February
23, 2017 with the same terms and conditions.
As at the date of this report, we have made the following
issuances of common stock in conversion of the August 22, 2014 note:
|
|
On April 13, 2015, we issued 26,250 common shares at a
deemed price of $0.64 per share for promissory note and interest
conversion of$16,721.
|
|
|
On April 27, 2015, we issued 26,250 common shares at a
deemed price of $0.22 per share for promissory note and interest
conversion of $5,801.
|
|
|
On April 30, 2015, we issued 54,200 common shares at a
deemed price of $0.15 per share for promissory note and interest
conversion of $9,160.
|
|
|
On May 5, 2015, we issued 78,892 common shares at a
deemed price of $0.12 per share for promissory note and interest
conversion of $9,230.
|
|
|
On May 11, 2015, we issued 92,741 common shares at a
deemed price of $0.09 per share for promissory note and interest
conversion of $8,439.
|
|
|
On May 19, 2015, we issued 166,802 common shares at a
deemed price of $0.08 per share for promissory note and interest
conversion of $13,091.
|
|
|
On June 9, 2015, we issued 255,000 common shares at a
deemed price of $0.05 per share for promissory note and interest
conversion of $13,260.
|
|
|
On July 22, 2015, we issued 100,000 common shares at a
deemed price of $0.05 per share for promissory note conversion of $5,200.
|
|
|
On April 11, 2016, we issued 500,000 common shares at a
deemed price of $0.00975 per share for promissory note conversion and
interest conversion of $4,875.
|
|
|
On April 26, 2016, we issued 1,600,000 common shares at a
deemed price of $0.00715 per share for promissory note conversion $11,400.
|
On July 27, 2016, we agreed with InLight Capital to amend the
promissory note by extending the maturity until February 23, 2017 in exchange
for $35,000 in consideration to be added to the note. As at September 29, 2016
the principal amount of $43,644.68 plus interest remained payable pursuant to
the promissory note, as amended.
In addition on August 22, 2014 and September 19, 2014, we
issued an aggregate of 538 warrants to InLight Capital Partners, LLC in
consideration for purchasing the note. Subject to adjustments, these warrants
are convertible into common shares at a price of $112.00 and expire after a term
of five years. In the case that after six months there is no registration
statement available for the resale of our common shares from exercising of these
warrants, the warrants may be exercised on a cashless basis at a price as set
out in the warrant.
Loan Agreement with Louis Feld
On February 6, 2015, Louis Feld provided our company with an
aggregate investment of $88,500 in consideration of our issuance of $88,500
convertible promissory note and warrants to acquire 13,828 common shares with an
aggregate exercise price of $88,500. We issued Mr. Feld a convertible promissory
note with 12% interest due August 6, 2016 and convertible into common shares on
a cashless basis at a price of 65% of the lowest closing bid price of our common
shares during the prior 20 trading days. During the periods ended June 30, 2016
and June 30, 2015, interest expense of $7,911 and $8,863 was accrued,
respectively. As at the date of this report, we
have made the following issuances of common stock in conversion of promissory
note:
|
|
On August 17, 2015, we issued 250,000 common shares at a
deemed price of $0.04 per share for promissory note and interest
conversion of $9,750.
|
|
|
On September 18, 2015, we issued 394,231 common shares at
a deemed price of $0.03 per share for promissory note conversion of
$10,250.
|
|
|
On March 29, 2015 the Company issued 450,748 common
shares at a deemed price of $0.0221 per share for promissory note
conversion of $6,475.
|
|
|
On April 4, 2016 the Company issued 641,025 common shares
at a deemed price of $0.0252 per share for promissory note conversion and
interest conversion of $10,500.00.
|
|
|
On April 8, 2016 the Company issued 769,230 common shares
at a deemed price of $0.0126 per share for promissory note conversion and
interest conversion of $7,500.00.
|
|
|
On April 14, 2016 the Company issued 846,153 common
shares at a deemed price of $0.00975 per share for promissory note
conversion and interest conversion of $8,250.
|
|
|
On April 17, 2016 the Company issued 1,128,205 common
shares at a deemed price of $0.00975 per share for promissory note
conversion $11,000.00. On May 3, 2016 the Company issued 1,586,538 common
shares at a deemed price of $0.0026 per share for promissory note
conversion $4,125.00.
|
As at the date of this report, there remains $7,150 balance
unconverted and payable pursuant to the note.
Loan Agreement with River North Equity LLC
On February 24, 2015, River North provided our company with an
aggregate investment of $100,000 in consideration of our issuance of a
convertible promissory note with a face value of $118,000. The face value of the
note includes minimum interest for 18 months at the rate of 12% per annum,
calculated monthly. The promissory note, which is due August 24, 2016, is
convertible into common shares on a cashless basis at a price of 65% of the
lowest closing bid price of our common shares during the prior 25 trading days
including the delivery of any related conversion notice.
On November 10, 2015, River North agreed to assign an aggregate
of $100,000 from the convertible promissory note to VES Trust.
Bridge Loan Agreement with JDF Capital Inc.
On April 15, 2015, JDF Capital provided our company with a
$50,000 loan with 10% interest per annum due April 15, 2015. On or about May 22,
2015 we prepaid the aggregate of $50,493.15, in full repayment of the loan, and
aggregate accrued interest of $493.15.
Promissory Notes with VES Investment Trust
On November 11, 2015 the balance note of $6,639 along with
interest of $5,681 totaling to $12,320 was assigned to VES Trust
|
|
On March 24, 2015, the Company issued 500,000 common
shares at a deemed price of $0.014 per share for promissory note of
$7,183.
|
|
|
On April 8, 2016, the Company issued 591,620 common
shares at a deemed price of $0.0086 per share for promissory note
conversion of $5,138.
|
As at the June 30, 2016, there remains a balance of $0
unconverted and payable pursuant to the note.
On December 1, 2015, we entered into a securities purchase
agreement with VES Investment Trust dated December 1, 2015 pursuant to which we
issued to VES Investment Trust a convertible promissory note in the aggregate
principal amount of $18,000, which amount includes the purchase price of
$15,000, 10% pre-paid interest (per annum, for 12 months) of $1,500, and $1,500
in respect of legal fees incurred by VES Investment Trust. The convertible note
has a maturity date of December 1, 2016 and is convertible in whole or in part
into shares of our common stock at price per share equal to 65% of the lowest
reported sale price of our common shares during the 20 trading days prior to
December 1, 2015 or prior to the applicable conversion date.
On January 27, 2016, we entered into a securities purchase
agreement with VES Investment Trust. Pursuant to the terms of the agreement, VES
Investment acquired a 10% convertible note with an aggregate face value of
$5,500, with an issuance discount of $500 and maturity of one year. The holder
of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of our companys common stock.
On November 10, 2015, River North agreed to assign an aggregate
of $100,000 from the convertible promissory note to VES Trust. As at the date of this report, we have made the following
issuances of common stock in conversion of promissory note:
|
|
On April 13, 2016 the Company issued 750,312 common
shares at a deemed price of $0.009329 per share for promissory note
conversion and interest conversion of $7,000.
|
|
|
On April 19, 2016 the Company issued 750,312 common
shares at a deemed price of $0.009329 per share for promissory note
conversion $7,000.
|
|
|
On April 26, 2016 the Company issued 923,077 common
shares at a deemed price of $0.0065 per share for promissory note
conversion $6,000.
|
|
|
On May 12, 2016 the Company issued 4,000,000 common
shares at a deemed price of $0.000845 per share for promissory note
conversion $3,380.
|
As at June 30, 2016, there remains a balance of $76,239
unconverted and payable pursuant to the note.
Recent Loans and Related Agreements
On August 3, 2015, we entered into a securities purchase
agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF
Capital acquired a convertible promissory note with an aggregate face value of
$36,000 due on February 3, 2016, which amount includes an issuance discount of
10% and carries interest at the rate of 10% per annum after 12 months. The note
is convertible at a 35% discount to the lowest sale price for the 20 days
trading days immediately prior to (i) the date of the purchase agreement, or
(ii) the voluntary conversion date, subject to various prescribed conditions. On
May 19, 2016, JDF Capital Inc. signed an extension of the maturity of the note
due February 3, 2016. The note now matures on February 3, 2017 with the same
terms and conditions.
On September 9, 2015, we entered into a securities purchase
agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF
Capital acquired a convertible promissory note with an aggregate face value of
$30,000 due on September 9, 2016, which amount includes an issuance discount of
10% and carries interest at the rate of 10% per annum after 12 months. The note
is convertible at a 35% discount to the lowest sale price for the 20 days
trading days immediately prior to (i) the date of the purchase agreement, or
(ii) the voluntary conversion date, subject to various prescribed conditions. On
September 09, 2016, JDF Capital Inc. signed an extension of the maturity of the
note due on September 9, 2016. The note now matures on September 9, 2017 with
the same terms and conditions.
On November 6, 2015, we entered into another securities
purchase agreement with JDF Capital Inc. Pursuant to the terms of the agreement,
JDF Capital acquired a convertible promissory note with an aggregate face value
of $12,000 due on November 6, 2016, which amount includes an issuance discount
of 10% and carries interest at the rate of 10% per annum after 12 months. The
note is convertible at a 35% discount to the lowest sale price for the 20 days
trading days immediately prior to (i) the date of the purchase agreement, or
(ii) the voluntary conversion date, subject to various prescribed conditions.
On December 1, 2015, we entered into a securities purchase
agreement with JDF Capital Inc. dated December 1, 2015 pursuant to which we
issued to JDF a convertible promissory note in the aggregate principal amount of
$18,000, which amount includes the purchase price of $15,000, 10% pre-paid
interest (per annum, for 12 months) of $1,500, and $1,500 in respect of legal
fees incurred by JDF. The convertible note has a maturity date of December 1,
2016 and is convertible in whole or in part into shares of our common stock at
price per share equal to 65% of the lowest reported sale price of our common
shares during the 20 trading days prior to December 1, 2015 or prior to the
applicable conversion date.
On December 3, 2015, we entered into a securities purchase
agreement with LG Capital Funding pursuant to which we issued to LG Capital a
convertible redeemable note with an aggregate face value of $17,000 due December
3, 2016 and bearing interest form issuance at the rate of 10% per annum payable
on maturity. The holder of the note is entitled, at its option, before or after
maturity, to convert all or a part of the principal or interest outstanding into
shares of our common stock at a price equal to 65% of lowest trading price
during the 20 trading days on the date the notice of conversion is delivered. In
the event that we experience a DTC Chill on our shares, the conversion price
shall be decreased to 55% instead of 65% while that Chill is in effect.
On January 27, 2016, we entered into a securities purchase
agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF
Capital acquired a 10% convertible note with an aggregate face value of $24,750,
with an issuance discount of $2,250 and legal fees of $2,500. The note matures
in one year. The holder of this note is entitled, at its option, to convert all
or a part of the principal outstanding at the date into shares of our companys
common stock. at a price equal to a 65% of the lowest sale price of the
common stock during the 20 trading days immediately prior to the date of the
securities purchase agreement or prior to the applicable conversion date.
On February 1, 2016, we entered into a securities purchase
agreement with Vigere Capital LP, a Delaware limited partnership. Pursuant to
the terms of the agreement, Vigere acquired all right, title and interest to an
aggregate of $70,500 portion of the note issued pursuant to a securities
purchase agreement between JDF Capital, Inc. and our company on July 22, 2014.
The convertible note purchased by Vigere has a maturity date of January 22, 2016
and is convertible in whole or in part into shares of our common stock at price
per share equal to 65% of the lowest reported sale price of our common shares
during the 20 trading days prior to July 22, 2014 ($160.00) or prior to the
applicable conversion date. On August 11, 2016, Vigere signed an extension of
the maturity of the note to be due January 22, 2017.
-
On April 12, 2016 the Company issued 776,000 common shares at a
deemed price of $0.0075 per share for promissory note conversion $5,820.
-
On May 02, 2016 the Company issued 1,700,000 common shares at a
deemed price of $0.0049 per share for promissory note conversion $8,398.
-
On May 10, 2016 the Company issued 3,100,000 common shares at a
deemed price of $0.0010 per share for promissory note conversion $3,023.
-
On May 12, 2016 the Company issued 2,500,000 common shares at a
deemed price of $0.0016 per share for promissory note conversion $4,063.
As at the June 30, 2016, there remains a balance of $49,197
unconverted and payable pursuant to the note.
On March 1, 2016, we entered into a securities purchase
agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF
Capital acquired a 10% convertible note with an aggregate face value of $13,200,
with an issuance discount of $1,200 and $2,000 of legal fees. The note matures
in one year. The holder of this note is entitled, at its option, to convert all
or a part of the principal outstanding at the date into shares of our company's
common stock at a price equal to a 65% of the lowest sale price of the common
stock during the 20 trading days immediately prior to the date of the securities
purchase agreement or prior to the applicable conversion date.
On March 24, 2016, we entered into a securities purchase
agreement with JDF Capital Inc. Pursuant to the terms of the agreement, JDF
Capital acquired a 10% convertible note with an aggregate face value of $12,100,
with an issuance discount of $ $1,100 and $1,000 of legal fees. The note matures
in one year. The holder of this note is entitled, at its option, to convert all
or a part of the principal outstanding at the date into shares of our company's
common stock at a price equal to a 65% of the lowest sale price of the common
stock during the 20 trading days immediately prior to the date of the securities
purchase agreement or prior to the applicable conversion date.
On March 28, 2016, we entered into a securities purchase
agreement with
APG Capital Holdings, LLC. Pursuant to the terns of the
agreement, APG Capital Holdings, LLC acquired a 10% convertible note with an
aggregate face value of $40,700, with an issuance discount of $ 3,700.00. The
note matures in one year. The holder of this note is entitled, at its option, to
convert all or a part of the principal outstanding at the date into shares of
our company's common stock at a price equal to a 65% of the lowest sale price of
the common stock during the 20 trading days immediately prior to the date of the
securities purchase agreement or prior to the applicable conversion date.
On April 19, 2016, our company entered into an agreement with
Toledo Advisors LLC. Pursuant to the terms of the agreement, the investor
acquired a 10% convertible note with an aggregate face value of $50,000, with
issuance discount of $7,500. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of our company's common stock at a price
equal to a 50% of the lowest sale price of the common stock during the 20
trading days ending on to the date of the applicable conversion date. The note
was assigned to a third party on September 7, 2016.
On April 19, 2016, our company entered into an agreement with
VES Investment Trust. Pursuant to the terms of the agreement, the investor
acquired a 10% convertible note with an aggregate face value of $30,000, with an
issuance discount of $2,500 and $2,500 of legal fees. The note matures in one
year. The holder of this note is entitled, at its option, to convert all or a
part of the principal outstanding at the date into shares of our companys
common stock at a 65% discount to the lowest trading price occurring during the
20 trading days prior to the notice of conversion.
On April 19, 2016, our company entered into an agreement with
APG Capital. Pursuant to the terms of the agreement, the investor acquired a 10%
convertible note with an aggregate face value of $59,500, with an issuance
discount of $9,500. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of our company's common stock at a 65% discount to the
lowest trading price occurring during the 20 trading days prior to the
applicable notice of conversion.
On May 16, 2016, our company entered into a securities purchase agreement with
JDF Capital Inc. Pursuant to the terms of the agreement, the investor acquired a
10% convertible note with an aggregate face value of $30,250, with an issuance
discount of $2,750 and $2,500 of legal fees. The note matures in one year. The
holder of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of our company's common stock at a
65% discount to the lowest trading price occurring during the 20 trading days
prior to the applicable notice of conversion.
On August 12, 2016, our company entered into an agreement with
JDF Capital Inc. Pursuant to the agreement, in consideration of $37,000 paid to
our company, we issued to JDF Capital a convertible promissory note in the
aggregate principal amount of $42,500, which amount is inclusive of
prepaid interest at the rate of 10% per annum and $2,500 for legal expenses. The
promissory note is due and payable on August 12, 2017 and will bear additional
interest after maturity at the rate of 10% per annum The Note is convertible at
the option of the holder into common shares of our company at a price per share
equal to 65% of the lowest trading price of our common stock as reported on the
OTC Markets electronic quotation system during the twenty trading days ending on
the date the applicable conversion notice is received by our company.
On September 1, 2016, our company entered into letter
agreements with five separate investors with the intent to buyout their notes
and warrants. Pursuant to the terms of the agreement, the investors have agreed
to a standstill period until September 16, 2016. The buyout will take place over
a six month period of time and will result in an aggregate of $252,856 in debt
being retired, an aggregate of $195,500 in warrants being retired and an
aggregate buyout amount of $460,000 will be paid over the period Additionally
the Company will also issue an aggregate of $232,500 in new convertible debt.
Conversion Price for note will be 65% of the lowest trading price of the Common
Stock as reported on the OTC Markets electronic quotation service or such
marketplace. Note will have no prepayment penalties and can be purchased from
the holder at face value.
The various letters of agreement impose standstill periods on
the holders of the convertible notes during which time they will refrain from
converting their convertible notes into common shares. Each standstill period
will expire upon termination of the applicable letter of intent or until the
execution of a definitive agreement, whichever is earlier. Each letter of intent
contemplates the completion of good faith negotiation and due diligence by the
parties by September 12, 2016 which, if successful, will be followed by the
execution and closing of a definitive agreement by September 14, 2016 and
September 16, 2016, respectively. The closing of the definitive definitive
agreement will be subject to a number of conditions precedent which include,
without limitation, our Companys ability to secure sufficient and timely
financing to complete the transaction, customary director approvals, and the
participation of each of the convertible noteholders in question.
On September 2, 2016 we entered into a loan agreement with JDF
Capital Inc. pursuant to which JDF Capital has provided our company with a
bridge loan in the amount of $50,000. The loan bears interest at the rate of 10%
per annum and is due November 2, 2016. In the event the loan is not repaid on
maturity, as additional consideration to JDF Capital, we have agreed to amend
the July 22, 2015, $708,000 convertible promissory note held by JDF Capital so
that the note shall be convertible into our common shares at a 50% discount to
market price rather than a 35% discount to market price. In September, 2016 we
prepaid $50,082.19 to JDF Capital in full settlement of all principal and
interest outstanding pursuant to the loan agreement.
On September 07, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $116,000, with an
issuance discount of $11,600. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of the of common stock in the Company at a
price equal to the lesser of $0.005 or 50% discount of the lowest trading price
of the Common Stock as reported on the OTC Markets for the twenty prior trading
days including the day upon which a Notice of Conversion is received.
On September 08, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $27,778, with an issuance
discount of $2,778. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock in the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
On September 15, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $257,778, with an
issuance discount of $25,778. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock in the Company at a price
equal to the lesser of $0.005 or 50% discount of the lowest trading price of the
Common Stock as reported on the OTC Markets for the twenty prior trading days
including the day upon which a Notice of Conversion is received.
On September 27, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $64,900, with an issuance
discount of $5,900 and legal fees of $4,000. The note matures in one year. The
holder of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of common stock in the Company at
a price equal to the lesser of $0.005 or 50% discount of the lowest trading
price of the Common Stock as reported on the OTC Markets for the twenty prior
trading days including the day upon which a Notice of Conversion is received.
On September 29, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $61,112, with an issuance
discount of $6,112. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock in the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
Agreements with Executive Officers, Directors and
Consultants
Regardless of their date, the transactions described below are
adjusted on a post reverse stock split basis. The adjustments included our first
reverse share split approved by our board of directors on January 19, 2015 (on
the basis of 20 old shares of common stock for one (1) new share of common
stock), and our second reverse stock split, approved by our board of directors
on July 13, 2015 (on the basis of 200 old shares of common stock for one (1) new
share of common stock).
On October 24, 2012, we entered into a share exchange agreement
dated October 18, 2012, with Alexander Walsh, our president and director.
Pursuant to the agreement, on October 25, 2012 we issued to Mr. Walsh 5,000
Series A Convertible Preferred shares in our capital stock in consideration of
the cancellation and return to treasury of 5,000 shares of our common stock held
by Mr. Walsh. The Series A Convertible Preferred Shares have a par value of
$0.001 per share and are convertible on a one for one basis into shares of our
common stock after a one year hold period. There are no other preferential
rights attached to the Series A Convertible Preferred Shares. Mr. Walsh
established a series of a 10b5-1 Sales Plans in connection with an overall asset
diversification strategy. Sales transactions occurring under Mr. Walshs 10b5-1
Plans were disclosed publicly through Form 4 filings with the SEC and are
subject to the restrictions and filing requirements of Rule 144.
On July 25, 2013, we entered into a consulting agreement with
Advanced Capital Trading, LLC, pursuant to which Advanced Capital performed
financial consulting services for our company for a period of three months with
an extension of an additional three months based on performance, such services
commenced effective August 1, 2013. Compensation payable to Advanced Capital of
$10,000 was paid upon execution of the consulting agreement.
Effective January 1, 2014, we entered into a consulting
agreement for a term of 12 months with International Compass, LLC for the
services of Bryan Kleinlein as chief financial officer of our company. As
compensation, we agreed to pay to International Compass $12,000 per month during
the term of the agreement payable in cash and/or common shares of our company
that were previously registered on Form S-8 at our sole discretion. The value of
the shares of our company issued as compensation, if any, shall be based on the
volume weighted average trading closing price of the shares of our company in
the five (5) trading days immediately preceding the date(s) which the shares are
due. Mr. Kleinlein was first appointed as our chief financial officer on May 15,
2012. Effective October 22, 2014, we entered into an amending agreement with
International Compass. Pursuant to this amending agreement, the term of the
agreement dated January 1, 2014 with International Compass was reduced from 12
months to 10 months. As consideration to International Compass for agreeing to
enter into the amending agreement, we agreed to pay Mr. Kleinlein an aggregate
of $30,000, payable in our S-8 shares with a deemed price per share equal to the
volume weighted average trading close price of the shares in the five trading
days immediately preceding the amending agreement. As a result, we issued Mr.
Kleinlein an aggregate of 1,908 S-8 shares on October 22, 2014 Mr. Kleinlein
resigned as our chief financial officer as of November 1, 2014.
Effective January 12, 2014, we entered into an employment
agreement with Alexander Walsh for provision of services as our president and
chief executive officer. The employment agreement will terminate on January 12,
2016. Pursuant to the terms of the employment agreement, Mr. Walsh will receive
an annual salary of $120,000 payable in monthly cash installments or, in the
event cash is unavailable, in shares of our companys common stock. The
employment agreement also provides for liability insurance and any travel and
out-of-pocket expenses incurred and approved by our company.
On April 28, 2014, we entered into a consulting agreement, with
our director, Brandon Colker, to provide services on behalf of our company.
Pursuant to the terms of the consulting agreement, Mr. Colker was to receivem my
May 15, 2014, compensation of $12,000 payable in unregistered restricted common
shares of our company's common stock at a deemed value of $200 per share
(Subsequent to the agreement, on February 12, 2015, Mr. Colker resigned as a
director and consultant of the company and, accordingly, the common shares were
not issued.
Effective May 30, 2014, we entered into a consulting agreement
with Robert Gomer. Pursuant to this agreement, Mr. Gomer is to assist us with
the current business of testing ultrasonic generator technology and performing
services customary expected of a consultant for a term of six months. In
exchange for these services that are to be provided to us, we agreed to issue an
aggregate of $10,000 per month, payable in two sums of $30,000 and in our S-8
shares with a deemed price per share equal to the volume weighted average
trading close price of the shares in the five trading days immediately preceding
the amending agreement. As a result, we issued Mr. Gomer an aggregate of 292 S-8
shares on September 1, 2014. The agreement expired and was not subsequently
renewed.
Effective August 1, 2014, we entered into a consultant
agreement with TEN Associates LLC. Pursuant to this agreement, TEN Associates is
to provide advice relative to corporate and business services and to perform
other related activities as directed by us. In exchange for these services that
are to be provided to us, we agreed to issue 500 common shares of our company to
TEN Associates.
Our company was made aware that a shareholder, who is also a
director and officer of our company, had sold an aggregate amount of shares that
would cause the shareholder to be required to pay our company with respect to a
short swing profit. Our company informed the shareholder that the shareholder
was liable to our company for an aggregate short swing profit of $80,523.58
under Section 16(b) of the Securities Exchange Act of 1934, as amended, for the
profit realized from transactions in our companys common stock. Our company and
the shareholder entered into a settlement agreement dated December 31, 2014
wherein, in exchange for the forbearance of legal action by our company pursuant
to Section 16(b) of the Act, the shareholder agreed to disgorge the short swing
profit to our company as of the effective date of the short swing settlement
agreement. Payment of the short swing profit from the shareholder was received
by our company on December 31, 2014.
On December 15, 2010, Alexander Walsh, a director and officer
of our company, entered into an assignment of debt agreement with Nanuk Warman,
which was also acknowledged by our company, whereby the debt of $47,537 advanced
by Mr. Warman to our company and outstanding as of December 6, 2010, was
assigned to Mr. Walsh.
On December 23, 2014, Mr. Walsh made demand for repayment of
the debt by our company. In connection with the assignment of debt agreement and
the demand, Mr. Walsh and our company entered into a settlement agreement dated
December 23, 2014 wherein our company is to repay the debt to Mr. Walsh in full.
Our company also agreed to pay an aggregate of $150,000 to Mr. Walsh as a
performance bonus for the services provided by Mr. Walsh for the period from
August 2013 to March 2014 as related to the acquisition of Tero Oilfield
Services Ltd. due on the following terms:
1.
|
an aggregate of $50,000 due immediately; and
|
|
|
2.
|
an aggregate of $100,000 bearing no interest and due on
the earlier of:
|
|
a.
|
at the sole discretion of our company; or
|
|
|
|
|
b.
|
the date of the sale, merger, amalgamation or other
business combination or reorganization of our
company.
|
Competition
The mineral exploration industry is highly competitive. We are
a new exploration-stage company and have a weak competitive position in the
industry. We compete with junior and senior mineral exploration companies,
independent producers and institutional and individual investors who are
actively seeking to acquire mineral exploration properties throughout the world
together with the equipment, labor and materials required to operate on those
properties. Competition for the acquisition of mineral exploration interests is
intense with many mineral exploration leases or concessions available in a
competitive bidding process in which we may lack the technological information
or expertise available to other bidders.
Many of the mineral exploration companies with which we compete
for financing and for the acquisition of mineral exploration properties have
greater financial and technical resources than those available to us.
Accordingly, these competitors may be able to spend greater amounts on acquiring
mineral exploration interests of merit or on exploring or developing their
mineral exploration properties. This advantage could enable our competitors to
acquire mineral exploration properties of greater quality and interest to
prospective investors who may choose to finance their additional exploration and
development. Such competition could adversely impact our ability to attain the
financing necessary for us to acquire further mineral exploration interests or
explore and develop our current or future mineral exploration properties.
We also compete with other junior mineral exploration companies
for financing from a limited number of investors that are prepared to invest in
such companies. The presence of competing junior mineral exploration companies
may impact our ability to raise additional capital in order to fund our
acquisition or exploration programs if investors perceive that investments in
our competitors are more attractive based on the merit of their mineral
exploration properties or the price of the investment opportunity. In addition,
we compete with both junior and senior mineral exploration companies for
available resources, including, but not limited to, professional geologists,
land specialists, engineers, camp staff, helicopters, float planes, mineral
exploration supplies and drill rigs.
General competitive conditions may be substantially affected by
various forms of energy legislation and/or regulation introduced from time to
time by the governments of the United States and other countries, as well as
factors beyond our control, including international political conditions,
overall levels of supply and demand for mineral exploration.
In the face of competition, we may not be successful in
acquiring, exploring or developing profitable mineral properties or interests,
and we cannot give any assurance that suitable oil and gas properties or
interests will be available for our acquisition, exploration or development.
Despite this, we hope to compete successfully in the mineral exploration
industry by:
|
|
keeping our costs low;
|
|
|
relying on the strength of our managements
contacts; and
|
|
|
using our size and experience to our advantage
by adapting quickly to changing market conditions or responding swiftly to
potential opportunities.
|
Intellectual Property
We own the trademark Lithium Exploration Group for the use of
mining exploration, namely, lithium exploration services, in class 42 (U.S. CLS.
100 and 101). The registration number is 4,075,565 and was registered on
December 20, 2011. We do not have any other intellectual property.
Government Regulation
Any operations at our Lithium properties will be subject to
various federal and state laws and regulations in Canada which govern
prospecting, development, mining, production, exports, taxes, labor standards,
occupational health, waste disposal, protection of the environment, mine safety,
hazardous substances and other matters. We will be required to obtain those
licenses, permits or other authorizations currently required to conduct
exploration and other programs. There are no current orders or directions
relating to us or to our lithium properties with respect to the foregoing laws
and regulations. Such compliance may include feasibility studies on the surface
impact of our proposed operations, costs associated with minimizing surface
impact, water treatment and protection, reclamation activities, including
rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife
and permits or bonds as may be required to ensure our compliance with applicable
regulations. It is possible that the costs and delays associated with such
compliance could become so prohibitive that we may decide to not proceed with
exploration, development, or mining operations on any of our mineral properties.
We are not presently aware of any specific material environmental constraints
affecting our properties that would preclude the economic development or
operation of property in Canada.
Environmental Regulations
We are not aware of any material violations of environmental
permits, licenses or approvals that have been issued with respect to our
operations. We expect to comply with all applicable laws, rules and regulations
relating to our business, and at this time, we do not anticipate incurring any
material capital expenditures to comply with any environmental regulations or
other requirements.
While our intended projects and business activities do not
currently violate any laws, any regulatory changes that impose additional
restrictions or requirements on us or on our potential customers could adversely
affect us by increasing our operating costs or decreasing demand for our
products or services, which could have a material adverse effect on our results
of operations.
Employees
We currently employ two individuals: Alexander Walsh as chief
executive officer, and Shanon Chilson as an administrative assistant and
controller. Outside consultants have been engaged for administrative duties and
industry specialties.
Research and Development
We have not spent any amounts which have been classified as
research and development activities in our financial statements during the last
two fiscal years.
Going Concern
We anticipate that additional funding will be required in the
form of equity financing from the sale of our common stock. At this time, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or through a loan from our
directors to exit the exploration phase of our company and reach development and
revenue. We do not have enough cash on hand to meet our obligations over the
next twelve months. We do not have any arrangements in place for any future
equity financing.
Subsidiaries
We have two wholly-owned subsidiaries, Alta Disposal Ltd. and Black Box Energy, Inc., and a 51% owned subsidiary, Alta Disposal Morinville Ltd. Alta Disposal Ltd., was incorporated in the province of Alberta, Canada on July 8, 2011. This subsidiary was formed to stake MAIM (Metallic and Industrial Mineral) rights in Alberta which subsequently lapsed or were sold. Black Box Energy, Inc. was incorporated on September 9, 2016 in the State of Nevada for the purposes of acquiring a 50% working interest in the McKean County Project. Alta Disposal Morinville Ltd. (formerly Blue Tap Resources, Inc.) is an Alberta, Canada corporation, In September 4, 2015 we sold substantially all of the assets, business and undertaking of Alta Disposal Morinville Ltd.
REPORTS TO SECURITY HOLDERS
We are not required to deliver an annual report to our
stockholders but will voluntarily send an annual report, together with our
annual audited financial statements upon request. We are required to file
annual, quarterly and current reports, proxy statements, and other information with the Securities and
Exchange Commission. Our Securities and Exchange Commission filings are
available to the public over the Internet at the SEC's website at
http://www.sec.gov.
The public may read and copy any materials filed by us with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The Internet address of the site is
http://www.sec.gov
.
Much of the information included in this annual report includes
or is based upon estimates, projections or other forward-looking statements.
Such forward-looking statements include any projections and estimates made by us
and by our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other forward-looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward-looking statements.
Risks Related to Our Business
We have a limited operating history and as a result there is
no assurance we can operate on a profitable basis.
We have a limited operating history. Our company's operations
will be subject to all the uncertainties arising from the absence of a
significant operating history. Potential investors should be aware of the
difficulties normally encountered by resource exploration companies and the high
rate of failure of such enterprises. The likelihood of success must be
considered in light of the problems, expenses, difficulties, complications and
delays encountered in connection with the exploration of the properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of our properties may not result in the discovery of reserves.
Problems such as unusual or unexpected formations of rock or land and other
conditions are involved in resource exploration and often result in unsuccessful
exploration efforts. If the results of our exploration do not reveal viable
commercial reserves, we may decide to abandon our claims and acquire new claims
for new exploration or cease operations. The acquisition of additional claims
will be dependent upon us possessing capital resources at the time in order to
purchase such claims. If no funding is available, we may be forced to abandon
our operations. There can be no assurance that we will be able to operate on a
profitable basis.
If we do not obtain additional financing, our business will
fail and our investors could lose their investment.
We had cash in the amount of $25,208 and working capital
deficiency (current liabilities exceeding current assets) of $2,473,600 as of
the year ended June 30, 2016. We currently do not generate much revenue from our
operations. Any direct acquisition of a claim under lease or option is subject
to our ability to obtain the financing necessary for us to fund and carry out
exploration programs on potential properties. The requirements are substantial.
Obtaining additional financing would be subject to a number of factors,
including market prices for resources, investor acceptance of our properties and
investor sentiment. These factors may negatively affect the timing, amount,
terms or conditions of any additional financing available to us. The most likely
source of future funds presently available to us is through the sale of equity
capital and loans. Any sale of share capital will result in dilution to existing
shareholders.
Because of the speculative nature of exploration of mineral
properties, we may never discover a commercially exploitable quantity of
minerals, our business may fail and investors may lose their entire
investment.
We are in the very early exploration stage and cannot guarantee
that our exploration work will be successful, or that any minerals will be
found, or that any production of minerals will be realized. The search for
valuable minerals as a business is extremely risky. Substantial investment will
be required to move our company toward the production of minerals. This may
require bringing in a partner to make the necessary investment, but there are no
plans at this time for any form of partnership or merger. We can provide
investors with no assurance that exploration on our properties will establish
that commercially exploitable reserves of minerals exist on our property.
Additional potential problems that may prevent us from discovering any reserves
of minerals on our property include, but are not limited to, unanticipated
problems relating to exploration and additional costs and expenses that may
exceed current estimates. If we are unable to establish the presence of
commercially exploitable reserves of minerals on our property, our ability to
fund future exploration activities will be impeded, we will not be able to
operate profitably and investors may lose all of their investment in our
company.
We have no known mineral reserves and we may not find any
lithium and, even if we find lithium, it may not be in economic quantities. If
we fail to find any lithium or if we are unable to find lithium in economic
quantities, we will have to suspend operations.
We have no known mineral reserves. Additionally, even if we
find lithium in sufficient quantity to warrant recovery, it ultimately may not
be recoverable. Finally, even if any lithium is recoverable, we do not know that
this can be done at a profit. Failure to locate lithium in economically
recoverable quantities will cause us to suspend operations.
Supplies needed for exploration may not always be available.
If we are unable to secure exploration supplies we may have to delay our
anticipated business operations.
Competition and unforeseen limited sources of supplies needed
for our proposed exploration work could result in occasional spot shortages of
supplies of certain products, equipment or materials. There is no guarantee we
will be able to obtain certain products, equipment and/or materials as and when
needed, without interruption, or on favorable terms. Such delays could affect
our anticipated business operations and increase our expenses.
Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.
Potential investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of the mineral claim may not result in the discovery of mineral
deposits. Problems such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration
efforts. If the results of our exploration do not reveal viable commercial
mineralization, we may decide to abandon our claims. If this happens, our
business will likely fail.
The marketability of natural resources will be affected by
numerous factors beyond our control, which may result in us not receiving an
adequate return on invested capital to be profitable or viable.
The marketability of natural resources, which may be acquired
or discovered by us, will be affected by numerous factors beyond our control.
These factors include market fluctuations in lithium pricing and demand, the
proximity and capacity of natural resource markets and processing equipment,
governmental regulations, land tenure, land use, regulation concerning the
importing and exporting of mineral resources and environmental protection
regulations. The exact effect of these factors cannot be accurately predicted,
but the combination of these factors may result in us not receiving an adequate
return on invested capital to be profitable or viable.
Exploration and production activities are subject to certain
environmental regulations, which may prevent or delay the commencement or
continuation of our operations.
In general, our exploration and production activities are
subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuation of a given operation. Specifically, we may be subject to
legislation regarding emissions into the environment, water discharges and
storage and disposition of hazardous wastes. In addition, legislation has been
enacted which requires well and facility sites to be abandoned and reclaimed to
the satisfaction of state authorities. However, such laws and regulations are
frequently changed and we are unable to predict the ultimate cost of compliance.
Generally, environmental requirements do not appear to affect us any differently
or to any greater or lesser extent than other companies in the industry.
Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our profitability.
The business of mineral exploration and development is subject
to substantial regulation under various countries laws relating to the
exploration for, and the development, upgrading, marketing, pricing, taxation,
and transportation of mineral resources and related products and other matters.
Amendments to current laws and regulations governing operations and activities
of mineral exploration and development operations could have a material adverse
impact on our business. In addition, there can be no assurance that income tax
laws, royalty regulations and government incentive programs related to the
properties and the mineral exploration industry generally will not be changed in
a manner which may adversely affect our progress and cause delays, inability to
explore and develop or abandonment of these interests.
Permits, leases, licenses, and approvals are required from a
variety of regulatory authorities at various stages of exploration and
development. There can be no assurance that the various government permits,
leases, licenses and approvals sought will be granted in respect of our
activities or, if granted, will not be cancelled or will be renewed upon expiry.
There is no assurance that such permits, leases, licenses, and approvals will
not contain terms and provisions, which may adversely affect our exploration and
development activities.
If we are unable to hire and retain key personnel, we may
not be able to implement our business plan.
Our success is largely dependent on our ability to hire highly
qualified personnel. This is particularly true in highly technical businesses
such as resource exploration. These individuals are in high demand and we may
not be able to attract the personnel we need. In addition, we may not be able to
afford the high salaries and fees demanded by qualified personnel, or may lose
such employees after they are hired. Failure to hire key personnel when needed,
or on acceptable terms, would have a significant negative effect on our
business.
Our independent certified public accounting firm, in their
report on the audited financial statements for the year ended June 30, 2016,
states that there is a substantial doubt that we will be able to continue as a
going concern.
As of June 30, 2016, we have experienced significant losses
since inception. Failure to arrange adequate financing on acceptable terms and
to achieve profitability would have an adverse effect on our financial position,
results of operations, cash flows and prospects. Accordingly, there is
substantial doubt that we will be able to continue as a going concern.
Risks Relating to the Industry in General
Planned exploration, and if warranted, development and
mining activities involve a high degree of risk.
We cannot assure you of the success of our planned operations.
Exploration costs are not fixed, and resources cannot be reliably identified
until substantial development has taken place, which entails high exploration
and development costs. The costs of mining, processing, development and
exploitation activities are subject to numerous variables, which could result in
substantial cost overruns. Mining for base or precious metals may involve
unprofitable efforts, not only from dry properties, but from properties that are
productive but do not produce sufficient net revenues to return a profit after
accounting for mining, operating and other costs.
Our operations may be curtailed, delayed or cancelled as a
result of numerous factors, many of which are beyond our control, including
economic conditions, mechanical problems, title problems, weather conditions,
compliance with governmental requirements and shortages or delays of equipment
and services.
We do not insure against all risks associated with our business
because insurance is either unavailable or its cost of coverage is prohibitive.
The occurrence of an event that is not covered by insurance could have a
material adverse effect on our financial condition.
The impact of government regulation could adversely affect
our business.
Our business is subject to applicable domestic and foreign laws
and regulations, including laws and regulations on taxation, exploration, and
environmental and safety matters. Many laws and regulations govern the spacing
of mines, rates of production, prevention of waste and other matters. These laws
and regulations may increase the costs and timing of planning, designing,
drilling, installing, operating and abandoning our mines and other facilities.
In addition, our operations are subject to complex environmental laws and
regulations adopted by domestic and foreign jurisdictions where we operate. We
could incur liability to governments or third parties for any unlawful discharge
of pollutants into the air, soil or water, including responsibility for remedial
costs.
The submission and approval of environmental impact
assessments may be required.
Environmental legislation is evolving in a manner which means
stricter standards; enforcement, fines and penalties for noncompliance are more
stringent. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and directors, officers and employees.
The cost of compliance with changes in governmental regulations has a potential
to reduce the profitability of operations.
Because the requirements imposed by these laws and regulations
frequently change, we cannot assure you that laws and regulations enacted in the
future, including changes to existing laws and regulations, will not adversely
affect our business.
Decline in mineral prices may make it commercially
infeasible for us to develop our property and may cause our stock price to
decline.
The value and price of your investment in our common shares,
our financial results, and our exploration, development and mining activities
may be significantly adversely affected by declines in the price of minerals and
other precious metals. Mineral prices fluctuate widely and are affected by
numerous factors beyond our control, such as interest rates, exchange rates,
inflation or deflation, fluctuation in the value of the United States dollar and
foreign currencies, global and regional supply and demand, and the political and
economic conditions of mineral-producing countries throughout the world. The
price of minerals fluctuates in response to many factors, which are beyond
anyones prediction abilities. The prices used in making the estimates in our
plans differ from daily prices quoted in the news media. Because mining occurs
over a number of years, it may be prudent to continue mining for some periods
during which cash flows are temporarily negative for a variety of reasons. Such
reasons include a belief that the low price is temporary, and/or the expense
incurred is greater when permanently closing a mine.
We may not have access to all of the supplies and materials
we need to begin exploration, which could cause us to delay or suspend
operations.
Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies such as dynamite
as well as certain equipment like bulldozers and excavators that we might need
to conduct exploration. If we cannot obtain the necessary supplies, we will have
to suspend our exploration plans until we do obtain such supplies.
Risks Associated with Our Common Stock
Trading on the OTC Markets may be volatile and sporadic,
which could depress the market price of our common stock and make it difficult
for our stockholders to resell their shares.
Our common stock is quoted on the OTCQB tier of the electronic
quotation system operated by OTC Markets . Trading in stock quoted on the OTC
Markets is often thin and characterized by wide fluctuations in trading prices,
due to many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Markets is not
a stock exchange, and trading of securities on the OTC Markets is often more
sporadic than the trading of securities listed on a quotation system like NASDAQ
or a stock exchange like NYSE or Amex. Accordingly, shareholders may have
difficulty reselling any of the shares.
Penny stock rules will limit the ability of our stockholders
to sell their stock.
The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholder's ability
to buy and sell our stock.
In addition to the penny stock rules described above, FINRA has
adopted rules that require that, in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative, low-priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that
speculative, low-priced securities will not be suitable for at least some
customers. FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock and have an adverse effect on the market for
its shares.
We do not intend to pay dividends and there will thus be
fewer ways in which you are able to make a gain on your investment.
We have never paid dividends and do not intend to pay any
dividends for the foreseeable future. To the extent that we may require
additional funding currently not provided for in our financing plan, our funding
sources may prohibit the declaration of dividends. Because we do not intend to
pay dividends, any gain on your investment will need to result from an
appreciation in the price of our common stock. There will therefore be fewer
ways in which you are able to make a gain on your investment.
Because the SEC imposes additional sales practice
requirements on brokers who deal in shares of penny stocks, some brokers may be
unwilling to trade our securities. This means that you may have difficulty
reselling your shares, which may cause the value of your investment to
decline.
Our shares are classified as penny stocks and are covered by
Section 15(g) of the Securities Exchange Act of 1934 (the Exchange Act) which
imposes additional sales practice requirements on brokers-dealers who sell our
securities in this offering or in the aftermarket. For sales of our securities,
broker-dealers must make a special suitability determination and receive a
written agreement from you prior to making a sale on your behalf. Because of the
imposition of the foregoing additional sales practices, it is possible that
broker-dealers will not want to make a market in our common stock. This could
prevent you from reselling your shares and may cause the value of your
investment to decline.
Other Risks
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.
Item 1B.
|
Unresolved Staff Comments
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
On May 25, 2016 we entered into a lease agreement with
Lakeshore Investment Group II, LLC to lease the premises of our executive
offices located at 4635 South Lakeshore Drive, Suite 200 and 130, Tempe Arizona.
The lease is for a period of 12 months beginning June 1, 2016 for a monthly rate
of $1,198.67, inclusive of internet and utilities.
We also currently rent an office at a business center at 840
6th Avenue SW, Suite 300, Calgary, AB T2P 3E5 for $998 a month on a month to
month basis. Our telephone number in Scottsdale is (480) 641-4790. Our telephone
number in Calgary is (403) 930-1925.
Item 3.
|
Legal Proceedings
|
Other than as set out below, we know of no material, existing
or pending legal proceedings against us, nor are we involved as a plaintiff in
any material proceeding or pending litigation. There are no proceedings in which
any of our directors, officers or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our
company.
On June 12, 2012, we filed a complaint against Glottech-USA in
the Court of Common Pleas of Chester County, Pennsylvania, alleging that
Glottech-USA misused our funds and was in breach of our agreements that called
for Glottech-USA to deliver one initial unit of the mechanical ultrasound
technology. We further alleged that Glottech-USA was financially insolvent and
unable to fulfill its promises to us.
On June 12, 2012, we filed a complaint with the Court of Common
Pleas of Chester County, Pennsylvania against Glottech-USA, LLC, Eldredge, Inc.,
and the Eldredge Companies, Inc. Pursuant to an unopposed motion, the Eldredge
parties were dismissed in October of 2012. The complaint initially sought an
order of the Court granting possession of the initial unit.
Effective August 14, 2012, we entered into an option agreement
with GD Glottech International to protect our license and distribution rights in
the event that Glottech-USA became unable to perform and honor its obligations
to us.
Pursuant to the terms of the option agreement, we were required
to provide an initial amount of $150,000 to be held in escrow for the option to
obtain a license on the patent rights, as set forth in the option agreement. On
September 1, 2012, Glottech-USAs license to the technology expired and also on
September 1, 2012, we exercised this option agreement and released the funds to
GD Glottech International.
On October 1, 2012, we entered into a license agreement and a
sales agency agreement with GD Glottech, regarding GD Glottech Internationals
proprietary and patented mechanical ultrasound technology for use in water
purification in the process of separation of salt and other minerals from
lithium bearing brine produced from oil and gas operations. The license
agreement and sales agency agreement expands and replaces all prior agreements
among our company, GD Glottech International and Glottech-USA, LLC regarding our
rights to use and sell the mechanical ultrasound technology, included in our
letter of intent dated November 18, 2011, and our option agreement dated August
14, 2012.
Pursuant to the sales agency agreement we were appointed as
sales agent for the patented mechanical ultrasound technology within Canada. Our
appointment is exclusive within the field of non petro-chemical mining and
non-exclusive in all other fields of use. In consideration of the sales agency
rights, we agreed to issue to GD Glottech International 500 (adjusted for
subsequent reverse stock splits) common shares of our capital stock, which
obligation has been satisfied through the transfer to GD Glottech International
of 500 (adjusted for subsequent reverse stock splits) shares held by our officer
and director, Alexander Walsh. It was the explicit intention of the parties that
this share transfer fulfills the prior obligations of Alexander Walsh and our
company with respect to the option contemplated in the March and November 2011
agreements with Glottech-USA. We will receive a royalty in respect of sales of
the technology secured by us. The term of the initial agreement will be for 5
years with the possibility of extension if sales targets are achieved.
Pursuant to the license agreement, we obtained the exclusive
right to use the mechanical ultrasound technology within the field of
non-petro-chemical mining within the territory of Canada. We may also sublicense
our rights under the license in respect of one or more units of the technology
to any entity operating within the field of use in which we own or beneficially
own at least a 20% equity interest. GD Glottech International agreed to supply
us with up to 5 technology units per 12-month period from the effective date of
the license term, which will start from the month of delivery of the unit of the
technology. The first unit of the technology provided under the license to be
provided at no additional cost to us and subsequent units shall be subject to a
fee based on the then current retail price of the units. If we sublicense any of
our rights, the term of the applicable license will be for 5 years from the date
the applicable unit is delivered. Pursuant to the license agreement, GD Glottech
International shall provide ongoing technical assistance and training in respect
of our use of the technology at our cost.
In consideration of the license, we will pay to GD Glottech
International a royalty based on the tonnage of water produced by our use of the
technology in accordance with the agreement. A minimum annual royalty will be
applicable. The term of the license agreement shall be for an initial period of
5 years and shall be renewable for additional terms of 5 years provided that we
satisfy the minimum royalty requirements during each period.
GD Glottech Internationals technology is designed to separate
suspended solids from water (brine), which is one step in the process that we
are taking to produce commercially viable minerals. The technology produces
extremely high temperatures, which destroy organic substances such as bacteria
and other toxic agents. We believe that GD Glottech International's technology
can provide lower costs of operation as well as reduced time for site clean-up
than traditional methods of water treatment. We anticipate using this
application to extract dissolved solids like lithium, potassium, and magnesium
from oil field brine. The disposal of produced water (brine) from oil and gas
production in Alberta is a significant environmental issue for the province and
presents a considerable economic issue for producers. We intend to use the
technology on our Valleyview Property in Alberta, in cooperation with oil and
gas producers, to treat and dispose of their produced water while monetizing the
minerals that are contained within that produced water stream that is being
brought to the surface during the oil and gas production process. As we owned the
MAIM (Metals and Industrial Minerals) claims to the minerals on the Valleyview
Property, the minerals contained in their produced water stream fall under our
rights. While we have had discussions with oil and gas consultants and oil
operators regarding their difficulties in treating the brine at some of their
fields, we have no formal agreements in place.
The technical process is based on the use of mechanical
ultrasound generated through the production of a series of cavitations.
Mechanical ultrasound is a machine-produced sound of a frequency above the upper
limit of the normal range of human hearing. Cavitations are the rapid formation
and collapse of bubbles in liquids, caused by the movement of something such as a propeller or by waves of high-frequency
sound. The production of mechanical ultrasound allows GD Glottech
Internationals technology to distill the fluid stock. Using mechanical
ultrasound for distillation has been attempted before, but the external energy
requirement needed to produce the mechanical ultrasound was far too expensive to
make it commercially viable. GD Glottech Internationals technology uses the
energy released during the cavitations in order to make it commercially viable
from an economic perspective. During these cavitations, a millisecond of energy
is released. During this release, temperatures can reach 5,000 degrees
centigrade.
On August 27, 2012, we filed a motion to amend our complaint to
include claims of breach of trust and fiduciary duty, breach of good faith and
fair dealing, breach of contract, conversion of funds, fraud, and the imposition
of a constructive trust. We believe that this action was necessary to protect
our interests against possible misuse of funds by Glottech-USA, LLC and its
principals. We will also seek damages as appropriate.
On October 19, 2012, GD Glottech International moved to
intervene as an interested party in the litigation pending against Glottech-USA.
GD Glottech International cited its role as owner of the patents as a basis for
intervening in the litigation against Glottech-USA. We believe GD Glottech
Internationals entry into the litigation against Glottech-USA is favorable to
our cause in the litigation.
On October 22, 2012, the Court of Common Pleas in Chester
County, Pennsylvania, granted our motion to amend our complaint against
Glottech-USA to add claims for fraud and damages reflective of the malfeasance
which we allege against Glottech-USA and its officers.
On December 12, 2012, GD Glottech International removed the
management of Glottech-USA and appointed itself as the manager of Glottech-USA.
On the same day, Larry Nesbit, Mark Siegel and Ron Fender filed a motion to
dissolve Glottech-USA in Mississippi on the basis that Glottech-USA was unable
to meet its financial obligations and could not finish or deliver the unit to
us.
On December 19, 2012, an attorney purportedly acting on behalf
of Glottech-USA filed a motion in the lawsuit pending in Chester County,
Pennsylvania, seeking possession of the unit. In addition, Glottech-USA filed a
counterclaim seeking possession of the unit.
GD Glottech International immediately filed a motion to quash
Glottech-USAs motion and for sanctions against the law firm that filed the
motion. We also filed a motion, seeking disqualification of the law firm that
purported to represent Glottech-USA on the basis that the new management for
Glottech-USA had fired the law firm and, as such, the law firm no longer had
authority to represent Glottech-USA.
On April 25, 2013, we attended a hearing on the motions pending
in the lawsuit filed in Chester County, Pennsylvania. The Court did not rule on
any of the motions and, instead, stayed the case as to Glottech-USA until
December of 2013 pending the outcome of the lawsuit seeking dissolution of
Glottech-USA. The matter in Pennsylvania is no longer stayed. An attorney
purporting to represent Glottech-USA and the receiver appointed in Mississippi
has filed motions and other documents that may move the matter forward. We have
pending preliminary objections to the counterclaim, including a request for a
determination of which group is in control of Glottech-USA.
Certain members of Glottech-USA continue to pursue dissolution
of the company in Mississippi. The members of Glottech-USA who seek dissolution
have stated in court filings that it is not practicable for Glottech-USA to
continue as an ongoing business. In addition, Sulzer filed suit against
Glottech-USA Texas for unfulfilled obligations.
We do not believe that Glottech-USA has sufficient capital to
continue as an ongoing business. We have provided full consideration to
Glottech-USA and complied with all other agreed upon terms. We believe any
assertions against us to lack merit.
Given pending litigation against Glottech-USA, and the
uncertainties naturally inherent of any litigation (particularly as to outcome
and timing thereof), we have moved to assure continuity of our licensing rights
through entering into, and exercising, the option to contract directly with the
technology inventor and patents owner, GD Glottech International.
Thus, regardless of the outcome of the litigation, or indeed
any action or inaction of Glottech-USA, our interest in the technology is
assured.
On December 18, 2015 we withdrew our complaint against
Glottech-USA, LLC filed in Court of Common Pleas in Chester County,
Pennsylvania. Concurrently, we released Glottech USA, LLC and its former
principals, Mark Seigel, Larry Nesbit and Ron Fender , from any and all claims
related to the complaint.
Item 4.
|
Mine Safety Disclosures
|
Not applicable.
PART II
Item 5.
|
Market for Registrant's Common Equity and
Related Stockholder Matters and Issuer Purchases of
Equity
Securities
|
Our common stock is quoted on the OTC Markets electronic
quotation system under the Symbol "LEXG".
The high and low bid prices of our common stock for the periods
indicated below are as follows:
OTC Bulletin
Board
|
Quarter Ended
|
High*
|
Low*
|
October 10, 2016
|
0.01
|
0.00
|
September 30, 2016
|
$0.02
|
$0.00
|
June 30, 2016
|
$0.05
|
$0.00
|
March 31, 2016
|
$0.14
|
$0.04
|
December 31, 2015
|
$0.45
|
$0.02
|
September 30, 2015
|
$0.15
|
$0.06
|
June 30, 2015
|
$5.80
|
$0.06
|
March 31, 2015
|
$9.20
|
$3.19
|
December 31, 2014
|
$32.20
|
$2.00
|
September 30, 2014
|
$199.60
|
$23.20
|
|
|
Prices reflect actual prices as quoted on the OTC Markets
adjusted retroactively for our 20 for 1 and 200 for 1 reverse stock splits
which became effective on February 25, 2015 and September 30, 2015,
respectively.
|
Our common shares are issued in registered form. VStock
Transfer, 77 Spruce St, Suite 201, Cedarhurst, New York 11516 (Telephone:
(212)-828-8436; Facsimile: (646) 536-3179) is the registrar and transfer agent
for our common shares.
On October 11, 2016, the list of stockholders for our shares of
common stock showed 15 registered stockholders and 162,724,024 shares of common
stock outstanding.
Dividends
We have not declared any dividends on our common stock since
the inception of our company on March 8, 2006. There is no restriction in our
Articles of Incorporation and Bylaws that will limit our ability to pay
dividends on our common stock. However, we do not anticipate declaring and
paying dividends to our shareholders in the near future.
Equity Compensation Plan Information
As of June 30, 2016, we have not adopted an equity compensation
plan under which our common stock is authorized for issuance.
Purchase of Equity Securities by the Issuer and Affiliated
Purchasers
We did not purchase any of our shares of common stock or other
securities during the year ended June 30, 2016.
Recent Sales of Unregistered Securities
We did not sell any equity securities which were not registered
under the Securities Act during the year ended June 30, 2016 that were not
otherwise disclosed on our quarterly reports on Form 10-Q or our current reports
on Form 8-K filed during the year ended June 30, 2016. We completed the
following sales of unregistered securities during and subsequent to the three
month period under June 30, 2016:
On April 4, 2016 the Company issued 160,043 common shares at a
deemed price of $0.0126 per share for promissory note conversion.
On April 4, 2016 the Company issued 650,000 common shares at a
deemed price of $0.026 per share for promissory note conversion.
On April 4, 2016 the Company issued 641,025 common shares at a
deemed price of $0.0252 per share for promissory note conversion.
On April 5, 2016 the Company issued 227,770 common shares at a
deemed price of $0.011 per share for promissory note conversion.
On April 6, 2016 the Company issued 490,027 common shares at a
deemed price of $0.01807 per share for promissory note conversion.
On April 7, 2016 the Company issued 267,396 common shares at a
deemed price of $0.0075 per share for promissory note conversion.
On April 8, 2016 the Company issued 591,620 common shares at a
deemed price of $0.009329 per share for promissory note conversion.
On April 8, 2016 the Company issued 769,230 common shares at a
deemed price of $0.0126 per share for promissory note conversion.
On April 11, 2016 the Company issued 500,000 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On April 12, 2016 the Company issued 776,000 common shares at a
deemed price of $0.0075 per share for promissory note conversion.
On April 13, 2016 the Company issued 775,000 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On April 13, 2016 the Company issued 669,222 common shares at a
deemed price of $0.0075 per share for promissory note conversion.
On April 13, 2016 the Company issued 750,312 common shares at a
deemed price of $0.009329 per share for promissory note conversion.
On April 11, 2016 the Company issued 575,327 common shares at a
deemed price of $0.010985 per share for promissory note conversion.
On April 14, 2016 the Company issued 790,000 common shares at a
deemed price of $0.007500 per share for promissory note conversion.
On April 14, 2016 the Company issued 803,725 common shares at a
deemed price of $0.0075 per share for promissory note conversion.
On April 14, 2016 the Company issued 846,153 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On April 17, 2016 the Company issued 1,128,205 common shares at
a deemed price of $0.00975 per share for promissory note conversion.
On April 18, 2016 the Company issued 819,493 common shares at a
deemed price of $0.010595 per share for promissory note conversion.
On April 19, 2016 the Company issued 850,000 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On April 19, 2016 the Company issued 1,041,960 common shares at
a deemed price of $0.0075 per share for promissory note conversion.
On April 19, 2016 the Company issued 750,312 common shares at a
deemed price of $0.009329 per share for promissory note conversion.
On April 20, 2016 the Company issued 750,000 common shares at a
deemed price of $0.0075 per share for promissory note conversion.
On April 21, 2016 the Company issued 469,119 common shares at a
deemed price of $0.010595 per share for promissory note conversion.
On April 21, 2016 the Company issued 1,048,416 common shares at
a deemed price of $0.007500 per share for exercise of warrants.
On April 22, 2016 the Company issued 1,140,474 common shares at
a deemed price of $0.0075 per share for promissory note conversion.
On April 22, 2016 the Company issued 1,100,000 common shares at
a deemed price of $0.00975 per share for promissory note conversion.
On April 22, 2016 the Company issued 256,410 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On April 26, 2016 the Company issued 923,077 common shares at a
deemed price of $0.0065 per share for promissory note conversion.
On April 26, 2016 the Company issued 1,600,000 common shares at
a deemed price of $0.00715 per share for promissory note conversion.
On April 28, 2016 the Company issued 1,500,000 common shares at
a deemed price of $0.0065 per share for promissory note conversion.
On April 28, 2016 the Company issued 1,007,941 common shares at
a deemed price of $0.0065 per share for promissory note conversion.
On April 29, 2016 the Company issued 769,231 common shares at a
deemed price of $0.0065 per share for promissory note conversion.
On April 29, 2016 the Company issued 1,214,575 common shares at
a deemed price of $0.0076 per share for promissory note conversion.
On April 29, 2016 the Company issued 1,529,480 common shares at
a deemed price of $0.007500 per share for exercise of warrants.
On April 29, 2016 the Company issued 1,700,000 common shares at
a deemed price of $0.00494 per share for promissory note conversion.
On May 2, 2016 the Company issued 1,700,000 common shares at a
deemed price of $0.00494 per share for promissory note conversion.
On May 2, 2016 the Company issued 1,514,380 common shares at a
deemed price of $0.002 per share for promissory note conversion.
On May 3, 2016 the Company issued 1,586,538 common shares at a
deemed price of $0.0026 per share for promissory note conversion.
On May 3, 2016 the Company issued 1,000,000 common shares at a
deemed price of $0.002 per share for promissory note conversion.
On May 5, 2016 the Company issued 2,302,321 common shares at a
deemed price of $0.00145 per share for promissory note conversion.
On May 5, 2016 the Company issued 2,000,000 common shares at a
deemed price of $0.002 per share for promissory note conversion.
On May 5, 2016 the Company issued 2,000,000 common shares at a
deemed price of $0.002 per share for promissory note conversion.
On May 9, 2016 the Company issued 2,500,000 common shares at a
deemed price of $0.001625 per share for promissory note conversion.
On May 9, 2016 the Company issued 5,500,000 common shares at a
deemed price of $0.00115 per share for promissory note conversion.
On May 9, 2016 the Company issued 3,500,000 common shares at a
deemed price of $0.00125 per share for promissory note conversion.
On May 9, 2016 the Company issued 6,100,000 common shares at a
deemed price of $0.00075 per share for promissory note conversion.
On May 10, 2016 the Company issued 3,200,000 common shares at a
deemed price of $0.000750 per share for promissory note conversion.
On May 10, 2016 the Company issued 3,100,000 common shares at a
deemed price of $0.000975 per share for promissory note conversion.
On May 10, 2016 the Company issued 6,600,000 common shares at a
deemed price of $0.00075 per share for promissory note conversion.
On May 11, 2016 the Company issued 6,000,000 common shares at a
deemed price of $0.00075 per share for promissory note conversion.
On May 11, 2016 the Company issued 3,500,000 common shares at a
deemed price of $0.00975 per share for promissory note conversion.
On May 12, 2016 the Company issued 2,500,000 common shares at a
deemed price of $0.001625 per share for promissory note conversion.
On May 12, 2016 the Company issued 4,000,000 common shares at a
deemed price of $0.000845 per share for promissory note conversion.
On May 13, 2016 the Company issued 9,717,385 common shares at a
deemed price of $0.00055 per share for promissory note conversion.
On May 12, 2016 the Company issued 7,900,000 common shares at a
deemed price of $0.0065 per share for promissory note conversion.
On June 8, 2016 (effective September 9, 2016) the Company
issued 4,518,720 common shares at a deemed price of $0.0005 per share for
promissory note conversion.
On September 7, 2016 the Company issued 5,800,000 common shares
at a deemed price of $0.0005 per share for promissory note conversion.
On September 15, 2016 the Company issued 6,480,660 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 19, 2016 the Company issued 5,500,000 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 22, 2016 the Company issued 6,807,860 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 29, 2016 the Company issued 6,500,000 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 29, 2016 the Company issued 7,344,000 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
We completed the above described issuances of common shares in
reliance on Rule 506 under Regulation D and/or Section 4(2) of the Securities
Act of 1933.
Item 6.
|
Selected Financial Data
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item 7.
|
Managements Discussion and Analysis of
Financial Condition and Results of Operations
|
The following discussion should be read in conjunction with our
audited financial statements and the related notes for the years ended June 30,
2016 and June 30, 2015 that appear elsewhere in this annual report. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to those discussed
below and elsewhere in this annual report, particularly in the section entitled
"Risk Factors" beginning on page 31 of this annual report.
Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Plan of Operation
Capital Expenditures
We do not intend to invest in capital expenditures during the
twelve-month period ending June 30, 2016.
General and Administrative Expenses
We expect that we will require $650,000 during the twelve-month
period ending June 30, 2017 on general and administrative expenses including
legal and auditing fees, rent, office equipment, consulting fees, salaries, and
other administrative related expenses.
Product Research and Development
We do not anticipate expending any funds on research and
development, manufacturing and engineering over the twelve months ending June
30, 2017.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the
twelve months ending June 30, 2017.
Results of Operations for the Years Ended June 30, 2016 and
2015
The following summary of our results of operations should be
read in conjunction with our audited financial statements for the years ended
June 30, 2016 and 2015.
Our operating results for the years ended June 30, 2016 and
2015 are summarized as follows:
|
|
Year
Ended
|
|
|
|
June
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
Operating Expenses
|
$
|
548,217
|
|
$
|
1,853,632
|
|
Interest Expense
|
$
|
781,107
|
|
$
|
1,371,159
|
|
Gain on change in the fair value of
derivative liability
|
$
|
(595,512
|
)
|
$
|
(2,806,127
|
)
|
Amortization of debt discount
|
$
|
515,942
|
|
$
|
1.970,562
|
|
Bad-debt write off
|
$
|
20,000
|
|
$
|
-
|
|
Gain on disposal business
operations
|
$
|
7,761
|
|
$
|
-
|
|
Equity in loss of unconsolidated affiliate
|
$
|
-
|
|
$
|
384
|
|
Other Income
|
$
|
-
|
|
$
|
93,944
|
|
Loss from discontinued operations
|
$
|
78,624
|
|
$
|
2,728,419
|
|
Impairment from discontinued
operations
|
$
|
-
|
|
$
|
60,178
|
|
Net Loss
|
$
|
1,340,617
|
|
$
|
2,728,419
|
|
Revenues
We have not earned revenues since our inception.
Operating Expenses
Our operating expenses for the years ended June 30, 2016 and
June 30, 2015 are outlined in the table below:
|
|
Year
Ended
|
|
|
|
June
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Mining expenses
|
$
|
31,174
|
|
$
|
37,033
|
|
Selling, general and administrative
|
$
|
517,043
|
|
$
|
1,192,170
|
|
Impairment loss
|
$
|
-
|
|
$
|
624,429
|
|
Total operating expenses
|
$
|
548,217
|
|
$
|
1,853,632
|
|
The decrease of $1,305,415 in operating expenses for the year
ended June 30, 2016, compared to the same period in fiscal 2015, was mainly due
to a decrease in selling, general, and administrative expenses, and a decrease
in impairment loss during the fiscal 2016. The decrease in selling, general, and
administrative expenses resulted primarily from our sale of the assets and
business of our 51% owned subsidiary, Alta Disposal Morinville, Ltd.
Liquidity and Financial Condition
Working Capital
|
|
|
As at
|
|
|
As at
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Total current assets
|
$
|
48,007
|
|
$
|
115,021
|
|
|
Total current liabilities
|
$
|
2,521,607
|
|
$
|
2,571,497
|
|
|
Working capital (deficit)
|
$
|
(2,473,600
|
)
|
$
|
(2,456,476
|
)
|
As of June 30, 2016, our total current assets were $48,007, our
total current liabilities were $2,521,607 and we had a working capital deficit
of $2,473,600 (June 30, 2015 - $2,456,476). Our financial statements report a net
loss of $1,340,617 as at June 30, 2016 and an accumulated deficit of $50,806,438
for the period from May 31, 2006 (date of inception) to June 30, 2016 (June 30,
2015 - $49,504,350).
We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital as needed. In
this regard we have raised additional capital through equity offerings and loan
transactions.
Cash Flows
|
|
|
At
|
|
|
At
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Net Cash (Used in) Operations
|
$
|
(402,644
|
)
|
$
|
(1,178,427
|
)
|
|
Net Cash Provided by Investing
Activities
|
$
|
-
|
|
$
|
299,940
|
|
|
Net Cash Provided by
Financing Activities
|
$
|
368,000
|
|
$
|
908,668
|
|
|
Cash (decrease) increase during the
year
|
$
|
(38,890
|
)
|
$
|
6,466
|
|
We had cash and cash equivalents in the amount of $64,099 as of
June 30, 2015 as compared to $57,632 as of June 30, 2014. We had a working
capital deficit of $2,473,600 as of June 30, 2016 compared to working capital
deficit of $2,456,476 as of June 30, 2015.
Our principal sources of funds have been from sales of our
common stock and the issuance of convertible debentures.
Anticipated Cash Requirements
We estimate that our expenses over the next 12 months will be
approximately $650,000 as described in the table below. These estimates may
change significantly depending on the nature of our future business activities
and our ability to raise capital from shareholders or other sources.
Description
|
|
Estimated
|
|
|
Estimated
|
|
|
|
Completion
|
|
|
Expenses
|
|
|
|
Date
|
|
|
($)
|
|
General and administrative
|
|
12 months
|
|
$
|
300,000
|
|
Mining expenses (mainly technology related)
|
|
12 months
|
|
$
|
150,000
|
|
Legal and accounting
|
|
12 months
|
|
$
|
200,000
|
|
Total
|
|
|
|
$
|
650,000
|
|
We intend to meet our cash requirements for the next 12 months
through the use of the cash we have on hand and through equity financing, debt
financing, or other sources, which may result in further dilution in the equity
ownership of our shares. We currently do not have any other arrangements in
place to complete any private placement financings and there is no assurance
that we will be successful in completing any such financings on terms that will
be acceptable to us.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
Going Concern
Our audited consolidated financial statements have been
prepared assuming that our Company will continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. As at June 30, 2016, we had a
working capital deficiency of $2,473,600 (June 30, 2015 - $2,456,476) and an
accumulated deficit of $50,806,439 (June 30, 2015 - $49,504,348). We intend to
fund operations through equity financing arrangements, which may be insufficient
to fund its capital expenditures, working capital and other cash requirements
for the next twelve months.
Our ability to emerge from the exploration stage is dependent
upon, among other things, obtaining additional financing to continue operations,
explore and develop the mineral properties and the discovery, development and
sale of ore reserves.
In response to these problems, our management intends to raise
additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about our
ability to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty..
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
Critical Accounting Policies
Our audited financial statements and accompanying notes are
prepared in accordance with generally accepted accounting principles used in the
United States. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.
Restatement to previously issued financial statements
Subsequent to the issuance of June 30, 2015 financial
statements, management determined that the warrants issued were incorrectly
valued and derivative liability on the conversion option embedded in convertible
notes was not recognized and during the year period ending June 30, 2016, these
warrants were revalued and a derivative liability on the conversion option was
calculated. As a result of revaluation of the warrants, the consolidated balance
sheet for the year ending June 30, 2015, the consolidated statements of
operations and comprehensive income (loss) and consolidated statement of cash
flows for the year period ending June 30, 2015 and consolidated statements of
changes in stockholders' deficit for the period ending June 30, 2014 and June
30, 2015 were restated.
The tables contained in Item 13 of the notes to the June 30, 2016 financial statements reflect the corrections to the affected line items in
the previously issued financial statements as of and for the year ended June 30,
2015.
Principal of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary Alta Disposal Ltd. and its 51% owned subsidiary Alta Disposal Morinville Ltd. (formerly Bluetap Resources Ltd.). Intercompany accounts and transactions have been eliminated in consolidation in conformity with the applicable accounting framework. The consolidated financial statements do not include the accounts of our wholly owned subsidiary, Black Box Energy, Inc., which was incorporated subsequent to the year ended June 30, 2016.
Use of Estimates
The preparation of consolidated financial statements in
conformity with United States generally accepted accounting principles 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 amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The Companys periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the
financial statements and future operations of the Company. Significant estimates
that may materially change in the near term include the valuation of derivative
liabilities and the underlying warrants, as well as fair value of investments.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market
funds, and certificates of term deposits with original maturities of less than
three months, which are readily convertible to known amounts of cash and which,
in the opinion of management, are subject to an insignificant risk of loss in
value. The Company had $25,208 and $64,098 in cash and cash equivalents at June
30, 2016 and 2015, respectively.
Concentration of Risk
The Company maintains cash balances at a financial institution
which, from time to time, may exceed Federal Deposit Insurance Corporation
insured limits for banks located in the US. As of June 30, 2016 and 2015, the
Company had no deposits in excess of federally insured limits in its US bank.
The Company has not experienced any losses with regard to its bank accounts and
believes it is not exposed to any risk of loss on its cash in bank accounts.
Prepaid Expenses
Prepaid expenses consist of security deposit for office lease
which will be expensed or refunded at the end of the lease period.
Start-Up Costs
In accordance with FASC 720-15-20 Start-Up Costs, the Company
expenses all costs incurred in connection with the start-up and organization of
the Company.
Mineral Acquisition and Exploration Costs
The Company has been in the exploration stage since its
formation on May 31, 2006. It is primarily engaged in the acquisition,
exploration, and development of mining properties. Mineral property acquisition
and exploration costs are expensed as incurred. When it has been determined that
a mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs incurred to develop such property are
capitalized. Such costs will be amortized using the units-of-production method
over the estimated life of the probable reserves.
Concentrations of Credit Risk
Our companys financial instruments that are exposed to
concentrations of credit risk primarily consist of our cash and cash equivalents
and related party payables we will likely incur in the near future. Our company
places our cash and cash equivalents with financial institutions of high credit
worthiness. At times, our cash and cash equivalents with a particular financial
institution may exceed any applicable government insurance limits. Our companys
management plans to assess the financial strength and credit worthiness of any
parties to which we extend funds, and as such, we believe that any associated
credit risk exposures are limited.
Non-controlling Interest
The 49% third party ownership of Alta Disposal Morinville Ltd.
(formerly Blue Tap Resources Ltd.) at June 30, 2016 and 2015 are recorded as
non-controlling interests in the consolidated financial statements. Details of
changes in the non-controlling interests during the years ended June 30, 2016
and 2015 and are reflected in the consolidated statement of deficit.
Related Parties
Parties are considered to be related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control,
are controlled by, or are under common control with the Company. Related parties
also include principal owners of the Company, its management, members of the
immediate families of principal owners of the Company and its management and
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests. The Company discloses all related party
transactions. All transactions shall be recorded at fair value of the goods or
services exchanged. Property purchased from a related party is recorded at the
cost to the related party and any payment to or on behalf of the related party
in excess of the cost is reflected as a distribution to related party.
Net Income or (Loss) per Share of Common Stock
The Company has adopted FASC Topic No. 260, Earnings Per
Share, (EPS) which requires presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation. In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the period.
Potentially dilutive securities are not presented in the
computation of EPS since their effects are anti-dilutive. The total number of
potential no. of shares is 441,092,305 at the year ending June 30, 2016.
Foreign Currency Translations
The Companys functional and reporting currency is the US
dollar. All transactions initiated in other currencies are translated into US
dollars using the exchange rate prevailing on the date of transaction. Monetary
assets and liabilities denominated in foreign currencies are translated into the
US dollar at the rate of exchange in effect at the balance sheet date.
Unrealized exchange gains and losses arising from such transactions are deferred
until realization and are included as a separate component of stockholders
equity (deficit) as a component of comprehensive income or loss. Upon
realization, the amount deferred is recognized in income in the period when it
is realized.
Translation of Foreign Operations
The financial results and position of foreign operations whose
functional currency is different from the Companys presentation currency are
translated as follows:
- assets and liabilities are translated at period-end exchange
rates prevailing at that reporting date;
- equity is translated at
historical exchange rates; and
- income and expenses are translated at
average exchange rates for the period.
Exchange differences arising on translation of foreign
operations are transferred directly to the Companys accumulated other
comprehensive loss in the consolidated balance sheets. Transaction gains and
losses arising from exchange rate fluctuation on transactions denominated in a
currency other than the functional currency are included in the consolidated
statements of operations.
The relevant translation rates are as follows: For the period
ending June 30, 2016 closing rate at 0.769 CDN$: US$, average rate at 0.7761
CDN$: US$ and for the year ended June 30, 2015 closing rate at 0.8017 CDN$: US$,
average rate at 0.8518 CDN$: US$.
Comprehensive Income (Loss)
FASC Topic No. 220, Comprehensive Income, establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. As at June 30, 2016 and
2015, the Company had no material items of other comprehensive income except for
the foreign currency translation adjustment.
Risks and Uncertainties
Our company operates in the resource exploration industry that
is subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating a resource
exploration business, including the potential risk of business failure.
Environmental Expenditures
The operations of our company have been, and may in the future
be, affected from time to time in varying degree by changes in environmental
regulations, including those for future reclamation and site restoration costs.
Both the likelihood of new regulations and their overall effect upon our company
vary greatly and are not predictable. Our company's policy is to meet or, if
possible, surpass standards set by relevant legislation by application of
technically proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental
and reclamation programs are charged against earnings as incurred or capitalized
and amortized depending on their future economic benefits. All of these types of
expenditures incurred since inception have been charged against earnings due to
the uncertainty of their future recoverability. Estimated future reclamation and
site restoration costs, when the ultimate liability is reasonably determinable,
are charged against earnings over the estimated remaining life of the related
business operation, net of expected recoveries.
Warrants
The Company accounts for currently outstanding detachable
warrants to purchase common stock as derivative liabilities as they are
freestanding derivative financial instruments. The warrants are recorded as
derivative liabilities at fair value, estimated using a Black-Scholes option
pricing model, and marked to market at each balance sheet date, with changes in
the fair value of the derivative liabilities recorded in the consolidated
statements of operations and comprehensive loss. Upon exercise of a derivative
financial instrument, the instrument is marked to fair value at the conversion
date and is reclassified to equity.
Convertible Instruments
The Company evaluates and accounts for conversion options
embedded in its convertible instruments in accordance with ASC 815 Derivatives
and Hedging. It provide three criteria that, if met, require companies to
bifurcate conversion options from their host instruments and account for them as
free standing derivative financial instruments. These three criteria include
circumstances in which (a) the economic characteristics and risks of the
embedded derivative instrument are not clearly and closely related to the
economic characteristics and risks of the host contract, (b) the hybrid
instrument that embodies both the embedded derivative instrument and the host
contract is not re-measured at fair value under otherwise applicable generally
accepted accounting principles with changes in fair value reported in earnings
as they occur and (c) a separate instrument with the same terms as the embedded
derivative instrument would be considered a derivative instrument. The result of
this accounting treatment could be that the fair value of a financial instrument
is classified as a derivative financial instrument and is marked-to-market at
each balance sheet date and recorded as a liability. In the event that the fair
value is recorded as a liability, the change in fair value is recorded in the
statement of operations as other income or other expense. Upon conversion or
exercise of a derivative financial instrument, the instrument is marked to fair
value at the conversion date and is reclassified to equity. The Company records,
when necessary, discounts to convertible notes for the intrinsic value of
conversion options embedded in debt instruments based upon the differences
between the fair value of the underlying common stock at the commitment date of
the note transaction and the effective conversion price embedded in the note.
Debt discounts under these arrangements are amortized over the term of the
related debt to their earliest date of notes redemption.
Fair Value of Financial Instruments
ASC 820,
Fair Value Measurements and Disclosures
requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. ASC 820 establishes a fair
value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instruments
categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. ASC 820 prioritizes the
inputs into three levels that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets
or liabilities;
Level 2 - Inputs other than quoted prices included within Level
1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs that are supported by little or
no market activity, therefore requiring an entity to develop its own assumptions
about the assumptions that market participants would use in pricing.
The carrying amounts of our companys financial assets and
liabilities, such as cash and cash equivalents, prepaid expenses, deposit,
accounts payable and accrued liabilities, and due to a related party approximate
their fair values because of the short maturity of these instruments.
Our companys Level 3 financial liabilities consist of the
derivative liability of our companys secured convertible promissory notes and
debentures issued to investors, and the derivative warrants issued in connection
with these convertible promissory notes and debentures. There is no current
market for these securities such that the determination of fair value requires
significant judgment or estimation. Our company used a lattice model which
incorporates transaction details such as company stock price, contractual terms,
maturity, risk free rates, as well as assumptions about future financings,
volatility, and holder behavior as of the date of issuance and each balance
sheet date.
Revenue Recognition
The Company has generated little revenues to date. It is the
Companys policy that revenue from product sales or services will be recognized
in accordance with ASC 605 Revenue Recognition. Four basic criteria must be
met before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectability is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectability of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded. The Company will defer any revenue for
which the product/services was not delivered or is subject to refund until such
time that the Company and the customer jointly determine that the
product/service has been delivered or no refund will be required.
Sales comprise the fair value of the consideration received or
receivable for the sale of goods and rendering of services in the ordinary
course of the Companys activities. Sales are presented, net of tax, rebates and
discounts, and after eliminating intercompany sales. The Company recognizes
revenue when the amount of revenue and related cost can be reliably measured and
it is probable that the collectability of the related receivables is reasonably
assured.
During the year ended June 30, 2016 and 2015, the Company
didnt record any revenue under continuing operation.
Receivables
Trade and other receivables are customer obligations due under
normal trade terms and are recorded at face value less any provisions for
uncollectible amounts considered necessary. The Company includes any balances
that are determined to be uncollectible in its overall allowance for doubtful
accounts. The Company recorded $Nil (June 30, 2015 - $18,984) in allowance for
doubtful accounts.
Recent Accounting Pronouncements
In January 2016, the FASB issued an accounting standard update
which requires, among other things, that entities measure equity investments
(except those accounted for under the equity method of accounting or those that
result in consolidation of the investee) at fair value, with changes in fair
value recognized in earnings. Under the standard, entities will no longer be
able to recognize unrealized holding gains and losses on equity securities
classified today as available for sale as a component of other comprehensive
income. For equity investments without readily determinable fair values the cost
method of accounting is also eliminated, however subject to certain exceptions,
entities will be able to elect to record equity investments without readily
determinable fair values at cost, less impairment and plus or minus adjustments
for observable price changes, with all such changes recognized
in earnings. This new standard does not change the guidance for classifying and
measuring investments in debt securities and loans. The standard is effective
for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company
is currently evaluating the anticipated impact of this standard on its
consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases
(Topic 842) to increase transparency and comparability among organizations by
recognizing lease assets and lease liabilities on the balance sheet and
disclosing key information about leasing arrangements. Topic 842 affects any
entity that enters into a lease, with some specified scope exemptions. The
guidance in this Update supersedes Topic 840, Leases. The core principle of
Topic 842 is that a lessee should recognize the assets and liabilities that
arise from leases. A lessee should recognize in the statement of financial
position a liability to make lease payments (the lease liability) and a
right-of-use asset representing its right to use the underlying asset for the
lease term. For public companies, the amendments in this Update are effective
for fiscal years beginning after December 15, 2018, including interim periods
within those fiscal years. We are currently evaluating the impact of adopting
ASU No. 2016-02 on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-08, Revenue from
Contracts with Customers (Topic 606): Principal versus Agent Considerations
(Reporting Revenue Gross versus Net) that clarifies how to apply revenue
recognition guidance related to whether an entity is a principal or an agent.
ASU 2016-08 clarifies that the analysis must focus on whether the entity has
control of the goods or services before they are transferred to the customer and
provides additional guidance about how to apply the control principle when
services are provided and when goods or services are combined with other goods
or services. The effective date for ASU 2016-08 is the same as the effective
date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods
beginning after December 15, 2017, including interim periods within those years.
The Company has not yet determined the impact of ASU 2016-08 on its consolidated
financial statements.
In March 2016, the FASB issued ASU No. 2016-09, Compensation
Stock Compensation, or ASU No. 2016-09. The areas for simplification in this
Update involve several aspects of the accounting for share-based payment
transactions, including the income tax consequences, classification of awards as
either equity or liabilities, and classification on the statement of cash flows.
For public entities, the amendments in this Update are effective for annual
periods beginning after December 15, 2016, and interim periods within those
annual periods. Early adoption is permitted in any interim or annual period. If
an entity early adopts the amendments in an interim period, any adjustments
should be reflected as of the beginning of the fiscal year that includes that
interim period. An entity that elects early adoption must adopt all of the
amendments in the same period. Amendments related to the timing of when excess
tax benefits are recognized, minimum statutory withholding requirements,
forfeitures, and intrinsic value should be applied using a modified
retrospective transition method by means of a cumulative-effect adjustment to
equity as of the beginning of the period in which the guidance is adopted.
Amendments related to the presentation of employee taxes paid on the statement
of cash flows when an employer withholds shares to meet the minimum statutory
withholding requirement should be applied retrospectively. Amendments requiring
recognition of excess tax benefits and tax deficiencies in the income statement
and the practical expedient for estimating expected term should be applied
prospectively. An entity may elect to apply the amendments related to the
presentation of excess tax benefits on the statement of cash flows using either
a prospective transition method or a retrospective transition method. We are
currently evaluating the impact of adopting ASU No. 2016-09 on its consolidated
financial statements.
In April 2016, the FASB issued ASU 2016-10, Revenue from
Contracts with Customers (Topic 606): Identifying Performance Obligations and
Licensing, which provides further guidance on identifying performance
obligations and improves the operability and understandability of licensing
implementation guidance. The effective date for ASU 2016-10 is the same as the
effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting
periods beginning after December 15, 2017, including interim periods within
those years. The Company has not yet determined the impact of ASU 2016-10 on its
consolidated financial statements.
FASB ASU 2016-12, Revenue from Contracts with Customers (Topic
606): Narrow-Scope Improvements and Practical Expedients was issued in June
2016 and clarifies the objective of the collectability criterion, presentation
of taxes collected from customers, non-cash consideration, contract
modifications at transition, completed contracts at transition and how guidance
in Topic 606 is retrospectively applied. The amendments do not change the core
principle of the guidance in Topic 606. The effective dates are the same as
those for Topic 606.
Item 7A.
|
Quantitative and Qualitative Disclosures
About Market Risk
|
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item 8.
|
Financial Statements and Supplementary
Data
|
Our audited financial statements are stated in United States
dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Lithium Exploration Group, Inc.
We have audited the accompanying consolidated balance sheets of Lithium Exploration Group, Inc. (the “Company”), as of June 30, 2016 and 2015 and the related statement of operations, comprehensive loss, stockholders’ deficit and cash flows for the two years in the period ended June 30, 2016. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lithium Exploration Group, Inc. as of June 30, 2016 and 2015, and the results of their operations and their cash flows for the two years in the period ended June 30, 2016, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 8 to the accompanying consolidated financial statements, the Company has accumulated deficit, negative cash flows from operations, and working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 8. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/RBSM LLP
October 18, 2016
New York, New York
LITHIUM EXPLORATION GROUP, INC.
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2016
Lithium Exploration Group, Inc.
|
Consolidated Balance Sheets
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
25,208
|
|
$
|
64,098
|
|
Receivable
|
|
-
|
|
|
13,421
|
|
Loan receivable
|
|
-
|
|
|
20,000
|
|
Prepaid
expenses
|
|
2,788
|
|
|
2,789
|
|
Current assets held for sale (Note 12)
|
|
20,011
|
|
|
14,713
|
|
Total current assets
|
|
48,007
|
|
|
115,021
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
48,007
|
|
$
|
115,021
|
|
|
|
|
|
|
|
|
LIABILITIES AND
DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Accounts payable
and accrued liabilities (Note 9)
|
$
|
211,813
|
|
$
|
65,962
|
|
Derivative liability convertible promissory notes (Note 6)
|
|
1,162,058
|
|
|
1,646,448
|
|
Derivative
liability warrants (Note 6)
|
|
268,611
|
|
|
143,375
|
|
Due to related party (Note 7 and 9)
|
|
115,000
|
|
|
115,000
|
|
Convertible promissory notes - net of unamortized debt discount (Note 6)
|
|
619,769
|
|
|
533,994
|
|
Accrued interest
convertible promissory notes (Note 6)
|
|
137,936
|
|
|
60,022
|
|
Current liabilities held for
sale (Note 12)
|
|
6,420
|
|
|
6,696
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
2,521,607
|
|
|
2,571,497
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFICIT
|
|
|
|
|
|
|
Lithium Explorations Group, Inc.
Stockholders Deficit
|
|
|
|
|
|
|
Capital stock (Note 3)
Authorized:
100,000,000
preferred shares, $0.001 par
value
10,000,000,000
(June 30, 2015 2,000,000,000)
common
shares,
$0.001 par
value
|
|
-
|
|
|
-
|
|
Issued
and
outstanding:
Nil
preferred shares (June 30, 2015
Nil)
119,772,784
common shares (June 30, 2015 7,574,353)
|
|
119,773
|
|
|
7,575
|
|
Additional paid-in capital
|
|
48,598,773
|
|
|
47,383,231
|
|
Accumulated other
comprehensive loss
|
|
(33,731
|
)
|
|
(29,484
|
)
|
Accumulated deficit
|
|
(50,806,439
|
)
|
|
(49,504,348
|
)
|
Total Lithium Exploration Group, Inc. Stockholders
Deficit
|
|
(2,121,624
|
)
|
|
(2,143,026
|
)
|
Non-controlling interest
|
|
(351,976
|
)
|
|
(313,450
|
)
|
Total Deficit
|
|
(2,473,600
|
)
|
|
(2,456,476
|
)
|
|
|
|
|
|
|
|
Total Liabilities and Deficit
|
$
|
48,007
|
|
$
|
115,021
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
Lithium Exploration Group, Inc.
|
Consolidated Statements of Operations And Comprehensive
Loss
|
|
|
|
|
|
|
June 30, 2015
|
|
|
|
June 30, 2016
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
Mining (Notes 3 & 5)
|
|
31,174
|
|
|
37,033
|
|
Selling, general and administrative (Notes 3
& 5)
|
|
517,043
|
|
|
1,192,170
|
|
Impairment Loss
|
|
-
|
|
|
624,429
|
|
Total operating
expenses
|
|
548,217
|
|
|
1,853,632
|
|
(Loss) from operations
|
|
(548,217
|
)
|
|
(1,853,632
|
)
|
Other income
(expenses)
|
|
|
|
|
|
|
Interest expense (Note 6)
|
|
(781,107
|
)
|
|
(1,371,159
|
)
|
Gain on change in the fair
value of derivative liability (Note 6)
|
|
595,512
|
|
|
2,806,127
|
|
Amortization of debt discount
|
|
(515,942
|
)
|
|
(1,970,562
|
)
|
Bad-debt write off
|
|
(20,000
|
)
|
|
-
|
|
Gain on disposal of business operations
|
|
7,761
|
|
|
-
|
|
Equity in loss of
unconsolidated affiliate
|
|
-
|
|
|
(384
|
)
|
Other income
|
|
-
|
|
|
93,944
|
|
|
|
|
|
|
|
|
(Loss) before income taxes
|
|
(1,261,993
|
)
|
|
(2,295,666
|
)
|
Provision for income taxes
(Note 4)
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Net (loss) from continued
operations
|
|
(1,261,993
|
)
|
|
(2,295,666
|
)
|
|
|
|
|
|
|
|
(Loss) from discontinued
operations
|
|
(78,624
|
)
|
|
(372,575
|
)
|
Impairment (loss) from discontinued
operations
|
|
-
|
|
|
(60,178
|
)
|
|
|
|
|
|
|
|
Net (loss)
|
|
(1,340,617
|
)
|
|
(2,728,419
|
)
|
Less: Net loss attributable
to the non-controlling interest
|
|
(38,526
|
)
|
|
(212,050
|
)
|
|
|
|
|
|
|
|
Net (loss) attributable to
Lithium Exploration Group, Inc. Common shareholders
|
$
|
(1,302,091
|
)
|
$
|
(2,516,369
|
)
|
|
|
|
|
|
|
|
Basic and Diluted (loss)
per Common Share from continuing operations
|
$
|
(0.05
|
)
|
$
|
(2.20
|
)
|
Basic and Diluted (loss) per Common Share
from discontinued operations
|
$
|
(0.00
|
)
|
$
|
(0.41
|
)
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Number
of Common Shares Outstanding
|
|
28,018,300
|
|
|
1,045,061
|
|
Comprehensive loss:
|
|
|
|
|
|
|
Net (loss)
|
$
|
(1,340,617
|
)
|
$
|
(2,728,419
|
)
|
Foreign currency translation
adjustment
|
|
(4,248
|
)
|
|
(23,715
|
)
|
Comprehensive (loss)
|
|
(1,344,865
|
)
|
|
(2,752,134
|
)
|
Comprehensive (loss)
attributable to non-controlling interest
|
|
(38,526
|
)
|
|
(212,050
|
)
|
Comprehensive (loss) attributable to Lithium
Exploration Group, Inc.
|
$
|
(1,306,339
|
)
|
$
|
(2,540,084
|
)
|
The accompanying notes are an integral part of these
consolidated financial statements.
Lithium Exploration Group, Inc.
|
Consolidated Statements of Changes in Stockholders
Deficit
|
|
|
|
Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
|
|
|
Stockholders
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
Loss
|
|
|
Deficit
|
|
|
Non-controlling
|
|
|
(Deficit)
|
|
|
|
Number of
|
|
|
Amount
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Interest
|
|
|
$
|
|
|
|
Shares
|
|
|
$
|
|
|
(Restated)
|
|
|
(Restated)
|
|
|
(Restated)
|
|
|
$
|
|
|
(Restated)
|
|
Balance June 30, 2014
(restated)
|
|
47,990
|
|
$
|
48
|
|
$
|
39,111,899
|
|
$
|
(5,769
|
)
|
$
|
(46,987,979
|
)
|
$
|
(101,400
|
)
|
$
|
(7,983,201
|
)
|
Common shares issued for consulting fees
|
|
2,594
|
|
|
3
|
|
|
118,987
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
118,990
|
|
Common shares issued for
investor relations
|
|
500
|
|
|
1
|
|
|
67,999
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
68,000
|
|
Common Stock issued for debt conversion
|
|
7,421,245
|
|
|
7,421
|
|
|
2,179,398
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,186,819
|
|
Derivative liability
transferred to additional paid
in capital on conversion of note
|
|
-
|
|
|
-
|
|
|
3,174,990
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,174,990
|
|
Common shares issued for cash less exercise
of warrants
|
|
102,004
|
|
|
102
|
|
|
2,729,920
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,730,022
|
|
Common shares issued to trust
|
|
20
|
|
|
-
|
|
|
38
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
38
|
|
Foreign currency translation loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(23,715
|
)
|
|
-
|
|
|
-
|
|
|
(23,715
|
)
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,516,370
|
)
|
|
(212,050
|
)
|
|
(2,728,419
|
)
|
Balance June 30, 2015 (restated)
|
|
7,574,353
|
|
$
|
7,575
|
|
$
|
47,383,231
|
|
$
|
(29,484
|
)
|
$
|
(49,504,348
|
)
|
$
|
(313,450
|
)
|
$
|
(2,456,476
|
)
|
Common shares issued for debt
conversion and interest
|
|
109,612,491
|
|
|
109,612
|
|
|
367,289
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
476,901
|
|
Derivative liability transferred to
additional paid in capital on conversion of note
|
|
-
|
|
|
-
|
|
|
768,175
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
768,175
|
|
Common shares issued for cash
less exercise of warrants
|
|
2,577,896
|
|
|
2,578
|
|
|
19,898
|
|
|
|
|
|
|
|
|
|
|
|
22,476
|
|
Common shares issued for fractional shares
adjustment
|
|
8,044
|
|
|
8
|
|
|
(7
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1
|
|
Disposal of business
operations
|
|
-
|
|
|
-
|
|
|
60,187
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
60,187
|
|
Foreign currency translation loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,247
|
)
|
|
-
|
|
|
|
|
|
(4,247
|
)
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,302,091
|
)
|
|
(38,526
|
)
|
|
(1,340,617
|
)
|
Balance June 30, 2016
|
|
119,772,784
|
|
$
|
119,773
|
|
$
|
48,598,773
|
|
$
|
(33,731
|
)
|
$
|
(50,806,439
|
)
|
$
|
(351,976
|
)
|
$
|
(2,473,600
|
)
|
The accompanying notes are an integral part of these
consolidated financial statements.
Lithium Exploration Group, Inc.
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
|
|
2015
|
|
|
|
2016
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
|
(1,261,993
|
)
|
$
|
(2,295,666
|
)
|
Loss from discontinued operations
|
|
(78,624
|
)
|
|
(432,753
|
)
|
Adjustments to
reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
Equity in income of investment held for sale
|
|
-
|
|
|
(104
|
)
|
Loss on sale of unconsolidated entities
|
|
-
|
|
|
488
|
|
Gain on disposal of business operation
|
|
(7,761
|
)
|
|
|
|
Common shares issued for consulting fees
|
|
-
|
|
|
118,990
|
|
Non-cash Interest expense
|
|
695,945
|
|
|
1,127,002
|
|
Common shares issued for interest
|
|
4,118
|
|
|
259,139
|
|
Common shares issued for investor relations
|
|
-
|
|
|
68,000
|
|
|
|
|
|
|
|
|
Impairment Loss
|
|
-
|
|
|
624,429
|
|
Bad debt written-off
|
|
20,000
|
|
|
-
|
|
Gain on change in the fair value of derivative
liability
|
|
(595,512
|
)
|
|
(2,806,127
|
)
|
Amortization of debt discount
|
|
515,942
|
|
|
1,970,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Receivable, net
|
|
13,421
|
|
|
(13,421
|
)
|
Prepaid expenses
|
|
-
|
|
|
16,610
|
|
Due to related party
|
|
-
|
|
|
115,000
|
|
Accrued interest
|
|
83,594
|
|
|
(14,982
|
)
|
Accounts
payable and accrued liabilities
|
|
145,851
|
|
|
52,235
|
|
Net cash used in operating
activities from continuing operations
|
|
(465,019
|
)
|
|
(1,210,598
|
)
|
Net
cash provided by operating activities from discontinued operations
|
|
62,375
|
|
|
32,171
|
|
Net cash used in operating activities
|
|
(402,644
|
)
|
|
(1,178,427
|
)
|
|
|
|
|
|
|
|
Cash Flows from Investing
Activities
|
|
|
|
|
|
|
Proceeds from disposal of investment
|
|
-
|
|
|
299,940
|
|
Net cash provided by investing activities
|
|
-
|
|
|
299,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
Repayment to related party
|
|
-
|
|
|
(45,332
|
)
|
Proceed from issuance of convertible
promissory notes, net
|
|
368,000
|
|
|
954,000
|
|
Net cash provided by financing activities
|
|
368,000
|
|
|
908,668
|
|
|
|
|
|
|
|
|
Effect of foreign exchange
|
|
(4,246
|
)
|
|
(23,715
|
)
|
|
|
|
|
|
|
|
(Decrease) increase in
cash and cash equivalents
|
|
(38,890
|
)
|
|
6,466
|
|
Cash and cash equivalents - beginning of period
|
|
64,098
|
|
|
57,632
|
|
Cash and cash equivalents - end of period
|
$
|
25,208
|
|
$
|
64,098
|
|
|
|
|
|
|
|
|
Supplementary disclosure
of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period
for:
|
|
|
|
|
|
|
Interest
|
$
|
-
|
|
$
|
2,698
|
|
Income taxes
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Supplementary non- cash
Investing and Financing Activities:
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
Common stock issued for debt
conversion and interest
|
$
|
476,901
|
|
$
|
2,186,820
|
|
Common stock issued on cashless exercise of
warrants
|
$
|
22,476
|
|
$
|
2,730,022
|
|
Derivative liability re-classed
to additional paid in capital
|
$
|
768,175
|
|
$
|
3,174,990
|
|
Debt
discount on issuance of convertible note and warrants
|
$
|
394,068
|
|
$
|
901,327
|
|
Initial derivative liability on
note issuance and warrants
|
$
|
1,027,009
|
|
$
|
2,018,791
|
|
Interest reclassed to convertible note
|
$
|
5,680
|
|
$
|
-
|
|
Re-classification
of discontinued assets and liabilities to additional paid in capital
|
$
|
60,187
|
|
$
|
-
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
Lithium Exploration Group, Inc. (formerly Mariposa Resources,
Ltd.) (the Company) was incorporated on May 31, 2006 in the State of Nevada,
U.S.A. It is based in Phoenix, Arizona, USA. The accounting and reporting
policies of the Company conform to accounting principles generally accepted in
the United States of America, and the Companys fiscal year end is June 30.
Effective November 30, 2010, the Company changed its name to
Lithium Exploration Group, Inc., by way of a merger with its wholly-owned
subsidiary Lithium Exploration Group, Inc., which was formed solely for the
change of name.
A wholly owned subsidiary, 1617437 Alberta Ltd. was
incorporated in the province of Alberta, Canada on July 8, 2011. Effective
October 2, 2013, the subsidiary changed its name to Alta Disposal Ltd.
On October 18, 2013, the Company acquired 51% interest in Alta
Disposal Morinville Ltd. (formerly Blue Tap Resources Ltd.). Effective September
4, 2015, the Company entered into an Asset Purchase Agreement with Cancen Oil
Canada whereby the Company agrees to sell all right, title and interest of Alta
Disposal Morinville Ltd. assets for total purchase price of CAD$10,000
approximately USD$7,466.
On March 1, 2014, the Company through its 100% subsidiary Alta
Disposal Ltd. acquired 50% interest in Tero Oilfield Services Ltd. (the Tero)
On May 1, 2015, the Company entered into a Share Purchase Agreement with an
individual and disposed its 50% interest in Tero.
The Company is engaged principally in the acquisition,
exploration, and development of resource properties. Prior to June 25, 2009, the
Company had the right to conduct exploration work on 20 mineral mining claims in
Esmeralda County, Nevada, U.S.A. On July 31, 2009, the Company acquired an
option to enter into a joint venture for the management and ownership of the
Jack Creek Project, a mining project located in Elko County, Nevada. On
September 25, 2009, the joint venture was terminated and the Company entered
into an agreement with Beeston Enterprises Ltd., under which the Company was
granted an option to acquire an undivided 50% interest in eight mineral claims
located in the Clinton Mining District of British Columbia, Canada. On December
16, 2010, the Company entered into an Assignment Agreement to acquire an
undivided 100% right, title and interest in and to certain mineral permits
located in the Province of Alberta, Canada (see Note 5). On November 8, 2011,
the Company entered into a letter agreement with Glottech-USA. Pursuant to the
terms of the agreement, the Company was granted an exclusive license to use and
distribute the technology within the Swan Hills region of Alberta as well as a
non-exclusive right to distribute the technology within Canada.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting
Policies
|
Basis of presentation and consolidation
The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
The consolidated financial statements as of June 30, 2015 were
restated during the period, and include all disclosures required by the
accounting principles generally accepted in the United States of America.
Principal of Consolidation
The consolidated financial statements include the accounts of
the Company, its wholly-owned subsidiary Alta Disposal Ltd. and its 51% owned
subsidiary Alta Disposal Morinville Ltd. (formerly Bluetap Resources Ltd.).
Intercompany accounts and transactions have been eliminated in consolidation in
conformity with the applicable accounting framework.
Use of Estimates
The preparation of consolidated financial statements in
conformity with United States generally accepted accounting principles 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 amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The Companys periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates, assumptions,
uncertainties and markets that could affect the financial statements and future
operations of the Company. Significant estimates that may materially change in
the near term include the valuation of derivative liabilities and the underlying
warrants, as well as fair value of investments.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market
funds, and certificates of term deposits with original maturities of less than
three months, which are readily convertible to known amounts of cash and which,
in the opinion of management, are subject to an insignificant risk of loss in
value. The Company had $25,208 and $64,098 in cash and cash equivalents at June
30, 2016 and 2015, respectively.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Concentration of Risk
The Company maintains cash balances at a financial institution
which, from time to time, may exceed Federal Deposit Insurance Corporation
insured limits for banks located in the US. As of June 30, 2016 and 2015, the
Company had no deposits in excess of federally insured limits in its US bank.
The Company has not experienced any losses with regard to its bank accounts and
believes it is not exposed to any risk of loss on its cash in bank accounts.
Prepaid expenses
Prepaid expenses consist of security deposit for office lease
which will be expensed or refunded at the end of the lease period.
Start-Up Costs
In accordance with FASC 720-15-20
Start-Up Costs,
the
Company expenses all costs incurred in connection with the start-up and
organization of the Company.
Mineral Acquisition and Exploration Costs
The Company has been in the exploration stage since its
formation on May 31, 2006. It is primarily engaged in the acquisition,
exploration, and development of mining properties. Mineral property acquisition
and exploration costs are expensed as incurred. When it has been determined that
a mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs incurred to develop such property are
capitalized. Such costs will be amortized using the units-of-production method
over the estimated life of the probable reserves.
Concentrations of Credit Risk
The Companys financial instruments that are exposed to
concentrations of credit risk primarily consist of its cash and cash equivalents
and related party payables it will likely incur in the near future. The Company
places its cash and cash equivalents with financial institutions of high credit
worthiness. At times, its cash and cash equivalents with a particular financial
institution may exceed any applicable government insurance limits. The Companys
management plans to assess the financial strength and credit worthiness of any
parties to which it extends funds, and as such, it believes that any associated
credit risk exposures are limited.
Non-controlling Interest
The 49% third party ownership of Alta Disposal Morinville Ltd.
(formerly Blue Tap Resources Ltd.) at June 30, 2016 and 2015 are recorded as
non-controlling interests in the consolidated financial statements. Details of
changes in the non-controlling interests during the years ended June 30, 2016
and 2015 and are reflected in the consolidated statement of deficit.
Related Parties
Parties are considered to be related to the Company if the
parties, directly or indirectly, through one or more intermediaries, control,
are controlled by, or are under common control with the Company. Related parties
also include principal owners of the Company, its management, members of the
immediate families of principal owners of the Company and its management and
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an extent that one of the transacting
parties might be prevented from fully pursuing its own separate interests. The
Company discloses all related party transactions. All transactions shall be
recorded at fair value of the goods or services exchanged. Property purchased
from a related party is recorded at the cost to the related party and any
payment to or on behalf of the related party in excess of the cost is reflected
as a distribution to related party.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Net Income or (Loss) per Share of Common Stock
The Company has adopted FASC Topic No. 260,
Earnings Per
Share
, (EPS) which requires presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation. In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the period.
Potentially dilutive securities are not presented in the
computation of EPS since their effects are anti-dilutive. The total number of
potential no. of shares is 441,092,305 at the year ending June 30, 2016.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Foreign Currency Translations
The Companys functional and reporting currency is the US
dollar. All transactions initiated in other currencies are translated into US
dollars using the exchange rate prevailing on the date of transaction. Monetary
assets and liabilities denominated in foreign currencies are translated into the
US dollar at the rate of exchange in effect at the balance sheet date.
Unrealized exchange gains and losses arising from such transactions are deferred
until realization and are included as a separate component of stockholders
equity (deficit) as a component of comprehensive income or loss. Upon
realization, the amount deferred is recognized in income in the period when it
is realized.
Translation of Foreign Operations
The financial results and position of foreign operations whose
functional currency is different from the Companys presentation currency are
translated as follows:
- assets and liabilities are translated at period-end
exchange rates prevailing at that reporting date;
- equity is translated at
historical exchange rates; and
- income and expenses are translated at
average exchange rates for the period.
Exchange differences arising on translation of foreign
operations are transferred directly to the Companys accumulated other
comprehensive loss in the consolidated balance sheets. Transaction gains and
losses arising from exchange rate fluctuation on transactions denominated in a
currency other than the functional currency are included in the consolidated
statements of operations.
The relevant translation rates are as follows: For the period
ending June 30, 2016 closing rate at 0.769 CDN$: US$, average rate at 0.7761
CDN$: US$ and for the year ended June 30, 2015 closing rate at 0.8017 CDN$: US$,
average rate at 0.8518 CDN$: US$.
Comprehensive Income (Loss)
FASC Topic No. 220,
Comprehensive Income,
establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. As at June 30, 2016 and
2015, the Company had no material items of other
comprehensive income
except for the foreign currency translation adjustment.
Risks and Uncertainties
The Company operates in the resource exploration industry that
is subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating a resource
exploration business, including the potential risk of business failure.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Environmental Expenditures
The operations of the Company have been, and may in the future
be, affected from time to time in varying degree by changes in environmental
regulations, including those for future reclamation and site restoration costs.
Both the likelihood of new regulations and their overall effect upon the Company
vary greatly and are not predictable. The Company's policy is to meet or, if
possible, surpass standards set by relevant legislation by application of
technically proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental
and reclamation programs are charged against earnings as incurred or capitalized
and amortized depending on their future economic benefits. All of these types of
expenditures incurred since inception have been charged against earnings due to
the uncertainty of their future recoverability. Estimated future reclamation and
site restoration costs, when the ultimate liability is reasonably determinable,
are charged against earnings over the estimated remaining life of the related
business operation, net of expected recoveries.
Warrants
The Company accounts for currently outstanding detachable
warrants to purchase common stock as derivative liabilities as they are
freestanding derivative financial instruments. The warrants are recorded as
derivative liabilities at fair value, estimated using a Black-Scholes option
pricing model, and marked to market at each balance sheet date, with changes in
the fair value of the derivative liabilities recorded in the consolidated
statements of operations and comprehensive loss. Upon exercise of a derivative
financial instrument, the instrument is marked to fair value at the conversion
date and is reclassified to equity.
Convertible Instruments
The Company evaluates and accounts for conversion options
embedded in its convertible instruments in accordance with ASC 815 Derivatives
and Hedging. It provide three criteria that, if met, require companies to
bifurcate conversion options from their host instruments and account for them as
free standing derivative financial instruments. These three criteria include
circumstances in which (a) the economic characteristics and risks of the
embedded derivative instrument are not clearly and closely related to the
economic characteristics and risks of the host contract, (b) the hybrid
instrument that embodies both the embedded derivative instrument and the host
contract is not re-measured at fair value under otherwise applicable generally
accepted accounting principles with changes in fair value reported in earnings
as they occur and (c) a separate instrument with the same terms as the embedded
derivative instrument would be considered a derivative instrument. The result of
this accounting treatment could be that the fair value of a financial instrument
is classified as a derivative financial instrument and is marked-to-market at
each balance sheet date and recorded as a liability. In the event that the fair
value is recorded as a liability, the change in fair value is recorded in the
statement of operations as other income or other expense. Upon conversion or
exercise of a derivative financial instrument, the instrument is marked to fair
value at the conversion date and is reclassified to equity. The Company records,
when necessary, discounts to convertible notes for the intrinsic value of
conversion options embedded in debt instruments based upon the differences
between the fair value of the underlying common stock at the commitment date of
the note transaction and the effective conversion price embedded in the note.
Debt discounts under these arrangements are amortized over the term of the
related debt to their earliest date of notes redemption
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Fair Value of Financial Instruments
ASC 820,
Fair Value Measurements and Disclosures
requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. ASC 820 establishes a fair
value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instruments
categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. ASC 820 prioritizes the
inputs into three levels that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets
or liabilities;
Level 2 - Inputs other than quoted prices included within Level
1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs that are supported by little or
no market activity, therefore requiring an entity to develop its own assumptions
about the assumptions that market participants would use in pricing.
The carrying amounts of the Companys financial assets and
liabilities, such as cash and cash equivalents, prepaid expenses, deposit,
accounts payable and accrued liabilities, and due to a related party approximate
their fair values because of the short maturity of these instruments.
The Companys Level 3 financial liabilities consist of the
liability of the Companys secured convertible promissory notes and debentures
issued to investors, and the derivative warrants issued in connection with these
convertible promissory notes and debentures. There is no current market for
these securities such that the determination of fair value requires significant
judgment or estimation. The Company used a fair value model which incorporates
transaction details such as Company stock price, contractual terms, maturity,
risk free rates, as well as assumptions about future financings, volatility, and
holder behavior as of the date of issuance and each balance sheet date.
Revenue Recognition
The Company has generated little revenues to date. It is the
Companys policy that revenue from product sales or services will be recognized
in accordance with ASC 605 Revenue Recognition. Four basic criteria must be
met before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectability is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectability of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded. The Company will defer any revenue for
which the product/services was not delivered or is subject to refund until such
time that the Company and the customer jointly determine that the
product/service has been delivered or no refund will be required.
Sales comprise the fair value of the consideration received or
receivable for the sale of goods and rendering of services in the ordinary
course of the Companys activities. Sales are presented, net of tax, rebates and
discounts, and after eliminating intercompany sales. The Company recognizes
revenue when the amount of revenue and related cost can be reliably measured and
it is probable that the collectability of the related receivables is reasonably
assured.
During the year ended June 30, 2016 and 2015, the Company
didnt record any revenue under continuing operation.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
Income Taxes
The Company accounts for income taxes pursuant to the
provisions of ASC 740-10, Income Taxes which requires, among other things, an
asset and liability approach to calculating deferred income taxes. The asset and
liability approach requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. A
valuation allowance is provided to offset any net deferred tax assets for which
management believes it is more likely than not that the net deferred asset will
not be realized.
The Company also follows the provisions of ASC 740-10 related
to accounting for uncertain income tax positions. When tax returns are filed,
some positions taken may be sustained upon examination by the taxing
authorities, while others may be subject to uncertainty about the merits of the
position taken or the amount of the position that would be ultimately sustained.
In accordance with the guidance of ASC 740-10, the benefit of a tax position is
recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the
position will be sustained upon examination, including the resolution of appeals
or litigation processes, if any. Tax positions taken are not offset or
aggregated with other positions. As of June 30, 2016 and 2015, the Company has
had no uncertain tax positions. The Company recognizes interest and penalties,
if any, related to uncertain tax positions as general and administrative
expenses. The Company currently has no federal or state tax examinations nor has
it had any federal or state examinations since its inception.
Receivables
Trade and other receivables are customer obligations due under
normal trade terms and are recorded at face value less any provisions for
uncollectible amounts considered necessary. The Company includes any balances
that are determined to be uncollectible in its overall allowance for doubtful
accounts. The Company recorded $Nil (June 30, 2015 - $18,984) in allowance for
doubtful accounts.
Recent Accounting Pronouncements
In January 2016, the FASB issued an accounting standard update
which requires, among other things, that entities measure equity investments
(except those accounted for under the equity method of accounting or those that
result in consolidation of the investee) at fair value, with changes in fair
value recognized in earnings. Under the standard, entities will no longer be
able to recognize unrealized holding gains and losses on equity securities
classified today as available for sale as a component of other comprehensive
income. For equity investments without readily determinable fair values the cost
method of accounting is also eliminated, however subject to certain exceptions,
entities will be able to elect to record equity investments without readily
determinable fair values at cost, less impairment and plus or minus adjustments
for observable price changes, with all such changes recognized in earnings. This
new standard does not change the guidance for classifying and measuring
investments in debt securities and loans. The standard is effective for us on
July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is
currently evaluating the anticipated impact of this standard on its consolidated
financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases
(Topic 842) to increase transparency and comparability among organizations by
recognizing lease assets and lease liabilities on the balance sheet and
disclosing key information about leasing arrangements. Topic 842 affects any
entity that enters into a lease, with some specified scope exemptions. The
guidance in this Update supersedes Topic 840, Leases. The core principle of
Topic 842 is that a lessee should recognize the assets and liabilities that
arise from leases. A lessee should recognize in the statement of financial
position a liability to make lease payments (the lease liability) and a right-of-use asset
representing its right to use the underlying asset for the lease term. For
public companies, the amendments in this Update are effective for fiscal years
beginning after December 15, 2018, including interim periods within those fiscal
years. We are currently evaluating the impact of adopting ASU No. 2016-02 on its
consolidated financial statements.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
2.
|
Significant Accounting Policies -
Continued
|
In March 2016, the FASB issued ASU 2016-08, Revenue from
Contracts with Customers (Topic 606): Principal versus Agent Considerations
(Reporting Revenue Gross versus Net) that clarifies how to apply revenue
recognition guidance related to whether an entity is a principal or an agent.
ASU 2016-08 clarifies that the analysis must focus on whether the entity has
control of the goods or services before they are transferred to the customer and
provides additional guidance about how to apply the control principle when
services are provided and when goods or services are combined with other goods
or services. The effective date for ASU 2016-08 is the same as the effective
date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods
beginning after December 15, 2017, including interim periods within those years.
The Company has not yet determined the impact of ASU 2016-08 on its consolidated
financial statements.
In March 2016, the FASB issued ASU No. 2016-09, Compensation
Stock Compensation, or ASU No. 2016-09. The areas for simplification in this
Update involve several aspects of the accounting for share-based payment
transactions, including the income tax consequences, classification of awards as
either equity or liabilities, and classification on the statement of cash flows.
For public entities, the amendments in this Update are effective for annual
periods beginning after December 15, 2016, and interim periods within those
annual periods. Early adoption is permitted in any interim or annual period. If
an entity early adopts the amendments in an interim period, any adjustments
should be reflected as of the beginning of the fiscal year that includes that
interim period. An entity that elects early adoption must adopt all of the
amendments in the same period. Amendments related to the timing of when excess
tax benefits are recognized, minimum statutory withholding requirements,
forfeitures, and intrinsic value should be applied using a modified
retrospective transition method by means of a cumulative-effect adjustment to
equity as of the beginning of the period in which the guidance is adopted.
Amendments related to the presentation of employee taxes paid on the statement
of cash flows when an employer withholds shares to meet the minimum statutory
withholding requirement should be applied retrospectively. Amendments requiring
recognition of excess tax benefits and tax deficiencies in the income statement
and the practical expedient for estimating expected term should be applied
prospectively. An entity may elect to apply the amendments related to the
presentation of excess tax benefits on the statement of cash flows using either
a prospective transition method or a retrospective transition method. We are
currently evaluating the impact of adopting ASU No. 2016-09 on its consolidated
financial statements.
In April 2016, the FASB issued ASU 2016-10, Revenue from
Contracts with Customers (Topic 606): Identifying Performance Obligations and
Licensing, which provides further guidance on identifying performance
obligations and improves the operability and understandability of licensing
implementation guidance. The effective date for ASU 2016-10 is the same as the
effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting
periods beginning after December 15, 2017, including interim periods within
those years. The Company has not yet determined the impact of ASU 2016-10 on its
consolidated financial statements.
FASB ASU 2016-12, Revenue from Contracts with Customers (Topic
606): Narrow-Scope Improvements and Practical Expedients was issued in June
2016 and clarifies the objective of the collectability criterion, presentation
of taxes collected from customers, non-cash consideration, contract
modifications at transition, completed contracts at transition and how guidance
in Topic 606 is retrospectively applied. The amendments do not change the core
principle of the guidance in Topic 606. The effective dates are the same as
those for Topic 606.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
On January 19, 2015, the Company's board of directors consented
to effect a reverse stock split of the Companys issued and outstanding shares
of common stock on a basis of 20 old shares of common stock for one 1 new share
of common stock. The reverse stock split was reviewed and approved for filing by
the FNRA effective February 25, 2015.
On July 13, 2015, the Company's board of directors consented to
effect a reverse stock split of the Companys issued and outstanding shares of
common stock on a basis of 200 old shares of common stock for one 1 new share of
common stock. The reverse stock split was reviewed and approved for filing by
the FNRA effective September 30, 2015. The Companys authorized capital will not
be affected by the reverse stock split. The split is reflected retrospectively
in the accompanying financial statements.
Authorized Stock
At inception, the Company authorized 100,000,000 common shares
and 100,000,000 preferred shares, both with a par value of $0.001 per share.
Each common share entitles the holder to one vote, in person or proxy, on any
matter on which action of the stockholders of the corporation is sought.
On April 8, 2009, the Company increased the number of
authorized shares to 600,000,000 shares, of which 500,000,000 shares are
designated as common stock par value $0.001 per share, and 100,000,000 shares
are designated as preferred stock, par value $0.001 per share.
On October 25, 2012, the Company designated 20,000,000 series A
convertible preferred stock with a par value of $0.001 per share and stated
value of $100 per share. The designated preferred stock is convertible at the
option of the holder, at any time beginning one year from the date such shares
are issued, into common stock of the Company with a par value of $0.001. All
shares of common stock of the Company, shall be of junior rank to all series A
preferred stock in respect to the preferences as to distributions and payments
upon the liquidation, dissolution and winding up of the Company. All other
shares of preferred stock shall be of junior rank to all series A preferred
shares in respect to the preferences as to distributions and payments upon the
liquidation, dissolution and winding up of the Company.
On January 3, 2014, the Company designated 2,000,000 series B
convertible preferred stock with a par value $0.001 per share, issuable only in
consideration of the extinguishment of existing debt convertible in to the
Companys common stock with a par value of $0.001. The designated preferred
stock shall be issued on the basis of 1 preferred stock for each $1 of
convertible debt. The series B convertible preferred stock shall be subordinate
to and rank junior to all indebtedness of the Company now or hereafter
outstanding.
On October 17, 2014, the Company amended its Articles of
Incorporation, which amendment was filed with the Nevada Secretary of State on
October 17, 2014, to increase the authorized capital of its common shares from
500,000,000 common shares, par value $0.001 to 2,000,000,000 common shares, par
value $0.001.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
3.
|
Capital Stock
Continued
|
The Company's authorized capital consists of 2,000,000,000
common shares and 100,000,000 preferred shares, all with a par value of $0.001.
Effective June 22, 2015, the Company designated 50,000,000 of
its 100,000,000 authorized shares of preferred stock as series A preferred
stock. The series A preferred stock, par value $0.001, will rank senior to the Companys common stock, carrying general voting
rights with the common stock at the rate of 62 votes per share. The series A
preferred stock will be deemed cancelled within 1 year of issuance and are not
entitled to share in dividends or other distributions. So long as any shares of
series A preferred stock are outstanding, the affirmative vote of not less than
75% of those outstanding shares of series A preferred stock will be required for
any change to the Companys Articles of Incorporation.
Effective September 9, 2015, the Company increase the
authorized capital of its common shares from 2,000,000,000 common shares, par
value $0.001 to 10,000,000,000 common shares, par value $0.001.
Share Issuances
Common Stock Issuance
For the year ended June 30, 2016:
During the year ended June 30, 2016, the Company issued
109,612,491 shares upon conversion of the convertible promissory notes and
accrued interest, valued at $476,901.
The Company also issued 2,577,896 shares, valued at $22,476 on cashless exercise of the warrants during the year ended June 30, 2016.
For the year ended June 30, 2015:
During the year ended June 30, 2015, the Company issued 7,421,245 shares upon conversion of the convertible promissory notes and accrued interest, valued at $2,186,820.
The Company also issued 102,004 shares, valued at $2,730,022 on cashless exercise of the warrants during the year ended June 30, 2015.
The Company issued 3,094 shares for investor relations and consulting fees during the year ended June 30, 2015 for a total amount of $186,990.
Issuances of Preferred Shares
On June 22, 2015, the Company designated 50,000,000 of its
100,000,000 authorized shares of Preferred Stock as Series A Preferred Stock.
The Series A Preferred Stock, par value $0.001, ranks senior to the common
stock and carries general voting rights with the common stock at the rate of 62
votes per share. The Series A Preferred Stock will be deemed cancelled within
1 year of issuance and is not entitled to share in dividends or other
distributions. So long as any shares of Series A Preferred Stock are
outstanding, the affirmative vote of not less than 75% of those outstanding
shares of Series A Preferred Stock will be required for any change to articles
of incorporation.
On July 6, 2015, the Company issued 130,000 Series A
preferred shares in consideration of the release and discharge of a first
ranking general security interest over all current and future assets of Alta
Disposal Ltd. that was granted to secure to the promissory note entered into on
July 22, 2014. These shares were issued at par value of $0.001. These shares
were subsequently cancelled on December 5, 2015 therefore the net impact on
share capital is nil.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
4.
|
Provision for Income
Taxes
|
The Company recognizes the tax effects of transactions in the
year in which such transactions enter into the determination of net income,
regardless of when reported for tax purposes. Deferred taxes are provided in the
financial statements under FASC 740-20-20 to give effect to the resulting
temporary differences which may arise from differences in the bases of fixed
assets, depreciation methods, allowances, and start-up costs based on the income
taxes expected to be payable in future years.
Exploration stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance, based upon management evaluation that such losses will more likely than not will be utilized in future periods. Additonally, the utilization of net operating losses may be limited by change of control provisions under IRC section 382 of the Internal Revenue code. Management has not evaluated if a change of control has taken place, as of date of the statements. Operating loss carryforwards generated during the period from May 31, 2006 (date of inception) through June 30, 2016 of approximately $15,320,225 will begin to expire in 2026. Accordingly, deferred tax assets were offset by the valuation allowance that increased by approximately $795,006 and $3,017,712 during the year ended June 30, 2016 and 2015 respectively.
The Company follows the provisions of uncertain tax positions
as addressed in FASC 740-10-65-1. The Company recognized approximately no
increase in the liability for unrecognized tax benefits.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
4.
|
Provision for Income Taxes -
Continued
|
The Company has no tax position at June 30, 2016 for which the
ultimate deductibility is highly certain but for which there is uncertainty
about the timing of such deductibility. The Company recognizes interest accrued
related to unrecognized tax benefits in interest expense and penalties in
operating expenses. No such interest or penalties were recognized during the
periods presented. The Company had no accruals for interest and penalties at
June 30, 2016. The Companys utilization of any net operating loss carry forward
may be unlikely as a result of its intended exploration stage activities. The
tax years for June 30, 2015, June 30, 2014, June 30, 2013 and June 30, 2012 are
still open for examination by the Internal Revenue Service (IRS).
|
|
For the year ended June 30, 2016
|
|
|
|
Amount
|
|
|
Tax Effect (35%)
|
|
Loss before income tax
|
$
|
1,340,617
|
|
$
|
469,216
|
|
Non-cash interest expense
|
|
(632,942
|
)
|
|
(221,530
|
)
|
Gain on change in fair value
of derivative liability
|
|
595,512
|
|
|
208,429
|
|
Amortization of debt discount
|
|
(515,942
|
)
|
|
(180,580
|
)
|
Gain on disposal of business
operation
|
|
7,761
|
|
|
2,716
|
|
Total
|
|
795,006
|
|
|
278,252
|
|
Valuation allowance
|
|
(795,006
|
)
|
|
(278,252
|
)
|
Net deferred tax asset (liability)
|
$
|
-
|
|
$
|
-
|
|
|
|
For the year ended June 30, 2015
|
|
|
|
Amount
|
|
|
Tax Effect (35%)
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
2,728,419
|
|
$
|
954,947
|
|
|
|
|
|
|
|
|
Shares issued for consulting
fees, mining expenses, investor relation and director fees
|
|
118,990
|
|
|
41,647
|
|
Shares issued for investor relations
|
|
68,000
|
|
|
23,800
|
|
Shares issued for interest
expenses
|
|
259,139
|
|
|
90,699
|
|
Amortization of discount
|
|
1,970,562
|
|
|
689,697
|
|
Non-cash interest expense
|
|
1,117,464
|
|
|
391,112
|
|
Impairment loss
|
|
(624,429
|
)
|
|
(218,550
|
)
|
Gain on change in fair value
of derivative liability
|
|
(2,806,127
|
)
|
|
982,144
|
|
|
|
|
|
|
|
|
Total
|
|
2,832,017
|
|
|
991,206
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
(2,832,017
|
)
|
|
(991,206
|
)
|
|
|
|
|
|
|
|
Net deferred tax asset
(liability)
|
$
|
-
|
|
$
|
-
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
5.
|
Mineral Property Costs
|
Mineral Permit (Assignment Agreement with Lithium
Exploration VIII Ltd.)
On December 16, 2010, the Company entered into an Assignment
Agreement to acquire the following:
|
a.)
|
An undivided 100% right, title and interest in and to
certain mineral permits located in the Province of Alberta,
Canada.
|
|
b.)
|
All of the assignors right, title and interest in and to
the Option Agreement.
|
In consideration for the Assignment, the Company agreed to pay
US$90,000 by way of cash or stock of equal value (consisting of amounts
previously paid by the Assignor pursuant to the Option Agreement). The full
$90,000 (consisting of option payments i and v below) was expensed and
included in the December 31, 2011 accounts payable balance. The Option shall be
in good standing and exercisable by the Company by paying the following amounts
on or before the dates specified in the following schedule:
|
i.)
|
CDN $40,000 (paid) upon execution of the
agreement;
|
|
ii.)
|
CDN $60,000 (paid) on or before January 1,
2012;
|
|
iii.)
|
CDN $100,000 on or before January 1, 2013 (amended and
paid);
|
|
iv.)
|
CDN $300,000 on or before January 1, 2014 (not paid);
and
|
|
v.)
|
Paying all such property payments as may be required to
maintain the mineral permits in good standing.
|
The Optionee shall provide a refundable amount of CDN$50,000
(paid) to the Optionor by November 2, 2010, which shall be applied by the
Optionor towards work assessment expenses acceptable to the Government of
Alberta, with any unused portion to be applied against payments required to
maintain the permits underlying the property in good
standing.
On December 31, 2012, the Company entered into an agreement to
amend the original payment requirement of CDN$100,000 due on January 1, 2013 to
the following payments: CDN $20,000 (paid) cash payment due on January 1, 2013
and CDN $80,000 by a 15% one year promissory note starting January 1, 2013. The
promissory note is interest free until June 30, 2013. After then, interest will
accrue on the principal balance then in arrears at the rate of 15% per annum. No
payments shall be payable until December 31, 2013. At any time, the Optionor may
elect to convert the remaining balance of CDN $80,000 plus accrued interest into
common shares of the Company at 75% of the closing market price of the Companys
common shares on the election day. The full CDN$100,000 (US$95,008) (consisting
of cash payment of CDN$20,000 (US$19,164) and note payable of CDN$80,000
(US$75,844) was expensed. The note is subject to be measured at its fair value
in accordance with ASC 480-10-25-14. The fair value at issuance was CDN$106,667
(US$101,125) as of June 30, 2013. An additional $26,667 was charged to mining
expense during the year June 30, 2013. An interest expense of CDN$3,058
(US$2,899) was accrued as at June 30, 2013. On July 3, 2013, the Optionor
elected to convert the promissory note of CDN $80,000 (US$75,844) plus accrued
interest of CDN$3,058 (US$2,899) for the total amount of CDN $83,058 (US$78,743)
into 239 common shares of the Company at a price of US$330 per share. The
January 1, 2014 payment was not paid by the Company, and subsequent to the
schedule payment date, the agreement was terminated.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
5.
|
Mineral Property Costs -
Continued
|
Glottech Technology
On March 17, 2011 and subsequently amended on November 18,
2011, the Company entered into a letter agreement to acquire one initial unit of
proprietary and patented mechanical ultrasound technology for use in water
purification, inclusive of its process of separating from water, as the primary
fluid stock, the salt and other minerals and by products contained therein,
with Glottech USA.
To acquire the unit, the Company must make the following
payments:
|
a)
|
US$25,000 upon execution of the agreement
(paid);
|
|
b)
|
US$75,000 within 180 days of execution of the agreement
(paid);
|
|
c)
|
US$700,000 within 10 days of receipt of invoice from
Glottech USA LLC if the payment in b) is made (paid).
|
|
d)
|
The Company also granted an option to acquire 500 shares
for $1.00 to Glottech USA upon receipt of the operational ultrasonic
generator that they are building for Lithium Exploration Group. The 500
shares are to be paid from outstanding shares owned by Alex Walsh, company
CEO. During the year ended June 30, 2011, the option resulting in
additional mining expenses of $4,940,000 was valued using the fair market
value of the shares to be issued. On October 1, 2012, Alex Walsh and GD
International entered into an agreement to transfer 500 common shares
owned by Alex Walsh to GD International. The shares were received by GD
International on October 29, 2012.
|
Commencing as of the end of an initial sixty day testing and
training period following satisfactory delivery and physical setup of the
technology, and continuing thereafter for as long as the technology remains in
the possession of the Company, the Company shall pay continuing monthly
royalties in an amount equal to $2.00 per physical ton of water processed
pursuant to the usage of the technology.
On June 12, 2012, the Company filed a complaint with the court
of common pleas of Chester County, Pennsylvania against Glottech USA, LLC,
Eldredge, Inc., and the Eldredge Companies, Inc. The complaint seeks an order of
the court granting possession of the unit, in its current state, to the
Company.
Effective August 14, 2012, the Company entered into an option
agreement with GD Glottech-International, Limited (GD International) to
protect our license and distribution rights in the event that GD-Glottech-USA,
LLC (GD USA) is unable to perform and honor the obligations contingent to a
letter agreement dated November 8, 2011.
Pursuant to the terms of the option agreement, we are required
to provide an initial deposit of $150,000 to be held in escrow for the option to
obtain a license on the patent rights, as set forth in the option agreement. A
further $15,000 was required for exercising the option agreement and it will be
credited to future fees when patents rights are exercised. We exerised this
option agreement on September 1, 2012 and released the funds to GD
International.
On October 1, 2012, the Company entered into a sales agency
agreement with GD International. The agreement shall replace all agreements
entered previously. Pursuant to the agreement, the Company is appointed as GD
Internationals sales agent for the technology within the territory. As a
consideration, 10,000 common shares of the Company shall be issued to GD
International (issued: see d) above). GD International retains all right, title
and interest in the technology. The term of this agreement will be an initial
period of five years. The term shall be automatically renewable thereafter for
successive five year periods provided that the Company has sold not less than 25
or more technology units during each applicable five year period.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
5.
|
Mineral Property Costs -
Continued
|
On May 2, 2013, the Company entered into an agreement to retain
the future use of the unit. Pursuant to the agreement, the Company must make the
following payments:
|
a)
|
US$20,000 within three days of execution of the agreement
(paid);
|
|
b)
|
US$30,000 within three days upon the testing of the unit
has been successfully completed.
|
6.
|
Convertible Promissory
Notes
|
Summary of convertible promissory note at June 30, 2016 and
2015 is as follows:
|
|
June
|
|
|
Principal
|
|
|
Interest
|
|
|
Total
|
|
|
Total
|
|
|
June 30,
|
|
|
|
30,
|
|
|
Issued
|
|
|
Converted
|
|
|
converted
|
|
|
repaid
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
|
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 13, 2013
|
$
|
67,913
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(46,005
|
)
|
$
|
-
|
|
$
|
21,908
|
|
March 15, 2014
|
|
29,394
|
|
|
-
|
|
|
5,681
|
|
|
(35,075
|
)
|
|
-
|
|
|
-
|
|
July 22, 2014
|
|
540,498
|
|
|
-
|
|
|
-
|
|
|
(242,239
|
)
|
|
-
|
|
|
298,259
|
|
August 22, 2014
|
|
37,242
|
|
|
-
|
|
|
-
|
|
|
(21,475
|
)
|
|
-
|
|
|
15,768
|
|
February 6, 2015
|
|
75,000
|
|
|
-
|
|
|
-
|
|
|
(67,850
|
)
|
|
-
|
|
|
7,150
|
|
February 24, 2015
|
|
100,000
|
|
|
-
|
|
|
-
|
|
|
(23,761
|
)
|
|
-
|
|
|
76,239
|
|
March 3, 2015
|
|
29,000
|
|
|
-
|
|
|
-
|
|
|
(29,000
|
)
|
|
-
|
|
|
-
|
|
August 3, 2015
|
|
-
|
|
|
36,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
36,000
|
|
September 9, 2015
|
|
-
|
|
|
30,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30,000
|
|
September 30, 2015
|
|
-
|
|
|
27,000
|
|
|
-
|
|
|
(7,374
|
)
|
|
-
|
|
|
19,626
|
|
November 06,2015
|
|
-
|
|
|
12,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,000
|
|
December 01, 2015
|
|
-
|
|
|
18,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,000
|
|
December 01, 2015
|
|
-
|
|
|
18,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,000
|
|
December 03, 2015
|
|
-
|
|
|
17,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
17,000
|
|
January 27, 2016
|
|
-
|
|
|
24,750
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
24,750
|
|
January 27, 2016
|
|
-
|
|
|
5,000
|
|
|
-
|
|
|
|
|
|
-
|
|
|
5,000
|
|
March 01, 2016
|
|
-
|
|
|
13,200
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13,200
|
|
March 24, 2016
|
|
-
|
|
|
12,100
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,100
|
|
March 28, 2016
|
|
-
|
|
|
40,700
|
|
|
-
|
|
|
|
|
|
-
|
|
|
40,700
|
|
April 19, 2016
|
|
-
|
|
|
147,000
|
|
|
-
|
|
|
|
|
|
-
|
|
|
147,000
|
|
May 16, 2016
|
|
-
|
|
|
30,250
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
879,047
|
|
$
|
431,000
|
|
$
|
5,681
|
|
$
|
(472,780
|
)
|
$
|
|
|
$
|
842,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Unamortized debt discount
|
$
|
(345,053
|
)
|
|
(394,070
|
)
|
|
|
|
|
515,942
|
|
|
|
|
$
|
(223,181
|
)
|
Total note payable, net of debt discount
|
$
|
533,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
619,769
|
|
Current portion
|
$
|
533,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
619,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term portion
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
On August 3, 2015 the Company issued an aggregate of $36,000
Convertible Promissory Notes that matures on February 03, 2016. These notes bear
10% interest per annum and the Holder of this Note is entitled, at its option,
at any time, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock at a price equal
to 65% of the lowest trading price of the Common Stock as reported on the OTC
Markets for the twenty prior trading days including the day upon which a Notice
of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $52,720 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
269.35%
|
|
Risk free rate:
|
|
0.17%
|
|
The initial fair values of the embedded debt derivative of
$33,231 was allocated as a debt discount with the remainder $19,489 was charged
to current period operations as interest expense.
The note matured during the period however, no repayment was
made. An agreement was entered into by the investor and the Company and the
maturity of the note has been extended by a year till February 3, 2017.
On September 9, 2015, the Company issued an aggregate of
$30,000 Convertible Promissory Notes that matures on September 09, 2016. These
notes bear 10% interest per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $54,495 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
275.84%
|
|
Risk free rate:
|
|
0.39%
|
|
The initial fair values of the embedded debt derivative $30,000
was allocated as a debt discount up to the proceeds of the note with the
remainder $24,495 was charged to current period operations as interest expense.
The note matured during the period however, no repayment was
made. An agreement was entered into by the investor and the Company and the
maturity of the note has been extended by a year till September 9, 2017.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
On September 30, 2015, Company issued an aggregate of $27,000
Convertible Promissory Notes that matures on September 30, 2016. These notes
bear 10% interest per annum and the holder of this Note is entitled, at its
option, at any time, to convert all or any amount of the principal face amount
of this Note then outstanding into shares of the Company's common stock at a
price equal to 65% of the lowest trading price of the Common Stock as reported
on the OTC Markets for the twenty prior trading days including the day upon
which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $306,808 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
375.79%
|
|
Risk free rate:
|
|
0.33%
|
|
The initial fair values of the embedded debt derivative $27,000
was allocated as a debt discount up to the proceeds of the note with the
remainder $279,808 was charged to current period operations as interest expense.
On November 6, 2015, the Company issued an aggregate of $12,000
Convertible Promissory Notes that matures on November 6, 2016. These notes bear
interest at 10% per annum and the Holder of this Note is entitled, at its
option, at any time, to convert all or any amount of the principal face amount
of this Note then outstanding into shares of the Company's common stock at a
price equal to 65% of the lowest trading price of the Common Stock as reported
on the OTC Markets for the twenty prior trading days including the day upon
which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $108,927 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
383.46%
|
|
Risk free rate:
|
|
0.47%
|
|
The initial fair values of the embedded debt derivative of
$12,000 was allocated as a debt discount up to the proceeds of the note with the
remainder $96,927 charged to operations as interest expense.
On December 1, 2015, the Company issued an aggregate of $18,000
Convertible Promissory Notes that matures on December 1, 2016. These notes bear
interest at 10% per annum and the Holder of this Note is entitled, at its
option, at any time, to convert all or any amount of the principal face amount
of this Note then outstanding into shares of the Company's common stock at a
price equal to 65% of the lowest trading price of the Common Stock as reported
on the OTC Markets for the twenty prior trading days including the day upon
which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $72,119 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
Dividend yield:
|
|
0%
|
|
Volatility
|
|
392.28%
|
|
Risk free rate:
|
|
0.51%
|
|
The initial fair values of the embedded debt derivative of
$18,000 was allocated as a debt discount up to the proceeds of the note with the
remainder $54,119 charged to operations as interest expense.
On December 1, 2015, the Company issued an aggregate of $18,000
Convertible Promissory Notes that matures on December 1, 2016. These note bear
interest at 10% per annum and the Holder of this Note is entitled, at its
option, at any time, to convert all or any amount of the principal face amount
of this Note then outstanding into shares of the Company's common stock at a
price equal to 65% of the lowest trading price of the Common Stock as reported
on the OTC Markets for the twenty prior trading days including the day upon
which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $72,119 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
392.28%
|
|
Risk free rate:
|
|
0.51%
|
|
The initial fair values of the embedded debt derivative of
$18,000 was allocated as a debt discount up to the proceeds of the note with the
remainder $54,119 charged to operations as interest expense.
On December 3, 2015, the Company issued an aggregate of $17,000
Convertible Promissory Notes that matures on December 3, 2016. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain conversion features. The
accounting treatment of derivative financial instruments requires that the
Company record the fair value of the derivatives as of the inception date of the
Convertible Promissory Note and to adjust the fair value as of each subsequent
balance sheet date. At the inception of the Convertible Promissory Note, the
Company determined a fair value of $27,706 of the embedded derivative. The fair
value of the embedded derivative was determined using the Black Scholes Model
based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
394.55%
|
|
Risk free rate:
|
|
0.57%
|
|
The initial fair values of the embedded debt derivative of
$17,000 was allocated as a debt discount up to the proceeds of the note with the
remainder $10,706 charged to operations as interest expense.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
On January 27, 2016, the Company issued an aggregate of $24,750
Convertible Promissory Notes that mature on January 27, 2017. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $45,731 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
383.68%
|
|
Risk free rate:
|
|
0.47%
|
|
The initial fair values of the embedded debt derivative of
$22,846 was allocated as a debt discount with the remainder $22,885 charged to
operations as interest expense.
On January 27, 2016, the Company issued an aggregate of $5,500
Convertible Promissory Notes that mature on January 27, 2017. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $9,239 of the embedded derivative. The fair value of the
embedded derivative was determined using the Black Scholes Model based on the
following assumptions:
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
Dividend yield:
|
|
0%
|
|
Volatility
|
|
383.68%
|
|
Risk free rate:
|
|
0.47%
|
|
The initial fair values of the embedded debt derivative of
$4,615 was allocated as a debt discount with the remainder $4,623 charged to
operations as interest expense.
On March 01, 2016, the Company issued an aggregate of $13,200
Convertible Promissory Notes that mature on March 01, 2017. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $29,217 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.68%
|
|
The initial fair values of the embedded debt derivative of
$13,200 was allocated as a debt discount up to the proceeds of the note with the
remainder $16,017 charged to operations as interest expense.
On March 23, 2016, the Company issued an aggregate of $12,100
Convertible Promissory Notes that mature on March 23, 2017. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $17,671 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.64%
|
|
The initial fair values of the embedded debt derivative of
$6,515 was allocated as a debt discount with the remainder $11,156 charged to
operations as interest expense.
On March 28, 2016, the Company issued an aggregate of $40,700
Convertible Promissory Notes that mature on March 28, 2017. These notes bear
interest at a rate of 10% per annum and the Holder of this Note is entitled, at
its option, at any time, to convert all or any amount of the principal face
amount of this Note then outstanding into shares of the Company's common stock
at a price equal to 65% of the lowest trading price of the Common Stock as
reported on the OTC Markets for the twenty prior trading days including the day
upon which a Notice of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $36,293 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.65%
|
|
The initial fair values of the embedded debt derivative of
$21,915 was allocated as a debt discount with the remainder $14,378 charged to
operations as interest expense.
On April 19, 2016, Company issued an aggregate of $57,500
Convertible Promissory Notes that matures on April 19, 2017. These notes bear
10% interest per annum and the Holder of this Note is entitled, at its option,
at any time, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock at a price equal
to 65% of the lowest trading price of the Common Stock as reported on the OTC
Markets for the twenty prior trading days including the day upon which a Notice
of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $55,966 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.53%
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
The initial fair values of the embedded debt derivative of
$55,966 was allocated as a debt discount with the remainder $nil was charged to
current period operations as interest expense.
On April 19, 2016, Company issued an aggregate of $59,500
Convertible Promissory Notes that matures on April 19, 2017. These notes bear
10% interest per annum and the Holder of this Note is entitled, at its option,
at any time, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock at a price equal
to 65% of the lowest trading price of the Common Stock as reported on the OTC
Markets for the twenty prior trading days including the day upon which a Notice
of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $55,966 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.53%
|
|
The initial fair values of the embedded debt derivative of
$55,966 was allocated as a debt discount with the remainder $nil was charged to
current period operations as interest expense.
On April 19, 2016, Company issued an aggregate of $30,000
Convertible Promissory Notes that matures on April 19, 2017. These notes bear
10% interest per annum and the Holder of this Note is entitled, at its option,
at any time, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock at a price equal
to 65% of the lowest trading price of the Common Stock as reported on the OTC
Markets for the twenty prior trading days including the day upon which a Notice
of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $55,966 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.53%
|
|
The initial fair values of the embedded debt derivative of
$30,000 was allocated as a debt discount up to the proceeds of the note with the
remainder $25,966 was charged to current period operations as interest expense.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
On May 16, 2016 Company issued an aggregate of $30,250
Convertible Promissory Notes that matures on May 16, 2017. These notes bear 10%
interest per annum and the Holder of this Note is entitled, at its option, at
any time, to convert all or any amount of the principal face amount of this Note
then outstanding into shares of the Company's common stock at a price equal to
65% of the lowest trading price of the Common Stock as reported on the OTC
Markets for the twenty prior trading days including the day upon which a Notice
of Conversion is received.
The Company identified embedded derivatives related to the
Convertible Promissory Notes. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial
instruments requires that the Company record the fair value of the derivatives
as of the inception date of the Convertible Promissory Note and to adjust the
fair value as of each subsequent balance sheet date. At the inception of the
Convertible Promissory Note, the Company determined a fair value of $22,132 of
the embedded derivative. The fair value of the embedded derivative was
determined using the Black Scholes Model based on the following assumptions:
Dividend yield:
|
|
0%
|
|
Volatility
|
|
371.21%
|
|
Risk free rate:
|
|
0.57%
|
|
The initial fair values of the embedded debt derivative of
$22,132 was allocated as a debt discount up to the proceeds of the note with the
remainder $nil was charged to current period operations as interest expense.
The Company during the period and subsequently has extended the maturity dates on few of the Convertible Promissory Notes.
During the year ended June 30, 2016 and 2015 the Company
amortized the debt discount on all the notes of $515,942 and $1,970,562 to
operations as interest expense, respectively.
Derivative Liability- Debt
The fair value of the described embedded derivative on all debt
was valued at $1,162,058 and $1,646,448 at June 30, 2016 and 2015, respectively,
which was determined using the Black Scholes Model with the following
assumptions:
|
|
June 30,
2016
|
|
|
June 30,
2015
|
|
Dividend yield:
|
|
0%
|
|
|
0%
|
|
Volatility
|
|
346.6 453.3%
|
|
|
258.89%
|
|
Risk free rate:
|
|
0.39%-0.66%
|
|
|
0.11% - 0.64%
|
|
At June 30, 2016 and 2015, the Company adjusted the recorded
fair value of the derivative liability on debt to market resulting in non-cash,
non-operating gain of $743,224 and loss of $527,854 for the year ended June 30,
2016 and 2015, respectively
During the year ended June 30, 2016 and 2015 the Company issued
109,612,491 and 7,421,245 no of shares of the Company common stock in settlement
of $476,901 and $2,186,820, respectively, of convertible note and interest.
During the year ended June 30, 2016 and 2015 the Company
reclassed the derivative liability of $768,175 and $3,174,990, respectively, to
additional paid in capital on conversion of convertible note.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
The following table provides a summary of changes in fair value
of the Companys Level 3 financial liabilities as of June 30, 2016 and June 30,
2015:
|
|
|
Derivative
|
|
|
|
|
Liability
(convertible
|
|
|
|
|
promissory notes)
|
|
|
Balance, June 30, 2014
|
$
|
3,066,200
|
|
|
Initial fair value at note issuances
|
|
1,227,384
|
|
|
Fair value of liability at
note conversion
|
|
(3,174,990
|
)
|
|
Mark-to-market at June 30, 2015
|
|
527,854
|
|
|
Balance, June 30, 2015
|
$
|
1,646,448
|
|
|
Initial fair value at note issuances
|
|
1,027,009
|
|
|
Fair value of liability at
note conversion
|
|
(768,175
|
)
|
|
Mark-to-market at June 30, 2016
|
|
(743,224
|
)
|
|
Balance, June 30, 2016
|
$
|
1,162,058
|
|
|
|
|
|
|
|
Net gain for the year included in earnings relating to the
liabilities held at June 30, 2016
|
$
|
743,224
|
|
Derivative Liability- Warrants
Along with the promissory notes, the Company issued warrants
that bear a cashless exercise provision. The warrants also include anti-dilution
protection with respect to lower priced issuances of common stock or securities
convertible or exchangeable into common stock, which provision resulted in
derivative liability treatment under ASC 480. The warrants are recorded at fair
value using the Black-Scholes option pricing model and marked-to-market at each
reporting period, with the changes in the fair value recorded in the
consolidated statement of operations and comprehensive income (loss).
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
During the year ended June 30, 2016 no warrants were issued
along with convertible note.
The fair value of the described embedded derivative on all
warrants was valued at $268,611 at June 30, 2016 and $143,375 at June 30, 2015
which was determined using the Black Scholes Model with the following
assumptions:
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
Dividend yield:
|
|
0%
|
|
|
0%
|
|
Volatility
|
|
229.1 275.4%
|
|
|
288.96%
|
|
Risk free rate:
|
|
0.71 1.01%
|
|
|
1.01 - 1.63%
|
|
|
|
|
Warrants
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
Outstanding
|
|
|
Average
|
|
|
Average
|
|
|
|
|
|
|
|
Exercise
|
|
|
Remaining
|
|
|
|
|
|
|
|
Price
|
|
|
life
|
|
|
Balance, June 30,
2014
|
|
15,204
|
|
$
|
242.57
|
|
|
2.62 years
|
|
|
Warrants issued
|
|
19,104
|
|
|
236.92
|
|
|
4.46 years
|
|
|
Exercised
|
|
(5,927
|
)
|
|
257.08
|
|
|
-
|
|
|
Cancelled
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Expired
|
|
(1,289
|
)
|
|
240.00
|
|
|
-
|
|
|
Balance, June 30, 2015
|
|
27,092
|
|
$
|
100.98
|
|
|
3.79 years
|
|
|
Warrants issued
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Exercised
|
|
(120
|
)
|
|
280.00
|
|
|
-
|
|
|
Cancelled
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Expired
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Balance, June 30, 2016
|
|
26,972
|
|
$
|
100.20
|
|
|
2.79 years
|
|
The following table provides a summary of changes in fair value
of the Companys Level 3 financial liabilities as of June 30, 2016 and 2015:
|
|
|
Derivative
|
|
|
|
|
Liability (warrants)
|
|
|
Balance, June 30, 2014
|
$
|
5,415,982
|
|
|
Initial fair value of warrant derivatives at
note issuances
|
|
791,407
|
|
|
Fair value of warrant
exercised
|
|
(2,730,022
|
)
|
|
Mark-to-market at June 30, 2015 warrant liability
|
|
(3,333,992
|
)
|
|
Balance, June 30, 2015
|
$
|
143,375
|
|
|
Initial fair value of warrant derivatives at
note issuances
|
|
-
|
|
|
Fair value of warrant
exercised
|
|
(22,476
|
)
|
|
Mark-to-market at June 30, 2016 warrant liability
|
|
147,712
|
|
|
Balance, June 30, 2016
|
$
|
268,611
|
|
|
|
|
|
|
|
Net loss for the year included in earnings relating to the
liabilities held at June 30, 2016
|
$
|
147,712
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
6.
|
Convertible Promissory Notes
Continued
|
At June 30, 2016 and 2015, the Company adjusted the recorded
fair value of the derivative liability on warrants to market resulting in
non-cash, non-operating loss of $147,712 and gain of $3,333,992 for the year
ended June 30, 2016 and 2015, respectively.
During the year ended June 30, 2016 and 2015 the Company
reclassed the derivative liability on warrants of $22,476 and $2,730,022,
respectively, to additional paid in capital on exercise of warrants.
7.
|
Related Party Transactions
|
During the year ended June 30, 2016, the Company incurred
consulting fees of $9,115 (June 30, 2015 - $157,086) with directors and officers
out of which there were no stock payments (June 30, 2015 - $58,990 were paid by
issuance of 2,167 shares of the Company common stock).
As of June 30, 2016, the Company repaid to a director for a
non-interest bearing demand loan of $nil (Note 9) (June 30, 2015 payable
$47,537). The balance outstanding for this loan is $115,000.
These transactions are in the normal course of operations and
are measured at the exchange amount of consideration established and agreed to
by the related parties.
8.
|
Going Concern and Liquidity
Considerations
|
The accompanying audited consolidated financial statements have
been prepared assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. As at June 30, 2016, the Company
had a working capital deficiency of $2,473,600 (June 30, 2015 - $2,456,476) and
an accumulated deficit of $50,806,439 (June 30, 2015 - $49,504,348). The Company
intends to fund operations through equity financing arrangements, which may be
insufficient to fund its capital expenditures, working capital and other cash
requirements for the next twelve months.
The ability of the Company to emerge from the exploration stage
is dependent upon, among other things, obtaining additional financing to
continue operations, explore and develop the mineral properties and the
discovery, development and sale of ore reserves.
In response to these problems, management intends to raise
additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about the
Companys ability to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
9.
|
Commitments and
Contingencies
|
Employment Agreements
On January 12, 2014, the Company entered into an employment
agreement with a director and officer. Commencing on January 12, 2014, the
director and officer will be employed for 24 months ending on January 12, 2016.
Pursuant to the agreement, annual salary of US$120,000 is payable monthly in
cash or if the Company does not have available cash, in shares of the Companys
common stock.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
9.
|
Commitments and Contingencies -
Continued
|
Consulting Agreements
On January 1, 2014, the Company entered in a consulting
agreement with a consultants to provide services as members of the Board of
Directors in regards to the Companys management and operations. The
compensation for the services to be provided will be $12,000 payable monthly in
cash or if the Company does not have available cash, in shares of the Companys
common stock. The consulting agreement was amended on October 22, 2014 to
include an additional aggregate of $30,000 payable as of October 22, 2014 in
cash or in shares of the Companys common stock, and changed the term of
agreement from 12 months to 10 months. Effective November 1, 2014, the
consultant resigned as member of the Board of Directors.
On April 28, 2014, the Company entered into a consulting
agreement with a consultant to provide services as members of the Board of
Directors in regards to the Companys management and operations.
Pursuant to the terms of the agreement, the consultant will
receive compensation of $12,000 in unregistered restricted common shares of the
Company's common stock at a deemed value of $200.0 per share, issuable on May
15, 2014, effective April 28, 2014 to April 27, 2015. The consultant resigned as
member of the Board of Directors and these shares were not issued.
On May 30, 2014, the Company entered into a consulting
agreement with a consultant to provide services as member of the Board of
Directors in regards to the Companys management and operation. The compensation
for the services to be provided will be $10,000 per month payable in common
stock of the Company from a period of six months from the effective date of May
30, 2014.
On August 1, 2014, the Company entered into a consulting
agreement with a consultant to provide advice relative to corporate and business
services and to perform other related activities. Pursuant to the terms of the
agreement, the Company will issue 500 common shares of the Company valued at
$68,000. These shares were issued in full effective October 22, 2014.
Lease Commitment
On May 25, 2016, the Company entered into a sublease agreement
for a term of twelve months and expiring on May 30, 2017. Future minimum rental
payments required under operating lease (exclusive of other additional rent
payments) are $13,185.
Litigation
From time to time we may be a defendant and plaintiff in
various other legal proceedings arising in the normal course of our business.
Except as disclosed above, we are currently not a party to any material legal
proceedings or government actions, including any bankruptcy, receivership, or
similar proceedings. In addition, we are not aware of any known litigation or
liabilities involving the operators of our properties that could affect our
operations. Furthermore, as of the date of this Annual Report, our management is
not aware of any proceedings to which any of our directors, officers, or
affiliates, or any associate of any such director, officer, affiliate, or
security holder is a party adverse to our company or has a material interest
adverse to us.
Secured Bridge Loan Agreement
On December 18, 2013, the Company entered into an agreement
with GD Glottech International Ltd (GDGI) whereby the Company loaned to GDGI
the sum of $20,000. GDGI will repay the total amount of the loan plus interest
in the amount of $333.34 (representing a 10% annual interest rate), within sixty
(60) days from the receipt of the loan funds or within five (5) days of Sonic
Cavitation, LLC receiving a 5% Capital Contribution.
On April 21, 2014, the Company entered into an amended
agreement with Sonic Cavitation, whereby Sonic Cavitation agreed to facilitate
the construction of one sonic cavitation generator. The Company agreed to pay
Sonic Cavitation a consulting fee of $20,000 upon execution of the agreement and
forgive the sum of $20,000 debt upon delivery of the prototype by Sonic
Cavitation. The agreement has been executed, however the delivery of the
prototype has not yet fulfilled.
During the year ending June 30, 2016, the directors of the
company decided that the loan is irrecoverable and has been written off to
$nil.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
11.
|
Discontinued Operations
|
On September 4, 2015, the Company entered into an Asset
Purchase agreement whereby the Company sells the net assets of Alta Disposal
Morinville Ltd. (of which the Company had acquired 51% interest on October 18,
2013) for total purchase price of CDN$10,000.
Operating results for the year ended June 30, 2016 and 2015 for
Alta Disposal Morinville Ltd. are presented as discontinued operations and the
assets and liabilities classified as held for sale are presented separately in
the consolidated balance sheet.
A breakdown of the discontinued operations is presented as
follow:
Consolidated Statements of Operations and Comprehensive
Loss
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
-
|
|
$
|
72,577
|
|
Selling, general and administrative
|
$
|
(78,624
|
)
|
|
(445,152
|
)
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
$
|
(78,624
|
)
|
$
|
(372,575
|
)
|
Consolidated Balance Sheets
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
1,301
|
|
$
|
46,731
|
|
Receivable, net
|
|
651
|
|
|
28,160
|
|
Prepaid expenses
|
|
1,822
|
|
|
-
|
|
GST Receivable
|
|
16,237
|
|
|
-
|
|
Impairment of net assets
|
|
-
|
|
|
(60,178
|
)
|
|
$
|
20,011
|
|
$
|
14,713
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
$
|
6,420
|
|
$
|
6,696
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
Black Box Energy, Inc.
On September 9, 2016, the Company acquired 100% interest in
Black Box Energy, Inc. a company incorporated in the State of Nevada. Black Box
Energy will purchase 50% of a 70% of the working interest in the McKean County
Project from PetroChase, Inc. The consideration paid for the 50% interest in
McKean County Project, is in the following amounts:
-
First Payment made on September 09, 2016 for an amount of
$125,000;
-
Second Payment made on September 16, 2016 for an amount of
$125,000; and
-
Management Fees Payment for an amount of $34,000 within 90 days
after the Second Payment.
Issuances of Convertible Note
On August 12, 2016, the Company entered into an agreement with
an investor. Pursuant to the terms of the agreement, the investor acquired a 10%
convertible note with an aggregate face value of $42,500, with an issuance
discount of $4,250 and $2,500 of legal fees. The note matures in one year. The
holder of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of common stock in the Company at
a price equal to 65% of the lowest trading price of the Common Stock as reported
on the OTC Markets for the twenty prior trading days including the day upon
which a Notice of Conversion is received.
On September 07, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $116,000, with an
issuance discount of $11,600. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of the of common stock in the Company at a
price equal to the lesser of $0.005 or 50% discount of the lowest trading price
of the Common Stock as reported on the OTC Markets for the twenty prior trading
days including the day upon which a Notice of Conversion is received.
On September 08, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $27,778, with an issuance
discount of $2,778. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock in the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
On September 15, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $257,778, with an
issuance discount of $25,778. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock in the Company at a price
equal to the lesser of $0.005 or 50% discount of the lowest trading price of the
Common Stock as reported on the OTC Markets for the twenty prior trading days
including the day upon which a Notice of Conversion is received.
On September 27, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $64,900, with an issuance
discount of $5,900 and legal fees of $4,000. The note matures in one year. The
holder of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of common stock in the Company
at a price equal to the lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock as reported on the OTC Markets for the twenty prior trading days including the day upon which a Notice of Conversion is received.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
12.
|
Subsequent Events -
Continued
|
On September 29, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $61,112, with an issuance
discount of $6,112. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock in the Company at a price equal to the lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock as reported on the OTC Markets for the twenty prior trading days including the day upon which a Notice of Conversion is received.
Intent Buyout of Convertible Promissory Notes and
Warrants
On September 1, 2016, The Company entered into letter
agreements with five separate investors with the intent to buyout their
convertible promissory notes and warrants. Pursuant to the terms of the
Agreement, the investors have agreed to a standstill period until September 16,
2016. The buyout will take place over a six month period of time and will result
in an aggregate of $252,856 in debt being retired, an aggregate of $195,500 in
warrants being retired and an aggregate buyout amount of $460,000 will be paid
over the period. Additionally the Company will also issue an aggregate of
$232,500 in new convertible debt. Conversion Price for note will be 65% of the
lowest trading price of the Common Stock as reported on the OTC Markets
electronic quotation service or such marketplace. Note will have no prepayment
penalties and can be purchased from the holder at face value.
Bridge Loan
On September 2, 2016 the Company entered into a bridge loan in
the amount of $50,000 with 10% interest per annum due November 2, 2016.
On September 7, 2016, the Company pre-paid the loan of $50,000 as per agreement dated September 2, 2016 for a total amount of $50,082 of which, $50,000 is the principal and $82 is the interest amount.
Assigned Notes
On September 7, 2016, a convertible promissory note assigned on
April 19, 2016 in the amount of $50,000 to an investor is restated into a
promissory note with a new investor, for an amount of $53,919.68. The note
matures in one year from the effective date of transfer. The holder of this note
is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock of the Company at a price
equal to the lesser of $0.005 or 50% discount of the lowest trading price of the
Common Stock as reported on the OTC Markets for the twenty prior trading days
including the day upon which a Notice of Conversion is received.
On September 8, 2016, a convertible promissory note assigned on
July 22, 2014 in the amount of $120,000 to an investor is restated into a
promissory note with a new investor, for an amount of $120,000. The note matures
in one year from the effective date of transfer. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock of the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
On September 9, 2016, a convertible promissory note assigned on
March 28, 2016 in the amount of $40,700 to an investor is restated into a
promissory note with a new investor, for an amount of $44,296.82. The note
matures in one year from the effective date of transfer. The holder of this note
is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock of the Company at a price
equal to the lesser of $0.005 or 50% discount of the lowest trading price of the
Common Stock as reported on the OTC Markets for the twenty prior trading days
including the day upon which a Notice of Conversion is received.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
12.
|
Subsequent Events -
Continued
|
On September 9, 2016, a convertible promissory note assigned on
April 19, 2016 in the amount of $59,500 to an investor is restated into a
promissory note with a new investor, for an amount of $64,400. The note matures
in one year from the effective date of transfer. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock of the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
Warrant Exchange
On September 19, 2016 the Company entered into an Exchange Agreement with JDF Capital Inc. pursuant to which it issued to JDF Capital a convertible promissory note with a face value of $140,000 in consideration for the cancellation of 700 share purchase warrants issued to JDF Capital on March 3, 2014. The cancelled warrants were exercisable on a cashless basis and had a fair value of approximately $140,000 upon cancellation. The convertible promissory note has a maturity dated of September 19, 2017, bears interest of 8% per year, and is convertible at a price equal to 65% of the lowest closing bid price of our common stock occurring during the twenty trading days immediately preceding September 19, 2016, or immediately preceding the notice of conversion.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $550,000 in consideration for the
cancellation of 4,583 share purchase warrants issued to JDF Capital on March 15,
2014. The cancelled warrants were exercisable on a cashless basis and had a fair
value of approximately $550,000 upon cancellation. The convertible promissory
note has a maturity dated of September 19, 2017, bears interest of 8% per year,
and is convertible at a price equal to 65% of the lowest closing bid price of
our common stock occurring during the twenty trading days immediately preceding
September 19, 2016, or immediately preceding the notice of conversion.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $708,000 in consideration for the
cancellation of 4,200 share purchase warrants issued to JDF Capital on July 22,
2014. The cancelled warrants were exercisable on a cashless basis and had a fair
value of approximately $708,000 upon cancellation. The convertible promissory
note has a maturity dated of September 19, 2017, bears interest of 8% per year,
and is convertible at a price equal to 60% of the lowest closing bid price of
our common stock occurring during the twenty trading days immediately preceding
September 19, 2016, or immediately preceding the notice of conversion
Conversions
Subsequent to June 30, 2016, the following conversions occurred:
On June 8, 2016 (effective September 9, 2016) the Company
issued 4,518,720 common shares at a deemed price of $0.0005 per share for
promissory note conversion.
On September 7, 2016 the Company issued 5,800,000 common shares
at a deemed price of $0.0005 per share for promissory note conversion.
On September 15, 2016 the Company issued 6,480,660 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 19, 2016 the Company issued 5,500,000 common
shares at a deemed price of $0.0005 per share for promissory note
conversion.
On September 22, 2016 the Company issued 6,807,860 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 29, 2016 the Company issued 6,500,000 common
shares at a deemed price of $0.0005 per share for promissory note conversion.
On September 29, 2016 the Company issued 7,344,000 common
shares at a deemed price of $0.0005 per share for promissory note
conversion.
The Company has evaluated subsequent events from July 1, 2016, through the date of this report, and determined there are no other items to disclose.
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
13.
|
Restatement to previously issued financial
statements
|
Subsequent to the issuance of June 30, 2015 financial
statements, management determined that the warrants issued were incorrectly
valued and derivative liability on the conversion option embedded in convertible
notes was not recognized and during the year period ending June 30, 2016, these
warrants were revalued and a derivative liability on the conversion option was
calculated. As a result of revaluation of the warrants, the consolidated balance
sheet for the year ending June 30, 2015, the consolidated statements of
operations and comprehensive income (loss) and consolidated statement of cash
flows for the year period ending June 30, 2015 and consolidated statements of
changes in stockholders deficit for the period ending June 30, 2014 and June
30, 2015 were restated.
The following tables reflect the corrections to the affected
line items in the previously issued financial statements as of and for the year
ended June 30, 2015.
Effect on Consolidated Balance Sheet
|
|
Year ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As previously
|
|
|
Effect of
|
|
|
As Restated
|
|
|
|
reported
|
|
|
Restatement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
64,098
|
|
$
|
-
|
|
$
|
64,098
|
|
Receivable
|
|
13,421
|
|
|
-
|
|
|
13,421
|
|
Loan receivable
|
|
20,000
|
|
|
-
|
|
|
20,000
|
|
Prepaid expenses
|
|
2,789
|
|
|
-
|
|
|
2,789
|
|
Current assets held for sale
|
|
14,713
|
|
|
-
|
|
|
14,713
|
|
Total current assets
|
|
115,021
|
|
|
-
|
|
|
115,021
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
115,021
|
|
$
|
-
|
|
$
|
115,021
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND DEFICIT
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
$
|
65,962
|
|
$
|
-
|
|
$
|
65,962
|
|
Derivative
liability warrants
|
|
3,134
|
|
|
140,241
|
|
|
143,375
|
|
Derivative liability
convertible promissory notes
|
|
-
|
|
|
1,646,448
|
|
|
1,646,448
|
|
Due to related
party
|
|
115,000
|
|
|
-
|
|
|
115,000
|
|
Convertible promissory notes
|
|
300,887
|
|
|
233,107
|
|
|
533,994
|
|
Accrued interest
convertible promissory notes
|
|
60,022
|
|
|
-
|
|
|
60,022
|
|
Liabilities of discontinued operations
|
|
6,696
|
|
|
-
|
|
|
6,696
|
|
Total Current Liabilities
|
$
|
551,701
|
|
$
|
2,019,796
|
|
$
|
2,571,497
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS DEFICIT
|
|
|
|
|
|
|
|
|
|
Capital stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nil preferred shares
|
|
-
|
|
|
-
|
|
|
-
|
|
7,574,353 common shares
|
|
7,575
|
|
|
-
|
|
|
7,575
|
|
Additional paid-in capital
|
|
43,165,743
|
|
|
4,217,488
|
|
|
47,383,231
|
|
Accumulated other
comprehensive loss
|
|
(29,484
|
)
|
|
-
|
|
|
(29,484
|
)
|
Deficit accumulated during the exploration
|
|
(43,267,064
|
)
|
|
(6,237,284
|
)
|
|
(49,504,348
|
)
|
Total Lithium Exploration Group, Inc. Stockholders
Deficit
|
|
(123,230
|
)
|
|
(2,019,796
|
)
|
|
(2,143,026
|
)
|
Non-controlling interest
|
|
(313,450
|
)
|
|
-
|
|
|
(313,450
|
)
|
Total Deficit
|
|
(436,680
|
)
|
|
(2,019,796
|
)
|
|
(2,456,476
|
)
|
Total Liabilities and Deficit
|
$
|
115,021
|
|
$
|
-
|
|
$
|
115,021
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
13.
|
Restatement to previously issued financial statements
-
continued
|
Effect on Consolidated Statement of Operations and
Comprehensive Income (Loss)
|
|
Year ended
June 30, 2015
|
|
|
|
As previously
|
|
|
Effect of
|
|
|
|
|
|
|
reported
|
|
|
Restatement
|
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
Mining (Notes 3 & 5)
|
|
37,033
|
|
|
-
|
|
|
37,033
|
|
Selling, general and administrative (Notes 3
& 5)
|
|
1,192,170
|
|
|
-
|
|
|
1,192,170
|
|
Impairment Loss
|
|
624,429
|
|
|
-
|
|
|
624,429
|
|
Total operating expenses
|
|
1,853,632
|
|
|
-
|
|
|
1,853,632
|
|
(Loss) from operations
|
|
(1,853,632
|
)
|
|
-
|
|
|
(1,853,632
|
)
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (Note 6)
|
|
(3,301,291
|
)
|
|
1,930,132
|
|
|
(1,371,159
|
)
|
Other income
|
|
93,944
|
|
|
-
|
|
|
93,944
|
|
Gain on change in the fair value of
derivative liability (Note 6)
|
|
3,710,345
|
|
|
(904,218
|
)
|
|
2,806,127
|
|
Fair value of warrants issued
|
|
(873,471
|
)
|
|
873,471
|
|
|
-
|
|
Amortization of discount on debt discount
|
|
-
|
|
|
(1,970,562
|
)
|
|
(1,970,562
|
)
|
Equity in income of
investment held for sale
|
|
104
|
|
|
-
|
|
|
104
|
|
Loss on sale of investment held for sale
|
|
(488
|
)
|
|
|
|
|
(488
|
)
|
Loss before income
taxes
|
|
(2,224,489
|
)
|
|
(71,177
|
)
|
|
(2,295,666
|
)
|
|
|
|
|
|
|
|
|
|
|
Provision for income Taxes
(Note 4)
|
|
-
|
|
|
-
|
|
|
-
|
|
Loss from continuing operations
|
|
(2,224,489
|
)
|
|
(71,177
|
)
|
|
(2,295,666
|
)
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
(372,575
|
)
|
|
-
|
|
|
(372,575
|
)
|
Impairment loss on
discontinued operations
|
|
(60,178
|
)
|
|
-
|
|
|
(60,178
|
)
|
Net loss
|
|
(2,657,242
|
)
|
|
(71,177
|
)
|
|
(2,728,419
|
)
|
Less: Net loss attributable
to the non-controlling interest
|
|
(212,050
|
)
|
|
-
|
|
|
(212,050
|
)
|
Net loss attributable to Lithium
Exploration Group, Inc. Common
shareholders
|
$
|
(2,445,192
|
)
|
$
|
(71,177
|
)
|
$
|
(2,516,369
|
)
|
Basic and Diluted loss per
Common Share
|
|
(2.34
|
)
|
|
(0.07
|
)
|
|
(2.41
|
)
|
Basic and Diluted Weighted Average Number
of Common Shares
Outstanding
|
|
1,045,061
|
|
|
-
|
|
|
1,045,061
|
|
Comprehensive loss :
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(2,657,242
|
)
|
|
(71,177
|
)
|
|
(2,728,419
|
)
|
Foreign currency translation
adjustment
|
|
(23,715
|
)
|
|
-
|
|
|
(23,715
|
)
|
Comprehensive loss
|
|
(2,680,957
|
)
|
|
(71,177
|
)
|
|
(2,752,134
|
)
|
Comprehensive loss
attributable to non-controlling interest
|
|
(212,050
|
)
|
|
-
|
|
|
(212,050
|
)
|
Comprehensive loss attributable to Lithium
Exploration Group, Inc.
|
$
|
(2,468,907
|
)
|
$
|
(71,177
|
)
|
$
|
(2,540,084
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
13.
|
Restatement to previously issued financial statements
-
continued
|
Effect on Consolidated Statements of Cash Flows
|
|
Year ending
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As previously
|
|
|
Misstatement
|
|
|
As Restated
|
|
|
|
reported
|
|
|
Adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities
|
|
|
|
|
|
|
|
|
|
Net loss from continuing
operations
|
$
|
(2,224,489
|
)
|
$
|
(71,177
|
)
|
$
|
(2,295,666
|
)
|
Loss from discontinued
operations
|
|
(432,753
|
)
|
|
-
|
|
|
(432,753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile
net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Equity in income of investment held for sale
|
|
(104
|
)
|
|
-
|
|
|
(104
|
)
|
Loss
on sale of unconsolidated affiliate
|
|
488
|
|
|
-
|
|
|
488
|
|
Common shares issued for consulting fees
|
|
118,990
|
|
|
-
|
|
|
118,990
|
|
Common shares issued for investor relations
|
|
68,000
|
|
|
-
|
|
|
68,000
|
|
Interest expense
|
|
3,057,135
|
|
|
(1,930,133
|
)
|
|
1,127,002
|
|
Amortization of discount on derivative liabilities
|
|
-
|
|
|
1,970,562
|
|
|
1,970,562
|
|
Common shares issued for interest expenses
|
|
259,139
|
|
|
-
|
|
|
259,139
|
|
Gain
on change in the fair value of derivative liability
|
|
(3,710,345
|
)
|
|
904,218
|
|
|
(2,806,127
|
)
|
Fair value of warrants issued
|
|
873,471
|
|
|
(873,471
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Impairment Loss
|
|
624,429
|
|
|
-
|
|
|
624,429
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Receivable, net
|
|
(13,421
|
)
|
|
-
|
|
|
(13,421
|
)
|
Prepaid expenses
|
|
16,610
|
|
|
-
|
|
|
16,610
|
|
Accounts payable and accrued liabilities
|
|
52,235
|
|
|
-
|
|
|
52,235
|
|
Due
to related party
|
|
115,000
|
|
|
-
|
|
|
115,000
|
|
Accrued interest
|
|
(14,982
|
)
|
|
-
|
|
|
(14,982
|
)
|
Net cash used in operating activities from
continuing operations
|
|
(1,210,598
|
)
|
|
-
|
|
|
(1,210,598
|
)
|
Net cash used in operating activities from discontinued
operations
|
|
32,171
|
|
|
-
|
|
|
32,171
|
|
Net cash used in operating activities
|
|
(1,178,427
|
)
|
|
-
|
|
|
(1,178,427
|
)
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from disposal of investment
|
|
299,940
|
|
|
-
|
|
|
299,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Repayment of related party
|
|
(45,332
|
)
|
|
-
|
|
|
(45,332
|
)
|
Proceed from issuance of convertible
promissory notes
|
|
954,000
|
|
|
-
|
|
|
954,000
|
|
Net cash
provided by financing activities
|
|
908,668
|
|
|
-
|
|
|
908,668
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange
|
|
(23,715
|
)
|
|
-
|
|
|
(23,715
|
)
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
6,466
|
|
|
-
|
|
|
6,466
|
|
Cash and cash equivalents - beginning of period
|
|
57,632
|
|
|
-
|
|
|
57,632
|
|
Cash and cash
equivalents - end of period
|
$
|
64,098
|
|
|
-
|
|
$
|
64,098
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary disclosure of cash flow
information:
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
Interest
|
$
|
2,698
|
|
|
(2,698
|
)
|
$
|
-
|
|
Income taxes
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
Supplementary non- cash Investing and Financing
|
|
|
|
|
|
|
|
|
|
Activities:
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities
:
|
|
|
|
|
|
|
|
|
|
Common stock issued for debt
conversion and interest
|
$
|
3,385,302
|
|
$
|
(1,198,482
|
)
|
$
|
2,186,820
|
|
Transfer of beneficial conversion feature to fair
value of note
|
$
|
518,808
|
|
$
|
(518,808
|
)
|
$
|
-
|
|
Common stock issued on cashless
exercise of warrants
|
$
|
767,982
|
|
$
|
1,962,038
|
|
$
|
2,730,020
|
|
Derivative liability re-classed to additional paid in
capital
|
$
|
-
|
|
$
|
3,174,990
|
|
$
|
3,174,990
|
|
|
|
|
|
|
|
|
|
|
|
Debt discount on convertible note and warrants
|
$
|
-
|
|
$
|
901,327
|
|
$
|
901,327
|
|
Initial derivative liability on note
issuance
|
$
|
-
|
|
$
|
2,018,791
|
|
$
|
2,018,791
|
|
Lithium Exploration Group, Inc.
|
Notes to Consolidated Financial Statements
|
June 30, 2016 and 2015
|
|
13.
|
Restatement to previously issued financial statements
-
continued
|
Effect on Consolidated Statements of Changes in Stockholders
Deficit
|
|
Year ended
June 30, 2015
|
|
|
|
As previously
|
|
|
Misstatement
|
|
|
As Restated
|
|
|
|
reported
|
|
|
Adjustment
|
|
|
|
|
Additional Paid in
Capital
|
|
|
|
|
|
|
|
|
|
Beginning Balance
|
$
|
38,573,856
|
|
$
|
538,043
|
|
$
|
39,111,899
|
|
Common shares issued for debt
conversion
|
|
3,636,984
|
|
|
(1,457,586
|
)
|
|
2,179,398
|
|
Common shares issued for exercise of warrants
|
|
767,879
|
|
|
1,962,041
|
|
|
2,729,920
|
|
Common shares issued for
consulting
|
|
118,987
|
|
|
-
|
|
|
118,987
|
|
Common shares issued for investor relation
|
|
67,999
|
|
|
-
|
|
|
67,999
|
|
Common shares issued to trust
|
|
38
|
|
|
-
|
|
|
38
|
|
Common shares issued for reclassification of derivative
liability on convertible notes
|
|
-
|
|
|
3,174,990
|
|
|
3,174,990
|
|
Closing Balance
|
$
|
43,165,743
|
|
$
|
4,217,488
|
|
$
|
47,383,231
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
|
|
|
|
|
|
|
Beginning Balance
|
$
|
(40,821,871
|
)
|
$
|
(6,166,108
|
)
|
$
|
(46,987,979
|
)
|
Net loss for the year
|
|
(2,445,192
|
)
|
|
(71,177
|
)
|
|
(2,516,369
|
)
|
Closing Balance
|
$
|
(43,267,063
|
)
|
$
|
(6,237,285
|
)
|
$
|
(49,504,348
|
)
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
|
|
|
|
|
|
|
Beginning Balance
|
$
|
(2,355,136
|
)
|
$
|
(5,628,065
|
)
|
$
|
(7,983,201
|
)
|
Common shares issued for consulting fees
|
|
118,990
|
|
|
-
|
|
|
118,990
|
|
Common shares issued for
investor relations
|
|
68,000
|
|
|
-
|
|
|
68,000
|
|
Common shares issued for exercise of warrants
|
|
767,981
|
|
|
1,962,041
|
|
|
2,730,022
|
|
Common shares issued for debt
conversion
|
|
3,644,405
|
|
|
(1,457,585
|
)
|
|
2,186,820
|
|
Common shares issued for reclassification of
derivative liability on convertible notes
|
|
-
|
|
|
3,174,990
|
|
|
3,174,990
|
|
Common shares issued to trust
|
|
38
|
|
|
-
|
|
|
38
|
|
Foreign exchange translation loss
|
|
(23,715
|
)
|
|
-
|
|
|
(23,715
|
)
|
Net loss for the year
|
|
(2,657,243
|
)
|
|
(71,177
|
)
|
|
(2,728,420
|
)
|
Closing Balance
|
$
|
(436,680
|
)
|
$
|
(2,019,796
|
)
|
$
|
(2,456,476
|
)
|
Item 9.
|
Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
|
There were no disagreements with our accountants related to
accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the two fiscal years and
subsequent interim periods.
Item 9A.
|
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, our
management evaluated the effectiveness of the design and operation of our
disclosure controls and procedures as of June 30, 2016.
Our management, with the participation of our president (our
principal executive officer, principal accounting officer and principal
financial officer), evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end
of the period covered by this report. Based on this evaluation, our president
(our principal executive officer, principal accounting officer and principal
financial officer) has concluded that, as of the end of such period, our
disclosure controls and procedures were not effective to ensure that information
that is required to be disclosed by us in the reports we file or submit under
the Exchange Act is (i) recorded, processed, summarized and reported, within the
time periods specified in the SECs rules and forms and (ii) accumulated and
communicated to our management, including our president (our principal executive
officer, principal accounting officer and principal financial officer), as
appropriate, to allow timely decisions regarding required disclosure.
Managements Report on Internal Control over Financial
Reporting
Management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial
reporting is a process designed by, or under the supervision of, our president
(our principal executive officer) and our chief financial officer (our principal
accounting officer and principal financial officer), to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements in accordance with GAAP. Internal control over financial
reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of our company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that receipts
and expenditures of our company are being made only in accordance with
authorizations of management and directors of our company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of our companys assets that could have a material effect on the
financial statements. Because of its inherent limitations, internal control over
financial reporting may not provide absolute assurance that a misstatement of
our financial statements would be prevented or detected.
Further, the evaluation of the effectiveness of internal
control over financial reporting was made as of a specific date, and continued
effectiveness in future periods is subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management has conducted, with the participation of our
president (our principal executive officer) and our chief financial officer (our
principal accounting officer and principal financial officer), an evaluation of
the effectiveness of our internal control over financial reporting as of June
30, 2016 in accordance with the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control
Integrated Framework. Based on this assessment, management concluded that as
of June 30, 2014, our companys internal control over financial reporting was
not effective based on present company activity. Our company is in the process
of adopting specific internal control mechanisms with our board and officers
collaboration to ensure effectiveness as we grow. We are presently engaging an
outside consultant to assist in adopting new measures to improve upon our
internal controls. Future controls, among other things, will include more checks
and balances and communication strategies between the management and the board
to ensure efficient and effective oversight over company activities as well as
more stringent accounting policies to track and update our financial reporting.
This annual report does not include an attestation report from
our registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by our registered
public accounting firm pursuant to rules of the Securities and Exchange
Commission that permit us to provide only the managements report in this annual
report.
Change in Internal Control Over Financial Reporting
There were no changes in our internal control over financial
reporting that occurred during our last fiscal year that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
Item 9B.
|
Other Information
|
On May 25, 2016 we entered into a lease agreement with
Lakeshore Investment Group II, LLC to lease the premises of our executive
offices located at 4635 South Lakeshore Drive, Suite 200 and 130, Tempe Arizona.
The lease is for a period of 12 months beginning June 1, 2016 for a monthly rate
of $1,198.67, inclusive of internet and utilities.
On August 12, 2016, the Company entered into an agreement with an investor.
Pursuant to the terms of the agreement, the investor acquired a 10% convertible
note with an aggregate face value of $42,500, with an issuance discount of
$4,250 and $2,500 of legal fees. The note matures in one year. The holder of
this note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock in the Company at a price
equal to 65% of the lowest trading price of the Common Stock as reported on the
OTC Markets for the twenty prior trading days including the day upon which a
Notice of Conversion is received.
On September 07, 2016, the Company entered into an agreement
with Concord Holding Group, LLC. Pursuant to the terms of the agreement, the
investor acquired a 10% convertible note with an aggregate face value of
$116,000, with an issuance discount of $11,600. The note matures in one year.
The holder of this note is entitled, at its option, to convert all or a part of
the principal outstanding at the date into shares of the of common stock in the
Company at a price equal to the lesser of $0.005 or 50% discount of the lowest
trading price of the Common Stock as reported on the OTC Markets for the twenty
prior trading days including the day upon which a Notice of Conversion is
received.
On September 08, 2016, the Company entered into an agreement
with Concord Advisors LLC. Pursuant to the terms of the agreement, the investor
acquired a 10% convertible note with an aggregate face value of $27,778, with an
issuance discount of $2,778. The note matures in one year. The holder of this
note is entitled, at its option, to convert all or a part of the principal
outstanding at the date into shares of common stock in the Company at a price
equal to the lesser of $0.005 or 50% discount of the lowest trading price of the
Common Stock as reported on the OTC Markets for the twenty prior trading days
including the day upon which a Notice of Conversion is received.
On September 9, 2016, a convertible promissory note assigned on March 28, 2016 in the amount of $40,700 to an investor is restated into a promissory note with a new investor, for an amount of $44,296. The note matures in one year from the effective date of transfer. The holder of this note is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of common stock of the Company at a price equal to the lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock as reported on the OTC Markets for the twenty prior trading days including the day upon which a Notice of Conversion is received.
On September 9, 2016, a convertible promissory note assigned on April 19, 2016 in the amount of $59,500 to an investor is restated into a promissory note with a new investor, for an amount of $64,400. The note matures in one year from the effective date of transfer. The holder of this note is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of common stock of the Company at a price equal to the lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock as reported on the OTC Markets for the twenty prior trading days including the day upon which a Notice of Conversion is received.
On September 9, 2016, we incorporated a wholly-owned
subsidiary, Black Box Energy, Inc., in the State of Nevada.
On September 9, 2016, through our wholly-owned subsidiary,
Black Box Energy, Inc., we entered into a letter agreement with PetroChase, Inc.
pursuant to which we purchased 50% of a 70% working interest held by PetroChase
in a certain oil & gas lease known as the McKean County Project, located in
McKean County, Pennsylvania. Each 10% working interest entitles the holder to
earn a $0.70% net revenue interest derived from the lease. In consideration for
the working interest we paid $250,000 to PetroChase, Inc. in equal installments
on September 9
th
and September 16
th
, 2016. We are required
to pay an additional $34,000 to PetroChase for management fees by December 16,
2016. Pursuant to the letter agreement, PetroChase will serve as the operator
and drill contractor for the project. The drilling of an initial well on the
property is scheduled for fall of 2016. The parties anticipate that a second
well will be drilled, however the agreement does not specify the number of
planned wells.
On September 15, 2016, the Company entered into an agreement
with Concord Holding Group LLC. Pursuant to the terms of the agreement, the
investor acquired a 10% convertible note with an aggregate face value of
$257,778, with an issuance discount of $25,778. The note matures in one year.
The holder of this note is entitled, at its option, to convert all or a part of
the principal outstanding at the date into shares of common stock in the Company
at a price equal to the lesser of $0.005 or 50% discount of the lowest trading
price of the Common Stock as reported on the OTC Markets for the twenty prior
trading days including the day upon which a Notice of Conversion is received.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $550,000 in consideration for the
cancellation of 4,583 share purchase warrants issued to JDF Capital on March 15,
2014. The cancelled warrants were exercisable on a cashless basis and had a fair
value of approximately $550,000 upon cancellation. The convertible promissory
note has a maturity dated of September 19, 2017, bears interest of 8% per year,
and is convertible at a price equal to 65% of the lowest closing bid price of
our common stock occurring during the twenty trading days immediately preceding
September 19, 2016, or immediately preceding the notice of conversion.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $708,000 in consideration for the
cancellation of 4,200 share purchase warrants issued to JDF Capital on July 22,
2014. The cancelled warrants were exercisable on a cashless basis and had a fair
value of approximately $708,000 upon cancellation. The convertible promissory
note has a maturity dated of September 19, 2017, bears interest of 8% per year,
and is convertible at a price equal to 60% of the lowest closing bid price of
our common stock occurring during the twenty trading days immediately preceding
September 19, 2016, or immediately preceding the notice of conversion.
On September 19, 2016 we entered into an Exchange Agreement
with JDF Capital Inc. pursuant to which we issued to JDF Capital a convertible
promissory note with a face value of $140,000 in consideration for the
cancellation of 1,000 share purchase warrants issued to JDF Capital on March
3, 2014. The cancelled warrants were exercisable on a cashless basis and had a
fair value of approximately $140,000 upon cancellation. The convertible
promissory note has a maturity dated of September 19, 2017, bears interest of 8%
per year, and is convertible at a price equal to 65% of the lowest closing bid
price of our common stock occurring during the twenty trading days immediately
preceding September 19, 2016, or immediately preceding the notice of
conversion.
On September 27, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $64,900, with an issuance
discount of $5,900 and legal fees of $4,000. The note matures in one year. The
holder of this note is entitled, at its option, to convert all or a part of the
principal outstanding at the date into shares of common stock in the Company at
a price equal to the lesser of $0.005 or 50% discount of the lowest trading
price of the Common Stock as reported on the OTC Markets for the twenty prior
trading days including the day upon which a Notice of Conversion is received.
On September 29, 2016, the Company entered into an agreement
with an investor. Pursuant to the terms of the agreement, the investor acquired
a 10% convertible note with an aggregate face value of $61,112, with an issuance
discount of $6,112. The note matures in one year. The holder of this note is
entitled, at its option, to convert all or a part of the principal outstanding
at the date into shares of common stock in the Company at a price equal to the
lesser of $0.005 or 50% discount of the lowest trading price of the Common Stock
as reported on the OTC Markets for the twenty prior trading days including the
day upon which a Notice of Conversion is received.
PART III
Item 10.
|
Directors, Executive Officers and Corporate
Governance
|
All of the directors of our company hold office until the next
annual meeting of the stockholders or until their successors have been elected
and qualified. Our officers are appointed by our board of directors and hold
office until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Name
|
Positions Held with the
Company
|
Age
|
Date First
Elected
or Appointed
|
Alexander Walsh
|
President, Chief Executive Officer and Director
|
36
|
November 4, 2010
|
Business Experience
The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he was employed.
Alexander Walsh President, Chief Executive Officer,
Secretary, Treasurer and Director
Mr. Walsh was appointed president, chief executive officer,
secretary, treasurer, and director of our company in November 2010. From May
2008 to November of 2010, Alex Walsh was a management consultant at AW
Enterprises, LLC. AW Enterprises was established as a management consulting firm
assisting small and middle market businesses in expanding their revenue and
profits through strategic partnerships. Mr. Walshs efforts included strategic
planning for companies looking to raise capital and assisting clients with
forming strategic partnerships that could increase their revenue and profits.
From May 2006 to May 2008, Mr. Walsh was a small business consultant and
managing partner for Business Strategies Group. Business Strategies Group is a
highly specialized team focusing on providing employee benefits, retirement
programs, and insurance products to small and middle market companies.
Mr.Walsh attended DePauw University in Greencastle, Indiana
where he majored in economics and management. Mr. Walsh was chosen as one of our
directors due to his background in venture capital, investor relations and
corporate development.
Family Relationships
There are no family relationships among our directors or
officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or
executive officers has, during the past ten years:
1.
|
been convicted in a criminal proceeding or been subject
to a pending criminal proceeding (excluding traffic violations and other
minor offences);
|
2.
|
had any bankruptcy petition filed by or against the
business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive
officer, either at the time of the bankruptcy filing or within two years
prior to that time;
|
3.
|
been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction or federal or state authority, permanently or temporarily
enjoining, barring, suspending or otherwise limiting, his involvement in
any type of business, securities, futures, commodities, investment,
banking, savings and loan, or insurance activities, or to be associated
with persons engaged in any such activity;
|
4.
|
been found by a court of competent jurisdiction in a
civil action or by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated;
|
5.
|
been the subject of, or a party to, any federal or state
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated (not including any settlement
of a civil proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease- and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud
or fraud in connection with any business entity; or
|
6.
|
been the subject of, or a party to, any sanction or
order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
|
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during the year ended June 30, 2016, all filing requirements
applicable to its officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:
Name
|
Number of
Late Reports
|
Number of
Transactions
Not
Reported on a Timely
Basis
|
Failure to
File
Requested Forms
|
Alexander Walsh
(1)
|
3
|
9
|
Nil
|
(1)
|
The named officer, director or greater than 10%
stockholder, as applicable, filed a late Form 4 Statement of Changes of
Beneficial Ownership of Securities.
|
Audit Committee and Audit Committee Financial Expert
Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.
We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating, compensation or audit committees or committees
performing similar functions nor do we have a written nominating, compensation
or audit committee charter. Our board of directors does not believe that it is
necessary to have such committees because it believes the functions of such
committees can be adequately performed by our board of directors.
Code of Ethics
We have adopted a Code of Ethics that applies to, among other
persons, our companys principal executive officers and senior financial
executives, as well as persons performing similar functions. As adopted, our
Code of Ethics sets forth written policies to promote:
|
|
honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of interest between personal and
professional relationships;
|
|
|
full, fair, accurate, timely and understandable
disclosure in all reports and documents that the Corporation files with,
or submits to, the Securities and Exchange Commission ("SEC") and in other
public communications made by the Corporation that are within the Senior
Officers area of responsibility;
|
|
|
compliance with applicable governmental laws, rules and
regulations;
|
|
|
the prompt internal reporting of violations of the Code;
and
|
|
|
accountability for adherence to the Code.
|
Our Code of Ethics and Business Conduct was filed with the
Securities and Exchange Commission as Exhibit 14.1 to our annual report on Form
10-KSB on September 28, 2007. We will provide a copy of the Code of Ethics and
Business Conduct to any person without charge, upon request. Requests can be
sent to: Lithium Exploration Group, Inc. 3200 N. Hayden Road, Suite 235,
Scottsdale, AZ 85251.
Item 11.
|
Executive Compensation
|
The particulars of the compensation paid to the following
persons:
|
(a)
|
our principal executive officer;
|
|
(b)
|
each of our two most highly compensated executive
officers who were serving as executive officers at the end of the years
ended June 30, 2016 and 2015; and
|
|
(c)
|
up to two additional individuals for whom disclosure
would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at the end of the years ended
June 30, 2016 and 2015.
|
who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION
TABLE
|
Name
and Principal
Position
|
Yea
r
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Alexander
Walsh
(1)
President,Chief
Executive Offic
er
and
Director
|
2016
2015
|
120,000
120,000
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
120,000
120,000
|
Bryan A.
Kleinlein
(2)
Former
Chief Financial
Officer
|
2016
2015
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
Nil
77,990
(3)
|
Nil
77,990
|
|
(1)
|
Alexander Walsh was appointed president, chief executive
officer, chief financial officer and director on November 4,
2010.
|
|
(2)
|
Bryan A. Kleinlein served as our Chief Financial Officer
from May 15, 2012 until November 1, 2014. He continued to provide
consulting services to the Company during fiscal 2015 following his
resignation.
|
|
(3)
|
Consists of fees paid to International Compass LLC, a
corporation controlled by Bryan A. Kleinlein, for consulting services
rendered.
|
2014 Stock Option Plan
On July 22, 2014, our directors approved the adoption of the
2014 Stock Plan which permits our company to issue up to 20,000,000 shares of
our common stock to directors, officers, employees and consultants of our
company.
Stock Options/SAR Grants
During the period from inception to June 30, 2016, we did not
grant any stock options to our executive officers.
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values
There were no options exercised during our fiscal year ended
June 30, 2016 and 2015 by any officer or director of our company.
Outstanding Equity Awards at Fiscal Year End
No equity awards were outstanding as of the year ended June 30,
2016.
Compensation of Directors
We reimburse our directors for expenses incurred in connection
with attending board meetings. We did not pay any directors fees during our
fiscal years ending June 30, 2016 and 2015, respectively.
We have no formal plan for compensating our directors for their
service in their capacity as directors. Directors are entitled to reimbursement
for reasonable travel and other out-of-pocket expenses incurred in connection
with attendance at meetings of our board of directors. Our board of directors
may award special remuneration to any director undertaking any special services
on our behalf other than services ordinarily required of a director.
Employment Contracts and Termination of Employment and
Change in Control Arrangements
Effective January 12, 2014, we entered into an employment
agreement with Alexander Walsh for provision of services as our president and
chief executive officer. Pursuant to the terms of the employment agreement, Mr.
Walsh will receive an annual salary of $120,000 payable in monthly cash
installments or, in the event cash is unavailable, in shares of our companys
common stock. The employment agreement also provides for liability insurance and
any travel and out-of-pocket expenses incurred and approved by our company. The
employment agreement expired on January 12, 2016, following which Mr. Walsh has
provided his services to the Company on a month to month basis at the same rate
of compensation.
Item 12.
|
Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters
|
The following table sets forth, as of October 13, 2016, certain
information with respect to the beneficial ownership of our common stock by each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock and by each of our current directors and executive officers. Each person
has sole voting and investment power with respect to the shares of common stock,
except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated.
|
Amount and Nature of
|
Percentage of
|
Name and Address of Beneficial Owner
|
Beneficial Owner
(1)
|
Class
|
Alexander Walsh
(2)
|
2,095 common
|
(3)
|
320 E. Fairmont Dr.,
|
|
|
Tempe, AZ, 85282
|
|
|
All Officers and Directors As a Group
|
2,095 common
|
(3)
|
Toledo Advisors LLC
|
|
|
641 5th St
|
0 common
(4)
|
9.99%
|
Lakewood, NJ 08701
|
|
|
Over 5% Shareholders
|
0 common
(4)
|
9.99%
|
|
(1)
|
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is
provided. In computing the percentage ownership of any person, the amount
of shares outstanding is deemed to include the amount of shares
beneficially owned by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the persons actual ownership or voting power with respect to the number
of shares of common stock actually outstanding on October 13, 2016. As of
October 13, 2016, there were 162,724,024 shares of our companys common
stock issued and outstanding.
|
|
(2)
|
Alexander Walsh is our companys president, chief
executive officer, chief financial officer and director.
|
|
(3)
|
Represents less than 1%
|
|
(4)
|
Toledo Advisors LLC has rights under a convertible note
to own a aggregate number of share of the issue common stock not to exceed
9.9 percent of shares outstanding.
|
Changes in Control
We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.
Item 13.
|
Certain Relationships and Related
Transactions, and Director Independence
|
Except as disclosed herein, there have been no transactions or
proposed transactions in which the amount involved exceeds the lesser of
$120,000 or one percent of the average of our total assets at year-end for the
last three completed fiscal years in which any of our directors, executive
officers or beneficial holders of more than 5% of the outstanding shares of our
common stock, or any of their respective relatives, spouses, associates or
affiliates, has had or will have any direct or material indirect interest.
The promoters of our company are our directors and officers.
Director Independence
We currently act with one director, consisting of Alexander
Walsh. We have determined that we do not have an independent director as
defined in NASDAQ Marketplace Rule 4200(a)(15).
We do not have a standing audit, compensation or nominating
committee, but our entire board of directors act in such capacity. We believe
that our directors are capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting. Our directors do not believe that it is necessary to have an audit
committee because we believe that the functions of an audit committee can be
adequately performed by the board of directors. In addition, we believe that
retaining additional independent directors who would qualify as an audit
committee financial expert would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development.
Item 14.
|
Principal Accounting Fees and Services
|
During the fiscal years ended June 30, 2016 and 2015, we
retained our independent auditor, RBSM LLP, Accountants & Advisors, to
provide services in the following categories and amounts:
|
Year
Ended
June 30,
|
2016
($)
|
2015
($)
|
Audit Fees
(1)
|
45,000
|
45,000
|
Audit Related Fees
(2)
|
Nil
|
Nil
|
Tax Fees
(3)
|
Nil
|
Nil
|
All Other Fees
(4)
|
Nil
|
Nil
|
Total
|
45,000
|
45,000
|
|
(1)
|
Audit fees consist of fees incurred for professional
services rendered for the audit of our financial statements, for reviews
of our interim financial statements included in our quarterly reports on
Form 10-Q and for services that are normally provided in connection with
statutory or regulatory filings or engagements.
|
|
(2)
|
Audit related fees consists of fees billed for
professional services that are reasonably related to the performance of
the audit or review of our financial statements, but are not reported
under "Audit Fees".
|
|
(3)
|
Tax fees consist of fees billed for professional services
relating to tax compliance, tax planning and tax advice.
|
|
(4)
|
All other fees consist of fees billed for all other
services.
|
Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.
PART IV
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
(1)
|
Financial statements for our company are listed in the
index under Item 8 of this document
|
|
(2)
|
All financial statement schedules are omitted because
they are not applicable, not material or the required information is shown
in the financial statements or notes thereto.
|
Exhibit
|
|
Number
|
Description
|
(3)
|
(i) Articles of
Incorporation; and (ii) Bylaws
|
3.1
|
Articles of Incorporations (incorporated by
reference to our Registration Statement on Form SB-2 filed on September
20, 2006)
|
3.2
|
Bylaws (incorporated by
reference to our Registration Statement on Form SB-2 filed on September
20, 2006)
|
3.3
|
Articles of Amendment dated May 31, 2006
(incorporated by reference to our Current Report on Form 8-K filed on
April 21, 2009)
|
3.4
|
Certificate of Amendment dated
April 8, 2009 (incorporated by reference to our Current Report on Form 8-
K/A filed on April 23, 2009)
|
3.5
|
Articles of Merger dated November 17, 2010
(incorporated by reference to our Current Report on Form 8-K filed on
December 7, 2010)
|
3.6
|
Certificate of Amendment dated
October 17, 2014 (incorporated by reference to our Quarterly Report on
Form 10-Q/A filed on December 2, 2014)
|
3.7
|
Articles of Incorporation of Alta Disposal
Morinville Ltd. (formerly Blue Tap Resources Inc.) (incorporated by
reference to our Current Report on Form 8-K filed on October 24, 2013)
|
3.8
|
Certificate of Amendment of
Alta Disposal Morinville Ltd. (formerly Blue Tap Resources Inc.)
(incorporated by reference to our Current Report on Form 8-K filed on
October 24, 2013)
|
3.9
|
Bylaws of Alta Disposal Morinville Ltd.
(formerly Blue Tap Resources Inc.) (incorporated by reference to our
Current Report on Form 8-K filed on October 24, 2013)
|
Exhibit
|
|
Number
|
Description
|
3.10
|
Certificate of Incorporation of
1617437 Alberta Ltd. (incorporated by reference to our Current Report on
Form 8-K filed on October 24, 2013)
|
3.11
|
Articles of Amendment of Alta Disposal Ltd.
(incorporated by reference to our Current Report on Form 8-K filed on
October 24, 2013)
|
3.12
|
Bylaws of Alta Disposal Ltd.
(incorporated by reference to our Current Report on Form 8-K filed on
October 24, 2013)
|
3.13
|
Certificate of Amendment filed September 9,
2015 (incorporated by reference to exhibit 4.1 of our Current Report on
Form 8-K filed on September 15, 2015)
|
(4)
|
Instruments Defining the
Rights of Security Holders, Including Indentures
|
4.1
|
Certificate of Designation of Series B
Preferred Stock (incorporated by reference to our Current Report on Form
8-K filed on January 9, 2014)
|
4.2
|
Certificate of Designation of
Series A Preferred Stock (incorporated by reference to exhibit 4.1 of our
Current Report on Form 8-K filed July 15, 2015
|
(10)
|
Material Contracts
|
10.1
|
Securities Purchase Agreement
between our company and JMJ Financial dated February 13, 2013
(incorporated by reference to our Current Report on Form 8-K filed on
February 15, 2013)
|
|
|
10.2
|
Amendment and Settlement
Agreement dated January 3, 2014 between our company and JDF Capital Inc.
(incorporated by reference to our Current Report on Form 8-K filed on
January 9, 2014)
|
|
|
10.3
|
Form of Common Stock Purchase
Warrant between our company and Centaurian Fund (incorporated by reference
to our Current Report on Form 8-K filed on April 3, 2014)
|
|
|
10.4
|
Form of Common Stock Purchase
Warrant between our company and Union Capital, LLC (incorporated by
reference to our Current Report on Form 8-K filed on April 3, 2014)
|
|
|
10.5
|
Form of Common Stock Purchase
Warrant between our company and Adar Bays, LLC (incorporated by reference
to our Current Report on Form 8-K filed on April 3, 2014)
|
|
|
10.6
|
Form of Common Stock Purchase
Warrant between our company and 514742 B.C. Ltd. (incorporated by
reference to our Current Report on Form 8-K filed on April 3, 2014)
|
|
|
10.7
|
Securities Purchase Agreement
dated as of March 3, 2014 between our company and JDF Capital Inc.
(incorporated by reference to our Current Report on Form 8-K filed on
April 3, 2014)
|
|
|
10.8
|
2014 Stock Option Plan
(incorporated by reference to our Current Report on Form 8-K filed on
August 6, 2014)
|
|
|
10.9
|
Form of Stock Option Agreement
(incorporated by reference to our Current Report on Form 8- K filed on
August 6, 2014)
|
|
|
10.10
|
Form of Stock Grant Agreement
(incorporated by reference to our Current Report on Form 8-K filed on
August 6, 2014)
|
|
|
10.11
|
Securities Purchase Agreement
dated July 22, 2014 between our company and JDF Capital Inc. Agreement
(incorporated by reference to our Current Report on Form 8-K filed on
August 7, 2014)
|
|
|
10.12
|
Convertible Promissory Note
dated July 22, 2014 between our company and JDF Capital Inc. (incorporated
by reference to our Current Report on Form 8-K filed on August 7, 2014)
|
|
|
10.13
|
Common Stock Purchase Warrant
dated July 22, 2014 between our company and JDF Capital Inc. (incorporated
by reference to our Current Report on Form 8-K filed on August 7, 2014)
|
|
|
10.14
|
Securities Purchase Agreement
dated as of February 24, 2015 between our company and River North Equity LLC Debt Settlement Agreement with Alexander R. Walsh
dated December 23, 2014 (incorporated by reference to our Quarterly Report
on Form 10-Q filed on February 23, 2015)
|
10.15
|
Form of Convertible Promissory Note between our company
and River North Equity LLC (incorporated by reference to our Quarterly
Report on Form 10-Q filed on February 23, 2015)
|
|
|
10.16
|
Loan Agreement dated April 15, 2015 with JDF Capital Inc.
(incorporated by reference to our Quarterly Report on Form 10-Q filed on
March 4, 2016)
|
|
|
10.17
|
Purchase Agreement dated November 6, 2015 with JDF
Capital Inc. (incorporated by reference to our Quarterly Report on Form
10-Q filed on March 4, 2016)
|
|
|
10.18
|
Convertible Promissory Note dated November 6, 2015 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 4, 2016)
|
|
|
10.19
|
Securities Purchase Agreement dated December 1, 2015 with
VES Investment Trust (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 4, 2016).
|
|
|
10.20
|
Convertible Promissory Note dated December 1, 2015 with
VES Investment Trust. (incorporated by reference to our Quarterly Report
on Form 10-Q filed on March 4, 2016)
|
|
|
10.21
|
Securities Purchase Agreement dated December 1, 2015 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 4, 2016)
|
|
|
10.22
|
Convertible Promissory Note dated December 1, 2015 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 4, 2016)
|
|
|
10.23
|
Securities Purchase Agreement dated December 3, 2015 with
LG Capital Funding, LLC. (incorporated by reference to our Quarterly
Report on Form 10-Q filed on March 4, 2016)
|
|
|
10.24
|
Convertible Promissory Note dated December 3, 2015 with
LG Capital Funding, LLC. (incorporated by reference to our Quarterly
Report on Form 10-Q filed on March 4, 2016)
|
|
|
10.25
|
Securities Purchase Agreement dated January 27, 2016 with
VES Investment Trust. (incorporated by reference to our Quarterly Report
on Form 10-Q filed on March 22, 2016)
|
|
|
10.26
|
Convertible Promissory Note dated January 27, 2016 with
VES Investment Trust. (incorporated by reference to our Quarterly Report
on Form 10-Q filed on March 22, 2016)
|
|
|
10.27
|
Securities Purchase Agreement dated January 27, 2016 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 22, 2016)
|
|
|
10.28
|
Convertible Promissory Note dated January 27, 2016 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 22, 2016)
|
|
|
10.29
|
Securities Purchase Agreement dated March 1, 2016 with
JDF Capital Inc. (incorporated by reference to our Quarterly Report on
Form 10-Q filed on March 22, 2016)
|
|
|
10.30
|
Convertible Promissory Note dated March 1, 2016 with JDF
Capital Inc. (incorporated by reference to our Quarterly Report on Form
10-Q filed on March 22, 2016)
|
|
|
10.31
|
Partial replacement note issued to APG Capital Holdings,
LLC, originally issued on July 22, 2014 in the amount of $672,000
(incorporated by reference to our Quarterly Report on Form 10-Q filed on
September 7, 2016)
|
|
|
10.32
|
Convertible Promissory Note dated April 19, 2016 with
Toledo Advisors LLC (incorporated by reference to our Quarterly Report on Form 10-Q filed on
September 7, 2016)
|
10.33
|
Convertible Promissory Note dated February 1,
2016 with Vigere Capital LP (incorporated by reference to our Quarterly
Report on Form 10-Q filed on September 7, 2016)
|
|
|
10.34
|
Form of Convertible Promissory Note between our
company and JDF Capital Inc. (incorporated by reference to our Current
Report on Form 8-K filed on April 3, 2014)
|
|
|
10.35
|
Form of Common Stock Purchase Warrant between
our company and JDF Capital Inc. (incorporated by reference to our Current
Report on Form 8-K filed on April 3, 2014)
|
|
|
10.36
|
Employment Agreement with Alexander Walsh dated
January 12, 2014 (incorporated by reference to our Current Report on Form
8-K filed on April 4, 2014)
|
|
|
10.37*
|
Letter Agreement dated September 9, 2016,
between Black Box Energy, Inc. and PetroChase Inc.
|
|
|
10.38*
|
Lease Agreement dated May 25, 2016 with
Lakeshore Investment Group II, LLC.
|
|
|
10.39*
|
Exchange Agreement dated September 19, 2016
($550,000) with JDF Capital Inc.
|
|
|
10.40*
|
Convertible Promissory Note ($550,000) dated
September 19, 2016 with JDF Capital Inc.
|
|
|
10.41*
|
Exchange Agreement dated September 19, 2016
($708,000) with JDF Capital Inc.
|
|
|
10.42*
|
Convertible Promissory Note ($708,000) dated
September 19, 2016 with JDF Capital Inc.
|
|
|
10.43*
|
Exchange Agreement dated September 19, 2016
($140,000) with JDF Capital Inc.
|
|
|
10.44*
|
Convertible Promissory Note ($140,000) dated
September 19, 2016 with JDF Capital Inc.
|
|
|
10.45*
|
Agreement for Purchase of Debt dated September 2, 2016 (executed September 7, 2016) with Concord Holding Group, LLC and APG Capital Holdings, LLC.
|
|
|
10.46*
|
Convertible Promissory Note dated September 7, 2016 ($53,919.68) with Concord Holding Group, LLC.
|
|
|
10.47*
|
Securities Purchase Agreement dated September 2, 2016 with Concord Holding Group, LLC.
|
|
|
10.48*
|
Convertible Promissory Note dated September 2, 2016 ($116,000) with Concord Holding Group, LLC.
|
|
|
10.49*
|
Securities Purchase Agreement dated September
15, 2016 with Concord Holding Group, LLC.
|
|
|
10.50*
|
Convertible Promissory Note dated September 15, 2016 ($257,778) with Concord Holding Group, LLC.
|
|
|
10.51*
|
Securities Purchase Agreement dated September
8, 2016 with Concord Holding Group, LLC.
|
|
|
10.52*
|
Convertible Promissory Note dated September 8, 2016 ($27,777) with Concord Holding Group, LLC.
|
|
|
10.53*
|
Agreement for Purchase of Debt dated September 2, 2016 with Concord Holding Group, LLC and APG Capital Holdings, LLC.
|
|
|
10.54*
|
Convertible Promissory Note dated September 2, 2016 ($64,000) with Concord Holding Group, LLC.
|
*
|
Filed herewith.
|
|
|
**
|
Furnished herewith. Pursuant to Rule 406T of
Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are
|
|
deemed not filed or part of any registration
statement or prospectus for purposes of Sections 11 or 12 of the
|
|
Securities Act of 1933, are deemed not filed
for purposes of Section 18 of the Securities and Exchange Act of 1934,
|
|
and otherwise are not subject to liability
under those sections.
|
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
LITHIUM EXPLORATION GROUP, INC.
|
|
|
|
|
|
|
Date: October 18, 2016
|
/s/
Alexander Walsh
|
|
Alexander Walsh
|
|
President, Secretary, Treasurer and Director
|
|
(Principal Executive Officer, Principal
Financial Officer and
|
|
Principal Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Date: October 18, 2016
|
/s/
Alexander Walsh
|
|
Alexander Walsh
|
|
President, Chief Executive Officer, and
Director
|
|
(Principal Executive Officer)
|