UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2020

 

☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period _____________to______________

 

Commission File Number: 000-53565

 

BLOX, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   20-8530914
(State or other jurisdiction of   (I.R.S. Employer Identification No.)
incorporation of organization)    

 

5th Floor, 1177 Avenue of Americas, New York   NY 10036
(Address of principal executive offices)   (ZIP Code)

 

Registrant’s telephone number, including area code: (604) 314-9293

 

     
  (Former name, former address and former fiscal year, if changed since last report  

 

Indicate by check mark whether the issuer (1) 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 past 90 days ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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 ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☐ Small reporting company ☒
    Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Title of each class   Trading Symbol(s)   Name of each exchange on
which registered
         

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 241,541,664 shares of common stock as of July 30, 2020.

 

Transitional Small Business Disclosure Format ☐Yes ☒ No

 

 

 

 

 

 

BLOX, INC.

 

Quarterly Report on Form 10-Q
For The Quarterly Period Ended
June 30, 2020

 

INDEX

 

PART I - FINANCIAL INFORMATION 2
   
Item 1. Financial Statements 2
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
   
Item 4. Controls and Procedures 20
   
PART II - OTHER INFORMATION 21
   
Item 1. Legal Proceedings 21
   
Item 1A. Risk Factors 21
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
   
Item 3. Defaults Upon Senior Securities 21
   
Item 4. Submission of Matters to a Vote of Securities Holders  
   
Item 5. Other Information 21
   
Item 6. Exhibits 22
   
SIGNATURES 23

  

  i  
 

 

PART I

 

As used in this quarterly report on Form 10-Q, the terms “we”, “us” “our”, the “Company” or the “registrant” refer to Blox Inc., a Nevada corporation, and its wholly-owned subsidiaries.

 

Our financial statements are stated in United States Dollars (US$) unless otherwise stated and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock.

 

Forward-Looking Statements

 

This quarterly report contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except as required by applicable law, including the securities laws of the United States, we do not intend, and undertake no obligation, to update any forward-looking statement.

 

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

 

● our current lack of working capital;

 

● our ability to obtain any necessary financing on acceptable terms;

 

● timing and amount of funds needed for capital expenditures;

 

● timely receipt of regulatory approvals;

 

● our management team’s ability to implement our business plan;

 

● effects of government regulation;

 

● general economic and financial market conditions;

 

● our ability to secure exploration permits for our prospective properties in Ghana;;

 

● our ability to develop our green mining business in Africa; and

 

● the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain.

 

  1  
 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The following unaudited interim financial statements of Blox, Inc. are included in this quarterly report on Form 10-Q.

 

Blox, Inc.

Condensed Interim Consolidated Balance Sheets

(Unaudited – Expressed in U.S. Dollars)

 

    As At
June 30,
2020		     As At
March 31,
2020		  
          (Audited)  
             
ASSETS            
Current Assets                
Cash (Note 8)   $ 63,066     $ 27,551  
Prepaid expenses     2,167       5,167  
Total Current Assets     65,233       32,718  
                 
Long term investments (Note 4)     111,293       61,091  
Equipment (Note 5)     71,560       71,560  

Total Assets

   $ 248,086     $ 165,369  
                 
LIABILITIES                
Current Liabilities                
Accounts payable and accrued liabilities   $ 294,464     $ 294,379  
Due to shareholder (Note 9)     391,214       391,214  
Loan payable     428       -  
Convertible debenture (Note 10)     52,000       120,480  
Loan interest payable (Note 10)     3,621       4,706  
Total Liabilities     741,727       810,779  
                 
STOCKHOLDERS’ DEFICIENCY                

Common Stock (Note 7)

- 400,000,000 authorized

- 241,541,664 issued (March 31, 2020 – 144,647,664)

     2,527       1,328  
Additional Paid-in Capital     7,636,122       7,382,603  
Contributed Surplus     27,213,786       27,279,356  
Accumulated Other Comprehensive Income     69,033       18,831  
Deficit     (35,415,109 )     (35,327,528 )
Total Stockholders’ Deficiency     (493,641 )     (645,410 )
Total Liabilities and Stockholders’ Deficiency   $ 248,086     $ 165,369  

  

See accompanying notes to the condensed interim consolidated financial statements.

 

  2  
 

 

Blox, Inc.

Condensed Interim Consolidated Statements of Comprehensive Loss

(Unaudited - Expressed in U.S. Dollars)

 

    Three Months Ended  
    June 30,
2020		     June 30,
2019		  
             
Operating Expenses            
Consulting and professional fees (Note 12)   $ 22,791     $ 34,505  
Default penalties (Note 7)     35,000       -  
Exploration (Note 6)     -       25,105  
Foreign exchange     5,078       1,777  
Office and administration fees     7,768       5,748  
Travel     -       263  
Total Operating Expenses     (70,637 )     (67,398 )
                 
Other Income (Loss)                
Interest expense     (883 )     -  
Gain on investment in warrants (Note 4)     -       44,653  
Accretion (Note 10)     (9,261 )     -  
Debt issuance cost – cash (Note 10)     (6,800 )     -  
Net Loss for the Period     (87,581 )     (22,745 )
                 
Other Comprehensive Income                
Unrealized gain on investment in common shares (Note 4)     50,202       68,276  
Comprehensive (Loss) Income for the Period   $ (37,379 )   $ 45,531  
                 
Net Loss Per Common Share   $ (0.00 )   $ (0.00 )
Weighted Average Number of Shares Outstanding – Basic and diluted     206,899,601       142,822,664  

  

See accompanying notes to the condensed interim consolidated financial statements. 

 

  3  
 

 

Blox, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)

Three Months ended June 30, 2020 and 2019

(Expressed in U.S. Dollars)

 

                Additional           Accumulated
Other		           Total
Stockholders’		  
    Common Stock     Paid-in     Contributed     Comprehensive         Equity  
    Shares     Amount     Capital     Surplus     Income     Deficit     (Deficiency)  
                                           
April 1, 2019     142,822,664     $ 1,309     $ 7,337,352     $ 15,658,030     $ 55,019     $ (22,469,528 )   $ 582,182  
                                                         
Unrealized gain on investment in common shares (Note 4)     -       -       -       -       68,276       -       68,276  
Net loss for the period     -       -       -       -       -       (22,745 )     (22,745 )
June 30, 2019     142,822,664     $ 1,309     $ 7,337,352     $ 15,658,030     $ 123,295     $ (22,492,273 )   $ 627,713  
                                                         
April 1, 2020     144,647,664     $ 1,328     $ 7,382,603     $ 27,279,356     $ 18,831     $ (35,327,528 )   $ (645,410 )
                                                         
Unrealized loss on investment in common shares (Note 4)     -       -       -       -       50,202       -       50,202  
Warrants exercised (Note 7)     32,894,589       329       50,537       (50,866 )     -       -       -  
Convertible debenture – equity portion (Note 10)     -       -       -       25,000       -       -       25,000  
Convertible debenture -converted to shares
(Note 10)		     66,999,411       670       168,182       (39,704 )     -       -       129,148  
Convertible debenture – default penalty shares (Note 10)     20,000,000       200       34,800       -       -       -       35,000  
Net loss for the period     -       -       -       -       -       (87,581 )     (87,581 )
June 30, 2020     264,541,664     $ 2,527     $ 7,636,122     $ 27,213,786     $ 69,033     $ (35,415,109 )   $ (493,641 )

 

See accompanying notes to the condensed interim consolidated financial statements. 

 

  4  
 

 

Blox, Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited – Expressed in U.S. Dollars)

 

    Three Months Ended  
   

June 30,
2020

     June 30,
2019		  
CASH PROVIDED BY (USED IN):            
OPERATING ACTIVITIES            
Net loss for the period   $ (87,581 )   $ (22,745 )
Non-cash items:                
Gain on investment in warrants     -       (44,653 )
Shares issued for default penalties     35,000       -  
Accretion     9,261       -  
Interest accrued on convertible debenture     790       -  
Discount on convertible debenture     6,800       -  
Changes in non-cash working capital:                
Prepaid expenses     3,000       3,000  
Accounts payable and accrued liabilities     245       51,602  
Due to shareholder     -       12,000  
      (32,485 )     (796 )
                 
FINANCING ACTIVITIES                
Proceeds from convertible debenture     74,800       -  
Convertible debenture transaction costs     (6,800 )     -  
      68,000       -  
                 
Increase (Decrease) in Cash     35,515       (796 )
Cash, Beginning of Period     27,551       9,792  
Cash, End of Period   $ 63,066     $ 8,996  

 

See accompanying notes to the condensed interim consolidated financial statements. 

 

  5  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

1. Description of Business

 

Blox, Inc. (the “Company”) was incorporated on July 21, 2005 under the laws of the state of Nevada. The address of the Company is #1177 Avenue of Americas 5th Floor, New York, NY 10036.

 

The Company is primarily engaged in developing mineral exploration projects in Guinea, West Africa.

 

2. Basis of Presentation

 

(a) Statement of Compliance

 

These condensed interim consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and are expressed in U.S. dollars. The Company’s fiscal year-end is March 31.

 

(b) Basis of Presentation

 

The condensed interim consolidated financial statements of the Company comprise the Company and its subsidiaries. These condensed interim consolidated financial statements are prepared on the historical cost basis. These condensed interim consolidated financial statements have also been prepared using the accrual basis of accounting, except for cash flow information. In the opinion of management, all adjustments (including normal recurring ones), considered necessary for the fair statement of results have been included in these financial statements. All intercompany balances and transactions have been eliminated upon consolidation. The interim results are not necessarily indicative of results for the full year ending March 31, 2021, or future operating periods. For further information, see the Company’s annual consolidated financial statements for the year ended March 31, 2020, including the accounting policies and notes thereto.

 

(c) Reporting and Functional Currencies

 

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company is the Canadian dollar (“CAD”). The Company’s reporting currency is the US dollar.

 

Transactions:

 

Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies of the Company and its subsidiaries using period end foreign currency exchange rates and expenses are translated using the exchange rate approximating those in effect on the date of the transactions during the reporting periods in which the expenses were transacted. Non-monetary assets and liabilities are translated at their historical foreign currency exchange rates. Gains and losses resulting from foreign exchange transactions are included in the determination of net income or loss for the period.

 

Translations:

 

Foreign currency financial statements are translated into the Company’s reporting currency, the US dollar as follows:

 

(i) All of the assets and liabilities are translated at the rate of exchange in effect on the balance sheet date;

 

(ii) Expenses are translated at the exchange rate approximating those in effect on the date of the transactions; and

 

(iii) Exchange gains and losses arising from translation are included in other comprehensive income.

 

  6  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

2. Basis of Presentation (continued)

 

(d) Significant Accounting Judgments and Estimates (continued)

 

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual outcomes could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised and may affect both the period of revision and future periods.

 

In applying the Company’s accounting policies, management has made certain judgments that may have a significant effect on the consolidated financial statements. Such judgments include the determination of the functional currencies and use of the going concern assumption.

 

(i) Determination of Functional Currencies

 

In determining the Company’s functional currency, it periodically reviews its primary and secondary indicators to assess the primary economic environment in which the entity operates in determining the Company’s functional currencies. The Company analyzes the currency that mainly influences labor, material and other costs of providing goods or services which is often the currency in which such costs are denominated and settled. The Company also analyzes secondary indicators such as the currency in which funds from financing activities such as equity issuances are generated and the funding dependency of the parent company whose predominant transactional currency is the Canadian dollar. Determining the Company’s predominant economic environment requires significant judgment.

 

(ii) Going Concern

 

These condensed interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has incurred a net loss of $87,581 for the three months ended June 30, 2020 and has incurred cumulative losses since inception of $35,415,109 as at June 30, 2020.

 

These factors raise substantial doubt about the ability of the Company to continue as going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary debt and/or equity financing to continue operations. These condensed interim consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management of the Company has undertaken steps as part of a plan to sustain operations for the next fiscal year including plans to raise additional equity financing, control costs and reduce operating losses.

 

3. Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

  7  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

4. Long Term Investments

 

          Fair Value as at  
  Number     June 30,
2020		     March 31,
2020		  
Available-for-sale                  
Common shares     3,333,333     $ 85,610     $ 46,993  
      1,000,000       25,683       14,098  
Total investment:           $ 111,293     $ 61,091  

 

On March 28, 2018, the Company participated in a private placement offering by its strategic partner, Ashanti Sankofa Inc (TSX.V- ASI), which shares the same management group and board of directors as the Company. The Company purchased 3,333,333 units at CAD$0.03 per unit for a total cost of $77,510 (CAD$100,000). Each unit consists of one common share and one transferable share purchase warrant with each warrant entitling the holder to acquire one additional common share at a price of CAD$0.05 for a period of 24 months from the closing of the private placement. On the date of issuance, the Company determined the fair value of the common share and warrants to be $44,331 and $33,179, respectively.

 

On April 16, 2018, the Company participated in a private placement offering by its strategic partner, Ashanti Sankofa Inc (TSX.V- ASI), which shares the same management group and board of directors as the Company. The Company purchased 1,000,000 units at CAD$0.03 per unit for a total cost of $23,850 (CAD$30,000). Each unit consists of one common share and one transferable share purchase warrant with each warrant entitling the holder to acquire one additional common share at a price of CAD$0.05 for a period of 24 months from the closing of the private placement. On the date of issuance, the Company determined the fair value of the common share and warrants to be $13,420 and $10,430, respectively.

 

As at June 30, 2020, the fair value of common shares was $111,293 which resulted in an unrealized gain of $50,202 that was recorded in other comprehensive income. The share purchase warrants of ASI expired during the year ended March 31, 2020.

 

5. Equipment

 

    Machinery     Total  
Cost            
Balance at June 30 & March 31, 2020   $ 232,620     $ 232,620  
Accumulated Depreciation                
Balance at June 30 & March 31, 2020   $ 161,060     $ 161,060  
Carrying amounts                
As at June 30 & March 31, 2020   $ 71,560     $ 71,560  

 

Machinery in the amount of $71,560 has not been placed into production and is not currently being depreciated.

 

  8  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

6. Mineral Property Interest

 

The Company entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 (the “Assumption Agreement”) among Joseph Boampong Memorial Institute Ltd. (“JBMIL”) and Equus Mining Ltd. (“EML”), Burey Gold Guinee sarl (“BGGs”) and Burey Gold Limited (“BGL”) and, collectively with EML and BGGs, (the “Vendors”), pursuant to which the Company agreed to assume JBMIL’s right to acquire a 78% beneficial interest in the Mansounia Concession (the “Property”) from the Vendors. The Company exercised that right and acquired a 78% beneficial interest in the Property.

 

The Property lies in the southwest margin of the Siguiri Basin, in the Kouroussa Prefecture, Kankan Region, in Guinea, West Africa and covers a surface area of 145 square kilometres. The Property is located approximately 80 kilometres west, by road, from the country’s third largest city, Kankan.

 

An exploration permit for the Property was granted by the Ministère des Mines et de la Géologie on August 20, 2013. As part of its due diligence, the Company obtained a legal opinion which confirmed that the license was in good standing at the time of acquisition. It is the Company’s intention to obtain an exploitation permit to allow the Company the right to mine and dispose of minerals for 15 years, with a possible 5-year extension. The Company has commenced work on the feasibility study required for obtaining this permit.

 

In consideration for the acquisition of the interest in the Property, the Company paid in cash $100,000 to BGL and $40,000 to EML and issued BGL and EML an aggregate of 6,514,350 shares of common stock of the Company (the “First Tranche Shares”), at a deemed price of $0.1765 per share, for an aggregate deemed value of $1,150,000. The First Tranche Shares were issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively. For accounting purposes, the Company recorded the cash payment of $140,000, and $10,000 for an independent valuation of the Property. Additionally, $781,722 was capitalized to mineral property interests, being the fair value of the first tranche of shares. The fair value of the first tranche shares was based on the closing price of the Company’s shares on the OTCQB on July 24, 2014.

 

Within 14 days of commercial gold production being publicly declared from ore mined from the Property, the Company will issue BGL and EML a second tranche of shares of common stock of the Company (the “Second Tranche Shares”). The number of Second Tranche Shares to be issued shall be calculated by dividing $1,150,000 by the volume weighted average share price of the Company’s common stock over a 20-day period preceding the issuance date. The Second Tranche Shares shall be issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively.

 

The exploration license, which was originally granted on August 20, 2013, was extended by the Company until January 30, 2020, pending the results of its application for a mining license for the property (first submitted December 7, 2018). On February 17, 2020, the Company received notice from Minister of Mines and Geology, Republic of Guinea, revoking the Company’s exploration license for the Mansounia Gold Project. As a result of the revocation of the Company’s exploration license, all rights held by the Company and its partners in the Mansounia Gold Project have been terminated. The Company has since confirmed that its mining license application cannot proceed without a valid exploration license, and that it is ineligible to re-apply for an exploration license due to the expiration of its previous license. At March 31, 2020, management decided to write off the mineral property interest.

 

    Mansounia
Property,
West Africa		  
Acquisition of mineral property interest      
Cash payment   $ 150,000  
Issuance of 6,514,350 common shares     781,722  
Write-off mineral property interest     (931,722 )
Balance, March 31 & June 30, 2020   $ -  

 

During the three months ended June 30, 2020, the Company spent $Nil (2019 – $25,105) on the property.

 

  9  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

7. Common Stock

 

(a) Private Placement

 

Year ended March 31, 2020

 

There were no shares issued from private placement for the year ended March 31, 2020.

 

Three months ended June 30, 2020

 

There were no shares issued from private placement for the three months ended June 30, 2020.

 

(b) Convertible debenture shares issuance

 

Year ended March 31, 2020

 

On August 16, 2019, the Company issued 300,000 commitment shares to two convertible debenture holders. The fair value of the common shares was $60,000 (Note 10).

 

In March 2020, $22,300 principal of convertible debenture was converted to 1,475,000 common shares of the Company at price range of $0.03 to $0.17 (Note 10). 

 

Three Months ended June 30, 2020

 

From April 1 to June 30, 2020, $127,273 principal of convertible debenture was converted to 66,999,411 common shares of the Company at a price range of $0.01 to $0.02 (Note 10). 

 

On May 28, 2020, the Company received a notice from one convertible debenture holder that $17,500 of default penalty will be converted into 10,000,000 shares. On June 1, 2020, the 10,000,000 common shares were issued to settle the default penalty of $17,500. The penalty incurred due to the loss of Mansounia property.

 

On June 8, 2020, the Company received a notice from one convertible debenture holder that $17,500 of default penalty will be converted into 10,000,000 shares. On June 8, 2020, the 10,000,000 common shares were issued to settle the default penalty of $17,500.

 

(c) Warrants

 

Year ended March 31, 2020

 

On August 7, 2019, 50,000 warrants were exercised for common shares at $0.05 per share.

 

On August 16, 2019, the Company issued 1,111,110 warrants to two convertible debenture holders with a fair value of $220,541 (Note 10). On the issuance date of the warrants, the share price was $0.20. The warrants expire five years from the date of issuance and are exercisable at $0.135 per share. The fair value of these warrants was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 1.57%, volatility of 231.6%, annual rate of dividend of 0%, and expected life of 5 years.

 

On February 27, 2020, the Company extended the term of 88,000,000 share purchase warrants from February 27, 2020 to February 27, 2021, no other terms were changed.

 

Three months ended June 30, 2020

 

On May 7, 2020, the Company entered into an Amendment #1 with one convertible debenture holder that the 555,555 warrant shares issued on August 16, 2019 are subject to anti-dilution protection. The Company agreed that the number of warrant shares should be equal to 10,000,000. On May 13, 2020, the convertible debt holder exercised 10,000,000 warrants to common shares via cashless exercise.

 

  10  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

7. Common Stock (continued)

 

(c) Warrants (continued)

 

On May 28 and June 8, 2020, the Company received an Exercise Notice from another convertible debenture holder that 10,844,805 and 12,049,784 warrant shares were exercised to common shares via cashless exercise.

 

The 1,111,110 warrants were cancelled as at June 30, 2020 due to the warrant shares that were issued.

 

The following table summarizes historical information about the Company’s warrants:

 

   

Number of
Warrants

     Weighted
Average
Exercise
Price ($)		     Weighted
Average
Life
Remaining
(Years)		  
                   
Balance, March 31, 2020     118,604,860       0.05       1.41  
Warrants issued     32,894,589       0.001       -  
Warrants exercised     (32,894,589 )     0.001       -  
Warrants cancelled     (1,111,110 )                
Balance, June 30, 2020     117,493,750       0.05       1.38  

 

As at June 30, 2020, the following warrants were outstanding and exercisable:

 

Number of Warrants     Exercise Price     Expiry Date
             
  87,543,750     $ 0.05     February 27, 2021
  29,950,000     $ 0.05     April 24, 2023
  117,493,750              

 

(d) Stock Options

 

Year ended March 31, 2020

 

650,000 options expired on August 7, 2019.

 

Three months ended June 30, 2020

 

1,500,000 options were cancelled on May 27, 2020 due to the optionee no longer being an officer of the Company. There were no stock options granted for the three months ended June 30, 2020.

 

The following table summarizes historical information about the Company’s incentive stock options:

 

     

Number of
options

     Weighted
Average
Exercise
Price ($)		     Weighted
Average
Life
Remaining
(Years)		  
                     
Balance, March 31, 2020       1,500,000       0.27       2.90  
Cancelled       (1,500,000 )     0.27          
Balance, June 30, 2020       -       -       -  

 

At June 30, 2020, there were no stock options outstanding.

 

  11  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

8. Fair Value of Financial Instruments

 

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 and based on the degree to which fair value is observable:

 

Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

 

Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

Level 2 and 3 financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

 

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy:

 

    Level 1     Level 2     Level 3    

Total
June 30,
2020

  
Cash   $ 63,066     $        -     $        -     $ 63,066  
Long-term investment – Shares     111,293       -       -       111,293  
Total   $ 174,359     $ -     $ -     $ 174,359  

 

    Level 1     Level 2     Level 3    

Total
March 31,
2020

  
Cash   $ 27,551     $       -     $        -     $ 27,551  
Long-term investment – Shares     61,091       -       -       61,091  
Total   $ 88,642     $ -     $ -     $ 88,642  

 

9. Due to Shareholder

 

During the period ended June 30, 2020, the Company received advances from Waratah Capital Ltd. (“Waratah”), a controlling shareholder of the Company, in the amount of $Nil (year ended March 31, 2020 - $61,868). As at June 30, 2020, the Company was indebted to Waratah for $391,214 (March 31, 2020 - $391,214). The advances from shareholder are unsecured, non-interest bearing and have no fixed repayment terms.

 

  12  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

10. Convertible Debenture

 

Year ended March 31, 2020

 

On August 16, 2019, the Company entered into security purchase agreements with two private investors, issuing two convertible promissory notes in an aggregate principal amount of $150,000, with a $15,000 original issue discount and $10,000 in legal fees, paid in cash to the investors and the legal counsel. Each note accrues interest at an annual rate of 5% and is to be repaid nine months after the dates of actual funding received. The investors have rights to convert a portion, or all, of the principal amount plus interest of each note at a lowest conversion price of i) $0.09 (fixed conversion price); or ii) 50% multiplied by the lowest closing bid price of the Common Stock during the 25 consecutive trading day period immediately preceding the date of the respective conversion (alternative conversion price) into common shares of the Company after 180 days and prior to May 16, 2020.

 

In addition, the Company issued 300,000 commitment shares to the two investors with a fair value of $60,000 and 1,111,110 warrants with a fair value of $220,541. The two warrant holders are entitled to purchase up to 1,111,110 common shares of the Company at an exercise price of $0.135 with a 5-year expiry date (Note 7 (b) & (c))

 

Based on a discount factor of 66%, the debt portion of the promissory note was valued at $102,567 and the conversion feature portion of the notes was valued at $202,208. The conversion feature was valued using the Black Scholes model with the following assumptions: risk free interest rate of 1.61%, volatility of 100.01%, dividend rate of 0% and expected life of 9 months.

 

The net proceeds received by the Company were allocated to the convertible debt and associated financial instruments based on their relative fair values as below:

 

   

Proceeds
Allocation

  
Debt   $ 23,656  
Conversion feature     46,638  
Warrants     50,867  
Shares     13,839  
Total proceeds   $ 135,000  

 

For the year ended March 31, 2020, $22,300 of debt principal was converted to 1,475,000 common shares of the Company at price range of $0.03 to $0.17 (Note 7 (b)).

 

Three months ended June 30, 2020

 

On June 8, 2020, the Company entered into security purchase agreements with a private investor, issuing one convertible promissory note in an aggregate principal amount of $74,800, with a $6,800 original issue discount, $500 in due diligence fees and $2,500 in legal fees, paid in cash to the investors and the legal counsel. Each note accrues interest at an annual rate of 8% and is to be repaid on June 8, 2021. The investors have rights to convert a portion, or all, of the principal amount plus interest at variable conversion price to Common Stock of the Company after 180 days and prior to June 8, 2021.

 

For the period ended June 30, 2020, $127,273 debt principal was converted to 66,999,411 common shares of the Company at price range of $0.01 to $0.02 (Note 7 (b)). Accretion for the note was calculated as $9,261 (2019 - $Nil) and interest expense of $790 was recorded. As of June 30, 2020, $149,572 debt principal were converted to commons shares.

 

  13  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

10. Convertible Debenture (continued)

 

    June 30,
2020 		     March 31,
2020		  
Convertible debenture – beginning of the period   $ 120,480     $ -  
Debt proceeds received     74,800       23,656  
Debt converted to common shares     (127,541 )     (20,753 )
Equity portion of convertible debenture     (25,000 )     -  
Finance cost - accretion     9,261       117,577  
Carrying value – end of the period   $ 52,000     $ 120,480  

 

11. Commitments

 

On June 22, 2013, the Company entered into a share purchase agreement with Waratah Capital Ltd. (“Waratah”) where the Company agreed to purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, the Company will issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah Investments, owns and operates gold and diamond mining properties in Ghana.

 

The closing of the agreement is subject to the completion of due diligence and the completion of a private placement for $1,500,000. The private placement closed during the year ended March 31, 2019. As of the issuance date of these financial statements, the due diligence has not yet been completed.

 

12. Related Party Transactions

 

The Company’s related parties include its subsidiaries, key management personnel, controlling shareholders, and strategic partner. Transactions with related parties for goods and services are based on the exchange amount as agreed to by the related parties.

 

The Company incurred the following expenses with related parties during the three months ended June 30, 2020 and 2019:

 

    Three Months Ended
June 30,		  
    2020     2019  
Compensation – CEO   $ 12,780     $ 13,500  
Compensation – Former Officer     -       6,750  
    $ 12,780     $ 20,250  

 

As at June 30, 2020, the Company was indebted to its related parties for the amounts as below:

 

    June 30,
2020		     March 31,
2020		  
             
Accounts payable and accrued liabilities   $ 134,793     $ 122,651  
Due to shareholder (Note 9)     391,214       391,214  

 

These amounts owing are unsecured, non-interest bearing and have no fixed repayment terms.

 

  14  
 

 

Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three months Ended June 30, 2020 and 2019

(Unaudited – Expressed in U.S. Dollars)

 

13. Geographical Area Information

 

    Canada     Africa     Total  
                   
June 30, 2020:                  
                   
Current assets   $ 62,871     $ 2,362     $ 65,233  
Long term investments     111,293       -       111,293  
Equipment     -       71,560       71,560  
Total assets   $ 174,164     $ 73,922     $ 248,086  
                         
Total liabilities   $ 642,930     $ 98,797     $ 741,727  
                         
March 31, 2020:                        
                         
Current assets   $ 30,575     $ 2,143     $ 32,718  
Long term investments     61,091       -       61,091  
Equipment     -       71,560       71,560  
Total assets   $ 91,666     $ 73,703     $ 165,369  
                         
Total liabilities   $ 718,237     $ 92,545     $ 810,779  

 

  15  
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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 those discussed below and elsewhere in this quarterly report on Form 10-Q.

 

Overview

 

We were incorporated in the State of Nevada on July 21, 2005, under the name “Nava Resources, Inc.” for the purpose of conducting mineral exploration activities. We were authorized to issue 400,000,000 shares of common stock, having a par value of $0.001 per share. On January 4, 2007, we obtained written consent from our shareholders to amend our Articles of Incorporation to change the par value of our common stock from $0.001 to $0.00001 per share, which change was effected on February 28, 2007. Effective July 30, 2013, we changed our name from “Nava Resources, Inc.” to “Blox Inc.”.

 

On July 9, 2020, the Company received notice from OTC Markets Group that the closing bid price of our common shares has closed below $0.01 for more than 30 consecutive calendar days and no longer meets the Standards for Continued Eligibility for the OTCQB quotation tier as per the OTCQB Standards Section 2.3(2), which states that the company must “maintain proprietary priced quotations published by a Market Maker in OTC Link with a minimum closing bid price of $0.01 per share on at least one of the prior thirty consecutive calendar days.”

 

As per Section 4.1 of the OTCQB Standards, the company will be granted a cure period of 90 calendar days during which the minimum closing bid price for the Company’s common stock must be $0.01 or greater for ten consecutive trading days in order to continue trading on the OTCQB marketplace. If the requirement is not met by October 7, 2020, the Company will be removed from the OTCQB marketplace and demoted to the OTC Pink reporting tier. In addition, if the Company’s closing bid price falls below $0.001 at any time for five consecutive trading days, the Company will be immediately removed from the OTCQB and demoted to the OTC Pink reporting tier.

 

Recent Developments

 

Recently Discontinued Projects

 

Mansounia Property, Guinea, West Africa

 

Our former Mansounia exploration permit was acquired in 2013 and was secured based on our technical and financial capabilities to obtain a mining permit. The 2013 exploration permit was near expiration when acquired and was subsequently renewed for the maximum of four times permitted by the Guinea Mining Code. In December 2019, the company submitted its final mining permit proposal to the Ministry of Mines. The ministry requested, in its discretion, that we provide evidence of funding to account for 15% of the capital required for project financing. The company was unable to secure the required financing during prior to expiration of the final permit extension, and the permit was withdrawn by decree from the Ministry of Mines. Although it is our understanding the Ministry of Mines exercises considerable discretion regarding the extension and revocation of permits and the grant of mining licenses, the decree to revoke our exploration permit suggests that our application is no longer under consideration. With respect to the fate of the project, we anticipate that we will attempt to renegotiate a position for the Mansounia project once Guinea reopens its border to international travel (the country has been inaccessible due to COVID-19) Currently the a permit for the property has been granted by way of two exploration licence to Penta Goldfields SARL, a company owned by our In country manager in Guinea, Mr. Nfamoussa Kaba. There is no guarantee that we will be successful in securing any future rights to the Mansounia project.

 

Current Business:

 

Pramkese, Osenase and Asamankese, Ghana, West Africa

 

On June 22, 2013, we entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) whereby we agreed to purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, we agreed to issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah, owns and operates gold and diamond mining properties in Ghana.

 

  16  
 

 

The closing of the agreement was subject to the completion of a private placement financing of up to US$1,500,000, which private placement was completed in April 2018. We issued 30,000,000 units (the “Units”) at a price of US$0.05 per unit for aggregate gross proceeds of US$1,500,000. US$1,100,000 of the proceeds were advanced as non-interest bearing loans since 2014 and were utilized to cover general and administrative expenses, as well as to carry out exploration work on our mineral properties. The remaining balance of US$400,000 was received by April 2018. Each Unit consists of one common share and one share purchase warrant entitling the holder thereof to purchase one additional common share at a price of $0.05 per share for a term of five years from the date of issuance.

 

Closing the Agreement is also conditional upon receiving legal opinions of Ghana counsel confirming various matters relating to the laws of Ghana, including corporate and title opinions; the Company receiving legal opinions of Australian counsel confirming various matters relating to the laws of Australia, including corporate and title opinions; completion of certain ongoing transactions by Quivira relating to the transfer of title to certain assets and to an assignment of debt; and preparation of U.S. GAAP consolidated financial statements for Quivira.

 

Our directors conducted their first visit to Ghana in August 2015, when they visited the Birim Region where the three Ghanaian concessions are located. The objective was to carry out a geological reconnaissance over the areas to identify potentially favourable lithologies.  The directors inspected the existing field programs in Ghana and oversaw the planning and implementation of programs for the near future. Field work on the three concessions has since ceased and associated exploration permits have expired. Neither the Company nor Quivira holds any right title or claim to the concessions, but the Company endeavors to renew permits subject to securing sufficient financing. There is no guarantee that sufficient financing will be raise in a timely manner, if at all.

 

We intend to renew permits for three concessions in Ghana for their gold and diamond potential, and to explore the market for other viable assets. All three licences have expired and require an estimated $100,000 to renew. We are currently in discussions with with prospective equity investors to finance the renewal costs, however no agreement has been secured. Nevertheless, in order to secure necessary financing, we will be required to increase our authorized capital. The Asamankese, Osenase and Pramkese concessions are located near Asamankese, Akim Oda and Kade towns respectively. The concession is dominated by broad pene plain, dotted with moderate to high hills and remnant of rain forest. The area is hilly and rugged, running from 180m to 300m in elevation. Around the licences is the Atewa range about 1050m above sea level. There are little published records of extensive widely scattered gold mineralization old pits, shafts and adits, as well as artisanal gold workings in the concessions. In the mid-sixties, the Geological Survey Department of Ghana undertook reconnaissance mapping and soil geochemical survey in the area during which traces of gold were recorded in panned concentrates of geochemical samples.

 

  1. Osenase

 

Osenase is in the Birim Central Municipal District. The nearest town to the project area is the District Capital Akim Oda. This project has seen limited amount of gold exploration. The concession was previously held by Cornucopia Resources in the 1990s and was engaged in potential for a diamond resource. Paramount Mining Corporation held the concession for almost 6 years with limited amount of work. The limited work done was focused on diamondiferous hard rock potential at Atiankama Nkwanta. The presence of diamonds in what appears to be an in-situ unit exposed by the Francis Pits at Atiakama Nkwanta provides an opportunity to explain the source of some of the diamonds in the region. S Two oriented grids were sampled in 2007 but were never analysed for gold. The samples have been stored at the Manso camp to be analysed later. No subsequent work has been carried out to establish gold or diamond potential, and there is no guarantee that ore is present in economically significant quantity. 

 

  2. Asamankese

 

Asamankese is a 150Km2 Prospecting License (PL) in the West Akim District. The nearest town to the project area is the District Capital Asamankese. Asamankese was originally part of Osenase under a reconnaissance licence. In 2006, about 4 soil-oriented grids on 800m x 50m was established and sampled. The samples were stored at the Manso camp to be analysed later. The samples are still in storage at the Manso camp. A total of 436 samples representing two of the gridlines L1600N and L2400N at 800m apart were later on analysed for gold. The samples were sent to SGS Tarkwa for 2kg BLEG analysis. Results received were not encouraging for gold, with only one modest spike of 170 ppb Au, associated with alluvials. A limited stream sediment program began in November 2008 but could not be completed due to financial constraints. About 108 stream sediment samples were collected and panned for visible gold out of a total 183 planned. No laboratory analysis was carried out. About 80 sample points are still yet to be sampled.

 

  17  
 

 

  3. Pramkese

 

Pramkese is a 66 square kilometres Prospecting License (PL) in the Kwaebibirim District located in the Birim Diamond Field. The nearest town to the project area is the District Capital Kade. Limited reconnaissance work was carried out in 2009 and the licence was converted to a Prospecting Licence. The exercise concentrated on the south of the town of Pramkese. Ten (10) alluvial pits were dug and sampled. The samples collected were panned and hand jigged for gold and diamond respectively. In the early 90’s, a fair amount of work was done on the concession for both alluvial gold and diamond by Basogard. Basogard defined some alluvial gold and diamond resources which were never investigated.

 

The company is now in discussions with various potential partners to explore and define the potential of these concessions, however no definitive agreements have been reached. There is no guarantee that any agreements will be reached or that permits will be secured.

 

Going Concern

 

Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred a net loss of $87,581 for the three months ended June 30, 2020, and have incurred cumulative losses since inception of $35,415,109. These factors raise substantial doubt about the ability of the Company to continue as going concern. Our ability to continue as a going concern is dependent on our ability to continue obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations.

 

We will need to raise additional funds to finance continuing operations. However, there are no assurances that we will be successful in raising additional funds. Without sufficient additional financing, it would be unlikely for us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in this quarterly report and eventually secure other sources of financing and attain profitable operations.

 

Results of Operations

 

Three Months Ended June 30, 2020 and 2019

 

The net loss for the three months ended June 30, 2020 were $87,581 as compared to the net loss for the three months ended June 30, 2019 of $22,745. Operating expenses for the 1st quarter totaled $70,637 compared to $67,398, in 2019 a decrease of $31,761. Some of the more items contributing to the net loss and comprehensive loss for the 1st quarter of 2020 and 2019 were as follows:

 

● Exploration expenses of $Nil (2019: $25,105). The exploration decreased significantly is due to lack of funding in the current quarter.

 

● Consulting and professional fees of $22,791 (2019: $34,505). The decrease is result of cutting back the management fees in the current quarter.

 

● Gain on the investment in warrants of $Nil (2019: $44,653). The fair value of warrants of ASI is Nil in the current quarter due to the warrants expired.

 

● Unrealized gain on the investment in common shares of $50,202 (2019: $68,276). The unrealized gain is due to holding the investment in Ashanti Sankofa Inc’s (TSX.V-ASI)’ common shares. The market value of ASI’s common shares decreased for the current quarter.

 

● Accretion of $9,261 (2019 - $Nil). The accretion of the convertible debenture was recognized in the two quarters of fiscal 2020. There was no such expense recorded in the comparable quarters.

 

Management anticipates operating expenses will materially increase in future periods as we focus on green mineral development and incur increased costs as a result of being a public company with a class of securities registered under the Securities Exchange Act of 1934.

 

  18  
 

 

Liquidity and Capital Resources

 

Working Capital

 

Continuing Operations   June 30,
2020		     March 31,
2020		  
Current Assets   $ 65,233     $ 32,718  
Current Liabilities     741,727       810,779  
Working Capital Deficit   $ (806,960 )   $ (778,061 )

 

Current Assets

 

The nominal increase in current assets as of June 30, 2020 compared to March 31, 2020 was primarily due to an increase in cash from $27,551 to $63,066.

 

Current Liabilities

 

Current liabilities as at June 30, 2020 increased by $69,052 since March 31, 2020, primarily due to issuing convertible notes being incurred during the current quarter.

 

Cash Flow

 

Our cash flow was as follows:

 

    Three Months Ended
June 30		  
    2020
$		     2019
$		  
Net cash used in operating activities     (32,485 )     (796 )
Net cash used in investing activities     -       -  
Net cash provided by financing activities     68,000       -  
Increase (Decrease) in cash and cash equivalents     35,515       (796 )

 

Operating activities

 

The increase in net cash used in operating activities for the three months ended June 30, 2020, compared to the same period in 2019 was primarily as a result of increased operating activities in the current quarter.

 

Investing activities

 

For the three months ended June 30, 2019 and 2020, there were no investing activities incurred.

 

Financing activities

 

There was a convertible promissory notes issued in the three months ended June 30, 2020, compared to the same period in 2019.

 

Critical Accounting Policies

 

There have been no significant changes to the critical accounting policies as described in our Annual Form 10-K for the year ended March 31, 2020.

 

  19  
 

 

Cash Requirements

 

Our current cash position is not sufficient to meet our present and near-term cash needs.  We will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements.  For the next 12 months we estimate that our capital needs will be $500,000 to $750,000 and we currently have approximately $63,000 in cash. We will seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.

 

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 our stockholders.

 

Contractual Obligations

 

Not applicable.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.

 

  20  
 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On September 29, 2017, the Company entered into an agreement with Waratah Capital Ltd. (“Waratah”), a controlling shareholder, whereby Waratah and the Company agreed that in order to allow the Company to finalize its acquisition of Quivira Gold Ltd. pursuant to the Share Purchase Agreement dated June 22, 2013 among the Company, Quivira Gold Ltd. and Waratah (the “Quivira Agreement”), the Bridge Loan Agreement dated as of April 17, 2015, and amended on April 28, 2016 and November 1, 2016 between the Company and Waratah would be cancelled and the Company will utilize the loan proceeds advanced to close a private placement of $1,500,000 required to consummate the Company’s acquisition of Quivira Gold Ltd.

 

On April 24, 2018, the Company closed the private placement as part of the Quivira acquisition and issued 30,000,000 units at a price of $0.05 per unit for gross proceeds of $1,500,000. Each unit consists of one common share and one transferable share purchase warrant exercisable at a price of $0.05 per share for a term of five years.

 

The above securities were issued to non-US persons (as that term is defined in Regulation S of the Securities Act of 1933), in offshore transactions relying on Regulation S of the Securities Act of 1933, as amended.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosure

 

Not applicable.

 

Item 5. Other Information

 

On June 30, 2020, Ronald Renee was appointed as the Interim Chief Officer Financial the Company.

 

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Item 6. Exhibits

 

Number   Exhibit Description
31.1   Certification of the Chief Executive Officer pursuant to Rule 13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2   Certification of the Chief Financial Officer pursuant to Rule 13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1   Certification of the Chief Executive Officer pursuant to 18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2   Certification of the Chief Financial Officer pursuant to 18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101 **   Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.
    101.INS XBRL Instance Document
    101.SCH XBRL Taxonomy Extension Schema Document
    101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
    101.DEF XBRL Taxonomy Extension Definition Linkbase Document
    101.LAB XBRL Taxonomy Extension Label Linkbase Document
    101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BLOX INC.

 

By: /s/ Ronald Renee  
Name: Ronald Renee  
Title: Chief Executive Officer  
     
Date: July 30, 2020  

 

 

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