UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒ |
QUARTERLY
REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,
2021 |
|
|
|
OR |
|
|
☐ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
Commission
file number 000-55256
Kibush Capital Corp.
(Exact
Name of Small Business Issuer as specified in its
charter)
Nevada
(State
or other Jurisdiction of Incorporation or
Organization)
c/o CSC Services of Nevada, Inc.
2215-B Renaissance Drive
Las Vegas, Nevada
89119
(Address
of principal executive offices)
+(61)
398464288
(Issuer’s
telephone number, including area code)
Indicate
by check mark whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act 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
☒ 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 (SS 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, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 if the Exchange Act.
Large
Accelerated Filer |
☐ |
Accelerated
Filer |
☐ |
Non-accelerated Filer (Do not check if smaller
reporting company) |
☐ |
Smaller
Reporting Company |
☒ |
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act). YES ☐ NO
☒
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer’s classes of
common stock, as of the latest practicable date.
As of
23rd September 2021, there were 737,087,103 shares
of the registrant’s common stock outstanding and 38,000,000 shares
of the registrant’s preferred stock
CAUTIONARY
NOTE REGARDING EXPLORATION STAGE STATUS
We
are considered an “exploration stage” company under the U.S.
Securities and Exchange Commission (“SEC”) Industry Guide 7,
Description of Property by Issuers Engaged or to be Engaged in
Significant Mining Operations (“Industry Guide 7”), because we do
not have reserves as defined under Industry Guide 7. Reserves are
defined in Guide 7 as that part of a mineral deposit which can be
economically and legally extracted or produced at the time of the
reserve determination. The establishment of reserves under Guide 7
requires, among other things, certain spacing of exploratory drill
holes to establish the required continuity of mineralization and
the completion of a detailed cost or feasibility study.
Because
we have no reserves as defined in Industry Guide 7, we have not
exited the exploration stage and continue to report our financial
information as an exploration stage entity as required under
Generally Accepted Accounting Principles (“GAAP”). Although for
purposes of FASB Accounting Standards Codification Topic 915,
Development Stage Entities, we have exited the development stage
and no longer report inception to date results of operations, cash
flows and other financial information, we will remain an
exploration stage company under Industry Guide 7 until such time as
we demonstrate reserves in accordance with the criteria in Industry
Guide 7.
Because
we have no reserves, we have and will continue to expense all mine
construction costs, even though these expenditures are expected to
have a future economic benefit in excess of one year. We also
expense our reclamation and remediation costs at the time the
obligation is incurred. Companies that have reserves and have
exited the exploration stage typically capitalize these costs, and
subsequently amortize them on a units-of-production basis as
reserves are mined, with the resulting depletion charge allocated
to inventory, and then to cost of sales as the inventory is sold.
As a result of these and other differences, our financial
statements will not be comparable to the financial statements of
mining companies that have established reserves and have exited the
exploration stage.
FORWARD
LOOKING STATEMENTS
This
Quarterly Report on Form 10-Q, Financial Statements and Notes to
Financial Statements contains forward-looking statements that
discuss, among other things, future expectations and projections
regarding future developments, operations and financial conditions.
All forward-looking statements are based on management’s existing
beliefs about present and future events outside of management’s
control and on assumptions that may prove to be incorrect. If any
underlying assumptions prove incorrect, our actual results may vary
materially from those anticipated, estimated, projected or
intended
PART I – FINANCIAL INFORMATION
ITEM
1. |
FINANCIAL
STATEMENTS |
June
30, 2021
C
O N T E N T S
CONSOLIDATED STATEMENT OF
OPERATIONS
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Quarter
Ended
June 30, |
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Quarter
Ended
June 30, |
|
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9 months
Ended
June 30,
|
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|
9 months
Ended
June 30,
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|
2021 |
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|
2020 |
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|
2021 |
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|
2020 |
|
Net revenues |
|
|
49,155 |
|
|
|
39,300 |
|
|
|
100,958 |
|
|
|
112,757 |
|
Other Income |
|
|
|
|
|
|
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Cost of
sales |
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-803 |
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-18,665 |
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-10,382 |
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-32,253 |
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Gross profit |
|
|
48,352 |
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|
20,635 |
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|
|
90,576 |
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|
80,504 |
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Operating expenses: |
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Research and development |
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- |
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- |
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- |
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General and administrative |
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General and administrative |
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262,781 |
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105,303 |
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|
442,979 |
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310,449 |
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Loss from operations |
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-214,429 |
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-84,668 |
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-352,403 |
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-229,945 |
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Other income (expense): |
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Interest income |
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- |
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- |
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|
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|
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Interest expense |
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|
-42,343 |
|
|
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-43,404 |
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-127,028 |
|
|
|
-112,153 |
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Other income |
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- |
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|
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|
|
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659,265 |
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Change in fair value of derivative liabilities |
|
|
- |
|
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|
-328 |
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|
|
|
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59,099 |
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Net loss from Operations |
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-256,772 |
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|
-128,400 |
|
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-479,431 |
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|
376,266 |
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Provision for income taxes |
|
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- |
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|
|
|
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|
|
- |
|
|
|
- |
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Net loss from Operations |
|
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-256,772 |
|
|
|
-128,400 |
|
|
|
-479,431 |
|
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|
376,266 |
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Less: Loss attributable to non-controlling interest |
|
|
21,766 |
|
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|
6,252 |
|
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34,697 |
|
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|
17,318 |
|
Gain/Loss from discontinued operations |
|
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|
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- |
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- |
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Less net loss from discontinued operations |
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- |
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- |
|
Net loss attributable to Holding Company |
|
|
-235,006 |
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-122,148 |
|
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-444,734 |
|
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|
393,584 |
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Other Comprehensive Income/(Loss) |
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Foreign Exchange Adjustment |
|
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-26,219 |
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|
- |
|
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44,284 |
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- |
|
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Comprehensive loss |
|
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-261,225 |
|
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-122,148 |
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-400,450 |
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393,584 |
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Basic and diluted loss per common share |
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-0 |
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-0 |
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|
-0 |
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|
0 |
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Weighted
average common shares outstanding |
|
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|
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basic and diluted |
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240,677,271 |
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233,177,226 |
|
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|
240,677,271 |
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|
240,677,271 |
|
INTERIM CONSOLIDATED BALANCE
SHEETS
|
|
June 30, 2021 |
|
|
September 30, 2020 |
|
ASSETS |
|
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Current
assets: |
|
|
|
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|
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Cash |
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19,055 |
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|
1,448 |
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Trade Debtors |
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- |
|
|
|
1,241 |
|
Sundry
Debtors |
|
|
218 |
|
|
|
- |
|
GST
receivables |
|
|
101,332 |
|
|
|
67,042 |
|
Inventory - Raw
Materials |
|
|
- |
|
|
|
- |
|
Total
current assets |
|
|
120,605 |
|
|
|
69,731 |
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|
|
|
|
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Property and
equipment, net |
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|
- |
|
|
|
- |
|
Paradise
Gardens |
|
|
- |
|
|
|
- |
|
Shares in Aqua
Mining |
|
|
- |
|
|
|
- |
|
Other assets |
|
|
- |
|
|
|
- |
|
Deposits Paid |
|
|
- |
|
|
|
- |
|
Goodwill |
|
|
- |
|
|
|
- |
|
Total
assets |
|
|
120,605 |
|
|
|
69,731 |
|
|
|
|
|
|
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|
LIABILITIES AND STOCKHOLDERS’
DEFICIT |
|
|
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|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
- |
|
|
|
- |
|
Accrued
expenses |
|
|
611,813 |
|
|
|
472,785 |
|
Wages payable |
|
|
2,292 |
|
|
|
2,392 |
|
Convertible notes
payable, net of discounts of $80,434 and $3,099, respectively |
|
|
- |
|
|
|
- |
|
Loan from related
party |
|
|
2,844,100 |
|
|
|
2,770,739 |
|
Derivative
liabilities |
|
|
- |
|
|
|
- |
|
Deposits |
|
|
- |
|
|
|
- |
|
Shares to be
Issued - Five Arrows |
|
|
- |
|
|
|
- |
|
Total
current liabilities |
|
|
3,458,205 |
|
|
|
3,245,916 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
deficit: |
|
|
|
|
|
|
|
|
Preferred stock,
$0.001 par value;
50,000,000
shares authorized; 38,000,000
shares issued and outstanding |
|
|
24,500 |
|
|
|
24,500 |
|
Common stock,
$0.001 par value;
2,000,000,000
shares authorized; 687,087,104
Shares issued and outstanding |
|
|
687,087 |
|
|
|
443,355 |
|
Additional paid-in
capital |
|
|
10,211,084 |
|
|
|
10,092,518 |
|
Accumulated
Operating Deficit |
|
|
-14,066,132 |
|
|
|
-13,577,116 |
|
Total
stockholders’ deficit, including non-controlling interest |
|
|
-3,143,461 |
|
|
|
-3,016,743 |
|
Non-Controlling
interest |
|
|
-194,139 |
|
|
|
-159,441 |
|
Total
stockholders’ deficit |
|
|
-3,337,600 |
|
|
|
-3,176,184 |
|
Total liabilities
and stockholders’ deficit |
|
|
120,605 |
|
|
|
69,731 |
|
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
9
Months Ended June 30 |
|
|
9
Months Ended June 30 |
|
|
|
2021 |
|
|
2020 |
|
Operating
Activities: |
|
|
|
|
|
|
|
|
Net loss/profit |
|
|
-256,772 |
|
|
|
-230,162 |
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
- |
|
|
|
2,695 |
|
Amortization of
debt discount |
|
|
- |
|
|
|
- |
|
Impairment of assets |
|
|
159,051 |
|
|
|
|
|
Discontinued
operations |
|
|
- |
|
|
|
- |
|
Gain/Loss from
discontinued operations |
|
|
- |
|
|
|
|
|
Change in fair
value of derivative instruments |
|
|
- |
|
|
|
63,467 |
|
Stock based
payments |
|
|
- |
|
|
|
- |
|
Changes in
operating assets and liabilities: |
|
|
- |
|
|
|
|
|
Prepaid expenses
and other assets |
|
|
- |
|
|
|
- |
|
Others asset GST
Rec |
|
|
-27,618 |
|
|
|
- |
|
Wages payable |
|
|
|
|
|
|
- |
|
Accounts
receivable |
|
|
|
|
|
|
-15,929 |
|
Inventory Raw
Materials |
|
|
- |
|
|
|
- |
|
Accrued
expenses |
|
|
-6,000 |
|
|
|
62,500 |
|
Accrued
interest |
|
|
42,343 |
|
|
|
25,345 |
|
Deposits |
|
|
- |
|
|
|
- |
|
Net cash
used in operating activities |
|
|
-88,996 |
|
|
|
-92,084 |
|
|
|
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
|
|
Goodwill on
Consolidation |
|
|
- |
|
|
|
- |
|
Investment in
Angel Jade |
|
|
|
|
|
|
|
|
Paradise
Gardens |
|
|
- |
|
|
|
- |
|
Purchase of
property and equipment |
|
|
-159,051 |
|
|
|
-3,195 |
|
Net cash
used in investing activities |
|
|
-159,051 |
|
|
|
-3,195 |
|
Financing
Activities: |
|
|
|
|
|
|
|
|
Proceeds from S1
Subscriptions |
|
|
224,400 |
|
|
|
- |
|
Repayment of loan
from related party |
|
|
|
|
|
|
- |
|
Proceeds from
related party loans, net of debt discounts |
|
|
|
|
|
|
95,953 |
|
Net cash
provided by financing activities |
|
|
224,400 |
|
|
|
95,953 |
|
Effective of
exchange rates on cash |
|
|
-11,794 |
|
|
|
-228 |
|
Net change in
cash |
|
|
-23,647 |
|
|
|
674 |
|
Cash, beginning of year |
|
|
54,496 |
|
|
|
2,223 |
|
Cash, end of
year |
|
|
19,055 |
|
|
|
2,669 |
|
CONSOLIDATED STATEMENT OF STOCKHOLDERS’
DEFICIT
for the period SEPTEMBER 30, 2020, December 31, 2020, March
2021
(Unaudited)
|
|
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|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Preferred Stock |
|
|
Paid In |
|
|
Non-
Controlling |
|
|
Accumulated |
|
|
Accumulated Other
Comprehensive |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Interest
|
|
|
Deficit
|
|
|
Income
|
|
|
Deficit
|
|
Balance at September 30, 2019 |
|
|
443,354,541 |
|
|
|
443,355 |
|
|
|
23,000,000 |
|
|
|
23,000 |
|
|
|
9,842,517 |
|
|
|
-122,996 |
|
|
|
-13,728,369 |
|
|
|
- |
|
|
|
-3,542,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
Series C Preferred Shares issued for repayment of back salary at
$0.001 per
share |
|
|
- |
|
|
|
- |
|
|
|
15,000 |
|
|
|
1,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,500 |
|
93,732,563 Common shares were
issued at 0.0015 per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,732,563 Common shares were
issued at 0.0015 per share , shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000,00 Common shares were
issued at 0.0015 per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000,00 Common shares were
issued at 0.0015 per share , shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate variation
Write back accruals |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
250,001 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
250,001 |
|
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-36,445 |
|
|
|
-151,252 |
|
|
|
- |
|
|
|
114,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2020 |
|
|
443,354,541 |
|
|
|
443,355 |
|
|
|
38,000,000 |
|
|
|
24,500 |
|
|
|
10,092,518 |
|
|
|
-159,441 |
|
|
|
-13,577,116 |
|
|
|
- |
|
|
|
-3,176,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate variation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-6497 |
|
|
|
- |
|
|
|
-6497 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-6,410 |
|
|
|
-106,592 |
|
|
|
- |
|
|
|
-113,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020 |
|
|
443,354,541 |
|
|
|
443,355 |
|
|
|
38,000,000 |
|
|
|
24,500 |
|
|
|
10,092,518 |
|
|
|
-165,852 |
|
|
|
-13,690,204 |
|
|
|
- |
|
|
|
-3,295,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,732,563 Common
shares were issued at 0.0015 per share |
|
|
93,732,563 |
|
|
|
93,733 |
|
|
|
|
|
|
|
|
|
|
|
44,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate variation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-11,568 |
|
|
|
- |
|
|
|
-11,568 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-6,521 |
|
|
|
-103,135 |
|
|
|
- |
|
|
|
-109,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2020 |
|
|
537,087,104 |
|
|
|
537,087 |
|
|
|
38,000,000 |
|
|
|
24,500 |
|
|
|
10,136,684 |
|
|
|
-172,373 |
|
|
|
-13,804,907 |
|
|
|
- |
|
|
|
-3,279,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000,00 Common
shares were issued at 0.0015 per share |
|
|
150,000,000 |
|
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
74,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
224,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate variation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-26,219 |
|
|
|
- |
|
|
|
-26,219 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-21,766 |
|
|
|
-235,006 |
|
|
|
- |
|
|
|
-256,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2020 |
|
|
687,087,104
|
|
|
|
687,087 |
|
|
|
38,000,000 |
|
|
|
24,500 |
|
|
|
10,211,084 |
|
|
|
-194,139 |
|
|
|
-14,066,132 |
|
|
|
- |
|
|
|
-3,337,600 |
|
NOTE 1 - CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Business
Kibush
Capital Corporation (formerly David Loren Corporation) (the
“Company”) includes its 90% owned subsidiary Aqua
Mining (PNG). See Basis of Presentation below. The Company has two
primary businesses: (i) mining exploration within Aqua Mining, and
(ii) timber operations in Papua New Guinea by Aqua
Mining.
Basis
of Presentation
The
Company maintains its accounting records on an accrual basis in
accordance with generally accepted accounting principles in the
United States of America (“U.S. GAAP”).
The
consolidated financial statements of the Company include the
accounts of the Company, and all entities in which a direct or
indirect controlling interest exists through voting rights or
qualifying variable interests. All intercompany balances and
transactions have been eliminated in the consolidated financial
statements.
Certain
information and disclosures normally included in the notes to
financial statements have been condensed or omitted as permitted by
the rules and regulations of the Securities and Exchange
Commission, although the Company believes the disclosure is
adequate to make the information presented not misleading. The
accompanying unaudited financial statements should be read in
conjunction with the financial statements of the Company for the
year ended September 30, 2019.
Change
in Fiscal Year End
The
Company’s fiscal year end is from October 1 to September 30 of each
year.
Going
Concern
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern, which contemplates
the realization of assets and the liquidation of liabilities in the
normal course of business. As at June 30, 2021, the Company has an
accumulated deficit of $14,066,132 and $13,577,116 as of September 30, 2020
and has not earned sufficient revenues to cover operating costs
since inception and has a working capital deficit. The Company
intends to fund its mining exploration through equity financing
arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements for the
year.
The
ability of the Company to emerge from the development stage is
dependent upon, among other things, obtaining additional financing
to continue mining exploration and execution of its business plan.
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 Company’s
ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Functional
and Reporting Currency
The
consolidated financial statements are presented in U.S. Dollars.
The Company’s functional currency is the U.S. Dollar. The
functional currency of Aqua Mining is the Papua New Guinean kina.
Assets and liabilities are translated using the exchange rate on
the respective balance sheet dates. Items in the income statement
and cash flow statement are translated into U.S. Dollars using the
average rates of exchange for the periods involved. The resulting
translation adjustments are recorded as a separate component of
other comprehensive income/(loss) within stockholders’
equity.
The
functional currency of foreign entities is generally the local
currency unless the primary economic environment requires the use
of another currency. Gains or losses arising from the translation
or settlement of foreign-currency-denominated monetary assets and
liabilities into the functional currency are recognized in the
income in the period in which they arise. However, currency
differences on intercompany loans that have the nature of a
permanent investment are accounted for as translation differences
as a separate component of other comprehensive income/(loss) within
stockholders’ equity.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
A
summary of the principal accounting policies are set out
below:
Cash
The
Company maintains its cash balances in interest and
non-interest-bearing accounts which do not exceed Federal Deposit
Insurance Corporation limits.
Principles
of Consolidation
The
accompanying consolidated financial statements include the accounts
of Kibush Capital and Aqua Mining. All intercompany accounts and
transactions have been eliminated.
Other
Comprehensive Income and Foreign Currency
Translation
FASB
ASC 220-10-05, Comprehensive Income, establishes standards
for the reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements.
Comprehensive income is defined to include all changes in equity
except those resulting from investments by owners and distribution
to owners.
The
accompanying consolidated financial statements are presented in
United States dollars.
Use
of Estimates
The
preparation of financial statements in conformity with Generally
Accepted Accounting Principles in the United States of America
(“GAAP”) requires management to make certain estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Significant
estimates made by management are, recoverability of long-lived
assets, valuation and useful lives of intangible assets, valuation
of derivative liabilities, and valuation of common stock, options,
warrants and deferred tax assets. Actual results could differ from
those estimates.
Non-Controlling
Interests
Investments
in associated companies over which the Company has the ability to
exercise significant influence are accounted for under the
consolidation method, after appropriate adjustments for
intercompany profits and dividends.
In
December 2007, the FASB issued SFAS No. 141(R), “Business
Combinations.” It requires an acquirer to recognize, at the
acquisition date, the assets acquired, the liabilities assumed, and
any non-controlling interest in the acquiree at their full fair
values as of that date. In a business combination achieved in
stages (step acquisitions), the acquirer will be required to
re-measure its previously held equity interest in the acquiree at
its acquisition-date fair value and recognize the resulting gain or
loss in earnings. The acquisition-related transaction and
restructuring costs will no longer be included as part of the
capitalized cost of the acquired entity but will be required to be
accounted for separately in accordance with applicable generally
accepted accounting principles. U.S. SFAS No. 141(R) applies
prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008.
A
non-controlling interest in a subsidiary is an ownership interest
in a consolidated entity that is reported as equity in the
consolidated financial statements and separate from the Company’s
equity. In addition, net income/(loss) attributable to
non-controlling interests is reported separately from net income
attributable to the Company in the consolidated financial
statements. The Company’s consolidated statements present the full
amount of assets, liabilities, income and expenses of all of our
consolidated subsidiaries, with a partially offsetting amount shown
in non-controlling interests for the portion of these assets and
liabilities that are not controlled by us.
Property
and Equipment
Property
and equipment are stated at cost. Depreciation is computed using
the straight-line method over estimated useful lives as
follows:
SCHEDULE
OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES
Plant
equipment |
|
2 to 15
years |
Motor
Vehicle |
|
4 to 15
years |
Maintenance
and repairs are charged to expense as incurred. Renewals and
improvements of a major nature are capitalized. At the time of
retirement or other disposition of property and equipment, the cost
and accumulated depreciation are removed from the accounts and any
resulting gains or losses are reflected in the consolidated
statement of operations.
Impairment
of Long-Lived Assets
In
accordance with FASB ASC 360-10-5, Accounting for the Impairment
or Disposal of Long-Lived Assets, the Company evaluates the
carrying value of its long-lived assets for impairment whenever
events or changes in circumstances indicate that such carrying
values may not be recoverable. The Company uses its best judgment
based on the current facts and circumstances relating to its
business when determining whether any significant impairment
factors exist. The Company considers the following factors or
conditions, among others, that could indicate the need for an
impairment review:
|
● |
Significant
under performance relative to expected historical or projected
future operating results. |
|
● |
Significant
changes in its strategic business objectives and utilization of the
assets. |
|
● |
Significant
negative industry or economic trends, including legal
factors. |
If
the Company determines that the carrying values of long-lived
assets may not be recoverable based upon the existence of one or
more of the above indicators of impairment, the Company’s
management performs an undiscounted cash flow analysis to determine
if impairment exists. If impairment exists, the Company measures
the impairment based on the difference between the asset’s carrying
amount and its fair value, and the impairment is charged to
operations in the period in which the long-lived asset impairment
is determined by management.
During
the year ended September 30, 2020, the Aqua Mining business
continued to generate material operating losses. Consequently,
management has re-assessed the carrying value of the existing plant
and equipment and its ability to generate positive cash flows over
the remaining useful life of the group of assets used within the
Timber milling business. Managements current assessment, which
takes into consideration the ongoing uncertain impacts of COVID-19
on market supply chains and the access to equipment required for
timber processing facility enhancements, indicates that the current
group of assets are impaired and need to be written down to a
carrying value indicative representative of fair value. Managements
current assessment of the carrying value is nil as there is no
reliable secondary market at present for these assets in the Port
Moresby region combined with other market constraints relating to
COVID-19 impacts on supply chains. Management will continue to
explore opportunities to expand the supply and processing capacity
of the timber milling process with a view to re-assessing the
carrying value of the asset group should positive operating cash
flows start to be generated in future periods.
The
carrying value of the Company’s investment in Joint Venture
contract with leaseholders of certain Mining Leases in Papua New
Guinea represents its ownership, accounted for under the equity
method. The ownership interest is not adjusted to fair value on a
recurring basis. Each reporting period the Company assesses the
fair value of the Company’s ownership interest in Joint Venture in
accordance with FASB ASC 325-20-35. Each year the Company conducts
an impairment analysis in accordance with the provisions within
FASB ASC 320-10-35 paragraphs 25 through 32.
Fair Value of Financial Instruments
The
carrying amounts of the Company’s cash, accounts payable and
accrued expenses approximate their estimated fair values due to the
short-term maturities of those financial instruments. The Company
believes the carrying amount of its notes payable approximates its
fair value based on rates and other terms currently available to
the Company for similar debt instruments
Beneficial
Conversion Features of Debentures
In
accordance with FASB ASC 470-20, Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios, we recognize the advantageous value
of conversion rights attached to convertible debt. Such rights give
the debt holder the ability to convert debt into common stock at a
price per share that is less than the trading price to the public
on the day the loan is made to us. The beneficial value is
calculated as the intrinsic value (the market price of the stock at
the commitment date in excess of the conversion rate) of the
beneficial conversion feature of debentures and related accruing
interest is recorded as a discount to the related debt and an
addition to additional paid in capital. The discount is amortized
over the remaining outstanding period of related debt using the
interest method.
Loss
per Share
The
Company applies FASB ASC 260, “Earnings per Share.” Basic earnings
(loss) per share is computed by dividing earnings (loss) available
to common stockholders by the weighted-average number of common
shares outstanding. Diluted earnings (loss) per share is computed
similar to basic earnings (loss) per share except that the
denominator is increased to include additional common shares
available upon exercise of stock options and warrants using the
treasury stock method, except for periods for which no common share
equivalents are included because their effect would be
anti-dilutive.
Income
Taxes
Income
taxes are accounted for in accordance with ASC Topic 740, “Income
Taxes.” Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future consequences of
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases
(temporary differences). Deferred tax assets and liabilities are
measured using tax rates expected to apply to taxable income in the
years in which those temporary differences are recovered or
settled. Valuation allowances for deferred tax assets are
established when it is more likely than not that some portion or
all of the deferred tax assets will not be realized.
Mineral
Property, Mineral Rights (Claims) Payments and Exploration
Costs
Pursuant
to EITF 04-02, “Whether Mineral Rights are Tangible or Intangible
Assets and Related Issues”, the Company has an accounting policy to
capitalize the direct costs to acquire or lease mineral properties
and mineral rights as tangible assets. The direct costs include the
costs of signature (lease) bonuses, options to purchase or lease
properties, and brokers’ and legal fees. If the acquired mineral
rights relate to unproven properties, the Company does not amortize
the capitalized mineral costs, but evaluates the capitalized
mineral costs periodically for impairment. The Company expenses all
costs related to the exploration of mineral claims in which it had
secured exploration rights prior to establishment of proven and
probable reserves.
Accounting
Treatment of Mining Interests
At
this time, the Company does not directly own or directly lease
mining properties. However, the Company does have contractual
rights and governmental permits which allow the Company to conduct
mining exploration on the properties referenced in this report.
These contractual relationships, coupled with the government
permits issued to the Company (or a subsidiary), are substantially
similar in nature to a mining lease. Therefore, we have treated
these contracts as lease agreements from an accounting
perspective.
Research
and Development
Research
and development costs are recognized as an expense in the period in
which they are incurred. The Company incurred no research and
development costs for the quarter ended June 30, 2021.
Recent
Accounting Pronouncements
In
October 2018, FASB issued Accounting Standards Update 2018-16,
Derivaties and Hedging (Topic 805): Inclusion of the Secured
Overnight Financing Rate (SOFR) Overight Index Swap (OIS) Rate as a
Benchmark Interest Rate for Hedge Accounting Purposes. The ASU
amends ASC 815 to add the OIS rate based on the SOFR as a fifth US
benchmark interest rate. We do not expect the adoption of this ASU
to have a material effect on our consolidated financial
statements.
In
October 2018, FASB issued Accounting Standards Update 2018-17:
Consolidation (Topic 810): Targeted Improvements to Related Party
Guidance for Variable Interest Entities. This standard expands the
application of a specific private company accounting alternative
related to VIEs and changes the guidance for determining whether a
decision-making fee is a variable interest. We do not expect the
adoption of this ASU to have a material effect on our consolidated
financial statements.
In
November 2018, FASB issued Accounting Standards Update 2018-18,
Collaborative Arrangements (Topic 808): Clarifying the Interaction
between Topic 808 and Topic 606. The ASU amends ASC 808 to clarify
ASC 606 should apply in entirety to certain transactions between
collaborative arrangement participants. We do not expect the
adoption of this ASU to have a material effect on our consolidated
financial statements.
In
November 2018, FASB issued Accounting Standards Update 2018-19,
Codification Improvements to Topic 326, Financial
Instruments—Credit Losses. The ASU changes the effective date of
ASU 2016-13 to fiscal years beginning after December 15, 2021,
including interim periods within those fiscal years. Thus, the
effective date for such entities’ annual financial statements is
now aligned with that for these interim financial statements. We
are currently evaluating the impact that the standard will have on
our consolidated financial statements and related
disclosures.
In
December 2018, FASB issued Accounting Standards Update 2018-20,
Leases (Topic 842): Narrow-Scope Improvements for Lessors. The
amendments are designed to make lessors adoption of the new leases
standard easier such as accounting policy election on sales tax,
exclude variable payments for all lessor costs, and clarification
on lessor costs. We are currently evaluating the impact that the
standard will have on our consolidated financial statements and
related disclosures.
In
March 2019, FASB Issued Accounting Standards Update 2019-01,
Leases (Topic 842): Codification Improvements. For public
business entities, the amendments in this Update are effective for
fiscal years beginning after December 15, 2019, and interim periods
within those fiscal years. We do not expect the adoption of this
ASU to have a material effect on our consolidated financial
statements.
In
March 2019, FASB Issued Accounting Standards Update 2019-02:
Improvements to Accounting for Costs of Films and License
Agreements for Program Materials. For public business entities,
the amendments in this Update are effective for fiscal years
beginning after December 15, 2019, and interim periods within those
fiscal years. We do not expect the adoption of this ASU to have a
material effect on our consolidated financial
statements.
In
March 2019, FASB Issued Accounting Standards Update 2019-03,
Not-for-Profit Entities (Topic 958): Updating the Definition of
Collections (Topic 958). We do not expect the adoption of this ASU
to have a material effect on our consolidated financial statements
as the ASU is applicable to not-for-profit entities.
In
April 2019, FASB Issued Accounting Standards Update 2019-04
Codification Improvements to Topic 326, Financial
Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and
Topic 825, Financial Instruments. The ASU 2019-04 clarifies and
improves guidance within the recently issued standards on credit
losses, hedging, and recognition and measurement of financial
instruments: The effective dates for amendments related to ASUs
2016-13 and 2017-12 align with the effective dates of those
standards, unless an entity has already adopted one or both. We do
not expect the adoption of this ASU to have a material effect on
our consolidated financial statements.
In
May 2019, FASB Issued Accounting Standards Update 2019-05, Targeted
Transition Relief. ASU 2019-05 provides transition relief for ASU
2016-13 (“credit losses standard”) by providing entities with an
alternative to irrevocably elect the fair value option for eligible
financial assets measured at amortized cost upon adoption of the
new credit losses standard. For entities that have not yet adopted
ASU 2016-13, the effective dates are the same as those in ASU
2016-13. For entities that have adopted ASU 2016-13, ASU 2019-05 is
effective for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years. Early adoption
is permitted once ASU 2016-13 has been adopted. We do not expect
the adoption of this ASU to have a material effect on our
consolidated financial statements.
In
May 2019, FASB Issued Accounting Standards Update 2019-06,
Extending the Private Company Accounting Alternatives on Goodwill
and Certain Identifiable Intangible Assets to Not-for-Profit
Entities. The amendments are affective upon issuance of the ASU. We
do not expect the adoption of this ASU to have a material effect on
our consolidated financial statements.
In
November 2019, the ASB issued Accounting Standards Update
2019-08-Compensation-Stock Compensation (Topic 718) and Revenue
from Contracts with Customers (Topic 606): Codification
Improvements-Share-Based Consideration Payable to a Customer. This
ASU will affect companies that issue share-based payments (e.g.,
options or warrants) to their customers. Similar to issuing a cash
rebate to a customer, issuing a share-based payment to a customer
can incentivize additional purchases. The share-based payments can
also serve a strategic purpose by aligning the interests of a
supplier and its customer, because the customer’s additional
purchases increase its investment in the supplier. For entities
that have not yet adopted the amendments in Update 2018-07, the
amendments in this update are effective in fiscal years beginning
after December 15, 2019. We do not expect the adoption of this ASU
to have a material effect on our consolidated financial
statements.
In
November 2019, the FASB issued Accounting Standards Update
2019-09-Financial Services-Insurance (Topic 944). This ASU will
affect companies that issue share-based payments (e.g., options or
warrants) to their customers. Similar to issuing a cash rebate to a
customer, issuing a share-based payment to a customer can
incentivize additional purchases. The share-based payments can also
serve a strategic purpose by aligning the interests of a supplier
and its customer, because the customer’s additional purchases
increase its investment in the supplier. The amendments in this
Update are effective in fiscal years beginning after December 15,
2021. We do not expect the adoption of this ASU to have a material
effect on our consolidated financial statements.
In November 2019, the FASB issued Accounting Standards Update
2019-10-Financial Instruments-Credit Losses (Topic 326),
Derivatives and Hedging (Topic 815), and Leases (Topic 842):
Effective Dates. This ASU discusses the FASB’s proposed ASU
Codification Improvements to Hedge Accounting, which would clarify
certain amendments made by ASU 2017-12, Targeted Improvements to
Accounting for Hedging Activities, to the guidance in ASC 815 on
hedging activities. The FASB issued the proposal in response to
feedback and questions received from stakeholders related to their
implementation of ASU 2017-12. The ASU also discusses the recent
issuance of FASB ASU No. 2019-10, Financial Instruments – Credit
Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases
(Topic 842): Effective Dates. The ASU provides a framework to
stagger effective dates for future major accounting standards and
amends the effective dates for certain major new accounting
standards to give implementation relief to certain types of
entities. Specifically, ASU 2019-10 changes some effective dates
for ASU 2017-12 on hedging, ASU 2016-02 on leasing, ASU 2016-13 on
current expected credit losses, and ASU 2017-04 on simplifying the
goodwill impairment test. The amendments in this Update amend the
mandatory effective dates Credit Losses for all entities as follows
or fiscal years beginning after December 15, 2019. The effective
dates for Hedging after applying this update are as follows: for
fiscal years beginning after December 15, 2018. The effective dates
for Leases after applying this Update are as follows for fiscal
years beginning after December 15, 2018. We do not expect the
adoption of this ASU to have a material effect on our consolidated
financial statements.
In
December 2019, the FASB issued Accounting Standards Update
2019-12-Income Taxes (Topic 740): Simplifying the Accounting for
Income Taxes. This ASU summarizes the FASB’s recently issued
Accounting Standards Update (ASU) No. 2019-12, simplifying the
Accounting for Income Taxes. The ASU enhances and simplifies
various aspects of the income tax accounting guidance in ASC 740.
The amendments in this update are effective for fiscal years, and
interim periods within those fiscal years, beginning after December
15, 2020. We do not expect the adoption of this ASU to have a
material effect on our consolidated financial
statements.
In
January 2020, the FASB issued Accounting Standards Update
2020-01-Investments-Equity Securities (Topic 321),
Investments-Equity Method and Joint Ventures (Topic 323), and
Derivatives and Hedging (Topic 815)-Clarifying the Interactions
between Topic 321, Topic 323, and Topic 815. This ASU clarifies the
interaction between accounting standards related to equity
securities (ASC 321), equity method investments (ASC 323), and
certain derivatives (ASC815). The amendments in this Update are
effective for fiscal years beginning after December 15, 2020. We do
not expect the adoption of this ASU to have a material effect on
our consolidated financial statements.
In March 2020, the FASB issued Accounting Standards Update
2020-03-Codification Improvements to Financial Instruments. The
Standard is part of FASB’s ongoing project to improve and clarify
its Accounting Standards Codification and avoid unintended
application. The items addressed are not expected to significantly
affect current practice or create a significant administrative cost
for most entities. The amendment is divided into issues 1 to 7 with
different effective dates as follows: The amendments related to
Issue 1, Issue 2, Issue 4, and Issue 5 are conforming amendments.
For public business entities, the amendments are effective upon
issuance of this update. For all other entities, the amendments are
effective for fiscal years beginning after December 15, 2019, and
interim periods within those fiscal years beginning after December
15, 2020. The amendment related to Issue 3 is a conforming
amendment that affects the guidance related to the amendments in
2016-01, Financial Instruments-Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial
Liabilities. The effective date of this update for the amendments
to Update 2016-01 is for fiscal years beginning after December 15,
2019, including interim periods within those fiscal years. For
entities that have not yet adopted the amendments related to Update
2016-13, the effective dates and the transition requirements for
these amendments are the same as the effective date and transition
requirements in Update 2016-13. For entities that have adopted the
guidance in Update 2016-13, the amendments are effective for fiscal
years beginning after December 15, 2019, including interim periods
within those fiscal years. For those entities, the amendments
should be applied on a modified-retrospective basis by means of a
cumulative-effect adjustment to opening retained earnings in the
statement of financial position as of the date that an entity
adopted the amendments in Update 2016-13. We do not expect the
adoption of this ASU to have a material effect on our consolidated
financial statements.
Other
accounting standards that have been issued or proposed by the FASB
or other standards-setting bodies that do not require adoption
until a future date are not expected to have a material impact on
our consolidated financial statements upon adoption.
NOTE
3 – INVESTMENTS IN SUBSIDIARIES
The
Company owns interests in the following entities which was recorded
at their book value since they were related party common control
acquisitions.
SCHEDULE
OF DIRECT COST MEASURED AT FAIR MARKET VALUE
|
|
Investment |
|
|
Ownership % |
|
|
|
|
|
|
|
|
|
|
Aqua Mining (PNG) |
|
|
34 |
|
|
|
90 |
% |
As Aqua
Mining (PNG) Ltd was acquired from a related entity, Five Arrows
Limited (see Note 10 – Business Combinations), the shares were
recorded in the accounts at their true cost value.
NOTE
4 – PROPERTY AND EQUIPMENT
SCHEDULE OF PROPERTY AND EQUIPMENT
|
|
June 30, 2021 |
|
|
September 30, 2020 |
|
|
|
|
|
|
|
|
Plant Equipment |
|
|
159,051 |
|
|
|
113,515 |
|
Motor
Vehicle |
|
|
- |
|
|
|
111,585 |
|
|
|
|
159,051 |
|
|
|
225,100 |
|
Less
Accumulated Depreciation |
|
|
- |
|
|
|
-97,280 |
|
Less Provision
for Impairment |
|
|
-159,051 |
|
|
|
-127820 |
|
— |
|
$ |
0 |
|
|
$ |
0 |
|
NOTE
5 – LOAN FROM RELATED PARTY
Convertible
Notes Issued to the President and Director of Kibush Capital
Corporation:
SCHEDULE
OF LOAN FROM RELATED PARTY
|
|
June 30, 2021 |
|
|
|
Note face amount |
|
|
Debt
Discount
|
|
|
Net
Amount
of
note
|
|
|
|
|
|
|
|
|
|
|
|
Loan from related party |
|
$ |
2,844,100 |
|
|
$ |
0 |
|
|
$ |
2,844,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2,844,100 |
|
|
$ |
0 |
|
|
$ |
2,844,100 |
|
|
|
September 30, 2020 |
|
|
|
Note face amount |
|
|
Debt
Discount |
|
|
Net Amount
of note |
|
|
|
|
|
|
|
|
|
|
|
Loan from related party |
|
$ |
2,770,739 |
|
|
$ |
0 |
|
|
$ |
2,770,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2,770,739 |
|
|
$ |
0 |
|
|
$ |
2,770,739 |
|
On
January 16, 2020, the Company entered into a Promissory Note
Consolidation Agreement (the “Consolidation Agreement”) with one of
its noteholders, Warren Sheppard., as lender (“Mr. Sheppard”).
Pursuant to the terms of the Consolidation Agreement, the Company
consolidated an aggregate of $1,358,692 of outstanding debt
obligations (the “Outstanding Debt”), which included principal and
interest, owed to Mr. Sheppard by the Company.
Upon
the assumption by the Company of the Outstanding Debt, the Company
and Mr. Sheppard entered into an unsecured promissory note (the
“Consolidated Note”), which such Consolidated Note restated the
repayment terms and conditions of the Outstanding Debt in full.
Pursuant to the terms and conditions of the Consolidated Note, the
Outstanding Debt accrues simple interest at 12.5% per year, compounded annually,
and the Consolidated Note has a maturity date of January 15, 2022. No regularly
scheduled periodic payments of principal or interest are due under
the Consolidated Note, and, unless there is an earlier event of
default, all outstanding and unpaid principal and interest under
the Consolidated Note is due and payable in a single lump sum
payment at maturity. The Consolidated Note also removes any common
stock conversion features from previous notes. The Company may
prepay the Consolidated Note at any time prior to maturity without
penalty.
As a
consequence of the debt consolidation, the derivative Liabilities
associated with option component has been eliminated, therefore,
derivative liabilities amounted to $728,080 as of the debt
consolidation date are subsequently reversed and charged into
profit and losses in January 2020.
As at
June 30 ,2021 the Related Party Loans of $2,844,100 comprises Consolidation
Note $1,358,692 and an
unsecured loan of $1,485,408.27
Mr
Sheppard has provided a letter of comfort to the company stating
that he will not request repayment of the loan, for a period of not
less than 12 months, from the date of signing the 10 K
accounts.
NOTE
6 – STOCKHOLDER’S DEFICIT
Common
Stock
On
August 22, 2013, the Company’s Board authorized a 225:1 reverse stock split.
All share and per share data in the accompanying financial
statements and footnotes has been adjusted retrospectively for the
effects of the stock split.
On
October 12, 2013, the Company issued by director’s resolution,
10,000,000 shares of
newly issued common stock for the purchase of a Memorandum of
Understanding (dated September 2, 2013) from a related company
(Five Arrows Limited); which gave Kibush Capital Corporation the
right to acquire 80% ownership in Instacash
Pty Ltd, an Australian Currency Services provider, and corporate
trustee of the Instacash Trust. As this transaction was with a
related party, the value was recorded at the par value of the stock
i.e. $0.001 per share
of common stock.
Between
October 23, 2013 and September 30, 2014, the Company issued a total
of 3,274,000
shares of common stock upon the requests from convertible note
holders to convert principal totaling $3,274 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
On
February 28, 2014, the Company issued by director’s resolution,
40,000,000 shares of
newly issued common stock to conclude a Assignment and Bill of Sale
(dated February 14, 2014) from a related company (Five Arrows
Limited); which gave Kibush Capital Corporation the right to enter
into a Joint Venture contract with the leaseholders of certain
Mining Leases in Papua New Guinea. As this transaction was with a
related party, the value was recorded at par value of the stock
i.e. $0.001 per share
of common stock.
Between
November 1, 2014 and March 31, 2015, the Company issued a total of
4,560,000 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $3,274 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
April 1, 2016 and September 30, 2016, the Company issued a total of
190,114,175 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $190,114 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
October 1, 2016 and December 31, 2016, the Company issued a total
of 208,879,614
shares of common stock upon the requests from convertible note
holders to convert principal totaling $208,880 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
January 1, 2017 and March 31, 2017, the Company issued a total of
9,375,000 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $9,375 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
April 1, 2017 and June 30, 2017, the Company issued a total of
405,000,000 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $405,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
On
August 23, 2017, the Company’s Board authorized a 1:25 reverse stock split.
All share and per share data in the accompanying financial
statements and footnotes has been adjusted retrospectively for the
effects of the stock split.
Between
October 1, 2017 and December 31, 2017, the Company issued a total
of 180,395,000
shares of common stock upon the requests from convertible note
holders to convert principal totaling $180,395 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
January 1, 2018 and March 31, 2018, the Company issued a total of
139,000,000 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $139,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
Between
April 1, 2018 and June 30, 2018, the Company issued a total of
120,000,000 shares
of common stock upon the requests from convertible note holders to
convert principal totaling $120,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was $0.001.
On
January 06, 2021 Company Issued a total of 22,123,392 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $33,185 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
On
February 10, 2021 Company Issued a total of 23,237,347 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $34,856 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
On
March 17, 2021 Company Issued a total of 48,381,823 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $72,573 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
On
April 12, 2021 Company Issued a total of 50,000,000 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $75,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
On
May 18, 2021 Company Issued a total of 50,000,000 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $75,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
On
July 15, 2021 Company Issued a total of 50,000,000 shares of common
stock upon the requests from convertible note holders to convert
principal totaling $75,000 into the
Company’s common stock based on the terms set forth in the loans.
The conversion rate was 0.0015.
Preferred
Stock
Preferred
stock includes 50,000,000
shares authorized at $0.001 par value, of
which 10,000,000
have been designated Series A and 25,000,000 designated as
Series B. A total of 3,000,000
shares of Series A preferred stock are issued and outstanding as of
December 30, 2020, and September 30, 2020. A total of 34,999,899 shares of
Series B preferred stock were outstanding as of December 31, 2020,
and a total of 101 Series C
Preference Shares are issued and outstanding as of December 31,
2020.
Issued
Preference Share B
On
January 9, 2020, the Board of Directors, with the approval of a
majority vote of the shareholders approved the filing of a
Certificate of Amendment of Designation of the Company’s Series B
Preferred Stock (“Series B Preferred Stock”). The Board of
Directors authorized the increase of authorized shares of the
Series B Preferred Stock to 37,999,899 shares by
filing the Certificate of Amendment of Designation with the Nevada
Secretary of State. The terms of the Certificate of Amendment of
Designation of the Series B Preferred Stock, which was filed and
approved by the State of Nevada on January 9, 2020, have not
otherwise changed as previously filed and disclosed.
Issued
Preference Share C
On
January 9, 2020, the Board of Directors, with the approval of a
majority vote of the shareholders approved the filing of a
Certificate of Amendment of Designation of the Company’s Series C
Preferred Stock (“Series C Preferred Stock”). The Board of
Directors authorized the increase of authorized shares of the
Series C Preferred Stock to 101 shares by filing
the Certificate of Amendment of Designation with the Nevada
Secretary of State. The terms of the Certificate of Amendment of
Designation of the Series C Preferred Stock, which was filed and
approved by the State of Nevada on January 9, 2020, have not
otherwise changed as previously filed and disclosed.
NOTE
7 – INCOME TAXES
The
provision/(benefit) for income taxes for the 3 months ended June
30, 2021 and the year ended September 30, 2020 was as follows
(assuming a 15% effective tax rate).
SCHEDULE
OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT)
|
|
|
3
months ended
June 30, |
|
|
|
Year
ending
September 30, |
|
|
|
|
2021 |
|
|
|
2020 |
|
Current Tax
Provision |
|
|
|
|
|
|
|
|
Federal- |
|
|
|
|
|
|
|
|
Taxable
Income |
|
|
- |
|
|
|
- |
|
Total current tax
provisions |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
Deferred Tax
Provision |
|
|
|
|
|
|
|
|
Federal- |
|
|
|
|
|
|
|
|
Loss carry
forwards |
|
|
- |
|
|
|
- |
|
Change in valuation
allowance |
|
|
- |
|
|
|
- |
|
Total deferred tax
provisions |
|
|
- |
|
|
|
- |
|
As of
September 30, 2020, the Company had approximately $13,577,116 in tax loss carry
forwards that can be utilized future periods to reduce taxable
income, and the carry forward incurred for the year ended September
30, 2020 will expire by the year 2035.
As of
June 30, 2021, the Company had approximately $14,066,132 in tax loss carry
forwards that can be utilized future periods to reduce taxable
income, and the carry forward incurred for the year ended September
30, 2021 will expire by the year 2036.
The
Company did not identify any material uncertain tax positions. The
Company did not recognize any interest or penalties for
unrecognized tax benefits.
The
federal income tax returns of the Corporation are subject to
examination by the IRS, generally for three years after they are
filed.
NOTE
8 – RELATED PARTY TRANSACTIONS
Details
of transactions between the Corporation and related parties are
disclosed below.
The
following transactions were carried out with related
parties:
SCHEDULE
OF RELATED PARTY TRANSACTIONS
|
|
June 30, 2021 |
|
|
September 30, 2020 |
|
|
|
|
|
|
|
|
Loan from related party |
|
$ |
2,844,100 |
|
|
$ |
2,770,739 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2,844,100 |
|
|
$ |
2,770,739 |
|
(a)
From time to time, the president and stockholder of the Company
provides advances to the Company for its working capital purposes.
These advances bear no interest and are due on demand.
(b)
See Note 6 for details of Convertible notes.
(c)
On January 9th, 2020, the Company issued Mr Sheppard 14,999,899 Class B
Preference Shares and 101 Class C
Preference Shares in full satisfaction of his unpaid 2015 and 2016
Salary of $250,000.
NOTE
9 – BUSINESS COMBINATIONS
Set
out below are the controlled and non-controlled members of the
group as of December 31, 2019, which, in the opinion of the
directors, are material to the group. The subsidiaries as listed
below have share capital consisting solely of ordinary shares,
which are held directly by the Company; the country of
incorporation is also their principal place of business.
SCHEDULE
OF BUSINESS COMBINATIONS
Name
of Entity |
|
Country of Incorporation |
|
Acquisition Date |
|
Voting Equity Interests |
|
|
|
|
|
|
|
|
|
|
Aqua
Mining (PNG) Ltd |
|
Papua New Guinea |
|
28-Feb-2014 |
|
|
90 |
% |
NOTE
10 – LEGAL PROCEEDINGS
We
are not presently a party to any litigation.
NOTE
11 - CONTINGENT LIABILITIES
None.
NOTE
12 – SUBSEQUENT EVENTS
COVID-19
pandemic
The
COVID-19 pandemic announced by the World Health Organisation post
31 January 2020 is having negative impact on the world economy. We
have witnessed unprecedented measures implemented by the government
on strict border security requirements. It is likely to have a
significant impact on the Company’s export sales and associated
supply chains. However, at this point of time, the impact of
COVID-19 is unknown and cannot be quantified. We expect our
business to remain in operation but will manage the unavoidable
disruptions to our best abilities.
NOTE
13 – INVENTORY
Inventories
are valued at cost. Cost is determined using the first-in,
first-out method. The cost of finished goods and work-in-progress
comprises raw materials, direct labour, other direct costs, and
related production overheads (based on normal operating capacity)
but excludes borrowing costs. There are three types of inventories
in three stages of completion. Raw materials comprise of logs that
are on the ground and at the log pond; Work-in-progress comprise of
rough sawn timber at the Rigo site whilst Finished goods are
planed, straightened timber at Laloki for sale. Each would have a
different wholesale value depending on the level of processing. The
stock levels held as raw materials and finished goods are minimal,
and the saleable condition of the finished timber is questionable
and unable to be accurately valued therefore we have written stock
down to nil
net realizable value
ITEM
2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION. |
Cautionary
Notice Regarding Forward Looking Statements
The
information contained in Item 2 contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Actual results may materially differ from those projected
in the forward-looking statements as a result of certain risks and
uncertainties set forth in this report. Although management
believes that the assumptions made and expectations reflected in
the forward-looking statements are reasonable, there is no
assurance that the underlying assumptions will, in fact, prove to
be correct or that actual results will not be different from
expectations expressed in this report.
This
filing contains a number of forward-looking statements which
reflect management’s current views and expectations with respect to
our business, strategies, products, future results and events, and
financial performance. All statements made in this filing other
than statements of historical fact, including statements addressing
operating performance, events, or developments which management
expects or anticipates will or may occur in the future, including
statements related to distributor channels, volume growth,
revenues, profitability, new products, adequacy of funds from
operations, statements expressing general optimism about future
operating results, and non-historical information, are forward
looking statements. In particular, the words “believe,” “expect,”
“intend,” “anticipate,” “estimate,” “may,” variations of such
words, and similar expressions identify forward-looking statements,
but are not the exclusive means of identifying such statements, and
their absence does not mean that the statement is not
forward-looking. These forward-looking statements are subject to
certain risks and uncertainties, including those discussed below.
Our actual results, performance or achievements could differ
materially from historical results as well as those expressed in,
anticipated, or implied by these forward-looking statements. We do
not undertake any obligation to revise these forward-looking
statements to reflect any future events or
circumstances.
Readers
should not place undue reliance on these forward-looking
statements, which are based on management’s current expectations
and projections about future events, are not guarantees of future
performance, are subject to risks, uncertainties and assumptions
(including those described below), and apply only as of the date of
this filing. Our actual results, performance or achievements could
differ materially from the results expressed in, or implied by,
these forward-looking statements. Factors which could cause or
contribute to such differences include, but are not limited to, the
risks to be discussed in our Annual Report on Form 10-K and in the
press releases and other communications to shareholders issued by
us from time to time which attempt to advise interested parties of
the risks and factors which may affect our business. We undertake
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Overview
Kibush
Capital Corp. (the “Company”, “We”, or “Us”) is an exploration
stage company as defined by the Security and Exchange Commission’s
(“SEC”) Industry Guide 7 as the Company has no established reserves
as required under the Industry Guide 7. The Company is undertaking
mineral exploration activities in Australia and Papua New Guinea.
Our business is currently comprised our subsidiary Aqua Mining. Our
Aqua Mining subsidiary is active in timber processing and mineral
exploration in Papua New Guinea.
Results
of Operations
Three
Months Ended June 30 , 2021, Compared to Three Months Ended June
30, 2020
During
the three months ended June 30, 2021, we recognized $49,155 in
revenue. We recognized $39,300 revenue during the three months
ended June 30, 2020. The increase in revenue is attributable to the
success of our timber operations and mineral exploration
activities.
We
had a net loss for the three months ended June 30, 2021, of
$248,744 and a net profit of $122,148 for the three months ended
June 30, 2020.
Liquidity
and Capital Resources
As of
June 30, 2021, the Company had $19,055 cash or cash equivalents on
hand. However, as of that date, we had total current assets of
$120,605 and total current liabilities of $3,458,205 resulting in a
working capital deficit of $3,337,600. As of June 30 ,2020, the
Company had total current assets of $204,976 and total current
liabilities of $3,157,688 resulting in a working capital deficit of
$2,952,712. The increase in working capital deficit arose mainly
due to increase in loans owing to related parties, who provided
advances to the Company for working capital purposes. The Company
intends to fund its exploration through the revenues from the
logging activities and the sale of its equity securities. However,
there can be no assurance that the Company will be successful doing
so. We currently have no agreements, arrangements, or
understandings with any person to obtain funds through bank loans,
lines of credit or any other sources.
Factors
Affecting Future Mineral Exploration Results
We
have generated no revenues from mining exploration, since
inception. As a result, we have only a limited history upon which
to evaluate our future potential performance. Our potential must be
considered by evaluation of all risks and difficulties encountered
by exploration companies which have not yet established business
operations and anticipated results and situations of entering
active exploration activities.
Off-Balance
Sheet Arrangements
We
had no Off-Balance Sheet arrangements during the quarter ended June
30, 2021.
ITEM
3. |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
We
are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
ITEM
4. |
CONTROLS
AND PROCEDURES. |
Evaluation of Disclosure Controls and Procedures
Under
the supervision and with the participation of our management,
including the Principal Executive Officer and Principal Financial
Officer, we have evaluated the effectiveness of our disclosure
controls and procedures as required by Exchange Act Rule 13a-15(b)
as of the end of the period covered by this report. Based on that
evaluation, the Principal Executive Officer and Principal Financial
Officer have concluded that the lack of a functioning audit
committee, the lack of segregation of duties within accounting
functions, and the lack of multiple directors on our board of
directors may result in ineffective oversight in the establishment
and monitoring of required internal controls and procedures, which
could result in a material misstatement in our financial statements
and/or reporting.
Changes
in Internal Control Over Financial Reporting
There
was no change in our internal control over financial reporting
during the quarter ended June 30, 2021, that has materially
affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM
1. |
LEGAL
PROCEEDINGS. |
We
are not presently a party to any litigation.
We
are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
ITEM
2. |
UNREGISTERED
SALE OF EQUITY SECURITIES. |
None.
ITEM
3. |
DEFAULTS
UPON SENIOR SECURITIES. |
None.
ITEM
4. |
MINE
SAFETY DISCLOSURES. |
None.
ITEM
5. |
OTHER
INFORMATION. |
None.
The
following documents are included herein:
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of
the Registrant and in the capacities on this 24th of
September 2021.
|
KIBUSH
CAPITAL CORP. |
|
|
|
|
BY: |
/s/
WARREN SHEPPARD |
|
|
Warren
Sheppard |
|
|
President,
Chief Executive Officer, Chief Financial and Director |
Kibush Capital (CE) (USOTC:DLCR)
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