GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
FOR NINE MONTHS ENDED MAY 31, 2007
UNAUDITED – PREPARED BY MANAGEMENT
The financial statements for the nine-month period ended May 31, 2007
have not been reviewed by the Company’s auditors.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
| | (Unaudited) MAY 31 | AUGUST 31 |
| | 2007 | 2006 |
ASSETS | | |
Current | | |
Cash and cash equivalents | $188,981 | $134,632 |
Short term investments | 7,430,945 | 1,512,759 |
Accounts receivable (Note 3) | 63,014 | 55,227 |
Prepaid expenses | 31,495 | 10,163 |
| | 7,714,435 | 1,712,781 |
Mineral Property Acquisition Costs (Note 4) | 334,773 | 334,773 |
Mineral Property Exploration Costs (Note 4) | 3,069,738 | 2,638,679 |
Capital Assets (Note5) | 57,650 | 52,621 |
| | $ 11,176,596 | $4,738,854 |
LIABILITIES | | |
Current Accounts payable and accrued liabilities |
$43,043 |
$34,851 |
SHAREHOLDERS’ EQUITY | | |
Share Capital (Note 6) | 18,908,329 | 11,916,774 |
Contributed Surplus(Note 6) | 1,257,185 | 1,238,038 |
Deficit | (9,031,961) | (8,450,809) |
| | 11,133,553 | 4,704,003 |
| | $11,176,596 | $4,738,854 |
Approved by the Directors:
“J. Paul Sorbara”
“Stephen W. Pearce”
The accompanying notes are integral part of these consolidated financial statements
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(Unaudited)
| | 3 MONTHS ENDED
MAY 31 | 9 MONTHS ENDED
MAY 31 |
| | 2007 | 2006 | 2007 | 2006 |
Expenses | | | | |
Amortization | $2,995 | 2,046 | $8,409 | 6,343 |
Automobile | 1,228 | 816 | 3,112 | 3,001 |
Foreign exchange loss | 17,523 | (443) | 34,099 | 12,151 |
Management fees | 30,000 | 30,000 | 90,000 | 90,000 |
Office and general | 61,737 | 22,342 | 133,201 | 64,015 |
Professional fees | 14,196 | 5,663 | 52,885 | 40,508 |
Rent and utilities | 17,811 | 15,110 | 51,086 | 47,981 |
Transfer agent and filing fees | 48,778 | 1,974 | 57,514 | 23,580 |
Travel | 7,831 | 5,343 | 21,050 | 18,535 |
Stock based compensation | 12,550 | - | 19,147 | |
Wages and benefits | 55,683 | 40,033 | 152,527 | 140,996 |
Loss Before The Following | 270,332 | 122,884 | 623,030 | 447,110 |
Interest Income | (20,317) | (11,391) | (41,878) | (29,987) |
Net Loss For The Period | 250,015 | 111,493 | 581,152 | 417,123 |
Deficit, Beginning of Period | 8,781,946 | 7,625,065 | 8,450,809 | 7,319,435 |
Deficit, End of Year Period | $9,031,961 | $7,736,558 | $9,031,961 | $7,736,558 |
Loss Per Share – Basic And Diluted | $(0.00) | $(0.00) | $(0.01) | $(0.01) |
Weighted Average Number of Common Shares Outstanding – Basic And Diluted | 49,935,061 | 42,196,490 | 44,862,088 | 39,107,490 |
The accompanying notes are integral part of these consolidated financial statements.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | 3 MONTHS ENDED
MAY 31 | 9 MONTHS ENDED
MAY 31 |
Cash Provided By (Used For) Operating Activities | 2007 | 2006 | 2007 | 2006 |
Net loss for the period | $(250,015) | $(111,493) | ($581,152) | $(417,123) |
Items not affecting cash: | | | | |
Stock based compensation | 12,550 | - | 19,147 | - |
Amortization | 2,995 | 2,046 | 8,409 | 6,343 |
Change in non-cash working capital items: | | | | |
Accounts receivable | (32,681) | 10,202 | (7,787) | (3,841) |
Accounts payable and accrued liabilities | (14,156) | 149,071 | 8,192 | 150,968 |
Prepaid expenses | (27,174) | 2,148 | (21,332) | 1,076 |
Cash Used In Operating Activities | (296,726) | 51,974 | (574,523) | (262,577 |
Investing Activities | | | | |
Expenditures on mineral properties | (232,641) | (447,196) | (431,059) | (587,317) |
Purchase of short term investments | (6,500,945) | (125,000) | (5,918,186) | (924,600) |
Purchase of capital assets | (5,934) | (1,677) | (13,438) | (3,583) |
| | (6,739,520) | (573,873 | (6,362,683) | (1,515,500) |
Financing Activities | | | | |
Share issuances for cash | (7,367,200) | 490,325 | 7,367,200 | 1,930,587 |
Share issue (costs) recovery | (375,646) | - | (375,646) | (127,170 |
| | 6,991,555 | 490,325 | 6,991,555 | 1,803,417 |
Increase (Decrease) In Cash | (44,691) | (31,574) | 54,349 | 25,340 |
Cash And Cash Equivalents, Beginning of Period | 233,672 | 121,551 | 134,632 | 64,637 |
Cash And Cash Equivalents, End Of period | $188,981 | $89,977 | $188,981 | $89,977 |
The accompanying notes are integral part of these consolidated financial statements.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
1.
NATURE OF OPERATIONS
The Company was incorporated under the Company Act of British Columbia on June 12, 1996.
The Company’s principal business activity is the exploration of mineral properties in Mexico. The Company has not yet determined whether these properties contain reserves that are economically recoverable.
The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral concessions, the ability of the Company to obtain financing to complete the development, and to attain future profitable production from the properties or proceeds from disposition.
2.
SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with Canadian generally accepted accounting principles.
a)
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its 100% owned subsidiaries, Minera Delta S.A. de C.V. of Mexico, and 4247 Investments Ltd. of British Columbia.
b)
Use of Estimates
Financial statements prepared in conformity with generally accepted accounting principles require management to make estimates and assumptions, which can affect the reported balances. In determining estimates of the valuation of its assets, the Company relies on assumptions regarding applicable industry performance and prospects, as well as general business and economic conditions that prevail and are expected to prevail. Assumptions underlying the asset valuations are limited by the availability of reliable comparable data and the uncertainty of predictions concerning future events.
c)
Cash and Cash Equivalents
Cash and cash equivalents consists of cash and those short term money market instruments that are readily convertible to cash with an original term of less than ninety days. Term deposits with maturity terms greater than ninety days are classified as short term investments.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
d)
Mineral Property Acquisition and Exploration Costs
The Company records its interest in mineral properties at cost, less option income realized. The cost of mineral properties and related exploration costs are deferred until the properties are brought into production, sold or abandoned. These deferred costs will be amortized on the unit-of-production basis over the estimated useful life of the properties following the commencement of production or are written-off if the properties are sold, allowed to lapse or abandoned. Amounts shown for the mineral properties and their related deferred exploration costs represent costs incurred and are not intended to reflect present or future values.
Management reviews capitalized costs on its mineral properties on a periodic basis and will recognize impairment in value based upon current exploration results and upon management’s assessment of the future probability of profitable revenues from the property or from sale of the property.
e)
Capital Assets
Capital assets are recorded at cost and are amortized on a straight-line basis over their estimated useful lives. The following rates are applied:
Computer equipment | 25% |
Furniture and fixtures | 10% |
Vehicles | 25% |
The Company periodically evaluates the recoverability of its property, plant and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimates of future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount.
f)
Asset Retirement Obligations
The Company follows the recommendations in CICA Handbook Section 3110 – “Asset Retirement Obligations” with respect to asset retirement obligations. Under Section 3110, legal obligations associated with the retirement of tangible long-lived assets are recorded as liabilities. The liabilities are calculated using the net present value of the cash flows required to settle the obligation. A corresponding amount is capitalized to the related asset. Asset retirement costs are charged to earnings in a manner consistent with the depreciation, depletion and amortization of the underlying asset. The liabilities are subject to accretion over time for changes in the fair value of the liability through charges to accretion which is included in cost of sales and operating expenses.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
f)
Asset Retirement Obligations (Continued)
It is possible that the Company’s estimates of its ultimate asset retirement obligations could change as a result of changes in regulations, the extent of environmental remediation required, the means of reclamation or of cost estimates. Changes in estimates are accounted for prospectively from the period the estimate is revised.
As at May 31, 2007, no provision has been made for asset retirement obligations.
g)
Loss Per Share
Loss per share has been calculated using the weighted average number of common shares outstanding for the year. The Company has adopted the new recommendations of the Canadian Institute of Chartered Accountants, whereby diluted earnings per share is calculated using the treasury stock method. Basic and diluted losses per share are the same, as the effect of potential issuances of shares under warrants or share option arrangements would be anti-dilutive.
h)
Stock Based Compensation
The Company applies the accounting Standard 3870 – “Stock-Based Compensation and Other Stock Based Payments”) requirement of the Canadian Institute of Chartered Accountants (“CICA” ). Under this standard all stock options granted to non-employees are accounted for using the fair value-based method of accounting. During 2004, the company adopted, with retroactive application, the fair value-based method of accounting for stock options granted to employees and directors. Compensation costs attributable to share options granted are measured at fair value at the grant date and are expensed with a corresponding increase to contributed surplus. Upon exercise of the stock options, consideration paid by the option holder together with the amount previously recognized in contributed surplus is recorded as an increase to share capital.
i)
Income Taxes
Income taxes are calculated using the liability method of accounting. Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax liabilities or assets. Future tax assets are recognized to the extent that they are considered more likely than not to be realized. Future income tax liabilities or assets are calculated using the tax rates anticipated to apply in the periods that the temporary differences are expected to reverse.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
2.
SIGNIFICANT ACCOUNTING POLICIES (Continued)
j)
Foreign Currency Translation
Minera Delta S.A. de C.V. is an integrated foreign operation and has been translated as follows; monetary items and those non-monetary items that are carried at market are translated to Canadian dollars at the rate prevailing on the balance sheet date. Non- monetary items, other than those carried at market, are translated at historical exchange rates. Income statement items have been translated on the date of occurrence. Amortization expense is translated at the same exchange rates as the assets to which they relate. The resulting gains or losses arising on the translation of foreign currency items are credited or charged to earnings.
k)
Financial Instruments
The carrying value of cash and cash equivalents, short term investments, accounts receivable and accounts payable and accrued liabilities approximate their fair value due to their short-term nature, unless otherwise noted.
l)
Asset Impairment
On an annual basis or when impairment indicators arise, the Company evaluates the future recoverability of its resource property costs. Impairment losses or write downs are recorded in the event the net book value of such assets exceeds the estimated indicated future recoverability of its resource property costs. Impairment losses or write downs are recorded in the event the net book value exceeds the estimated indicted future cash flows attributable to such assets.
m)
Variable Interest Entities
The Canadian Institute of Chartered Accountants (CICA) issued Accounting Guideline 15, “Consolidation of Variable Interest Entities”, to provide accounting guidance related to variable interest entities (“VIE”). A VIE exists when the entity’s equity investment is at risk. When a VIE is determined to exist, the guidance requires the VIE to be consolidated by the primary beneficiary. The Company adopted the Guideline effective September 1, 2005 and has determined that it does not have a primary beneficiary interest in VIEs.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
3.
ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
| | 2007 | 2006 |
| | | |
Taxes recoverable | $ 5,753 | 30,126 |
Interest receivable | 18,992 | 21,137 |
Other receivable | 38,269 | 498 |
| | | |
| | $ 63,014 | 51,761 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
4.
DEFERRED MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
State of Chihuahua, Mexico
| |
SAN TIMOTEO ORO |
NUEVA UNION |
LA REFORMA |
CORONA |
OTEROS LA ESPERANZA | BUFALO LA HERMOSA LA BARRANCA BECK EL CHAMIZAL | LOS HILOS LAS BOLAS EL MANTO DON LAZARO AMPLIACION LA VERDE |
NOPALERA FLOR DEL TRIGO |
TOTAL 2007 |
TOTAL 2006 |
Acquisition costs | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - |
Exploration costs | | | | | | | | | | |
Assaying | 24,468 | - | - | - | - | - | 11,446 | - | 35,914 | 105,115 |
Drilling | 132,612 | - | - | - | - | - | 1,018 | - | 133,630 | 286,862 |
Geology and mapping | 17,893 | 1,445 | 1,564 | - | - | 2,310 | 40,827 | - | 64,039 | 66,232 |
Property taxes and
passage rights | 649 | 152 | 3,705 | 3,205 | 946 | 4,733 | 1,199 | 12,653 | 27,242 | 19,463 |
Salaries | 18,909 | 12,918 | - | - | - | - | 10,734 | - | 42,561 | 23,304 |
Travel | 4,174 | - | - | - | - | 64 | 503 | - | 4,741 | 11,449 |
Road construction and site preparation | 57,860 | 376 | 125 | - | - | 302 | 10,644 | - | 69,307 | 47,074 |
Miscellaneous | 32,920 | 6,333 | 135 | - | - | 64 | 7,242 | 6,931 | 53,625 | 27,817 |
Current costs | 289,485 | 21,224 | 5,529 | 3,205 | 946 | 7,473 | 83,613 | 19,584 | 431,059 | 587,316 |
Balance, beginning of year | 784,405 | 26,695 | 474,358 | 22,489 | 7,178 | 12,409 | 1,325,554 | 320,364 | 2,973,452 | 2,306,954 |
Balance, end of period | $1,073,890 | $ 47,919 | $ 479,887 | $25,694 | $ 8,124 | $ 19,882 | $ 1,409,167 | $ 339,948 | $ 3,404,511 | $2,894,270 |
Costs summary | | | | | | | | | | |
Acquisition | $69,257 | $ - | $75,000 | $ - | $ - | $ - | $ 187,123 | $ 3,393 | $ 334,773 | 334,773 |
Exploration | $1,004,633 | $47,919 | $404,887 | 25,694 | $ 8,124 | $ 19,882 | $1,222,044 | $ 336,555 | $ 3,069,738 | 2,559,497 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
4.
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
State of Chihuahua, Mexico6
| |
SAN TIMOTEO ORO |
NUEVA UNION |
LA REFORMA |
CORONA |
OTEROS LA ESPERANZA | BUFALO LA HERMOSA LA BARRANCA BECK EL CHAMIZAL | LOS HILOS LAS BOLAS EL MANTO DON LAZARO AMPLIACION LA VERDE |
NOPALERA FLOR DEL TRIGO |
TOTAL 2006 |
TOTAL 2005 |
Acquisition costs | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - |
Exploration costs Assaying | - | - | - | - | - | 89 | 48,737 | 56,289 | 105,115 | 16,424 |
Drilling | - | - | - | - | - | - | 184,615 | 102,247 | 286,862 | 105,437 |
Geology and mapping | - | 107 | 5,125 | - | - | 1,290 | 50,016 | 9,694 | 66,232 | 142,635 |
Property taxes and passage rights | 427 | 151 | 3,049 | 2,632 | 656 | 5,102 | 1,230 | 6,216 | 19,463 | 45,455 |
Salaries | - | 12,589 | - | - | - | - | 10,715 | - | 23,304 | 20,813 |
Travel | - | 2,580 | - | 238 | - | 123 | 8,134 | 374 | 11,449 | 10,884 |
Road construction and site preparation | - | - | - | - | - | - | - | - | - | - |
Miscellaneous | - | - | - | | - | - | 30,953 | 16,121 | 47,074 | 3,232 |
| | - | 4,125 | - | 524 | | 837 | 17,182 | 5,149 | 27,817 | 17,318 |
Current costs | | 19,552 | 8,174 | | 656 | 7,441 | 351,582 | 196,090 | 587,316 | 362,198 |
| | 427 | | | 3,394 | | | | | | |
Balance, beginning of period | 777,457 | - | 446,279 | 16,514 | 5,887 | - | 950,012 | 110,805 | 2,306,954 | 2,348,693 |
Balance, end of period | $ 777,884 | $ 19,552 | $ 454,453 | $ 19,908 | $ 6,543 | $ 7,441 | $1,301,594 | $ 306,895 | $ 2,894,270 | 2,710,891 |
| | | | | | | | | | | |
Costs summary Acquisition | $ 69,257 | $ - | $ 75,000 | $ - | $ - | $ - | $ 187,123 | $ 3,393 | $ 334,773 | 386,859 |
Exploration | $ 708,627 | $ 19,552 | $ 379,453 | $19,908 | $ 6,543 | $ 7,441 | $ 1,114,471 | $ 303,502 | $2,559,497 | 2,324,032 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
4.
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS (Continued)
The Company has various net smelter returns on specific claims forming a part of the Company’s properties. The net smelter returns range from 1% to 3%, which have buyouts ranging from US$250,000 to US$2,000,000.
In May 2007, the Company optioned Corona and Chamizal Properties to a company which undertook to spend $500,000 and $200,000 on the properties and issue 300,000 and 150,000 shares respectively to the Company within three years.
5.
CAPITAL ASSETS
| | | 2007 | |
COST | ACCUMULATED AMORTIZATION | NET |
Computer equipment | $ 25,158 | 16,235 | 8,923 |
Furniture and fixtures | 32,125 | 7,775 | 24,350 |
Vehicles | 38,802 | 14,181 | 24,621 |
| | $ 96,085 | 38,191 | 57,894 |
| | | 2006 | |
| | COST | ACCUMULATED AMORTIZATION | NET |
Computer equipment | $ 21,580 | 14,446 | 7,134 |
Furniture and fixtures | 20,359 | 6,185 | 14,174 |
Vehicles | 32,018 | 10,754 | 21,264 |
| | $ 73,957 | 31,385 | 42,572 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
6.
SHARE CAPITAL
Authorized
The authorized share capital of the Company consists of an unlimited number of shares without par value.
Issued and Fully Paid | NUMBER OF
SHARES |
AMOUNT |
Balance, August 31, 2003 | 28,361,689 | $ 7,835,501 |
Issued for cash at $0.20 per share | 200,000 | 40,000 |
Issued for options exercised at $0.25 per share | 150,000 | 37,500 |
Issued for warrants exercised at $0.25 per share | 12,627 | 3,157 |
Issued for warrants exercised at $0.22 per share | 7,310,884 | 1,608,395 |
Fair value of options allocated to shares on exercise | - | 14,870 |
Issued for cash at $0.45 per share | 1,200,000 | 540,000 |
Share issue costs recovery | - | 4,176 |
Balance, August 31 2006 and February 28, 2005 | 37,235,200 | 10,083,599 |
Issued for warrants exercised at $0.25 per share | 11,111 | 2,778 |
Balance, May 31 and August 31, 2005 | 37,246,311 | 10,086,377 |
Issued for options exercised at $0.25 per share | 15,000 | 3,750 |
Issued for options exercised at $0.36 per share | 25,000 | 9,000 |
Issued for warrants exercised at $0.55 per share | 40,000 | 22,000 |
Issued for cash at $0.35 per share | 4,000,000 | 1,400,000 |
Issued for agent’s commission | 15,750 | 5,512 |
Issued for options exercised at $0.25 per share | 50,000 | 12,500 |
Issued for options exercised at $0.30 per share | 50,000 | 15,000 |
Issued for warrants exercised at $0.55 per share | 841,500 | 462,825 |
Fair value of options allocated to shares on exercise | - | 26,980 |
Fair value of agent’s warrants | - | 80,013 |
Share issue costs | - | (207,183) |
Balance, May 31 2006 and August 31, 2006 | 42,283,561 | 11,916,774 |
Issued for cash at $0.40 per share | 16,618,000 | 6,647,200 |
Issued for warrants exercised at $0.45 per share | 1,600,000 | 720,000 |
Fair value of agent’s warrants | - | 335,908 |
Share issue costs | - | (711,554) |
Balance, May 31 2007 | 60,501,561 | $18,908,328 |
In February 2006, the Company completed a brokered private placement for 4 million units at a price of $0.35 per unit. Each unit consisted of one common share and one nontransferable share purchase warrant exercisable for a period of one year at a price of $0.45 for each whole warrant. Subsequently the warrants were extended until May 15, 2007. In addition, 400,000 warrants as well as 15,750 units were issued to the agent, as commission.
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
6.
SHARE CAPITAL (Continued)
In April 2007, the Company closed a private placement of 16,618,000 units at a price of $0.40 per unit. Each unit consisted of one common share and one non-transferable share purchase warrant exercisable for a period of two years at a price of $0.45. Once resale restrictions on the Shares having expired and upon Golden Goliath's shares trading at or above a weighted average trading price of $0.75 for 20 consecutive trading days, the Company may give notice that the Warrants will expire 30 days from the date of providing such notice. The Company engaged Bolder Investment Partners, Ltd. as agent. They received a commission of $351,235 in cash and 252,476 Units, having the same terms as those issued pursuant to the private placement, as well as 1,482,250 agent`s warrants exercisable at $0.45 per share for two years.
a)
Outstanding Warrants
As at May 31, 2007, the Company has 18,352,726 shares purchase warrants outstanding, exercisable at $0.45 until April 20, 2009.
b)
Stock Options
A summary of changes in stock options since August 31, 2003 is presented below:
| |
NUMBER
OF
SHARES | WEIGHTED AVERAGE EXERCISE PRICE |
Balance, August 31, 2003 | 2,075,000 | $ 0.25 |
Granted | 680,000 | 0.36 |
Granted | 50,000 | 0.52 |
Cancelled | (50,000) | 0.35 |
Exercised | (150,000) | 0.25 |
Balance, May 31, 2004 | 2,605,000 | 0.28 |
Cancelled | (50,000) | 0.35 |
Granted | 765,000 | 0.30 |
Balance, May 31 2005 | 3,320,000 | 0.33 |
Expired | (1,880,000) | 0.25 |
Exercised | (140,000) | 0.32 |
Balance, May 31, 2006 | 1,300,000 | 0.31 |
Granted | 2,275,000 | 0.36 |
Granted | 25,000 | 0.36 |
Granted | 50,000 | 0.45 |
Balance, May 31, 2007 | 3,625,000 | $ 0.34 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
6.
SHARE CAPITAL (Continued)
b)
Stock Options
The following summarizes information about stock options outstanding at May 31, 2007:
| | OPTIONS OUTSTANDING | OPTIONS EXERCISABLE |
| | | WEIGHTED | | | |
| | | AVERAGE | WEIGHTED | | WEIGHTED |
| | NUMBER | REMAINING | AVERAGE | NUMBER | AVERAGE |
| | OF | CONTRACTUAL | EXERCISE | OF | EXERCISE |
| | OPTIONS | LIFE | PRICE | OPTIONS | PRICE |
| | | | | | |
| | 3,625,000 | 3.23 years | $0.34 | 3,625,000 | $0.34 |
The fair value for options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate of 4.15% (2006, 4.47%, 2005 – 3.5%), dividend yield of nil, volatility factor of 93.34% (2006, 95.67%), and a weighted average expected life of the options of 5 years (2006– 5 years).
c)
Contributed Surplus
The following table summarizes the Company’s Contributed Surplus:
Balance, August 31, 2003 | $ 360,827 |
Stock options granted | 181,210 |
Stock options exercised | (14,870) |
Balance, May 31, 2005 | 527,167 |
Stock options granted | 127,087 |
Balance, May 31, 2006 | 654,254 |
Stock options granted | 629,911 |
Stock options exercised | (26,980) |
Balance, May 31, 2007 | $ 1,257,185 |
7.
INCOME TAXES
The Company is subject to income taxes on its unconsolidated financial statements in Canada and Mexico. The consolidated provision for income taxes varies from the amount that would be computed from applying the combined Federal, Provincial and Mexican Income Tax rates to
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
7.
INCOME TAXES (Continued)
the net loss before taxes are as follows:
| | August 31, 2006 | August 31, 2005 |
Combined statutory tax rate | 33% | 36% |
Expected income tax recovery | $ (376,746) | $ (386,257) |
Non-deductible differences | 195,229 | 136,759 |
Effect of changes in tax rate | (181,698) | - |
Unrecognized tax losses | 363,215 | 249,498 |
Income tax provision | $ - | $ - |
The significant components of the Company’s future income tax assets are as follows:
| | | |
August 31, 2006 | August 31, 2005 |
Mineral properties | $ 867,160 | $ 897,870 |
Loss available for future periods | 2,151,077 | 2,544,822 |
Valuation allowance | (3,018,237) | (3,442,692) |
Net future income tax asset | $ - | $ - |
The Company has Canadian and Mexican non-capital losses of approximately $6,752,000 which may be carried forward and applied against taxable income in future years. These losses expire as follows:
2007 | $279,000 |
2008 | $738,000 |
2009 | $682,000 |
2010 | $1,003,000 |
2011 | $665,000 |
2012 | $1,185,000 |
2013 | $257,000 |
2014 | $661,000 |
2015 | $697,000 |
2026 | $585,000 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
8.
RELATED PARTY TRANSACTIONS
a)
Accounts payable and accrued liabilities include $3,382 (2006-$3,382) due to a company controlled by a director.
b)
During the nine months ended May 31, 2007, the Company paid $90,000 (2006 –$90,000) recorded as management fees for geological and management services to a company controlled by a director.
c)
During the nine months ended May 31, 2007, the Company paid $38,961 (2006 -$26,707) in wages and benefits to a director.
d)
During the nine months ended May 31, 2007, the Company paid $39,500 (2006- $31,500) in respect of office and administration costs to a management company controlled by a director of the Company.
9.
SEGMENTED INFORMATION
The Company has one operating segment, which is mineral exploration. All mineral properties are located in Mexico. All option proceeds are attributable to the Mexican mineral properties. Assets by geographic segment, at cost, are as follows:
May 31, 2007 | CANADA | MEXICO | TOTAL |
| | | |
Current assets | $7,611,747 | $ 102,688 | $7,714,435 |
Capital assets | 12,968 | 44,682 | 57,650 |
Mineral property costs | - | 3,404,511 | 3,404,511 |
Total assets | 7,624,715 | 3,551,881 | 11,176,596 |
Interest income | 41,334 | 544 | 41,878 |
Net loss | 426,466 | 154,686 | 581,152 |
May 31, 2006 | | | |
Current assets | $ 2,014,129 | $ 48,972 | $ 2,063,101 |
Capital assets | 11,437 | 31,135 | 42,572 |
Mineral property costs | 1,256,440 | 1,637,830 | 2,894,270 |
Total assets | 3,282,006 | 1,717,937 | 4,999,943 |
Interest income | 24,647 | 5,340 | 29,987 |
Net loss | 289,558 | 127,565 | 417,123 |
GOLDEN GOLIATH RESOURCES LTD.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2007
(Unaudited)
10.
COMPARATIVE INFORMATION
Certain comparative information has been reclassified to agree to the disclosure adopted in the current year.
11.
SUBSEQUENT EVENTS
a)
In July 2007, the Company granted 1,075,000 incentive stock options to directors and officers of the company, and 375,000 incentive stock options to employees and consultants of the company at a price of $0.40 per share, exercisable for a period of five years.
b)
In July 2007, the Exchange approved an investment relation agreement entered into by the Company with a consultant, for a three months period, at a monthly fee of US$7,500 plus 60,000 Golden Goliath Resources stock options. The contract would be renewable for two further six monthly periods, at a similar monthly cash payment and issuance of 120,000 shares per each period.
