UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedJune 30, 2014
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________
Commission file number:333-159300
GOLD TORRENT, INC.
(Exact name of registrant as specified in its charter)
Nevada | 06-1791524 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
960 Broadway Avenue
Suite 160
Boise, Idaho 83707
(Address of principal executive offices, including zip code)
(208) 343-1413
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Exchange Act:None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, Par Value $0.001
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ]No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ]No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes[X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes[X] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405of this chapter) is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q.[X]
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 of the Exchange Act.
Large accelerated filer[ ] Accelerated filer [ ] Non-accelerated filer [ ]Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ]No[X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 12, 2014, the registrant’s outstanding common stock consisted of 4,635,000shares.
Table of Contents
2 |
PART 1 – FINANCIAL INFORMATION
Item 1. Interim Financial Statements
The unaudited interim financial statements of GOLD TORRENT, INC. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to US dollars unless otherwise noted.
GOLD TORRENT, INC.
(A Development Stage Company)
June 30, 2014
3 |
GOLD TORRENT, INC.
(A Development Stage Company)
Interim Balance Sheets
(Unaudited - Expressed in US dollars)
June 30, 2014 | March 31, 2014 | |||||||
Assets | ||||||||
Current | ||||||||
Cash | $ | 11,045 | $ | 35,696 | ||||
Intangible asset (note 7) | 2,060 | 2,060 | ||||||
$ | 13,105 | $ | 37,756 | |||||
Liabilities | ||||||||
Current | ||||||||
Accounts payable (note 5) | $ | 468,546 | $ | 453,355 | ||||
Accrued liabilities (note 3) | 10,000 | 10,000 | ||||||
Stockholders’ loans (note 6) | 26,156 | 40,656 | ||||||
504,702 | 504,011 | |||||||
Stockholders’ Deficiency | ||||||||
Common Stock (note 4) | ||||||||
Authorized: | ||||||||
200,000,000 common shares, $0.001 par value 20,000,000 preferred shares, $0.001 par value | ||||||||
Issued and outstanding: | ||||||||
4,635,000 common shares, $0.001 par value | 22,963 | 22,938 | ||||||
Contributed Surplus (note 4) | 31,225 | - | ||||||
Additional Paid-in Capital | 70,262 | 70,262 | ||||||
Deficit Accumulated During the Development Stage | (616,047 | ) | (559,455 | ) | ||||
(491,597 | ) | (466,255 | ) | |||||
$ | 13,105 | $ | 37,756 |
Nature of operations and going concern (note 1)
See accompanying notes to interim financial statements.
F-1 |
GOLD TORRENT, INC.
(A Development Stage Company)
Interim Statements of Operations
(Unaudited - Expressed in US dollars)
For the Three Months Ended June 30, 2014 | For the Three Months Ended June 30, 2013 | Period from August 15, 2006 (inception) to June 30, 2014 | ||||||||||
Expenses | ||||||||||||
Accounting and legal | $ | 22,000 | $ | 9,333 | $ | 332,903 | ||||||
Bank charges and finance fees | 817 | 150 | 6,805 | |||||||||
Consulting and development fees | - | 35,000 | 133,728 | |||||||||
Finder’s fees (note 4) | 31,250 | - | 31,250 | |||||||||
Office | 267 | - | 7,259 | |||||||||
Licenses and fees | 2,258 | 4,800 | 103,574 | |||||||||
Amortization | - | - | 528 | |||||||||
Net Loss and Comprehensive Loss for Period | $ | (56,592 | ) | $ | (49,283 | ) | $ | (616,047 | ) | |||
Basic and diluted loss per share | $ | (0.01 | ) | $ | (0.01 | ) | ||||||
Weighted average number of common shares outstanding | 4,635,000 | 4,582,000 |
See accompanying notes to interim financial statements.
F-2 |
GOLD TORRENT, INC.
(A Development Stage Company)
Interim Statements of Cash Flows
(Unaudited - Expressed in US dollars)
For the Three Months Ended June 30, 2014 | For the Three Months Ended June 30, 2013 | Period from August 15, 2006 (inception) to June 30, 2014 | ||||||||||
Cash Flow from Operating Activities | ||||||||||||
Net loss for the period | $ | (56,592 | ) | $ | (49,283 | ) | $ | (616,047 | ) | |||
Amortization of equipment | - | - | 528 | |||||||||
Shares issued for services | 31,250 | - | 32,400 | |||||||||
Changes in assets and liabilities | ||||||||||||
Accounts payable | 15,191 | 2,927 | 468,546 | |||||||||
Accrued liabilities | - | - | 10,000 | |||||||||
Cash Used in Operating Activities | (10,151 | ) | (46,356 | ) | (104,573 | ) | ||||||
Cash Flow from Investing Activities | ||||||||||||
Purchase of intangible asset | - | - | (2,060 | ) | ||||||||
Purchase of equipment | - | - | (528 | ) | ||||||||
Cash Used in Investing Activities | - | - | (2,588 | ) | ||||||||
Cash Flow from Financing Activities | ||||||||||||
Net proceeds from issuance of common stock | - | - | 92,050 | |||||||||
Loan received from third party | - | - | 400,000 | |||||||||
Advances to related party | - | - | (400,000 | ) | ||||||||
Advances from related parties (note 5) | - | 46,206 | - | |||||||||
Loans received from (repaid to) stockholders | (14,500 | ) | - | 26,156 | ||||||||
Cash (Used) Provided by Financing Activities | (14,500 | ) | 46,206 | 118,206 | ||||||||
Increase (Decrease) in Cash | (24,651 | ) | (150 | ) | 11,045 | |||||||
Cash, Beginning of Period | 35,696 | 2,861 | - | |||||||||
Cash, End of Period | $ | 11,045 | $ | 2,711 | $ | 11,045 | ||||||
Supplemental Information | ||||||||||||
Stock dividend issued for no consideration | $ | - | $ | - | $ | 20,619 | ||||||
Shares issued for services | $ | - | $ | - | $ | 32,400 | ||||||
Tax paid | $ | - | $ | - | $ | - | ||||||
Interest paid | $ | - | $ | - | $ | - |
See accompanying notes to interim financial statements.
F-3 |
GOLD TORRENT, INC.
(A Development Stage Company)
Interim Statements of Stockholders’ Deficiency
(Unaudited - Expressed in US dollars)
Shares of Common Stock Issued | Common Stock | Share Subscriptions | Contributed Surplus | Additional Paid-in Capital | Deficit Accumulated During the Development Stage | Total | ||||||||||||||||||||||
Balance, August 15, 2006 (inception) | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
Shares issued to founders for services | 2,300,000 | 1,150 | - | - | - | - | 1,150 | |||||||||||||||||||||
Shares issued for cash | 320,000 | 160 | - | - | 7,840 | - | 8,000 | |||||||||||||||||||||
Net loss for period | - | - | - | - | - | (55,294 | ) | (55,294 | ) | |||||||||||||||||||
Balance, March 31, 2007 | 2,620,000 | 1,310 | - | - | 7,840 | (55,294 | ) | (46,144 | ) | |||||||||||||||||||
Shares issued for cash | 228,000 | 114 | - | - | 5,586 | - | 5,700 | |||||||||||||||||||||
Share subscriptions received | - | - | 43,350 | - | - | - | 43,350 | |||||||||||||||||||||
Net loss for year | - | - | - | - | - | (37,962 | ) | (37,962 | ) | |||||||||||||||||||
Balance, March 31, 2008 | 2,848,000 | 1,424 | 43,350 | - | 13,426 | (93,256 | ) | (35,056 | ) | |||||||||||||||||||
Shares issued for cash | 1,734,000 | 867 | (43,350 | ) | - | 42,483 | - | - | ||||||||||||||||||||
Net loss for year | - | - | - | - | - | (52,476 | ) | (52,476 | ) | |||||||||||||||||||
Balance, March 31, 2009 | 4,582,000 | 2,291 | - | - | 55,909 | (145,732 | ) | (87,532 | ) | |||||||||||||||||||
Net loss for year | - | - | - | - | - | (63,204 | ) | (63,204 | ) | |||||||||||||||||||
Balance, March 31, 2010 | 4,582,000 | 2,291 | - | - | 55,909 | (208,936 | ) | (150,736 | ) | |||||||||||||||||||
Stock dividend | - | 20,619 | - | - | (20,619 | ) | - | - | ||||||||||||||||||||
Net loss for year | - | - | - | - | - | (59,922 | ) | (59,922 | ) | |||||||||||||||||||
Balance, March 31, 2011 | 4,582,000 | 22,910 | - | - | 35,290 | (268,858 | ) | (210,658 | ) | |||||||||||||||||||
Net loss for year | - | - | - | - | - | (63,259 | ) | (63,259 | ) | |||||||||||||||||||
Balance, March 31, 2012 | 4,582,000 | 22,910 | - | - | 35,290 | (332,117 | ) | (273,917 | ) | |||||||||||||||||||
Net loss for year | (96,202 | ) | (96,202 | ) | ||||||||||||||||||||||||
Balance, March 31, 2013 | 4,582,000 | 22,910 | - | - | 35,290 | (428,319 | ) | (370,119 | ) | |||||||||||||||||||
Shares issued for cash | 28,000 | 28 | 34,972 | - | 35,000 | |||||||||||||||||||||||
Net loss for year | - | - | - | - | - | (131,136 | ) | (131,136 | ) | |||||||||||||||||||
Balance, March 31, 2014 | 4,610,000 | $ | 22,938 | $ | - | $ | - | $ | 70,262 | $ | (559,455 | ) | $ | (466,255 | ) | |||||||||||||
Shares issued for services | 25,000 | 25 | - | 31,225 | - | - | 31,250 | |||||||||||||||||||||
Net loss for the period | - | - | - | - | - | (56,592 | ) | (56,592 | ) | |||||||||||||||||||
Balance, June 30, 2014 | 4,635,000 | $ | 22,963 | $ | - | $ | 31,225 | $ | 70,262 | $ | (616,047 | ) | $ | (491,597 | ) |
See accompanying notes to interim financial statements.
F-4 |
GOLD TORRENT, INC.
(A Development Stage Company)
Notes to Interim Financial Statements
Three Months Ended June 30, 2014
(Unaudited - Expressed in US dollars)
1. | Nature of Operations and Going Concern |
GOLD TORRENT, INC. (the “Company”) is a development stage company and was incorporated as a Nevada company on August 15, 2006. Since inception, the Company has been creating, testing and developing mobile applications, games and tools designed to engage consumers in transacting business via mobile devices. Going forward, the Company plans to focus on acquiring ownership in late-stage exploration to development stage gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America.
The Company has incurred losses since inception and has an accumulated deficit of $616,047 as of June 30, 2014, with limited resources and no source of operating cash flows. As at June 30, 2014, the Company has a working capital deficiency of $491,597 (March 31, 2014 - $468,315).
The Company’s continuance as a going concern is dependent on the success of the efforts of its directors and principal stockholders in providing financial support in the short-term, raising additional capital through equity or debt financing either from its own resources or from third parties, and achieving profitable operations. In the event that such resources are not secured, the assets may not be realized or liabilities discharged at their carrying amounts, and the difference from the carrying amounts reported in these unaudited interim financial statements could be material.
These unaudited interim financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of the assets or the amounts and classifications of the liabilities that may result from the inability of the Company to continue as a going concern.
2. | Significant Accounting Policies |
(a) | Basis of presentation |
These unaudited interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s functional and reporting currency is the US dollar.
These unaudited interim financial statements reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of the interim financial information. The results of operations for the interim period presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year to end March 31, 2015. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted. These unaudited interim financial statements and notes included herein have been prepared on a basis consistent with, and should be read in conjunction with, the Company’s audited financial statements and notes for the year ended March 31, 2014, as filed in its Form 10-K.
(b) | Use of estimates |
The preparation of interim financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to accounts payable and accrued liabilities, the fair value of warrants attached to common shares issued, the fair value of shares issued for services, and the recoverability of income tax assets. While management believes the estimates used are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.
F-5 |
GOLD TORRENT, INC.
(A Development Stage Company)
Notes to Interim Financial Statements
Three Months Ended June 30, 2014
(Unaudited - Expressed in US dollars)
2. | Significant Accounting Policies (continued) |
(c) | Basic and diluted earnings (loss) per share |
Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share assumes the exercise of common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive.
(d) | Foreign currency translation |
Transactions in currencies other than the US dollar are translated into US dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.
(e) | Research and development |
Research and development expenditures are charged to operations as incurred.
(f) | Financial instruments |
All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income and reported in stockholders’ equity.
A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company prioritizes the inputs into three levels that may be used to measure fair value:
(i) | Level 1 – | Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | |
(ii) | Level 2 – | Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly, such as quoted prices for similar assets or liabilities in active markets, or indirectly, such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions. | |
(iii) | Level 3 – | Applies to assets or liabilities for which there are unobservable market data. |
Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as held-to-maturity, loans and receivables or other financial liabilities are included in the initial carrying value of such instruments and amortized using the effective interest method. Transaction costs classified as held-for-trading are expensed when incurred, while those classified as available-for-sale are included in the initial carrying value.
F-6 |
GOLD TORRENT, INC.
(A Development Stage Company)
Notes to Interim Financial Statements
Three Months Ended June 30, 2014
(Unaudited - Expressed in US dollars)
2. | Significant Accounting Policies (continued) |
(g) | Income taxes |
The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company recognizes the effect of uncertain tax positions where it is more likely than not based on technical merits that the position could be sustained where the tax benefit has a greater than 50% likelihood of being realized upon settlement. A valuation allowance against deferred tax assets is recorded if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
(h) | Recent accounting guidance not yet adopted |
On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that reduces some of the disclosure and reporting requirements for developmentstage entities. The change will be effective for interim and annual reporting periods beginning after December 15, 2014, with early adoption permitted. As of such date, among other things, development stage entities will no longer be required to report inception-to-date information. The Company is currently assessing what effects this will have on the presentation of its financial statements in future filings.
3. | Financial Instruments |
The Company has designated its cash as held-for-trading; and accounts payable, accrued liabilities, amounts due to related parties and stockholders’ loans, as other financial liabilities.
(a) | Fair value |
The fair values of the Company’s cash, accounts payable, accrued liabilities, amounts due to related parties and stockholders’ loans approximate their carrying values due to the short-term maturity of these instruments.
(b) | Credit risk |
Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s financial asset that is exposed to credit risk is cash, which is minimized to the extent that it is placed with a major financial institution. Concentration of credit risk exists with respect to the Company’s cash, as all amounts are held at a single major American financial institution.
(c) | Translation risk |
The Company’s functional currency is the US dollar. The Company translates transactions in foreign currencies into US currency using rates on the date of the transactions. Translation risk is considered minimal, as the Company does not incur any significant transactions in currencies other than US dollars.
(d) | Interest rate risk |
The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.
(e) | Liquidity risk |
Liquidity risk is the risk that the Company will encounter difficulty in satisfying its financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. At June 30, 2014, the Company had accounts payable of $468,546 (March 31, 2014 - $453,355), which are due within 30 days or less. The Company’s stockholders’ loans (note 6) of $26,156 (March 31, 2014 - $40,656) are interest-bearing and due December 31, 2014.
F-7 |
GOLD TORRENT, INC.
(A Development Stage Company)
Notes to Interim Financial Statements
Three Months Ended June 30, 2014
(Unaudited - Expressed in US dollars)
3. | Financial Instruments (continued) |
As at June 30, 2014, accrued liabilities consist of accrued accounting and legal fees of $10,000 (March 31, 2014 - $10,000).
4. | Common Stock |
On April 22, 2014, the Company entered into a Finder’s Fee agreement for the issuance of 25,000 common shares at an estimated fair value of $1.25 per share for a total amount of $31,250 as a retainer for services.
5. | Accounts Payable |
On September 10, 2013, certain shareholders of the Company (the “Sellers”), entered into a stock purchase agreement with certain purchasers, and as a result, the Sellers were no longer a related party as at December 31, 2013.
(a) | Accounts payable as at June 30, 2014 includes the following: |
(i) | $311,132 (March 31, 2014 - $315,968) due to a company controlled by a former shareholder of the Company. | |
(ii) | $7,851 (March 31, 2014 - $7,851) due to a company controlled by a former shareholder of the Company for payment of legal services made on behalf of the Company. | |
(iii) | $32,838 (March 31, 2014 - $32,989) due to former directors of the Company for advances made to the Company. | |
(iv) | $70,000 (March 31, 2014 - $70,000) due to a company controlled by a former shareholder of the Company for payment relating to web design and development expenses. |
(b) | The Company entered into an agreement with a company controlled by a former director and former shareholder of the Company for the facilitation of its business and technology development dated August 15, 2006, as amended on May 8, 2009. The agreement required the Company to pay a monthly fee of $1,500 for services provided and to reimburse for expenses incurred on its behalf. The agreement was terminated effective September 9, 2013. The Company incurred charges of $nil (June 30, 2013 - $nil; period from August 15, 2006 to March 31, 2014 - $63,728) for the period ended June 30, 2014 pursuant to this agreement, which was expensed as consulting and development fees. | |
(c) | For the period ended June 30, 2014, the Company was charged fees of $nil (June 30, 2013 - $5,000; period from August 15, 2006 to June 30, 2014 - $53,600) by a company controlled by a former shareholder for administrative costs related to the Company’s filing of its regulatory documents. | |
The above amounts are recorded at the exchange amount, representing the amount agreed upon by the parties, are non-interest-bearing and have no specific terms of repayment. |
6. | Stockholders’ Loans |
During the year ended March 31, 2014, current officers and shareholders of the Company advanced loans of $40,656. These loans are due December 31, 2014 and bear interest at 10% per annum. The Company repaid $14,500 during the three months ended June 30, 2014.
F-8 |
GOLD TORRENT, INC.
(A Development Stage Company)
Notes to Interim Financial Statements
Three Months Ended June 30, 2014
(Unaudited - Expressed in US dollars)
7. | Intangible Asset |
During the year ended March 31, 2014, the Company purchased a domain name for $2,060. Amortization relating to the intangible asset will commence when it is put into use.
8. | Segmented Information |
The Company operates primarily in one business segment being the seeking of ownership in mining projects with substantially all of its assets and operations located in the United States (2013 – Canada).
9. | Subsequent Event |
Subsequent to June 30, 2014, the Company entered into a non-binding Letter of Intent agreement with a third party to enter into a joint venture for the development of the gold property known as Willow Creek, Alaska. After both parties signed this letter on July 28, 2014, the Company will undertake a due diligence investigation into the project, which is expected to be completed on October 26, 2014.
F-9 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited interim financial statements for the three months ended June 30, 2014 are expressed in US dollars and are prepared in accordance with generally accepted accounting principles in the United States of America. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for our fiscal year ending March 31, 2015. Our unaudited financial statements and notes included therein have been prepared on a basis consistent with and should be read in conjunction with our audited financial statements and notes for the year ended March 31, 2014, as filed in our annual report on Form 10-K.
The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this annual report.
Business Overview
GOLD TORRENT, INC. (the “Company”) is a development stage company. We were incorporated as a Nevada company on August 15, 2006 as Celldonate Inc. and we have no subsidiaries. Historically we were in the business of developing mobile monetization solutions and applications. Since our inception we have been creating, testing and developing mobile applications, games and tools designed to engage consumers in transacting business via mobile devices.
On January 16, 2014, the Company changed its name to “Gold Torrent, Inc.” in order to better reflect the direction and business of the Company. Going forward, we plan to focus on acquiring ownership in late-stage exploration to development-stage gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America but may pursue other profitable business opportunities that are available to us. Our main focus will be on identifying solid resources, and then utilize funding to bring a distressed asset into production, while either securing equity ownership or rights of title in the form of royalties. We are targeting pre-production resource projects that are well understood, show strong financial projections and low capital intensity, where we can apply capital to take the projects into production within 12-24 months.
On July 28, 2014 the Company entered into a non-binding Letter of Intent agreement with a third party to enter into a joint venture for the development of the gold property known as Willow Creek, Alaska. The Company will undertake a due diligence investigation into the project, which is expected to completed on October 26, 2014.
Since our inception, we have incurred operational losses, and our most recent independent auditors’ report includes an “emphasis of matter” paragraph on going concern. We have also accumulated net losses since our inception and incurred a net loss for the most recent audited and interim periods. To finance our operations, we have received advances from related parties, loan payables and completed several rounds of financing, raising $92,050 through private placements of our common stock.
Results of Operations
For the Three Months ended June 30, 2014
During the three months ended June 30, 2014, we incurred a net loss of $56,592, compared to a net loss of $49,283 during the same period in the prior year. From our inception on August 15, 2006 to June 30, 2014, we incurred a net loss of $616,047.
4 |
Our net loss per share for the three months ended June 30, 2014 was $0.01. Our net loss per share for the three months ended June 30, 2013 was $0.01.
During the three months ended June 30, 2014, we incurred total expenses of $56,592, compared to total expenses of $49,283 during the same period in the prior year. From our inception on August 15, 2006 to June 30, 2014, we incurred expenses of $616,047.
Our total expenses during the three months ended June 30, 2014 consisted of $22,000 in accounting and legal fees, $2,258 in licenses and fees, $31,250 in finders’ fees, $817 in bank charges and finance fees and $267 in office expenses. For the same period in fiscal 2013, we incurred expenses of $9,333 in accounting and legal fees, $4,800 in licenses and fees, $35,000 in consulting and development fees, $150 in bank charges and $nil in office expenses. Our total expenses are not significantly higher. However the variation in expenses are mainly due to the higher accounting, legal and finder’s fees, while we did not incur consulting and development fees as a result of our change in business focus.
Our total expenses from our inception on August 15, 2006 to June 30, 2014 consisted of $332,903 in accounting and legal fees, $103,574 in licenses and fees, $7,259 in office expenses, $6,805 in bank charges and finance fees, $133,728 in consulting and development fees, $31,250 in finder’s fees, and $528 in amortization.
Liquidity and Capital Resources
We have limited operational history. From our inception on August 15, 2006 to June 30, 2014 we did not generate any revenues. As of June 30, 2014, we had $11,045 in cash, $504,702 in total liabilities and a working capital deficit of $493,657. As of June 30, 2014, we had an accumulated deficit of $616,047. We are dependent on funds raised through equity financing, related parties, and loan payables. Our cumulative net loss of $616,047 from our inception on August 15, 2006 to June 30, 2014 was funded by equity financing and advances from shareholders and former related parties. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.
During the three months ended June 30, 2014, we used $10,151 in cash on operating activities, compared to cash used of $46,356 on operating activities during the same period in fiscal 2013. Our decrease in cash spending on operating activities between the two periods was primarily due to not making cash payments for operating costs as described above.
During the three months ended June 30, 2014 and 2013, we did not engage in any investing activities.
During the three months ended June 30, 2014, we repaid $14,500 in cash from financing activities, compared to receiving $46,206 in cash during the same period in fiscal 2013.
From our inception on August 15, 2006 to June 30, 2014, we spent $104,573 in cash for operating activities and $2,588 on investing activities, and we received $118,206 in cash from financing activities, consisting of $26,156 in cash from loans, and $92,050 in proceeds from the issuance of our common stock.
During the three months ended June 30, 2014, our monthly cash requirements to fund our operating activities, including advances from former related parties, was approximately $3,384 compared to approximately $15,452 during the same period in fiscal 2013. In the absence of the continued sale of our common stock or advances from the former or new related parties, our cash of $11,045 as of June 30, 2014 is not sufficient to cover our current monthly burn rate for the foreseeable future and not enough to pay our current liabilities balance of $504,702. Until we are able to complete private and/or public financing as described below, we anticipate that we will rely on loans from shareholders to proceed with our plan of operations.
Our business strategy going forward is to acquire ownership in late-stage exploration to development-stage gold mining projects and/or royalty or streaming interests in low capital intensity, mining projects in North America. Our main focus will be on identifying solid resources, and then utilize funding to bring a distressed asset into production, while either securing equity ownership or rights of title in the form of royalties.
We expect to require approximately $1,200,000 to carry out our business strategy. Our plan of operations over the next 12 months is to obtain the necessary financing to fill a number of key operational positions. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.
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Future Financings
We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our securities, loans and advances from former related parties to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our unaudited financial statements for the three months ended June 30, 2014 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.
We will require approximately $1,200,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months from private placements, advances from related parties or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.
If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital will not be sufficient to enable us to sustain our operations for the next 12 months, even if we do decide to scale back our operations.
Off-Balance Sheet Arrangements
The Company entered into a non-binding Letter of Intent agreement with a third party to enter into a joint venture for the development of the gold property known as Willow Creek, Alaska. After both parties signed this letter on July 28, 2014 the Company will undertake a due diligence investigation into the project, which is expected to be completed on October 26, 2014.
Critical Accounting Policies
Our unaudited interim financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our unaudited interim financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.
Foreign Currency Translation
Our unaudited financial statements are presented in United States dollars. Transactions in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, excluding amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.
Recent Accounting Guidance Not Yet Adopted
On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that reduces some of the disclosure and reporting requirements for developmentstage entities. The change will be effective for interim and annual reporting periods beginning after December 15, 2014, with early adoption permitted. As of such date, among other things, development stage entities will no longer be required to report inception-to-date information. We are currently assessing what effects this will have on the presentation of our interim financial statements in future filings.
Inflation
The amounts presented in the unaudited interim financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required.
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Item 4. Controls and Procedures
Disclosure Controls
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable assurance the information required to be reported in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to Securities and Exchange Commission (“SEC”) rules and forms, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the three months ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.
Item 2. Unregistered Sales of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
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Exhibit Number | Exhibit Description | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 8* | |
101.INS | XBRL Instance Document** | |
101.SCH | XBRL Taxonomy Extension Schema** | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase** | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase** | |
101.LAB | XBRL Taxonomy Extension Label Linkbase** | |
101.PRE | XBRL Taxonomy Presentation Linkbase** |
* Filed herewith.
** Furnished herewith.
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Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 13, 2014 | GOLD TORRENT, INC. | |
By: | /s/ Ryan Hart | |
Ryan Hart | ||
Chief Executive Officer, President and Director | ||
By: | /s/ Alexander Kunz | |
Alexander Kunz | ||
Chief Financial Officer and Director |
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