Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Apr. 30, 2014 | Jun. 18, 2014 | |
Document and Entity Information: | ' | ' |
Entity Registrant Name | 'Tungsten Corp. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Apr-14 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001475065 | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 73,939,612 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 |
CURRENT ASSETS: | ' | ' |
Cash | $2,739 | $27,007 |
Prepaid expenses | 0 | 8,311 |
Total Current Assets | 2,739 | 35,318 |
OTHER ASSETS | ' | ' |
Mineral properties | 174,013 | 174,013 |
Total Other Assets | 174,013 | 174,013 |
Total Assets | 176,752 | 209,331 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable and accrued expenses | 55,122 | 17,141 |
Convertible notes, net of discounts of $63,750 and $111,562 | 63,750 | 15,938 |
Derivative liability | 137,770 | 214,050 |
Advances from stockholders | 99,951 | 99,951 |
Total Current Liabilities | 356,593 | 347,080 |
STOCKHOLDERS' DEFICIT: | ' | ' |
Preferred stock at $0.0001 par value: 25,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock at $0.0001 par value: 300,000,000 shares authorized; 73,939,612 and 71,542,799 shares issued and outstanding, respectively | 7,394 | 7,154 |
Additional paid-in capital | 1,642,353 | 1,359,630 |
Deficit accumulated during the exploration stage | -1,829,588 | -1,504,533 |
Total Stockholders' Deficit | -179,841 | -137,749 |
Total Liabilities and Stockholders' Deficit | $176,752 | $209,331 |
Balance_Sheets_Parentheticals_
Balance Sheets Parentheticals (Unaudited) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 |
Parentheticals | ' | ' |
Net Discount of convertible notes | $63,750 | $111,562 |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 73,939,612 | 71,542,799 |
Common Stock, Shares Outstanding | 73,939,612 | 71,542,799 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
REVENUE: | ' | ' |
Revenue earned during the exploration stage | $0 | $0 |
Cost of exploration | ' | ' |
Exploration costs | 0 | 0 |
Total cost of exploration | 0 | 0 |
Gross margin | 0 | 0 |
Operating expenses | ' | ' |
Director's fees | 64,688 | 0 |
Officers' compensation | 18,000 | 18,067 |
Professional fees | 40,974 | 36,212 |
General and administrative expenses | 58,052 | 35,604 |
Total operating expenses | 181,714 | 89,883 |
Loss from operations | -181,714 | -89,883 |
Other (income) expense | ' | ' |
Change in fair value of derivative liabilities | -76,280 | 0 |
Cost of financing | 150,000 | 0 |
Cost of extension | 18,025 | 0 |
Interest expense | 51,596 | 0 |
Other (income) expense, net | 143,341 | 0 |
Loss before income tax provision | -322,055 | -89,883 |
Income tax provision | 0 | 0 |
Net loss | ($325,055) | ($89,883) |
Net loss per common share - basic and diluted | $0 | $0 |
Weighted common shares outstanding - basic and diluted | 73,435,300 | 66,663,000 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($325,055) | ($89,883) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ' | ' |
Amortization of debt and original issue discount | 47,812 | 0 |
Stock-based compensation | 264,938 | 0 |
Change in fair value of derivative liabilities | -76,280 | 0 |
Cost of extension | -18,025 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses | 8,311 | 0 |
Accounts payable and accrued expenses | 37,981 | 5,831 |
NET CASH USED IN OPERATING ACTIVITIES | -24,268 | -84,052 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Cash used in acquisition | 0 | -46,092 |
Acquisition of mineral property claims | 0 | -150,000 |
NET CASH USED IN INVESTING ACTIVITIES | 0 | -196,092 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Amounts received from (repayment to) stockholders | 0 | 76,951 |
Proceeds from sale of common stock | 0 | 250,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 0 | 326,951 |
NET CHANGE IN CASH | -24,268 | 46,807 |
Cash at beginning of period | 27,007 | 7,163 |
Cash at end of period | 2,739 | 53,970 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ' | ' |
Interest paid | 0 | 0 |
Income tax paid | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Common stock issued for mineral property claims | $0 | $750,000 |
ORGANIZATION_AND_OPERATIONS
ORGANIZATION AND OPERATIONS | 3 Months Ended |
Apr. 30, 2014 | |
ORGANIZATION AND OPERATIONS | ' |
ORGANIZATION AND OPERATIONS | ' |
NOTE 1 - ORGANIZATION AND OPERATIONS | |
ONLINE TELE-SOLUTIONS, INC. | |
Online Tele-Solutions, Inc. ("Online Tele-Solutions") was incorporated under the | |
laws of the State of Nevada on June 5, 2008. Initial operations have included | |
organization and incorporation, target market identification, marketing plans, | |
and capital formation. A substantial portion of the Company's activities had | |
involved developing a business plan and establishing contacts and visibility in | |
the marketplace. The Company has generated no revenues since inception. | |
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION | |
On March 9, 2012, the Board of Directors and the consenting stockholders adopted | |
and approved a resolution to (i) amend the Company's Articles of Incorporation | |
to (a) increase the number of shares of authorized common stock from 50,000,000 | |
to 300,000,000; (b) create 25,000,000 shares of "blank check" preferred stock | |
with a par value of $0.0001 per share; (c) change the par value of the common | |
stock from $0.001 per share to $0.0001 per share; and (ii) effectuate a forward | |
split of all issued and outstanding shares of common stock, at a ratio of | |
thirty-for-one (30:1) (the "Stock Split"). | |
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION | |
On November 14, 2012, the Board of Directors of Online Tele-Solutions and two | |
(2) stockholders holding an aggregate of 45,600,000 shares of common stock | |
issued and outstanding as of November 6, 2012, approved and consented, in | |
writing, to effectuate an amendment to the Company's Articles of Incorporation | |
to change the name of Online Tele-Solutions to "Tungsten Corp." the "Company"). | |
NEVADA TUNGSTEN HOLDINGS LTD. | |
Nevada Tungsten Holdings Ltd. ("Tungsten") was incorporated on October 30, 2012 | |
under the laws of the State of Nevada. Tungsten intends to engage in the | |
exploration of certain tungsten interests in the State of Nevada. | |
REVERSE ACQUISITION AND CHANGE IN SCOPE OF BUSINESS | |
On April 8, 2013, the Company closed a voluntary share exchange transaction | |
pursuant to a stock exchange agreement ("SEA") with Guy Martin and Nevada | |
Tungsten Holdings Ltd. Pursuant to the terms of the SEA, the Company acquired | |
all of the issued and outstanding shares of Nevada Tungsten Holdings Ltd.'s | |
common stock from Guy Martin. The sole asset of Nevada Tungsten Holdings Ltd. is | |
an option to acquire all tungsten rights in regards to 32 patented and | |
unpatented mining claims situated in White Pine Country, Nevada pursuant to an | |
option agreement by and between Viscount Nevada Holdings Ltd. (the "Optionor") | |
and Nevada Tungsten Holdings Ltd. (the "Option Agreement"). | |
Immediately prior to the Share Exchange Transaction on April 8, 2013, the | |
Company had 66,000,000 common shares issued and outstanding. Simultaneously with | |
the Closing of the Share Exchange Agreement, on the Closing Date, the Company's | |
then majority stockholder surrendered 3,000,000 shares of the Company's common | |
stock to the Company for cancellation. | |
As a result of the Share Exchange Agreement, the Company issued 3,000,000 common | |
shares for the acquisition of 100% of the issued and outstanding shares of | |
Tungsten. Even though the shares issued only represented approximately 4.3% of | |
the issued and outstanding common stock immediately after the consummation of | |
the Share Exchange Agreement the stockholder of Tungsten completely took over | |
and controlled the board of directors and management of the Company upon | |
acquisition. | |
As a result of the change in control to the then Tungsten Stockholder, for | |
financial statement reporting purposes, the merger between the Company and | |
Tungsten has been treated as a reverse acquisition with Tungsten deemed the | |
accounting acquirer and the Company deemed the accounting acquiree under the | |
acquisition method of accounting in accordance with section 805-10-55 of the | |
FASB Accounting Standards Codification. The reverse acquisition is deemed a | |
capital transaction and the net assets of Tungsten (the accounting acquirer) are | |
carried forward to the Company (the legal acquirer and the reporting entity) at | |
their carrying value before the acquisition. The acquisition process utilizes | |
the capital structure of the Company and the assets and liabilities of Tungsten | |
which are recorded at their historical cost. The equity of the Company is the | |
historical equity of Tungsten retroactively restated to reflect the number of | |
shares issued by the Company in the transaction. | |
SIGNIFICANT_AND_CRITICAL_ACCOU
SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES | 3 Months Ended |
Apr. 30, 2014 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' |
SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES | ' |
NOTE 2 - SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES | |
The Management of the Company is responsible for the selection and use of | |
appropriate accounting policies and the appropriateness of accounting policies | |
and their application. Critical accounting policies and practices are those that | |
are both most important to the portrayal of the Company's financial condition | |
and results and require management's most difficult, subjective, or complex | |
judgments, often as a result of the need to make estimates about the effects of | |
matters that are inherently uncertain. The Company's significant and critical | |
accounting policies and practices are disclosed below as required by generally | |
accepted accounting principles. | |
BASIS OF PRESENTATION | |
The accompanying unaudited interim financial statements and related notes have | |
been prepared in accordance with accounting principles generally accepted in the | |
United States of America ("U.S. GAAP") for interim financial information, and | |
with the rules and regulations of the United States Securities and Exchange | |
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly, | |
they do not include all of the information and footnotes required by U.S. GAAP | |
for complete financial statements. The unaudited interim financial statements | |
furnished reflect all adjustments (consisting of normal recurring accruals) | |
which are, in the opinion of management, necessary to a fair statement of the | |
results for the interim periods presented. Interim results are not necessarily | |
indicative of the results for the full year. These unaudited interim financial | |
statements should be read in conjunction with the financial statements of | |
Tungsten Corp. for the period from October 30, 2012 (inception) through January | |
31, 2014 and notes thereto contained in the Company's Current Report on Form | |
10-K filed with the SEC on March 31, 2014. | |
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND | |
ASSUMPTIONS | |
The preparation of financial statements in conformity with accounting principles | |
generally accepted in the United States of America 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(s) | |
of the financial statements and the reported amounts of revenues and expenses | |
during the reporting period(s). | |
Critical accounting estimates are estimates for which (a) the nature of the | |
estimate is material due to the levels of subjectivity and judgment necessary to | |
account for highly uncertain matters or the susceptibility of such matters to | |
change and (b) the impact of the estimate on financial condition or operating | |
performance is material. The Company's critical accounting estimates and | |
assumptions affecting the financial statements were: | |
(i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company | |
will continue as a going concern, which contemplates continuity of | |
operations, realization of assets, and liquidation of liabilities in | |
the normal course of business; | |
(ii) VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that | |
the realization of the Company's net deferred tax assets resulting | |
from its net operating loss ("NOL") carry-forwards for Federal income | |
tax purposes that may be offset against future taxable income was not | |
considered more likely than not and accordingly, the potential tax | |
benefits of the net loss carry-forwards are offset by a full valuation | |
allowance. Management made this assumption based on (a) the Company | |
has incurred recurring losses, (b) general economic conditions, and | |
(c) its ability to raise additional funds to support its daily | |
operations by way of a public or private offering, among other | |
factors. | |
(iii)ESTIMATES AND ASSUMPTIONS USED IN VALUATION OF EQUITY INSTRUMENTS: | |
Management estimates expected term of share options and similar | |
instruments, expected volatility of the Company's common shares and | |
the method used to estimate it, expected annual rate of quarterly | |
dividends, and risk free rate(s) to value share options and similar | |
instruments. | |
These significant accounting estimates or assumptions bear the risk of change | |
due to the fact that there are uncertainties attached to these estimates or | |
assumptions, and certain estimates or assumptions are difficult to measure or | |
value. | |
Management bases its estimates on historical experience and on various | |
assumptions that are believed to be reasonable in relation to the financial | |
statements taken as a whole under the circumstances, the results of which form | |
the basis for making judgments about the carrying values of assets and | |
liabilities that are not readily apparent from other sources. | |
Management regularly evaluates the key factors and assumptions used to develop | |
the estimates utilizing currently available information, changes in facts and | |
circumstances, historical experience and reasonable assumptions. After such | |
evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |
Actual results could differ from those estimates. | |
FISCAL YEAR-END | |
The Company elected January 31st as its fiscal year ending date. | |
PRINCIPLES OF CONSOLIDATION | |
The Company applies the guidance of Topic 810 "CONSOLIDATION" of the FASB | |
Accounting Standards Codification to determine whether and how to consolidate | |
another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned | |
subsidiaries--all entities in which a parent has a controlling financial | |
interest--shall be consolidated except (1) when control does not rest with the | |
parent, the majority owner; (2) if the parent is a broker-dealer within the | |
scope of Topic 940 and control is likely to be temporary; (3) consolidation by | |
an investment company within the scope of Topic 946 of a non-investment-company | |
investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a | |
controlling financial interest is ownership of a majority voting interest, and, | |
therefore, as a general rule ownership by one reporting entity, directly or | |
indirectly, of more than 50 percent of the outstanding voting shares of another | |
entity is a condition pointing toward consolidation. The power to control may | |
also exist with a lesser percentage of ownership, for example, by contract, | |
lease, agreement with other stockholders, or by court decree. The Company | |
consolidates all less-than-majority-owned subsidiaries, if any, in which the | |
parent's power to control exists. | |
The Company's consolidated subsidiary and/or entity is as follows: | |
Date of incorporation | |
or formation | |
Name of consolidated State or other jurisdiction of (date of acquisition, | |
subsidiary or entity incorporation or organization if applicable) Attributable interest | |
-------------------- ----------------------------- -------------- --------------------- | |
Nevada Tungsten Holdings Ltd. The State of Nevada October 30, 2012 100% | |
(April 8, 2013) | |
These consolidated financial statements include all accounts of the Company as | |
of April 30, 2014 and for the period from April 8, 2013 (date of acquisition) | |
through April 30, 2014; and Nevada Tungsten Holdings Ltd. as of April 30, 2014 | |
and 2013, for the period ended April 30, 2014, and for the period from October | |
30, 2012 (inception) through April 30, 2014. | |
All inter-company balances and transactions have been eliminated. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards | |
Codification ("Paragraph 820-10-35-37") to measure the fair value of its | |
financial instruments and paragraph 825-10-50-10 of the FASB Accounting | |
Standards Codification for disclosures about fair value of its financial | |
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair | |
value in accounting principles generally accepted in the United States of | |
America (U.S. GAAP), and expands disclosures about fair value measurements. To | |
increase consistency and comparability in fair value measurements and related | |
disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which | |
prioritizes the inputs to valuation techniques used to measure fair value into | |
three (3) broad levels. The three (3) levels of fair value hierarchy defined by | |
Paragraph 820-10-35-37 are described below: | |
Level 1 Quoted market prices available in active markets for identical assets | |
or liabilities as of the reporting date. | |
Level 2 Pricing inputs other than quoted prices in active markets included in | |
Level 1, which are either directly or indirectly observable as of the | |
reporting date. | |
Level 3 Pricing inputs that are generally observable inputs and not | |
corroborated by market data. | |
Financial assets are considered Level 3 when their fair values are determined | |
using pricing models, discounted cash flow methodologies or similar techniques | |
and at least one significant model assumption or input is unobservable. | |
The fair value hierarchy gives the highest priority to quoted prices | |
(unadjusted) in active markets for identical assets or liabilities and the | |
lowest priority to unobservable inputs. If the inputs used to measure the | |
financial assets and liabilities fall within more than one level described | |
above, the categorization is based on the lowest level input that is significant | |
to the fair value measurement of the instrument. | |
The carrying amounts of the Company's financial assets and liabilities, such as | |
cash, accounts payable and accrued expenses approximate their fair values | |
because of the short maturity of these instruments. | |
The Company uses Level 3 of the fair value hierarchy to measure the fair value | |
of the derivative liabilities and revalues its derivative liability at every | |
reporting period and recognizes gains or losses in the statements of operations | |
that are attributable to the change in the fair value of the derivative warrant | |
liability. | |
Transactions involving related parties cannot be presumed to be carried out on | |
an arm's-length basis, as the requisite conditions of competitive, free-market | |
dealings may not exist. Representations about transactions with related parties, | |
if made, shall not imply that the related party transactions were consummated on | |
terms equivalent to those that prevail in arm's-length transactions unless such | |
representations can be substantiated. | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS | |
LEVEL 3 FINANCIAL LIABILITIES - DERIVATIVE CONVERSION FEATURES | |
The Company uses Level 3 of the fair value hierarchy to measure the fair value | |
of the derivative liabilities and revalues its derivative warrant liability and | |
derivative liability on the conversion feature at every reporting period and | |
recognizes gains or losses in the consolidated statements of operations that are | |
attributable to the change in the fair value of the derivative liabilities. | |
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS | |
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards | |
Codification for its long-lived assets. The Company's long-lived assets, which | |
include mineral properties, are reviewed for impairment whenever events or | |
changes in circumstances indicate that the carrying amount of an asset may not | |
be recoverable. | |
The Company assesses the recoverability of its long-lived assets by comparing | |
the projected undiscounted net cash flows associated with the related long-lived | |
asset or group of long-lived assets over their remaining estimated useful lives | |
against their respective carrying amounts. Impairment, if any, is based on the | |
excess of the carrying amount over the fair value of those assets. Fair value is | |
generally determined using the asset's expected future discounted cash flows or | |
market value, if readily determinable. If long-lived assets are determined to be | |
recoverable, but the newly determined remaining estimated useful lives are | |
shorter than originally estimated, the net book values of the long-lived assets | |
are depreciated over the newly determined remaining estimated useful lives. | |
The Company considers the following to be some examples of important indicators | |
that may trigger an impairment review: (i) significant under-performance or | |
losses of assets relative to expected historical or projected future operating | |
results; (ii) significant changes in the manner or use of assets or in the | |
Company's overall strategy with respect to the manner or use of the acquired | |
assets or changes in the Company's overall business strategy; (iii) significant | |
negative industry or economic trends; (iv) increased competitive pressures; and | |
(v) regulatory changes. The Company evaluates acquired assets for potential | |
impairment indicators at least annually and more frequently upon the occurrence | |
of such events. | |
Management periodically reviews the recoverability of the capitalized mineral | |
properties. Management will take into consideration various information | |
including, but not limited to, historical production records taken from previous | |
mine operations, results of exploration activities conducted to date, estimated | |
future prices and reports and opinions of outside consultants. When a | |
determination has been made that a project or property will be abandoned, or its | |
carrying value has been impaired, a provision is made for any expected loss on | |
the project or property. | |
CASH EQUIVALENTS | |
The Company considers all highly liquid investments with a maturity of three | |
months or less when purchased to be cash equivalents. | |
MINERAL PROPERTIES | |
The Company follows Section 930 of the FASB Accounting Standards Codification | |
for its mineral properties. Mineral properties and related mineral rights | |
acquisition costs are capitalized pending determination of whether the drilling | |
has found proved reserves. In accordance with the Disclosure requirements of | |
Section 350-30-50-2, the Company capitalizes costs incurred to renew or extend | |
the term or requirements that need to be met for retention of the mineral | |
properties. If a mineral ore body is discovered, capitalized costs will be | |
amortized on a unit-of-production basis following the commencement of | |
production. Otherwise, capitalized acquisition costs are expensed when it is | |
determined that the mineral property has no future economic value. General | |
exploration costs and costs to maintain rights and leases, including rights of | |
access to lands for geophysical work and salaries, equipment, and supplies for | |
geologists and geophysical crews are expensed as incurred. When it is determined | |
that a mining deposit can be economically and legally extracted or produced | |
based on established proven and probable reserves, further exploration costs and | |
development costs as well as interest costs relating to exploration and | |
development projects that require greater than six (6) months to be readied for | |
their intended use incurred after such determination will be capitalized. The | |
establishment of proven and probable reserves is based on results of final | |
feasibility studies which indicate whether a property is economically feasible. | |
Upon commencement of commercial production, capitalized costs will be | |
transferred to the appropriate asset categories and amortized on a | |
unit-of-production basis. Capitalized costs, net of salvage values, relating to | |
a deposit which is abandoned or considered uneconomic for the foreseeable future | |
will be written off. The sale of a partial interest in a proved property is | |
accounted for as a cost recovery and no gain or loss is recognized as long as | |
this treatment does not significantly affect the unit-of-production amortization | |
rate. A gain or loss will be recognized for all other sales of proved properties | |
and will be classified in other operating revenues. Maintenance and repairs are | |
charged to expense, and renewals and betterments are capitalized to the | |
appropriate property and equipment accounts. | |
The provision for depreciation, depletion and amortization ("DD&A") of mineral | |
properties will be calculated on a property-by-property basis using the | |
unit-of-production method. Taken into consideration in the calculation of DD&A | |
are estimated future dismantlement, restoration and abandonment costs, which are | |
net of estimated salvage values. Upon becoming fully amortized, the related cost | |
and accumulated amortization are removed from the accounts. | |
To date, the Company has not established the commercial feasibility of any | |
exploration prospects; therefore, all general exploration costs, if any, are | |
being expensed. | |
MINERAL EXPLORATION AND MINE DEVELOPMENT COSTS | |
All mineral exploration and pre-extraction expenditures are expensed as incurred | |
until such time the Company exits the Exploration Stage by establishing proven | |
or probable reserves. Mine development costs incurred to develop mineral | |
deposits, to expand the capacity of mines or to develop mine areas substantially | |
in advance of production are capitalized once proven and probable reserves | |
exist, and the property is determined to be a commercially mineable property. | |
Costs incurred to maintain current production or to maintain assets on a standby | |
basis are charged to operations. If the Company does not continue with | |
exploration after the completion of the feasibility study, the cost of mineral | |
rights will be expensed at that time. Costs of abandoned projects, including | |
related property and equipment costs, are charged to mining costs. | |
RESTORATION COSTS (ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS) | |
Various federal and state mining laws and regulations require the Company to | |
reclaim the surface areas and restore underground water quality for its mine | |
projects to the pre-existing mine area average quality after the completion of | |
mining. | |
In accordance with ASC 410, Asset Retirement and Environmental Obligations, the | |
Company capitalizes the measured fair value of asset retirement and | |
environmental obligations to mineral rights and properties. ASC 410 requires the | |
Company to record a liability for the present value of the estimated future site | |
restoration and environmental remediation costs with corresponding increase to | |
the carrying amount of the related mineral rights and properties. The asset | |
retirement and environmental obligations are accreted to an undiscounted value | |
until the time at which they are expected to be settled. The accretion expense | |
is charged to earnings and the actual retirement costs are recorded against the | |
asset retirement obligations when incurred. Any difference between the recorded | |
asset retirement obligations and the actual retirement costs incurred will be | |
recorded as a gain or loss in the period of settlement. | |
Environmental expenditures that relate to ongoing environmental and reclamation | |
programs will be charged against statements of operations as incurred or | |
capitalized and amortized depending upon their future economic benefits. Future | |
site restoration and environmental remediation costs, which include extraction | |
equipment removal, site restoration and environmental remediation, are accrued | |
at the end of each reporting period based on management's best estimate of the | |
costs expected to be incurred for each project. Such estimates are determined by | |
the Company's engineering studies which consider the costs of future surface and | |
groundwater activities, current regulations, actual expenses incurred, and | |
technology and industry standards. | |
On a quarterly basis, the Company reviews the assumptions used to estimate the | |
expected cash flows required to settle the asset retirement obligations, | |
including changes in estimated probabilities, amounts and timing of the | |
settlement of the asset retirement and environmental obligations, as well as | |
changes in the legal obligation requirements at each of its mineral projects. | |
Changes in any one or more of these assumptions may cause revision of asset | |
retirement obligations for the corresponding assets. | |
The Company does not currently anticipate any material capital expenditures for | |
site restoration costs and considers the estimated future site restoration costs | |
to be minimal and so the present value of the same at October 31, 2013 as all of | |
its mineral properties are at early stages of exploration. | |
RELATED PARTIES | |
The Company follows subtopic 850-10 of the FASB Accounting Standards | |
Codification for the identification of related parties and disclosure of related | |
party transactions. | |
Pursuant to Section 850-10-20 the Related parties include a. affiliates of the | |
Company; b. Entities for which investments in their equity securities would be | |
required, absent the election of the fair value option under the Fair Value | |
Option Subsection of Section 825-10-15, to be accounted for by the equity method | |
by the investing entity; c. trusts for the benefit of employees, such as pension | |
and profit-sharing trusts that are managed by or under the trusteeship of | |
management; d. principal owners of the Company; e. management of the Company; f. | |
other parties with which the Company may deal if one party controls or can | |
significantly influence the management or operating policies of the other to an | |
extent that one of the transacting parties might be prevented from fully | |
pursuing its own separate interests; and g. Other parties that can significantly | |
influence the management or operating policies of the transacting parties or | |
that have an ownership interest in one of the transacting parties and can | |
significantly influence the other to an extent that one or more of the | |
transacting parties might be prevented from fully pursuing its own separate | |
interests. | |
The financial statements shall include disclosures of material related party | |
transactions, other than compensation arrangements, expense allowances, and | |
other similar items in the ordinary course of business. However, disclosure of | |
transactions that are eliminated in the preparation of consolidated or combined | |
financial statements is not required in those statements. The disclosures shall | |
include: a. the nature of the relationship(s) involved; b. a description of the | |
transactions, including transactions to which no amounts or nominal amounts were | |
ascribed, for each of the periods for which income statements are presented, and | |
such other information deemed necessary to an understanding of the effects of | |
the transactions on the financial statements; c. the dollar amounts of | |
transactions for each of the periods for which income statements are presented | |
and the effects of any change in the method of establishing the terms from that | |
used in the preceding period; and d. amounts due from or to related parties as | |
of the date of each balance sheet presented and, if not otherwise apparent, the | |
terms and manner of settlement. | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
The Company accounts for derivative instruments and hedging activities in | |
accordance with paragraph 810-10-05-4 of the FASB Accounting Standards | |
Codification ("Paragraph 810-10-05-4"). Paragraph 810-10-05-4 requires companies | |
to recognize all derivative instruments as either assets or liabilities in the | |
balance sheet at fair value. The accounting for changes in the fair value of a | |
derivative instrument depends upon: (i) whether the derivative has been | |
designated and qualifies as part of a hedging relationship, and (ii) the type of | |
hedging relationship. For those derivative instruments that are designated and | |
qualify as hedging instruments, a company must designate the hedging instrument | |
based upon the exposure being hedged as either a fair value hedge, cash flow | |
hedge or hedge of a net investment in a foreign operation. | |
DERIVATIVE LIABILITY | |
The Company evaluates its convertible debt, options, warrants or other | |
contracts, if any, to determine if those contracts or embedded components of | |
those contracts qualify as derivatives to be separately accounted for in | |
accordance with paragraph 810-10-05-4 and Section 815-40-25 of the FASB | |
Accounting Standards Codification. The result of this accounting treatment is | |
that the fair value of the embedded derivative is marked-to-market each balance | |
sheet date and recorded as either an asset or a liability. In the event that the | |
fair value is recorded as a liability, the change in fair value is recorded in | |
the consolidated statement of operations and comprehensive income (loss) as | |
other income or expense. Upon conversion, exercise or cancellation of a | |
derivative instrument, the instrument is marked to fair value at the date of | |
conversion, exercise or cancellation and then that the related fair value is | |
reclassified to equity. | |
In circumstances where the embedded conversion option in a convertible | |
instrument is required to be bifurcated and there are also other embedded | |
derivative instruments in the convertible instrument that are required to be | |
bifurcated, the bifurcated derivative instruments are accounted for as a single, | |
compound derivative instrument. | |
The classification of derivative instruments, including whether such instruments | |
should be recorded as liabilities or as equity, is re-assessed at the end of | |
each reporting period. Equity instruments that are initially classified as | |
equity that become subject to reclassification are reclassified to liability at | |
the fair value of the instrument on the reclassification date. Derivative | |
instrument liabilities will be classified in the balance sheet as current or | |
non-current based on whether or not net-cash settlement of the derivative | |
instrument is expected within 12 months of the balance sheet date. | |
The Company adopted Section 815-40-15 of the FASB Accounting Standards | |
Codification ("Section 815-40-15") to determine whether an instrument (or an | |
embedded feature) is indexed to the Company's own stock. Section 815-40-15 | |
provides that an entity should use a two-step approach to evaluate whether an | |
equity-linked financial instrument (or embedded feature) is indexed to its own | |
stock, including evaluating the instrument's contingent exercise and settlement | |
provisions. The adoption of Section 815-40-15 has affected the accounting for | |
(i) certain freestanding warrants that contain exercise price adjustment | |
features and (ii) convertible bonds issued by foreign subsidiaries with a strike | |
price denominated in a foreign currency. | |
The Company marks to market the fair value of the embedded derivative warrants | |
at each balance sheet date and records the change in the fair value of the | |
embedded derivative warrants as other income or expense in the consolidated | |
statements of operations and comprehensive income (loss). | |
The Company utilizes the Lattice model that values the liability of the | |
derivative warrants based on a probability weighted discounted cash flow model | |
with the assistance of the third party valuation firm. The reason the Company | |
picks the Lattice model is that in many cases there may be multiple embedded | |
features or the features of the bifurcated derivatives may be so complex that a | |
Black-Scholes valuation does not consider all of the terms of the instrument. | |
Therefore, the fair value may not be appropriately captured by simple models. In | |
other words, simple models such as Black-Scholes may not be appropriate in many | |
situations given complex features and terms of conversion option (e.g., combined | |
embedded derivatives). The Lattice model is based on future projections of the | |
various potential outcomes. The features that were analyzed and incorporated | |
into the model included the exercise and full reset features. Based on these | |
features, there are two primary events that can occur; the Holder exercises the | |
Warrants or the Warrants are held to expiration. The Lattice model analyzed the | |
underlying economic factors that influenced which of these events would occur, | |
when they were likely to occur, and the specific terms that would be in effect | |
at the time (i.e. stock price, exercise price, volatility, etc.). Projections | |
were then made on the underlying factors which led to potential scenarios. | |
Probabilities were assigned to each scenario based on management projections. | |
This led to a cash flow projection and a probability associated with that cash | |
flow. A discounted weighted average cash flow over the various scenarios was | |
completed to determine the value of the derivative warrants. | |
BENEFICIAL CONVERSION FEATURE | |
When the Company issues an debt or equity security that is convertible into | |
common stock at a discount from the fair value of the common stock at the date | |
the debt or equity security counterparty is legally committed to purchase such a | |
security (Commitment Date), a beneficial conversion charge is measured and | |
recorded on the Commitment Date for the difference between the fair value of the | |
Company's common stock and the effective conversion price of the debt or equity | |
security. If the intrinsic value of the beneficial conversion feature is greater | |
than the proceeds allocated to the debt or equity security, the amount of the | |
discount assigned to the beneficial conversion feature is limited to the amount | |
of the proceeds allocated to the debt or equity security. | |
COMMITMENT AND CONTINGENCIES | |
The Company follows subtopic 450-20 of the FASB Accounting Standards | |
Codification to report accounting for contingencies. Certain conditions may | |
exist as of the date the consolidated financial statements are issued, which may | |
result in a loss to the Company but which will only be resolved when one or more | |
future events occur or fail to occur. The Company assesses such contingent | |
liabilities, and such assessment inherently involves an exercise of judgment. In | |
assessing loss contingencies related to legal proceedings that are pending | |
against the Company or unasserted claims that may result in such proceedings, | |
the Company evaluates the perceived merits of any legal proceedings or | |
unasserted claims as well as the perceived merits of the amount of relief sought | |
or expected to be sought therein. | |
If the assessment of a contingency indicates that it is probable that a material | |
loss has been incurred and the amount of the liability can be estimated, then | |
the estimated liability would be accrued in the Company's consolidated financial | |
statements. If the assessment indicates that a potentially material loss | |
contingency is not probable but is reasonably possible, or is probable but | |
cannot be estimated, then the nature of the contingent liability, and an | |
estimate of the range of possible losses, if determinable and material, would be | |
disclosed. | |
Loss contingencies considered remote are generally not disclosed unless they | |
involve guarantees, in which case the guarantees would be disclosed. Management | |
does not believe, based upon information available at this time, that these | |
matters will have a material adverse effect on the Company's consolidated | |
financial position, results of operations or cash flows. However, there is no | |
assurance that such matters will not materially and adversely affect the | |
Company's business, financial position, and results of operations or cash flows. | |
REVENUE RECOGNITION | |
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards | |
Codification for revenue recognition. The Company will recognize revenue when it | |
is realized or realizable and earned. The Company considers revenue realized or | |
realizable and earned when all of the following criteria are met: (i) persuasive | |
evidence of an arrangement exists, (ii) the product has been shipped or the | |
services have been rendered to the customer, (iii) the sales price is fixed or | |
determinable and, (iv) collectability is reasonably assured. | |
STOCK-BASED COMPENSATION FOR OBTAINING EMPLOYEE SERVICES | |
The Company accounts for its stock based compensation in which the Company | |
obtains employee services in share-based payment transactions under the | |
recognition and measurement principles of the fair value recognition provisions | |
of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to | |
paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all | |
transactions in which goods or services are the consideration received for the | |
issuance of equity instruments are accounted for based on the fair value of the | |
consideration received or the fair value of the equity instrument issued, | |
whichever is more reliably measurable. The measurement date used to determine | |
the fair value of the equity instrument issued is the earlier of the date on | |
which the performance is complete or the date on which it is probable that | |
performance will occur. If the Company is a newly formed corporation or shares | |
of the Company are thinly traded the use of share prices established in the | |
Company's most recent private placement memorandum ("PPM"), or weekly or monthly | |
price observations would generally be more appropriate than the use of daily | |
price observations as such shares could be artificially inflated due to a larger | |
spread between the bid and asked quotes and lack of consistent trading in the | |
market. | |
The fair value of share options and similar instruments is estimated on the date | |
of grant using a Black-Scholes option-pricing valuation model. The ranges of | |
assumptions for inputs are as follows: | |
* Expected term of share options and similar instruments: The expected life | |
of options and similar instruments represents the period of time the option | |
and/or warrant are expected to be outstanding. Pursuant to Paragraph | |
718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the | |
expected term of share options and similar instruments represents the | |
period of time the options and similar instruments are expected to be | |
outstanding taking into consideration of the contractual term of the | |
instruments and employees' expected exercise and post-vesting employment | |
termination behavior into the fair value (or calculated value) of the | |
instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to | |
use the SIMPLIFIED METHOD, I.E., EXPECTED TERM =(VESTING TERM + ORIGINAL | |
CONTRACTUAL TERM) / 2), if (i) A company does not have sufficient | |
historical exercise data to provide a reasonable basis upon which to | |
estimate expected term due to the limited period of time its equity shares | |
have been publicly traded; (ii) A company significantly changes the terms | |
of its share option grants or the types of employees that receive share | |
option grants such that its historical exercise data may no longer provide | |
a reasonable basis upon which to estimate expected term; or (iii) A company | |
has or expects to have significant structural changes in its business such | |
that its historical exercise data may no longer provide a reasonable basis | |
upon which to estimate expected term. The Company uses the simplified | |
method to calculate expected term of share options and similar instruments | |
as the company does not have sufficient historical exercise data to provide | |
a reasonable basis upon which to estimate expected term. | |
* Expected volatility of the entity's shares and the method used to estimate | |
it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or | |
nonpublic entity that uses the calculated value method shall disclose the | |
reasons why it is not practicable for the Company to estimate the expected | |
volatility of its share price, the appropriate industry sector index that | |
it has selected, the reasons for selecting that particular index, and how | |
it has calculated historical volatility using that index. The Company uses | |
the average historical volatility of the comparable companies over the | |
expected contractual life of the share options or similar instruments as | |
its expected volatility. If shares of a company are thinly traded the use | |
of weekly or monthly price observations would generally be more appropriate | |
than the use of daily price observations as the volatility calculation | |
using daily observations for such shares could be artificially inflated due | |
to a larger spread between the bid and asked quotes and lack of consistent | |
trading in the market. | |
* Expected annual rate of quarterly dividends. An entity that uses a method | |
that employs different dividend rates during the contractual term shall | |
disclose the range of expected dividends used and the weighted-average | |
expected dividends. The expected dividend yield is based on the Company's | |
current dividend yield as the best estimate of projected dividend yield for | |
periods within the expected term of the share options and similar | |
instruments. | |
* Risk-free rate(s). An entity that uses a method that employs different | |
risk-free rates shall disclose the range of risk-free rates used. The | |
risk-free interest rate is based on the U.S. Treasury yield curve in effect | |
at the time of grant for periods within the expected term of the share | |
options and similar instruments. | |
The Company's policy is to recognize compensation cost for awards with only | |
service conditions and a graded vesting schedule on a straight-line basis over | |
the requisite service period for the entire award. | |
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR | |
SERVICES | |
The Company accounts for equity instruments issued to parties other than | |
employees for acquiring goods or services under guidance of Sub-topic 505-50 of | |
the FASB Accounting Standards Codification ("Sub-topic 505-50"). | |
Pursuant to ASC Section 505-50-30, all transactions in which goods or services | |
are the consideration received for the issuance of equity instruments are | |
accounted for based on the fair value of the consideration received or the fair | |
value of the equity instrument issued, whichever is more reliably measurable. | |
The measurement date used to determine the fair value of the equity instrument | |
issued is the earlier of the date on which the performance is complete or the | |
date on which it is probable that performance will occur. If shares of the | |
Company are thinly traded the use of share prices established in the Company's | |
most recent private placement memorandum ("PPM"), or weekly or monthly price | |
observations would generally be more appropriate than the use of daily price | |
observations as such shares could be artificially inflated due to a larger | |
spread between the bid and asked quotes and lack of consistent trading in the | |
market. | |
The fair value of share options and similar instruments is estimated on the date | |
of grant using a Black-Scholes option-pricing valuation model. The ranges of | |
assumptions for inputs are as follows: | |
* Expected term of share options and similar instruments: Pursuant to | |
Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards | |
Codification the expected term of share options and similar instruments | |
represents the period of time the options and similar instruments are | |
expected to be outstanding taking into consideration of the contractual | |
term of the instruments and holder's expected exercise behavior into the | |
fair value (or calculated value) of the instruments. The Company uses | |
historical data to estimate holder's expected exercise behavior. If the | |
Company is a newly formed corporation or shares of the Company are thinly | |
traded the contractual term of the share options and similar instruments is | |
used as the expected term of share options and similar instruments as the | |
Company does not have sufficient historical exercise data to provide a | |
reasonable basis upon which to estimate expected term. | |
* Expected volatility of the entity's shares and the method used to estimate | |
it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or | |
nonpublic entity that uses the calculated value method shall disclose the | |
reasons why it is not practicable for the Company to estimate the expected | |
volatility of its share price, the appropriate industry sector index that | |
it has selected, the reasons for selecting that particular index, and how | |
it has calculated historical volatility using that index. The Company uses | |
the average historical volatility of the comparable companies over the | |
expected contractual life of the share options or similar instruments as | |
its expected volatility. If shares of a company are thinly traded the use | |
of weekly or monthly price observations would generally be more appropriate | |
than the use of daily price observations as the volatility calculation | |
using daily observations for such shares could be artificially inflated due | |
to a larger spread between the bid and asked quotes and lack of consistent | |
trading in the market. | |
* Expected annual rate of quarterly dividends. An entity that uses a method | |
that employs different dividend rates during the contractual term shall | |
disclose the range of expected dividends used and the weighted-average | |
expected dividends. The expected dividend yield is based on the Company's | |
current dividend yield as the best estimate of projected dividend yield for | |
periods within the expected term of the share options and similar | |
instruments. | |
* Risk-free rate(s). An entity that uses a method that employs different | |
risk-free rates shall disclose the range of risk-free rates used. The | |
risk-free interest rate is based on the U.S. Treasury yield curve in effect | |
at the time of grant for periods within the expected term of the share | |
options and similar instruments. | |
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity | |
instruments are issued at the date the grantor and grantee enter into an | |
agreement for goods or services (no specific performance is required by the | |
grantee to retain those equity instruments), then, because of the elimination of | |
any obligation on the part of the counterparty to earn the equity instruments, a | |
measurement date has been reached. A grantor shall recognize the equity | |
instruments when they are issued (in most cases, when the agreement is entered | |
into). Whether the corresponding cost is an immediate expense or a prepaid asset | |
(or whether the debit should be characterized as contra-equity under the | |
requirements of paragraph 505-50-45-1) depends on the specific facts and | |
circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude | |
that an asset (other than a note or a receivable) has been received in return | |
for fully vested, non-forfeitable equity instruments that are issued at the date | |
the grantor and grantee enter into an agreement for goods or services (and no | |
specific performance is required by the grantee in order to retain those equity | |
instruments). Such an asset shall not be displayed as contra-equity by the | |
grantor of the equity instruments. The transferability (or lack thereof) of the | |
equity instruments shall not affect the balance sheet display of the asset. This | |
guidance is limited to transactions in which equity instruments are transferred | |
to other than employees in exchange for goods or services. Section 505-50-30 | |
provides guidance on the determination of the measurement date for transactions | |
that are within the scope of this Subtopic. | |
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully | |
vested, non-forfeitable equity instruments that are exercisable by the grantee | |
only after a specified period of time if the terms of the agreement provide for | |
earlier exercisability if the grantee achieves specified performance conditions. | |
Any measured cost of the transaction shall be recognized in the same period(s) | |
and in the same manner as if the entity had paid cash for the goods or services | |
or used cash rebates as a sales discount instead of paying with, or using, the | |
equity instruments. A recognized asset, expense, or sales discount shall not be | |
reversed if a stock option that the counterparty has the right to exercise | |
expires unexercised. | |
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to | |
receive future services in exchange for unvested, forfeitable equity | |
instruments, those equity instruments are treated as unissued for accounting | |
purposes until the future services are received (that is, the instruments are | |
not considered issued until they vest). Consequently, there would be no | |
recognition at the measurement date and no entry should be recorded. | |
INCOME TAX PROVISION | |
The Company accounts for income taxes under Section 740-10-30 of the FASB | |
Accounting Standards Codification, which requires recognition of deferred tax | |
assets and liabilities for the expected future tax consequences of events that | |
have been included in the financial statements or tax returns. Under this | |
method, deferred tax assets and liabilities are based on the differences between | |
the financial statement and tax bases of assets and liabilities using enacted | |
tax rates in effect for the fiscal year in which the differences are expected to | |
reverse. Deferred tax assets are reduced by a valuation allowance to the extent | |
management concludes it is more likely than not that the assets will not be | |
realized. Deferred tax assets and liabilities are measured using enacted tax | |
rates expected to apply to taxable income in the fiscal years in which those | |
temporary differences are expected to be recovered or settled. The effect on | |
deferred tax assets and liabilities of a change in tax rates is recognized in | |
the Statements of Income and Comprehensive Income in the period that includes | |
the enactment date. | |
The Company adopted section 740-10-25 of the FASB Accounting Standards | |
Codification ("Section 740-10-25") with regards to uncertainty income taxes. | |
Section 740-10-25 addresses the determination of whether tax benefits claimed or | |
expected to be claimed on a tax return should be recorded in the financial | |
statements. Under Section 740-10-25, the Company may recognize the tax benefit | |
from an uncertain tax position only if it is more likely than not that the tax | |
position will be sustained on examination by the taxing authorities, based on | |
the technical merits of the position. The tax benefits recognized in the | |
financial statements from such a position should be measured based on the | |
largest benefit that has a greater than fifty percent (50%) likelihood of being | |
realized upon ultimate settlement. Section 740-10-25 also provides guidance on | |
de-recognition, classification, interest and penalties on income taxes, | |
accounting in interim periods and requires increased disclosures. | |
The estimated future tax effects of temporary differences between the tax basis | |
of assets and liabilities are reported in the accompanying consolidated balance | |
sheets, as well as tax credit carry-backs and carry-forwards. The Company | |
periodically reviews the recoverability of deferred tax assets recorded on its | |
consolidated balance sheets and provides valuation allowances as management | |
deems necessary. | |
Management makes judgments as to the interpretation of the tax laws that might | |
be challenged upon an audit and cause changes to previous estimates of tax | |
liability. In addition, the Company operates within multiple taxing | |
jurisdictions and is subject to audit in these jurisdictions. In management's | |
opinion, adequate provisions for income taxes have been made for all years. If | |
actual taxable income by tax jurisdiction varies from estimates, additional | |
allowances or reversals of reserves may be necessary. | |
UNCERTAIN TAX POSITIONS | |
The Company did not take any uncertain tax positions and had no adjustments to | |
unrecognized income tax liabilities or benefits pursuant to the provisions of | |
Section 740-10-25 for the reporting period ended April 30, 2014 or 2013. | |
LIMITATION ON UTILIZATION OF NOLS DUE TO CHANGE IN CONTROL | |
Pursuant to the Internal Revenue Code Section 382 ("Section 382"), certain | |
ownership changes may subject the NOL's to annual limitations which could reduce | |
or defer the NOL. Section 382 imposes limitations on a corporation's ability to | |
utilize NOLs if it experiences an "ownership change." In general terms, an | |
ownership change may result from transactions increasing the ownership of | |
certain stockholders in the stock of a corporation by more than 50 percentage | |
points over a three-year period. In the event of an ownership change, | |
utilization of the NOLs would be subject to an annual limitation under Section | |
382 determined by multiplying the value of its stock at the time of the | |
ownership change by the applicable long-term tax-exempt rate. Any unused annual | |
limitation may be carried over to later years. The imposition of this limitation | |
on its ability to use the NOLs to offset future taxable income could cause the | |
Company to pay U.S. federal income taxes earlier than if such limitation were | |
not in effect and could cause such NOLs to expire unused, reducing or | |
eliminating the benefit of such NOLs. | |
NET INCOME (LOSS) PER COMMON SHARE | |
Net income (loss) per common share is computed pursuant to section 260-10-45 of | |
the FASB Accounting Standards Codification. Basic net income (loss) per common | |
share is computed by dividing net income (loss) by the weighted average number | |
of shares of common stock outstanding during the period. Diluted net income | |
(loss) per common share is computed by dividing net income (loss) by the | |
weighted average number of shares of common stock and potentially outstanding | |
shares of common stock during the period to reflect the potential dilution that | |
could occur from common shares issuable through stock options and warrants. The | |
total amount of potentially outstanding dilutive common shares from the | |
conversion of the convertible notes plus accrued interest converted would be | |
3,962,308 and 0 for the reporting period ended April 30, 2014 and 2013, | |
respectively. | |
CASH FLOWS REPORTING | |
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards | |
Codification for cash flows reporting, classifies cash receipts and payments | |
according to whether they stem from operating, investing, or financing | |
activities and provides definitions of each category, and uses the indirect or | |
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25 | |
of the FASB Accounting Standards Codification to report net cash flow from | |
operating activities by adjusting net income to reconcile it to net cash flow | |
from operating activities by removing the effects of (a) all deferrals of past | |
operating cash receipts and payments and all accruals of expected future | |
operating cash receipts and payments and (b) all items that are included in net | |
income that do not affect operating cash receipts and payments. The Company | |
reports the reporting currency equivalent of foreign currency cash flows, using | |
the current exchange rate at the time of the cash flows and the effect of | |
exchange rate changes on cash held in foreign currencies is reported as a | |
separate item in the reconciliation of beginning and ending balances of cash and | |
cash equivalents and separately provides information about investing and | |
financing activities not resulting in cash receipts or payments in the period | |
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards | |
Codification. | |
SUBSEQUENT EVENTS | |
The Company follows the guidance in Section 855-10-50 of the FASB Accounting | |
Standards Codification for the disclosure of subsequent events. The Company will | |
evaluate subsequent events through the date when the financial statements were | |
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, | |
the Company as an SEC filer considers its financial statements issued when they | |
are widely distributed to users, such as through filing them on EDGAR. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial | |
Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting | |
Discontinued Operations and Disclosures of Disposals of Components of an Entity. | |
The amendments in this Update change the requirements for reporting discontinued | |
operations in Subtopic 205-20. | |
Under the new guidance, a discontinued operation is defined as a disposal of a | |
component or group of components that is disposed of or is classified as held | |
for sale and "represents a strategic shift that has (or will have) a major | |
effect on an entity's operations and financial results." The ASU states that a | |
strategic shift could include a disposal of (i) a major geographical area of | |
operations, (ii) a major line of business, (iii) a major equity method | |
investment, or (iv) other major parts of an entity. Although "major" is not | |
defined, the standard provides examples of when a disposal qualifies as a | |
discontinued operation. | |
The ASU also requires additional disclosures about discontinued operations that | |
will provide more information about the assets, liabilities, income and expenses | |
of discontinued operations. In addition, the ASU requires disclosure of the | |
pre-tax profit or loss attributable to a disposal of an individually significant | |
component of an entity that does not qualify for discontinued operations | |
presentation in the financial statements. | |
The ASU is effective for public business entities for annual periods beginning | |
on or after December 15, 2014, and interim periods within those years. | |
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic | |
915): Elimination of Certain Financial Reporting Requirements, Including an | |
Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. | |
The amendments in this Update remove the definition of a development stage | |
entity from the Master Glossary of the Accounting Standards Codification, | |
thereby removing the financial reporting distinction between development stage | |
entities and other reporting entities from U.S. GAAP. In addition, the | |
amendments eliminate the requirements for development stage entities to (1) | |
present inception-to-date information in the statements of income, cash flows, | |
and shareholder equity, (2) label the financial statements as those of a | |
development stage entity, (3) disclose a description of the development stage | |
activities in which the entity is engaged, and (4) disclose in the first year in | |
which the entity is no longer a development stage entity that in prior years it | |
had been in the development stage. | |
The amendments also clarify that the guidance in Topic 275, Risks and | |
Uncertainties, is applicable to entities that have not commenced planned | |
principal operations. | |
Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 | |
states that a development stage entity does not meet the condition in paragraph | |
810-10-15-14(a) to be a variable interest entity if (1) the entity can | |
demonstrate that the equity invested in the legal entity is sufficient to permit | |
it to finance the activities that it is currently engaged in and (2) the | |
entity's governing documents and contractual arrangements allow additional | |
equity investments. | |
The amendments in this Update also eliminate an exception provided to | |
development stage entities in Topic 810, Consolidation, for determining whether | |
an entity is a variable interest entity on the basis of the amount of investment | |
equity that is at risk. The amendments to eliminate that exception simplify U.S. | |
GAAP by reducing avoidable complexity in existing accounting literature and | |
improve the relevance of information provided to financial statement users by | |
requiring the application of the same consolidation guidance by all reporting | |
entities. The elimination of the exception may change the consolidation | |
analysis, consolidation decision, and disclosure requirements for a reporting | |
entity that has an interest in an entity in the development stage. | |
The amendments related to the elimination of inception-to-date information and | |
the other remaining disclosure requirements of Topic 915 should be applied | |
retrospectively except for the clarification to Topic 275, which shall be | |
applied prospectively. For public business entities, those amendments are | |
effective for annual reporting periods beginning after December 15, 2014, and | |
interim periods therein. | |
Early application of each of the amendments is permitted for any annual | |
reporting period or interim period for which the entity's financial statements | |
have not yet been issued (public business entities) or made available for | |
issuance (other entities). Upon adoption, entities will no longer present or | |
disclose any information required by Topic 915. | |
Management does not believe that any recently issued, but not yet effective | |
accounting pronouncements, if adopted, would have a material effect on the | |
accompanying consolidated financial statements. | |
GOING_CONCERN
GOING CONCERN | 3 Months Ended |
Apr. 30, 2014 | |
GOING CONCERN: | ' |
GOING CONCERN | ' |
NOTE 3 - GOING CONCERN | |
The financial statements have been prepared assuming that the Company will | |
continue as a going concern, which contemplates continuity of operations, | |
realization of assets, and liquidation of liabilities in the normal course of | |
business. | |
As reflected in the financial statements, the Company had a deficit accumulated | |
during the exploration stage at April 30, 2014, a net loss and net cash used in | |
operating activities for the reporting period then ended. These factors raise | |
substantial doubt about the Company's ability to continue as a going concern. | |
The Company is attempting to commence exploration and generate sufficient | |
revenue; however, the Company's cash position may not be sufficient to support | |
its daily operations. While the Company believes in the viability of its | |
strategy to commence operations and generate sufficient revenue and in its | |
ability to raise additional funds, there can be no assurances to that effect. | |
The ability of the Company to continue as a going concern is dependent upon its | |
ability to further implement its business plan and generate sufficient revenue | |
and its ability to raise additional funds by way of a public or private | |
offering. | |
The financial statements do not include any adjustments related to the | |
recoverability and classification of recorded asset amounts or the amounts and | |
classification of liabilities that might be necessary should the Company be | |
unable to continue as a going concern. | |
MINERAL_PROPERTIES
MINERAL PROPERTIES | 3 Months Ended |
Apr. 30, 2014 | |
MINERAL PROPERTIES | ' |
MINERAL PROPERTIES | ' |
NOTE 4 - MINERAL PROPERTIES | |
CHERRY CREEK CLAIM | |
Effective January 31, 2013, Tungsten signed an Option Agreement with Viscount | |
Nevada Holdings Ltd. ("Viscount") to acquire an undivided 100% right, title and | |
interest in and to all Tungsten located in certain mining claims ("Cherry Creek | |
claim") in the State of Nevada. The Option shall be in good standing and | |
exercisable by Tungsten by paying the following amounts on or before: (i) | |
$150,000 to Viscount on or before April 15, 2013; (ii) $100,000 to Viscount on | |
or before February 15, 2014; (iii) $50,000 to Viscount on or before February 15, | |
2015; and (iv) paying all such property tax payments as may be required to | |
maintain the mineral claims in good standing. | |
In addition, Tungsten shall use commercially reasonable efforts to incur the | |
following annual work commitments as currently recommended and agreed to by the | |
parties: (i) exploration expenditures on the property of $250,000 on or before | |
the first anniversary of the execution of this Agreement; (ii) exploration | |
expenditures on the property of $250,000 on or before the second anniversary of | |
the execution of this Agreement; and (iii) exploration expenditures on the | |
property of $1,000,000 on or before the third anniversary of the execution of | |
the Agreement. | |
On April 11, 2013, the Company made the first payment of $150,000. | |
On February 11, 2014, the Company and Viscount signed an amendment to the Option | |
Agreement keeping the Option in good standing if $100,000 is paid to Viscount | |
and $250,000 of exploration expenditures is made on or before June 15, 2014. | |
Viscount was compensated for agreeing to this amendment with the issuance of | |
250,000 restricted shares of common stock, valued at $18,025, the fair market | |
value of the common stock on the date of issuance, which was recorded as other | |
(income) expense - cost of extension. | |
On June 12, 2014, the Company and Viscount signed an amendment to the Cherry | |
Creek property Option Agreement keeping the Option in good standing if $100,000 | |
is paid to Viscount and $250,000 of exploration expenditures is made on or | |
before September 15, 2014. | |
IDAHO CLAIM | |
On April 19, 2013, the Company entered into a purchase agreement (the | |
"Agreement") with Monfort Ventures Ltd. ("Monfort"), pursuant to which the | |
Company acquired title to certain unpatented pacer mining claims located in | |
Custer County, Idaho (the "Property") upon issuance by the Company of 3,000,000 | |
shares of its common stock to Monfort (the "Shares") valued at $0.25 per share, | |
the most recent PPM price, or $750,000. | |
Subsequent to the purchase of the Idaho claim, management decided to impair the | |
value of the acquired unpatented pacer mining claims by $750,000. This | |
impairment was a consequence of the assets being exploratory in nature and not | |
being supported any ore reserves. It is not possible to evaluate and establish | |
the real value of the mineral properties until additional work is completed and | |
that may take several years. With that being stated, the Company's position is | |
that these acquired mineral assets, which consist of ownership of unpatented | |
mining claims, cannot be truly assessed at this time. The Company assumes that | |
these assets have been impaired and the exchange price based on $0.25 per share | |
is not supportable as the possible value of these assets in the future. The | |
Company impaired the stock value exchange of $750,000 as of year ended January | |
31, 2014. | |
SUMMARY OF MINERAL PROPERTIES | |
Mineral properties consisted of the following: | |
April 30, 2014 January 31, 2014 | |
-------------- ---------------- | |
Cherry Creek Claim $ 174,013 $ 174,013 | |
Idaho Claim 750,000 750,000 | |
Less impairment (750,000) (750,000) | |
---------- ---------- | |
Total $ 174,013 $ 174,013 | |
====bsp; |
Convertible_Note_Payable
Convertible Note Payable | 3 Months Ended |
Apr. 30, 2014 | |
Convertible Note Payable | ' |
Convertible Note Payable | ' |
NOTE 5 - CONVERTIBLE NOTE PAYABLE | |
On January 2, 2014 (the "Closing Date"), Tungsten Corp., a Nevada corporation | |
(the "Company"), entered into a 12% note purchase agreement dated as of the | |
Closing Date (the "Purchase Agreement") with Hanover Holdings I, LLC, a New York | |
limited liability company ("Hanover"), maturing on September 2, 2014. Hanover | |
has the option to convert the outstanding notes and interest due into the | |
Company's common shares at $0.0325 per share at any time prior to September 2, | |
2014. The Purchase Agreement provides that, upon the terms and subject to the | |
conditions set forth therein, Hanover shall purchase from the Company on the | |
Closing Date a senior convertible note with an initial principal amount of | |
$127,500 (the "Convertible Note") for a purchase price of $85,000 (a 33.33% | |
original issue discount). Pursuant to the Purchase Agreement, on the Closing | |
Date, the Company issued the Convertible Note to Hanover. | |
DERIVATIVE ANALYSIS | |
Because the conversion feature included in the convertible note payable has full | |
reset adjustments tied to future issuances of equity securities by the Company, | |
they are subject to derivative liability treatment under Section 815-40-15 of | |
the FASB Accounting Standard Codification ("Section 815-40-15"). | |
The Company estimated the fair value of the conversion feature on the date of | |
grant using the Black-Scholes Option Pricing Model with the following | |
weighted-average assumptions: | |
January 2, 2014 | |
--------------- | |
Expected life (year) .67 | |
Expected volatility (*) 190.12% | |
Expected annual rate of quarterly dividends 0.00% | |
Risk-free rate(s) 0.11% | |
(A) FAIR VALUE OF CONVERSION FEATURES | |
Financial assets and liabilities measured at fair value on a recurring basis are | |
summarized below and disclosed on the balance sheet at April 30, 2014: | |
Fair Value Measurement Using | |
Carrying Value Level 1 Level 2 Level 3 Total | |
-------------- ------- ------- ------- ----- | |
Derivative conversion features $137,770 $ -- $ -- $137,770 $137,770 | |
Financial assets and liabilities measured at fair value on a recurring basis are | |
summarized below and disclosed on the balance sheet at January 31, 2014: | |
Fair Value Measurement Using | |
Carrying Value Level 1 Level 2 Level 3 Total | |
-------------- ------- ------- ------- ----- | |
Derivative conversion features $214,050 $ -- $ -- $214,050 $214,050 | |
The table below provides a summary of the changes in fair value, including net | |
transfers in and/or out, of all financial assets and liabilities measured at | |
fair value on a recurring basis using significant unobservable inputs (Level 3) | |
during the three months ended April 30, 2014: | |
Fair Value Measurement Using Level 3 Inputs | |
Derivative | |
Liabilities Total | |
----------- ---------- | |
Balance, January 31, 2014 $ 214,050 $ 214,050 | |
Purchases, issuances and settlements -- -- | |
Total (gains) or losses (realized/unrealized) included | |
in consolidated statements of operations (76,280) (76,280) | |
Transfers in and/or out of Level 3 -- -- | |
---------- ---------- | |
Balance, April 30, 2014 $ 137,770 $ 137,770 | |
====bsp; ====pre> | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Apr. 30, 2014 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 6 - RELATED PARTY TRANSACTIONS | |
FREE OFFICE SPACE | |
The Company has been provided office space by its Chief Executive Officer at no | |
cost. The management determined that such cost is nominal and did not recognize | |
the rent expense in its financial statements. | |
ADVANCES FROM STOCKHOLDER | |
From time to time, stockholders of the Company advance funds to the Company for | |
working capital purpose. Those advances are unsecured, non-interest bearing and | |
due on demand. | |
Advances from stockholder consisted of the following: | |
April 30, 2014 January 31, 2014 | |
-------------- ---------------- | |
Advances from stockholders $ 99,951 $ 99,951 | |
-------- -------- | |
Total $ 99,951 $ 99,951 | |
===nbsp; ===/pre> | |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Apr. 30, 2014 | |
STOCKHOLDERS' DEFICIT | ' |
STOCKHOLDERS' DEFICIT | ' |
NOTE 7 - STOCKHOLDERS' DEFICIT | |
SHARES AUTHORIZED | |
Upon formation the total number of shares of common stock which the Company is | |
authorized to issue is Fifty Million (50,000,000) shares, par value $0.001 per | |
share. | |
On March 9, 2012 the Board of Directors and the consenting stockholders adopted | |
and approved a resolution to effectuate an amendment to the Company's Articles | |
of Incorporation to (i) increase the number of shares of authorized common stock | |
from 50,000,000 to 300,000,000; (ii) create 25,000,000 shares of "blank check" | |
preferred stock with a par value of $0.0001 per share and (iii) decrease the par | |
value of common stock from $0.001 per share to $0.0001 per share. | |
COMMON STOCK | |
SHARES ISSUED FOR CASH | |
On April 8, 2013, concurrent with the closing of the reverse merger, the Company | |
closed a private placement of 2,000,000 shares at $0.25 per share for an | |
aggregate of $500,000 in subscription receivable, $250,000 of which was received | |
upon closing of the private placement while the remaining $250,000 was received | |
on May 24, 2013 and May 28, 2013. | |
Immediately after the reverse merger and the private placement the Company had | |
71,000,000 issued and outstanding common shares. | |
The Company has entered into lock up agreements with each of Messrs. Martin and | |
Oliver in regards to the aggregate of 3,000,000 shares of the common stock that | |
each hold (the "Lock Up Agreements"). Pursuant to the terms of the Lock Up | |
Agreements, in regards to their respective 3,000,000 shares of common stock, | |
1,000,000 shares have been released concurrent with the closing of the | |
Transaction, and 1,000,000 shares shall be released on each anniversary | |
thereafter. | |
On April 19, 2013, the Company cancelled 6,000,000 shares, in the aggregate, of | |
the Company's common stock that was held by two former shareholders. | |
On February 18, 2014 (the "Closing Date"), Tungsten Corp., a Nevada corporation | |
(the "Company"), entered into a common stock purchase agreement dated as of the | |
Closing Date (the "Purchase Agreement") with Hanover Holdings I, LLC, a New York | |
limited liability company (the "Investor"). The Purchase Agreement provides | |
that, upon the terms and subject to the conditions set forth therein, the | |
Investor is committed to purchase up to $3,000,000 (the "Total Commitment") | |
worth of the Company's common stock, $0.0001 par value (the "Shares"), over the | |
24-month term of the Purchase Agreement. In accordance with the Purchase | |
Agreement, the Company issued 2,065,177 shares of its restricted common stock | |
valued at $150,000, the fair value of the common stock on the date of issuance, | |
which was recorded as cost for financing. | |
On April 7, 2014, the Company entered into Amendment No.1 (the "Amendment) to | |
the Registration Rights Agreement (the "Rights Agreement"), dated February 18, | |
2014, between the Company and Hanover Holdings I, LLC, a New York limited | |
liability company. Pursuant to the terms of the Amendment, the Company is | |
required to file a registration statement with the Securities and Exchange | |
Commission covering the resale of 21,388,254 shares of common stock, including | |
2,065,177 shares as initial commitment shares, 3,750,000 shares as additional | |
commitment shares, and 9,600,000 shares to cover the total commitment under the | |
Rights Agreement. | |
SHARES ISSUED FOR OBTAINING EMPLOYEE SERVICES | |
On May 13, 2013, the Company entered into a Restricted Stock Award Agreement | |
(the "Agreement") with Joseph P. Galda, pursuant to which Mr. Galda was granted | |
750,000 shares of restricted common stock of the Company (the "Restricted | |
Shares") in consideration for services to be rendered to the Company by Mr. | |
Galda as a director of the Company. The Restricted Shares will vest over a three | |
(3) year period at the rate of 62,500 shares of common stock per quarter, with | |
the first portion of the Restricted Shares vesting on June 30, 2013 and all the | |
Restricted Shares vesting by March 31, 2016. Under the Agreement, all unvested | |
Restricted Shares shall vest upon a "change in control," as defined in the | |
Agreement. According to the Agreement, the vesting of the Restricted Shares is | |
subject to Mr. Galda's continuous service to the Company as a director. In the | |
event that the Board of Directors of the Company determines that Mr. Galda has | |
committed certain acts of misconduct, Mr. Galda will not be entitled to the | |
Restricted Shares. Mr. Galda also made certain representations to the Company in | |
connection with the restricted stock award, including representations relating | |
to this ability to bear economic risk, the sufficiency of information received, | |
his level of sophistication in financial and business matters, and his purpose | |
for acquiring the Restricted Shares. These shares were valued at $0.81 per | |
share, the close price on the date of grant, or $607,500 and were amortized over | |
the vesting period, or $50,625 per quarter which was included in | |
Officer/Directors' compensation. For the three months ended April 30, 2014 the | |
Company recognized $50,625 in equity based compensation under this Agreement. | |
On January 17, 2014 the Company entered into an Agreement with Carmel Advisors | |
LLC to provide public relations, communications, advisory and consulting | |
services for a period of twelve (12) months, and be compensated for those | |
services rendered by the issuance of 2,000,000 restricted 144 shares of the | |
Company's common stock, and that when issued in accordance with the Agreement, | |
such shares are earned ratably over the term of the agreement and the unearned | |
shares are forfeitable in the event of non-performance by Carmel Advisor or | |
terminated by the Company. As of April 30, 2014 the 2,000,000 shares were issued | |
in satisfaction of the terms of the Agreement. These shares were valued at $0.09 | |
per share, the close price on the date of grant, or $180,000, and will be | |
amortized over the twelve (12) month period, or $15,000 per month which will be | |
included in general and administration: advertising and promotion expenses. For | |
the three months ended April 30, 2014 the Company recognized $45,000 in | |
Advertising and Promotion expenses under this Agreement. | |
On January 31, 2014 the Restricted Stock Award Agreement with Joseph P. Galda | |
was amended and restated with the effect that the first vesting of the | |
Restricted Shares in the amount of 250,000 shares will take place on April 30, | |
2014. All other provisions of the Agreement remain unchanged and in force. | |
On January 31, 2013, the Company entered into a Restricted Stock Award Agreement | |
(the "Agreement") with David Bikerman, pursuant to which Mr. Bikerman was | |
granted 750,000 shares of restricted common stock of the Company (the | |
"Restricted Shares") in consideration for services to be rendered to the Company | |
by Mr. Bikerman as a director of the Company. The Restricted Shares will vest | |
over a three (3) year period at the rate of 62,500 shares of common stock per | |
quarter, with the first 187,500 of the Restricted Shares vesting on April 30, | |
2014 and all the Restricted Shares vesting by June 30, 2016. Under the | |
Agreement, all unvested Restricted Shares shall vest upon a "change in control," | |
as defined in the Agreement. According to the Agreement, the vesting of the | |
Restricted Shares is subject to Mr. Bikerman's continuous service to the Company | |
as a director. In the event that the Board of Directors of the Company | |
determines that Mr. Bikerman has committed certain acts of misconduct, Mr. | |
Bikerman will not be entitled to the Restricted Shares. Mr. Bikerman also made | |
certain representations to the Company in connection with the restricted stock | |
award, including representations relating to this ability to bear economic risk, | |
the sufficiency of information received, his level of sophistication in | |
financial and business matters, and his purpose for acquiring the Restricted | |
Shares. These shares were valued at $0.075 per share, the close price on the | |
date of grant, or $56,250 and will be amortized over the vesting period, or | |
$4,687.50 per quarter which will be included in officer/directors' compensation. | |
For the three months ended April 30, 2014 the Company recognized $4,687.50 in | |
equity based compensation under this Agreement. | |
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR | |
SERVICES | |
On January 31, 2014 the Company entered into a letter agreement (the "Letter | |
Agreement") with Crescendo Communications, LLC ("Crescendo") whereby Crescendo | |
has agreed to accept shares of common stock of the Company as partial payment of | |
fees owed, and that when issued pursuant to the Letter Agreement, such shares | |
shall be fully paid and non-assessable by the Company. For the three months | |
ended April 30, 2014, in satisfaction of the payment of $5,250 for fees owed, | |
81,636 restricted shares were issued whose total fair value equaled the amount | |
owed. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Apr. 30, 2014 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
NOTE 8 - SUBSEQUENT EVENTS | |
The Company has evaluated all events that occurred after the balance sheet date | |
through the date when the financial statements were issued to determine if they | |
must be reported. The Management of the Company determined that there were no | |
reportable subsequent events to be disclosed. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 30, 2014 | |
SIGNIFICANT ACCOUNTING POLICIES | ' |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | |
The accompanying unaudited interim financial statements and related notes have | |
been prepared in accordance with accounting principles generally accepted in the | |
United States of America ("U.S. GAAP") for interim financial information, and | |
with the rules and regulations of the United States Securities and Exchange | |
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly, | |
they do not include all of the information and footnotes required by U.S. GAAP | |
for complete financial statements. The unaudited interim financial statements | |
furnished reflect all adjustments (consisting of normal recurring accruals) | |
which are, in the opinion of management, necessary to a fair statement of the | |
results for the interim periods presented. Interim results are not necessarily | |
indicative of the results for the full year. These unaudited interim financial | |
statements should be read in conjunction with the financial statements of | |
Tungsten Corp. for the period from October 30, 2012 (inception) through January | |
31, 2014 and notes thereto contained in the Company's Current Report on Form | |
10-K filed with the SEC on March 31, 2014. | |
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS | ' |
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND | |
ASSUMPTIONS | |
The preparation of financial statements in conformity with accounting principles | |
generally accepted in the United States of America 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(s) | |
of the financial statements and the reported amounts of revenues and expenses | |
during the reporting period(s). | |
Critical accounting estimates are estimates for which (a) the nature of the | |
estimate is material due to the levels of subjectivity and judgment necessary to | |
account for highly uncertain matters or the susceptibility of such matters to | |
change and (b) the impact of the estimate on financial condition or operating | |
performance is material. The Company's critical accounting estimates and | |
assumptions affecting the financial statements were: | |
(i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company | |
will continue as a going concern, which contemplates continuity of | |
operations, realization of assets, and liquidation of liabilities in | |
the normal course of business; | |
(ii) VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that | |
the realization of the Company's net deferred tax assets resulting | |
from its net operating loss ("NOL") carry-forwards for Federal income | |
tax purposes that may be offset against future taxable income was not | |
considered more likely than not and accordingly, the potential tax | |
benefits of the net loss carry-forwards are offset by a full valuation | |
allowance. Management made this assumption based on (a) the Company | |
has incurred recurring losses, (b) general economic conditions, and | |
(c) its ability to raise additional funds to support its daily | |
operations by way of a public or private offering, among other | |
factors. | |
(iii)ESTIMATES AND ASSUMPTIONS USED IN VALUATION OF EQUITY INSTRUMENTS: | |
Management estimates expected term of share options and similar | |
instruments, expected volatility of the Company's common shares and | |
the method used to estimate it, expected annual rate of quarterly | |
dividends, and risk free rate(s) to value share options and similar | |
instruments. | |
These significant accounting estimates or assumptions bear the risk of change | |
due to the fact that there are uncertainties attached to these estimates or | |
assumptions, and certain estimates or assumptions are difficult to measure or | |
value. | |
Management bases its estimates on historical experience and on various | |
assumptions that are believed to be reasonable in relation to the financial | |
statements taken as a whole under the circumstances, the results of which form | |
the basis for making judgments about the carrying values of assets and | |
liabilities that are not readily apparent from other sources. | |
Management regularly evaluates the key factors and assumptions used to develop | |
the estimates utilizing currently available information, changes in facts and | |
circumstances, historical experience and reasonable assumptions. After such | |
evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |
Actual results could differ from those estimates. | |
FISCAL YEAR-END Policy | ' |
FISCAL YEAR-END | |
The Company elected January 31st as its fiscal year ending date. | |
PRINCIPLES OF CONSOLIDATION | ' |
PRINCIPLES OF CONSOLIDATION | |
The Company applies the guidance of Topic 810 "CONSOLIDATION" of the FASB | |
Accounting Standards Codification to determine whether and how to consolidate | |
another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned | |
subsidiaries--all entities in which a parent has a controlling financial | |
interest--shall be consolidated except (1) when control does not rest with the | |
parent, the majority owner; (2) if the parent is a broker-dealer within the | |
scope of Topic 940 and control is likely to be temporary; (3) consolidation by | |
an investment company within the scope of Topic 946 of a non-investment-company | |
investee. Pursuant to ASC Paragraph 810-10-15-8 the usual condition for a | |
controlling financial interest is ownership of a majority voting interest, and, | |
therefore, as a general rule ownership by one reporting entity, directly or | |
indirectly, of more than 50 percent of the outstanding voting shares of another | |
entity is a condition pointing toward consolidation. The power to control may | |
also exist with a lesser percentage of ownership, for example, by contract, | |
lease, agreement with other stockholders, or by court decree. The Company | |
consolidates all less-than-majority-owned subsidiaries, if any, in which the | |
parent's power to control exists. | |
The Company's consolidated subsidiary and/or entity is as follows: | |
Date of incorporation | |
or formation | |
Name of consolidated State or other jurisdiction of (date of acquisition, | |
subsidiary or entity incorporation or organization if applicable) Attributable interest | |
-------------------- ----------------------------- -------------- --------------------- | |
Nevada Tungsten Holdings Ltd. The State of Nevada October 30, 2012 100% | |
(April 8, 2013) | |
These consolidated financial statements include all accounts of the Company as | |
of April 30, 2014 and for the period from April 8, 2013 (date of acquisition) | |
through April 30, 2014; and Nevada Tungsten Holdings Ltd. as of April 30, 2014 | |
and 2013, for the period ended April 30, 2014, and for the period from October | |
30, 2012 (inception) through April 30, 2014. | |
All inter-company balances and transactions have been eliminated. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
The Company follows paragraph 820-10-35-37 of the FASB Accounting Standards | |
Codification ("Paragraph 820-10-35-37") to measure the fair value of its | |
financial instruments and paragraph 825-10-50-10 of the FASB Accounting | |
Standards Codification for disclosures about fair value of its financial | |
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair | |
value in accounting principles generally accepted in the United States of | |
America (U.S. GAAP), and expands disclosures about fair value measurements. To | |
increase consistency and comparability in fair value measurements and related | |
disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which | |
prioritizes the inputs to valuation techniques used to measure fair value into | |
three (3) broad levels. The three (3) levels of fair value hierarchy defined by | |
Paragraph 820-10-35-37 are described below: | |
Level 1 Quoted market prices available in active markets for identical assets | |
or liabilities as of the reporting date. | |
Level 2 Pricing inputs other than quoted prices in active markets included in | |
Level 1, which are either directly or indirectly observable as of the | |
reporting date. | |
Level 3 Pricing inputs that are generally observable inputs and not | |
corroborated by market data. | |
Financial assets are considered Level 3 when their fair values are determined | |
using pricing models, discounted cash flow methodologies or similar techniques | |
and at least one significant model assumption or input is unobservable. | |
The fair value hierarchy gives the highest priority to quoted prices | |
(unadjusted) in active markets for identical assets or liabilities and the | |
lowest priority to unobservable inputs. If the inputs used to measure the | |
financial assets and liabilities fall within more than one level described | |
above, the categorization is based on the lowest level input that is significant | |
to the fair value measurement of the instrument. | |
The carrying amounts of the Company's financial assets and liabilities, such as | |
cash, accounts payable and accrued expenses approximate their fair values | |
because of the short maturity of these instruments. | |
The Company uses Level 3 of the fair value hierarchy to measure the fair value | |
of the derivative liabilities and revalues its derivative liability at every | |
reporting period and recognizes gains or losses in the statements of operations | |
that are attributable to the change in the fair value of the derivative warrant | |
liability. | |
Transactions involving related parties cannot be presumed to be carried out on | |
an arm's-length basis, as the requisite conditions of competitive, free-market | |
dealings may not exist. Representations about transactions with related parties, | |
if made, shall not imply that the related party transactions were consummated on | |
terms equivalent to those that prevail in arm's-length transactions unless such | |
representations can be substantiated. | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS | ' |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS | |
LEVEL 3 FINANCIAL LIABILITIES - DERIVATIVE CONVERSION FEATURES | |
The Company uses Level 3 of the fair value hierarchy to measure the fair value | |
of the derivative liabilities and revalues its derivative warrant liability and | |
derivative liability on the conversion feature at every reporting period and | |
recognizes gains or losses in the consolidated statements of operations that are | |
attributable to the change in the fair value of the derivative liabilities. | |
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS | ' |
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS | |
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards | |
Codification for its long-lived assets. The Company's long-lived assets, which | |
include mineral properties, are reviewed for impairment whenever events or | |
changes in circumstances indicate that the carrying amount of an asset may not | |
be recoverable. | |
The Company assesses the recoverability of its long-lived assets by comparing | |
the projected undiscounted net cash flows associated with the related long-lived | |
asset or group of long-lived assets over their remaining estimated useful lives | |
against their respective carrying amounts. Impairment, if any, is based on the | |
excess of the carrying amount over the fair value of those assets. Fair value is | |
generally determined using the asset's expected future discounted cash flows or | |
market value, if readily determinable. If long-lived assets are determined to be | |
recoverable, but the newly determined remaining estimated useful lives are | |
shorter than originally estimated, the net book values of the long-lived assets | |
are depreciated over the newly determined remaining estimated useful lives. | |
The Company considers the following to be some examples of important indicators | |
that may trigger an impairment review: (i) significant under-performance or | |
losses of assets relative to expected historical or projected future operating | |
results; (ii) significant changes in the manner or use of assets or in the | |
Company's overall strategy with respect to the manner or use of the acquired | |
assets or changes in the Company's overall business strategy; (iii) significant | |
negative industry or economic trends; (iv) increased competitive pressures; and | |
(v) regulatory changes. The Company evaluates acquired assets for potential | |
impairment indicators at least annually and more frequently upon the occurrence | |
of such events. | |
Management periodically reviews the recoverability of the capitalized mineral | |
properties. Management will take into consideration various information | |
including, but not limited to, historical production records taken from previous | |
mine operations, results of exploration activities conducted to date, estimated | |
future prices and reports and opinions of outside consultants. When a | |
determination has been made that a project or property will be abandoned, or its | |
carrying value has been impaired, a provision is made for any expected loss on | |
the project or property. | |
CASH EQUIVALENTS | ' |
CASH EQUIVALENTS | |
The Company considers all highly liquid investments with a maturity of three | |
months or less when purchased to be cash equivalents | |
MINERAL PROPERTIES Policy | ' |
MINERAL PROPERTIES | |
The Company follows Section 930 of the FASB Accounting Standards Codification | |
for its mineral properties. Mineral properties and related mineral rights | |
acquisition costs are capitalized pending determination of whether the drilling | |
has found proved reserves. In accordance with the Disclosure requirements of | |
Section 350-30-50-2, the Company capitalizes costs incurred to renew or extend | |
the term or requirements that need to be met for retention of the mineral | |
properties. If a mineral ore body is discovered, capitalized costs will be | |
amortized on a unit-of-production basis following the commencement of | |
production. Otherwise, capitalized acquisition costs are expensed when it is | |
determined that the mineral property has no future economic value. General | |
exploration costs and costs to maintain rights and leases, including rights of | |
access to lands for geophysical work and salaries, equipment, and supplies for | |
geologists and geophysical crews are expensed as incurred. When it is determined | |
that a mining deposit can be economically and legally extracted or produced | |
based on established proven and probable reserves, further exploration costs and | |
development costs as well as interest costs relating to exploration and | |
development projects that require greater than six (6) months to be readied for | |
their intended use incurred after such determination will be capitalized. The | |
establishment of proven and probable reserves is based on results of final | |
feasibility studies which indicate whether a property is economically feasible. | |
Upon commencement of commercial production, capitalized costs will be | |
transferred to the appropriate asset categories and amortized on a | |
unit-of-production basis. Capitalized costs, net of salvage values, relating to | |
a deposit which is abandoned or considered uneconomic for the foreseeable future | |
will be written off. The sale of a partial interest in a proved property is | |
accounted for as a cost recovery and no gain or loss is recognized as long as | |
this treatment does not significantly affect the unit-of-production amortization | |
rate. A gain or loss will be recognized for all other sales of proved properties | |
and will be classified in other operating revenues. Maintenance and repairs are | |
charged to expense, and renewals and betterments are capitalized to the | |
appropriate property and equipment accounts. | |
The provision for depreciation, depletion and amortization ("DD&A") of mineral | |
properties will be calculated on a property-by-property basis using the | |
unit-of-production method. Taken into consideration in the calculation of DD&A | |
are estimated future dismantlement, restoration and abandonment costs, which are | |
net of estimated salvage values. Upon becoming fully amortized, the related cost | |
and accumulated amortization are removed from the accounts. | |
To date, the Company has not established the commercial feasibility of any | |
exploration prospects; therefore, all general exploration costs, if any, are | |
being expensed. | |
MINERAL EXPLORATION AND MINE DEVELOPMENT COSTS | ' |
MINERAL EXPLORATION AND MINE DEVELOPMENT COSTS | |
All mineral exploration and pre-extraction expenditures are expensed as incurred | |
until such time the Company exits the Exploration Stage by establishing proven | |
or probable reserves. Mine development costs incurred to develop mineral | |
deposits, to expand the capacity of mines or to develop mine areas substantially | |
in advance of production are capitalized once proven and probable reserves | |
exist, and the property is determined to be a commercially mineable property. | |
Costs incurred to maintain current production or to maintain assets on a standby | |
basis are charged to operations. If the Company does not continue with | |
exploration after the completion of the feasibility study, the cost of mineral | |
rights will be expensed at that time. Costs of abandoned projects, including | |
related property and equipment costs, are charged to mining costs. | |
RESTORATION COSTS (ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS) Policy | ' |
RESTORATION COSTS (ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS) | |
Various federal and state mining laws and regulations require the Company to | |
reclaim the surface areas and restore underground water quality for its mine | |
projects to the pre-existing mine area average quality after the completion of | |
mining. | |
In accordance with ASC 410, Asset Retirement and Environmental Obligations, the | |
Company capitalizes the measured fair value of asset retirement and | |
environmental obligations to mineral rights and properties. ASC 410 requires the | |
Company to record a liability for the present value of the estimated future site | |
restoration and environmental remediation costs with corresponding increase to | |
the carrying amount of the related mineral rights and properties. The asset | |
retirement and environmental obligations are accreted to an undiscounted value | |
until the time at which they are expected to be settled. The accretion expense | |
is charged to earnings and the actual retirement costs are recorded against the | |
asset retirement obligations when incurred. Any difference between the recorded | |
asset retirement obligations and the actual retirement costs incurred will be | |
recorded as a gain or loss in the period of settlement. | |
Environmental expenditures that relate to ongoing environmental and reclamation | |
programs will be charged against statements of operations as incurred or | |
capitalized and amortized depending upon their future economic benefits. Future | |
site restoration and environmental remediation costs, which include extraction | |
equipment removal, site restoration and environmental remediation, are accrued | |
at the end of each reporting period based on management's best estimate of the | |
costs expected to be incurred for each project. Such estimates are determined by | |
the Company's engineering studies which consider the costs of future surface and | |
groundwater activities, current regulations, actual expenses incurred, and | |
technology and industry standards. | |
On a quarterly basis, the Company reviews the assumptions used to estimate the | |
expected cash flows required to settle the asset retirement obligations, | |
including changes in estimated probabilities, amounts and timing of the | |
settlement of the asset retirement and environmental obligations, as well as | |
changes in the legal obligation requirements at each of its mineral projects. | |
Changes in any one or more of these assumptions may cause revision of asset | |
retirement obligations for the corresponding assets. | |
The Company does not currently anticipate any material capital expenditures for | |
site restoration costs and considers the estimated future site restoration costs | |
to be minimal and so the present value of the same at October 31, 2013 as all of | |
its mineral properties are at early stages of exploration. | |
RELATED PARTIES Policy | ' |
RELATED PARTIES | |
The Company follows subtopic 850-10 of the FASB Accounting Standards | |
Codification for the identification of related parties and disclosure of related | |
party transactions. | |
Pursuant to Section 850-10-20 the Related parties include a. affiliates of the | |
Company; b. Entities for which investments in their equity securities would be | |
required, absent the election of the fair value option under the Fair Value | |
Option Subsection of Section 825-10-15, to be accounted for by the equity method | |
by the investing entity; c. trusts for the benefit of employees, such as pension | |
and profit-sharing trusts that are managed by or under the trusteeship of | |
management; d. principal owners of the Company; e. management of the Company; f. | |
other parties with which the Company may deal if one party controls or can | |
significantly influence the management or operating policies of the other to an | |
extent that one of the transacting parties might be prevented from fully | |
pursuing its own separate interests; and g. Other parties that can significantly | |
influence the management or operating policies of the transacting parties or | |
that have an ownership interest in one of the transacting parties and can | |
significantly influence the other to an extent that one or more of the | |
transacting parties might be prevented from fully pursuing its own separate | |
interests. | |
The financial statements shall include disclosures of material related party | |
transactions, other than compensation arrangements, expense allowances, and | |
other similar items in the ordinary course of business. However, disclosure of | |
transactions that are eliminated in the preparation of consolidated or combined | |
financial statements is not required in those statements. The disclosures shall | |
include: a. the nature of the relationship(s) involved; b. a description of the | |
transactions, including transactions to which no amounts or nominal amounts were | |
ascribed, for each of the periods for which income statements are presented, and | |
such other information deemed necessary to an understanding of the effects of | |
the transactions on the financial statements; c. the dollar amounts of | |
transactions for each of the periods for which income statements are presented | |
and the effects of any change in the method of establishing the terms from that | |
used in the preceding period; and d. amounts due from or to related parties as | |
of the date of each balance sheet presented and, if not otherwise apparent, the | |
terms and manner of settlement. | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
The Company accounts for derivative instruments and hedging activities in | |
accordance with paragraph 810-10-05-4 of the FASB Accounting Standards | |
Codification ("Paragraph 810-10-05-4"). Paragraph 810-10-05-4 requires companies | |
to recognize all derivative instruments as either assets or liabilities in the | |
balance sheet at fair value. The accounting for changes in the fair value of a | |
derivative instrument depends upon: (i) whether the derivative has been | |
designated and qualifies as part of a hedging relationship, and (ii) the type of | |
hedging relationship. For those derivative instruments that are designated and | |
qualify as hedging instruments, a company must designate the hedging instrument | |
based upon the exposure being hedged as either a fair value hedge, cash flow | |
hedge or hedge of a net investment in a foreign operation. | |
DERIVATIVE LIABILITY,Policy | ' |
DERIVATIVE LIABILITY | |
The Company evaluates its convertible debt, options, warrants or other | |
contracts, if any, to determine if those contracts or embedded components of | |
those contracts qualify as derivatives to be separately accounted for in | |
accordance with paragraph 810-10-05-4 and Section 815-40-25 of the FASB | |
Accounting Standards Codification. The result of this accounting treatment is | |
that the fair value of the embedded derivative is marked-to-market each balance | |
sheet date and recorded as either an asset or a liability. In the event that the | |
fair value is recorded as a liability, the change in fair value is recorded in | |
the consolidated statement of operations and comprehensive income (loss) as | |
other income or expense. Upon conversion, exercise or cancellation of a | |
derivative instrument, the instrument is marked to fair value at the date of | |
conversion, exercise or cancellation and then that the related fair value is | |
reclassified to equity. | |
In circumstances where the embedded conversion option in a convertible | |
instrument is required to be bifurcated and there are also other embedded | |
derivative instruments in the convertible instrument that are required to be | |
bifurcated, the bifurcated derivative instruments are accounted for as a single, | |
compound derivative instrument. | |
The classification of derivative instruments, including whether such instruments | |
should be recorded as liabilities or as equity, is re-assessed at the end of | |
each reporting period. Equity instruments that are initially classified as | |
equity that become subject to reclassification are reclassified to liability at | |
the fair value of the instrument on the reclassification date. Derivative | |
instrument liabilities will be classified in the balance sheet as current or | |
non-current based on whether or not net-cash settlement of the derivative | |
instrument is expected within 12 months of the balance sheet date. | |
The Company adopted Section 815-40-15 of the FASB Accounting Standards | |
Codification ("Section 815-40-15") to determine whether an instrument (or an | |
embedded feature) is indexed to the Company's own stock. Section 815-40-15 | |
provides that an entity should use a two-step approach to evaluate whether an | |
equity-linked financial instrument (or embedded feature) is indexed to its own | |
stock, including evaluating the instrument's contingent exercise and settlement | |
provisions. The adoption of Section 815-40-15 has affected the accounting for | |
(i) certain freestanding warrants that contain exercise price adjustment | |
features and (ii) convertible bonds issued by foreign subsidiaries with a strike | |
price denominated in a foreign currency. | |
The Company marks to market the fair value of the embedded derivative warrants | |
at each balance sheet date and records the change in the fair value of the | |
embedded derivative warrants as other income or expense in the consolidated | |
statements of operations and comprehensive income (loss). | |
The Company utilizes the Lattice model that values the liability of the | |
derivative warrants based on a probability weighted discounted cash flow model | |
with the assistance of the third party valuation firm. The reason the Company | |
picks the Lattice model is that in many cases there may be multiple embedded | |
features or the features of the bifurcated derivatives may be so complex that a | |
Black-Scholes valuation does not consider all of the terms of the instrument. | |
Therefore, the fair value may not be appropriately captured by simple models. In | |
other words, simple models such as Black- | |
Scholes may not be appropriate in many | |
situations given complex features and terms of conversion option (e.g., combined | |
embedded derivatives). The Lattice model is based on future projections of the | |
various potential outcomes. The features that were analyzed and incorporated | |
into the model included the exercise and full reset features. Based on these | |
features, there are two primary events that can occur; the Holder exercises the | |
Warrants or the Warrants are held to expiration. The Lattice model analyzed the | |
underlying economic factors that influenced which of these events would occur, | |
when they were likely to occur, and the specific terms that would be in effect | |
at the time (i.e. stock price, exercise price, volatility, etc.). Projections | |
were then made on the underlying factors which led to potential scenarios. | |
Probabilities were assigned to each scenario based on management projections. | |
This led to a cash flow projection and a probability associated with that cash | |
flow. A discounted weighted average cash flow over the various scenarios was | |
completed to determine the value of the derivative warrants. | |
COMMITMENT AND CONTINGENCIES Policy | ' |
COMMITMENT AND CONTINGENCIES | |
The Company follows subtopic 450-20 of the FASB Accounting Standards | |
Codification to report accounting for contingencies. Certain conditions may | |
exist as of the date the consolidated financial statements are issued, which may | |
result in a loss to the Company but which will only be resolved when one or more | |
future events occur or fail to occur. The Company assesses such contingent | |
liabilities, and such assessment inherently involves an exercise of judgment. In | |
assessing loss contingencies related to legal proceedings that are pending | |
against the Company or unasserted claims that may result in such proceedings, | |
the Company evaluates the perceived merits of any legal proceedings or | |
unasserted claims as well as the perceived merits of the amount of relief sought | |
or expected to be sought therein. | |
If the assessment of a contingency indicates that it is probable that a material | |
loss has been incurred and the amount of the liability can be estimated, then | |
the estimated liability would be accrued in the Company's consolidated financial | |
statements. If the assessment indicates that a potentially material loss | |
contingency is not probable but is reasonably possible, or is probable but | |
cannot be estimated, then the nature of the contingent liability, and an | |
estimate of the range of possible losses, if determinable and material, would be | |
disclosed. | |
Loss contingencies considered remote are generally not disclosed unless they | |
involve guarantees, in which case the guarantees would be disclosed. Management | |
does not believe, based upon information available at this time, that these | |
matters will have a material adverse effect on the Company's consolidated | |
financial position, results of operations or cash flows. However, there is no | |
assurance that such matters will not materially and adversely affect the | |
Company's business, financial position, and results of operations or cash flows. | |
REVENUE RECOGNITION, Policy | ' |
REVENUE RECOGNITION | |
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards | |
Codification for revenue recognition. The Company will recognize revenue when it | |
is realized or realizable and earned. The Company considers revenue realized or | |
realizable and earned when all of the following criteria are met: (i) persuasive | |
evidence of an arrangement exists, (ii) the product has been shipped or the | |
services have been rendered to the customer, (iii) the sales price is fixed or | |
determinable and, (iv) collectability is reasonably assured. | |
STOCK-BASED COMPENSATION FOR OBTAINING EMPLOYEE SERVICES | ' |
STOCK-BASED COMPENSATION FOR OBTAINING EMPLOYEE SERVICES | |
The Company accounts for its stock based compensation in which the Company | |
obtains employee services in share-based payment transactions under the | |
recognition and measurement principles of the fair value recognition provisions | |
of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to | |
paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all | |
transactions in which goods or services are the consideration received for the | |
issuance of equity instruments are accounted for based on the fair value of the | |
consideration received or the fair value of the equity instrument issued, | |
whichever is more reliably measurable. The measurement date used to determine | |
the fair value of the equity instrument issued is the earlier of the date on | |
which the performance is complete or the date on which it is probable that | |
performance will occur. If the Company is a newly formed corporation or shares | |
of the Company are thinly traded the use of share prices established in the | |
Company's most recent private placement memorandum ("PPM"), or weekly or monthly | |
price observations would generally be more appropriate than the use of daily | |
price observations as such shares could be artificially inflated due to a larger | |
spread between the bid and asked quotes and lack of consistent trading in the | |
market. | |
The fair value of share options and similar instruments is estimated on the date | |
of grant using a Black-Scholes option-pricing valuation model. The ranges of | |
assumptions for inputs are as follows: | |
* Expected term of share options and similar instruments: The expected life | |
of options and similar instruments represents the period of time the option | |
and/or warrant are expected to be outstanding. Pursuant to Paragraph | |
718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the | |
expected term of share options and similar instruments represents the | |
period of time the options and similar instruments are expected to be | |
outstanding taking into consideration of the contractual term of the | |
instruments and employees' expected exercise and post-vesting employment | |
termination behavior into the fair value (or calculated value) of the | |
instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to | |
use the SIMPLIFIED METHOD, I.E., EXPECTED TERM =(VESTING TERM + ORIGINAL | |
CONTRACTUAL TERM) / 2), if (i) A company does not have sufficient | |
historical exercise data to provide a reasonable basis upon which to | |
estimate expected term due to the limited period of time its equity shares | |
have been publicly traded; (ii) A company significantly changes the terms | |
of its share option grants or the types of employees that receive share | |
option grants such that its historical exercise data may no longer provide | |
a reasonable basis upon which to estimate expected term; or (iii) A company | |
has or expects to have significant structural changes in its business such | |
that its historical exercise data may no longer provide a reasonable basis | |
upon which to estimate expected term. The Company uses the simplified | |
method to calculate expected term of share options and similar instruments | |
as the company does not have sufficient historical exercise data to provide | |
a reasonable basis upon which to estimate expected term. | |
* Expected volatility of the entity's shares and the method used to estimate | |
it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or | |
nonpublic entity that uses the calculated value method shall disclose the | |
reasons why it is not practicable for the Company to estimate the expected | |
volatility of its share price, the appropriate industry sector index that | |
it has selected, the reasons for selecting that particular index, and how | |
it has calculated historical volatility using that index. The Company uses | |
the average historical volatility of the comparable companies over the | |
expected contractual life of the share options or similar instruments as | |
its expected volatility. If shares of a company are thinly traded the use | |
of weekly or monthly price observations would generally be more appropriate | |
than the use of daily price observations as the volatility calculation | |
using daily observations for such shares could be artificially inflated due | |
to a larger spread between the bid and asked quotes and lack of consistent | |
trading in the market. | |
* Expected annual rate of quarterly dividends. An entity that uses a method | |
that employs different dividend rates during the contractual term shall | |
disclose the range of expected dividends used and the weighted-average | |
expected dividends. The expected dividend yield is based on the Company's | |
current dividend yield as the best estimate of projected dividend yield for | |
periods within the expected term of the share options and similar | |
instruments. | |
* Risk-free rate(s). An entity that uses a method that employs different | |
risk-free rates shall disclose the range of risk-free rates used. The | |
risk-free interest rate is based on the U.S. Treasury yield curve in effect | |
at the time of grant for periods within the expected term of the share | |
options and similar instruments. | |
The Company's policy is to recognize compensation cost for awards with only | |
service conditions and a graded vesting schedule on a straight-line basis over | |
the requisite service period for the entire award. | |
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR SERVICES | ' |
EQUITY INSTRUMENTS ISSUED TO PARTIES OTHER THAN EMPLOYEES FOR ACQUIRING GOODS OR | |
SERVICES | |
The Company accounts for equity instruments issued to parties other than | |
employees for acquiring goods or services under guidance of Sub-topic 505-50 of | |
the FASB Accounting Standards Codification ("Sub-topic 505-50"). | |
Pursuant to ASC Section 505-50-30, all transactions in which goods or services | |
are the consideration received for the issuance of equity instruments are | |
accounted for based on the fair value of the consideration received or the fair | |
value of the equity instrument issued, whichever is more reliably measurable. | |
The measurement date used to determine the fair value of the equity instrument | |
issued is the earlier of the date on which the performance is complete or the | |
date on which it is probable that performance will occur. If shares of the | |
Company are thinly traded the use of share prices established in the Company's | |
most recent private placement memorandum ("PPM"), or weekly or monthly price | |
observations would generally be more appropriate than the use of daily price | |
observations as such shares could be artificially inflated due to a larger | |
spread between the bid and asked quotes and lack of consistent trading in the | |
market. | |
The fair value of share options and similar instruments is estimated on the date | |
of grant using a Black-Scholes option-pricing valuation model. The ranges of | |
assumptions for inputs are as follows: | |
* Expected term of share options and similar instruments: Pursuant to | |
Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards | |
Codification the expected term of share options and similar instruments | |
represents the period of time the options and similar instruments are | |
expected to be outstanding taking into consideration of the contractual | |
term of the instruments and holder's expected exercise behavior into the | |
fair value (or calculated value) of the instruments. The Company uses | |
historical data to estimate holder's expected exercise behavior. If the | |
Company is a newly formed corporation or shares of the Company are thinly | |
traded the contractual term of the share options and similar instruments is | |
used as the expected term of share options and similar instruments as the | |
Company does not have sufficient historical exercise data to provide a | |
reasonable basis upon which to estimate expected term. | |
* Expected volatility of the entity's shares and the method used to estimate | |
it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or | |
nonpublic entity that uses the calculated value method shall disclose the | |
reasons why it is not practicable for the Company to estimate the expected | |
volatility of its share price, the appropriate industry sector index that | |
it has selected, the reasons for selecting that particular index, and how | |
it has calculated historical volatility using that index. The Company uses | |
the average historical volatility of the comparable companies over the | |
expected contractual life of the share options or similar instruments as | |
its expected volatility. If shares of a company are thinly traded the use | |
of weekly or monthly price observations would generally be more appropriate | |
than the use of daily price observations as the volatility calculation | |
using daily observations for such shares could be artificially inflated due | |
to a larger spread between the bid and asked quotes and lack of consistent | |
trading in the market. | |
* Expected annual rate of quarterly dividends. An entity that uses a method | |
that employs different dividend rates during the contractual term shall | |
disclose the range of expected dividends used and the weighted-average | |
expected dividends. The expected dividend yield is based on the Company's | |
current dividend yield as the best estimate of projected dividend yield for | |
periods within the expected term of the share options and similar | |
instruments. | |
* Risk-free rate(s). An entity that uses a method that employs different | |
risk-free rates shall disclose the range of risk-free rates used. The | |
risk-free interest rate is based on the U.S. Treasury yield curve in effect | |
at the time of grant for periods within the expected term of the share | |
options and similar instruments. | |
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity | |
instruments are issued at the date the grantor and grantee enter into an | |
agreement for goods or services (no specific performance is required by the | |
grantee to retain those equity instruments), then, because of the elimination of | |
any obligation on the part of the counterparty to earn the equity instruments, a | |
measurement date has been reached. A grantor shall recognize the equity | |
instruments when they are issued (in most cases, when the agreement is entered | |
into). Whether the corresponding cost is an immediate expense or a prepaid asset | |
(or whether the debit should be characterized as contra-equity under the | |
requirements of paragraph 505-50-45-1) depends on the specific facts and | |
circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude | |
that an asset (other than a note or a receivable) has been received in return | |
for fully vested, non-forfeitable equity instruments that are issued at the date | |
the grantor and grantee enter into an agreement for goods or services (and no | |
specific performance is required by the grantee in order to retain those equity | |
instruments). Such an asset shall not be displayed as contra-equity by the | |
grantor of the equity instruments. The transferability (or lack thereof) of the | |
equity instruments shall not affect the balance sheet display of the asset. This | |
guidance is limited to transactions in which equity instruments are transferred | |
to other than employees in exchange for goods or services. Section 505-50-30 | |
provides guidance on the determination of the measurement date for transactions | |
that are within the scope of this Subtopic. | |
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully | |
vested, non-forfeitable equity instruments that are exercisable by the grantee | |
only after a specified period of time if the terms of the agreement provide for | |
earlier exercisability if the grantee achieves specified performance conditions. | |
Any measured cost of the transaction shall be recognized in the same period(s) | |
and in the same manner as if the entity had paid cash for the goods or services | |
or used cash rebates as a sales discount instead of paying with, or using, the | |
equity instruments. A recognized asset, expense, or sales discount shall not be | |
reversed if a stock option that the counterparty has the right to exercise | |
expires unexercised. | |
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to | |
receive future services in exchange for unvested, forfeitable equity | |
instruments, those equity instruments are treated as unissued for accounting | |
purposes until the future services are received (that is, the instruments are | |
not considered issued until they vest). Consequently, there would be no | |
recognition at the measurement date and no entry should be recorded. | |
INCOME TAX PROVISION Policy | ' |
INCOME TAX PROVISION | |
The Company accounts for income taxes under Section 740-10-30 of the FASB | |
Accounting Standards Codification, which requires recognition of deferred tax | |
assets and liabilities for the expected future tax consequences of events that | |
have been included in the financial statements or tax returns. Under this | |
method, deferred tax assets and liabilities are based on the differences between | |
the financial statement and tax bases of assets and liabilities using enacted | |
tax rates in effect for the fiscal year in which the differences are expected to | |
reverse. Deferred tax assets are reduced by a valuation allowance to the extent | |
management concludes it is more likely than not that the assets will not be | |
realized. Deferred tax assets and liabilities are measured using enacted tax | |
rates expected to apply to taxable income in the fiscal years in which those | |
temporary differences are expected to be recovered or settled. The effect on | |
deferred tax assets and liabilities of a change in tax rates is recognized in | |
the Statements of Income and Comprehensive Income in the period that includes | |
the enactment date. | |
The Company adopted section 740-10-25 of the FASB Accounting Standards | |
Codification ("Section 740-10-25") with regards to uncertainty income taxes. | |
Section 740-10-25 addresses the determination of whether tax benefits claimed or | |
expected to be claimed on a tax return should be recorded in the financial | |
statements. Under Section 740-10-25, the Company may recognize the tax benefit | |
from an uncertain tax position only if it is more likely than not that the tax | |
position will be sustained on examination by the taxing authorities, based on | |
the technical merits of the position. The tax benefits recognized in the | |
financial statements from such a position should be measured based on the | |
largest benefit that has a greater than fifty percent (50%) likelihood of being | |
realized upon ultimate settlement. Section 740-10-25 also provides guidance on | |
de-recognition, classification, interest and penalties on income taxes, | |
accounting in interim periods and requires increased disclosures. | |
The estimated future tax effects of temporary differences between the tax basis | |
of assets and liabilities are reported in the accompanying consolidated balance | |
sheets, as well as tax credit carry-backs and carry-forwards. The Company | |
periodically reviews the recoverability of deferred tax assets recorded on its | |
consolidated balance sheets and provides valuation allowances as management | |
deems necessary. | |
Management makes judgments as to the interpretation of the tax laws that might | |
be challenged upon an audit and cause changes to previous estimates of tax | |
liability. In addition, the Company operates within multiple taxing | |
jurisdictions and is subject to audit in these jurisdictions. In management's | |
opinion, adequate provisions for income taxes have been made for all years. If | |
actual taxable income by tax jurisdiction varies from estimates, additional | |
allowances or reversals of reserves may be necessary. | |
UNCERTAIN TAX POSITIONS | ' |
UNCERTAIN TAX POSITIONS | |
The Company did not take any uncertain tax positions and had no adjustments to | |
unrecognized income tax liabilities or benefits pursuant to the provisions of | |
Section 740-10-25 for the reporting period ended April 30, 2014 or 2013. | |
Limitation on Utilization of NOLs due to Change in Control | ' |
LIMITATION ON UTILIZATION OF NOLS DUE TO CHANGE IN CONTROL | |
Pursuant to the Internal Revenue Code Section 382 ("Section 382"), certain | |
ownership changes may subject the NOL's to annual limitations which could reduce | |
or defer the NOL. Section 382 imposes limitations on a corporation's ability to | |
utilize NOLs if it experiences an "ownership change." In general terms, an | |
ownership change may result from transactions increasing the ownership of | |
certain stockholders in the stock of a corporation by more than 50 percentage | |
points over a three-year period. In the event of an ownership change, | |
utilization of the NOLs would be subject to an annual limitation under Section | |
382 determined by multiplying the value of its stock at the time of the | |
ownership change by the applicable long-term tax-exempt rate. Any unused annual | |
limitation may be carried over to later years. The imposition of this limitation | |
on its ability to use the NOLs to offset future taxable income could cause the | |
Company to pay U.S. federal income taxes earlier than if such limitation were | |
not in effect and could cause such NOLs to expire unused, reducing or | |
eliminating the benefit of such NOLs. | |
NET INCOME (LOSS) PER COMMON SHARE Policy | ' |
NET INCOME (LOSS) PER COMMON SHARE | |
Net income (loss) per common share is computed pursuant to section 260-10-45 of | |
the FASB Accounting Standards Codification. Basic net income (loss) per common | |
share is computed by dividing net income (loss) by the weighted average number | |
of shares of common stock outstanding during the period. Diluted net income | |
(loss) per common share is computed by dividing net income (loss) by the | |
weighted average number of shares of common stock and potentially outstanding | |
shares of common stock during the period to reflect the potential dilution that | |
could occur from common shares issuable through stock options and warrants. The | |
total amount of potentially outstanding dilutive common shares from the | |
conversion of the convertible notes plus accrued interest converted would be | |
3,962,308 and 0 for the reporting period ended April 30, 2014 and 2013, | |
respectively. | |
CASH FLOWS REPORTING Policy | ' |
CASH FLOWS REPORTING | |
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards | |
Codification for cash flows reporting, classifies cash receipts and payments | |
according to whether they stem from operating, investing, or financing | |
activities and provides definitions of each category, and uses the indirect or | |
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25 | |
of the FASB Accounting Standards Codification to report net cash flow from | |
operating activities by adjusting net income to reconcile it to net cash flow | |
from operating activities by removing the effects of (a) all deferrals of past | |
operating cash receipts and payments and all accruals of expected future | |
operating cash receipts and payments and (b) all items that are included in net | |
income that do not affect operating cash receipts and payments. The Company | |
reports the reporting currency equivalent of foreign currency cash flows, using | |
the current exchange rate at the time of the cash flows and the effect of | |
exchange rate changes on cash held in foreign currencies is reported as a | |
separate item in the reconciliation of beginning and ending balances of cash and | |
cash equivalents and separately provides information about investing and | |
financing activities not resulting in cash receipts or payments in the period | |
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards | |
Codification. | |
SUBSEQUENT EVENTS Policy | ' |
SUBSEQUENT EVENTS | |
The Company follows the guidance in Section 855-10-50 of the FASB Accounting | |
Standards Codification for the disclosure of subsequent events. The Company will | |
evaluate subsequent events through the date when the financial statements were | |
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, | |
the Company as an SEC filer considers its financial statements issued when they | |
are widely distributed to users, such as through filing them on EDGAR. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ' |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial | |
Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting | |
Discontinued Operations and Disclosures of Disposals of Components of an Entity. | |
The amendments in this Update change the requirements for reporting discontinued | |
operations in Subtopic 205-20. | |
Under the new guidance, a discontinued operation is defined as a disposal of a | |
component or group of components that is disposed of or is classified as held | |
for sale and "represents a strategic shift that has (or will have) a major | |
effect on an entity's operations and financial results." The ASU states that a | |
strategic shift could include a disposal of (i) a major geographical area of | |
operations, (ii) a major line of business, (iii) a major equity method | |
investment, or (iv) other major parts of an entity. Although "major" is not | |
defined, the standard provides examples of when a disposal qualifies as a | |
discontinued operation. | |
The ASU also requires additional disclosures about discontinued operations that | |
will provide more information about the assets, liabilities, income and expenses | |
of discontinued operations. In addition, the ASU requires disclosure of the | |
pre-tax profit or loss attributable to a disposal of an individually significant | |
component of an entity that does not qualify for discontinued operations | |
presentation in the financial statements. | |
The ASU is effective for public business entities for annual periods beginning | |
on or after December 15, 2014, and interim periods within those years. | |
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic | |
915): Elimination of Certain Financial Reporting Requirements, Including an | |
Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. | |
The amendments in this Update remove the definition of a development stage | |
entity from the Master Glossary of the Accounting Standards Codification, | |
thereby removing the financial reporting distinction between development stage | |
entities and other reporting entities from U.S. GAAP. In addition, the | |
amendments eliminate the requirements for development stage entities to (1) | |
present inception-to-date information in the statements of income, cash flows, | |
and shareholder equity, (2) label the financial statements as those of a | |
development stage entity, (3) disclose a description of the development stage | |
activities in which the entity is engaged, and (4) disclose in the first year in | |
which the entity is no longer a development stage entity that in prior years it | |
had been in the development stage. | |
The amendments also clarify that the guidance in Topic 275, Risks and | |
Uncertainties, is applicable to entities that have not commenced planned | |
principal operations. | |
Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 | |
states that a development stage entity does not meet the condition in paragraph | |
810-10-15-14(a) to be a variable interest entity if (1) the entity can | |
demonstrate that the equity invested in the legal entity is sufficient to permit | |
it to finance the activities that it is currently engaged in and (2) the | |
entity's governing documents and contractual arrangements allow additional | |
equity investments. | |
The amendments in this Update also eliminate an exception provided to | |
development stage entities in Topic 810, Consolidation, for determining whether | |
an entity is a variable interest entity on the basis of the amount of investment | |
equity that is at risk. The amendments to eliminate that exception simplify U.S. | |
GAAP by reducing avoidable complexity in existing accounting literature and | |
improve the relevance of information provided to financial statement users by | |
requiring the application of the same consolidation guidance by all reporting | |
entities. The elimination of the exception may change the consolidation | |
analysis, consolidation decision, and disclosure requirements for a reporting | |
entity that has an interest in an entity in the development stage. | |
The amendments related to the elimination of inception-to-date information and | |
the other remaining disclosure requirements of Topic 915 should be applied | |
retrospectively except for the clarification to Topic 275, which shall be | |
applied prospectively. For public business entities, those amendments are | |
effective for annual reporting periods beginning after December 15, 2014, and | |
interim periods therein. | |
Early application of each of the amendments is permitted for any annual | |
reporting period or interim period for which the entity's financial statements | |
have not yet been issued (public business entities) or made available for | |
issuance (other entities). Upon adoption, entities will no longer present or | |
disclose any information required by Topic 915. | |
Management does not believe that any recently issued, but not yet effective | |
accounting pronouncements, if adopted, would have a material effect on the | |
accompanying consolidated financial statements. | |
Companys_Consolidated_Subsidia
Company's Consolidated Subsidiary and/or Entity(TABLE) | 3 Months Ended |
Apr. 30, 2014 | |
Company's Consolidated Subsidiary and/or Entity(TABLE): | ' |
Company's Consolidated Subsidiary and/or Entity(TABLE) | ' |
The Company's consolidated subsidiary and/or entity is as follows: | |
Date of incorporation | |
or formation | |
Name of consolidated State or other jurisdiction of (date of acquisition, | |
subsidiary or entity incorporation or organization if applicable) Attributable interest | |
-------------------- ----------------------------- -------------- --------------------- | |
Nevada Tungsten Holdings Ltd. The State of Nevada October 30, 2012 100% | |
(April 8, 2013 |
Mineral_properties_consisted_o
Mineral properties consisted of the following claims (Tables) | 3 Months Ended |
Apr. 30, 2014 | |
Mineral properties consisted of the following claims: | ' |
Mineral properties consisted of the following claims | ' |
Mineral properties consisted of the following: | |
April 30, 2014 January 31, 2014 | |
-------------- ---------------- | |
Cherry Creek Claim $ 174,013 $ 174,013 | |
Idaho Claim 750,000 750,000 | |
Less impairment (750,000) (750,000) | |
---------- ---------- | |
Total $ 174,013 $ 174,013 | |
====bsp; ====pan> |
Derivative_Instruments_Table
Derivative Instruments ( Table) | 3 Months Ended |
Apr. 30, 2014 | |
Derivative Instruments | ' |
Black-Scholes Option Pricing Model | ' |
January 2, 2014 | |
--------------- | |
Expected life (year) .67 | |
Expected volatility (*) 190.12% | |
Expected annual rate of quarterly dividends 0.00% | |
Risk-free rate(s) 0.11% | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis-April2014 | ' |
Fair Value Measurement Using | |
Carrying Value Level 1 Level 2 Level 3 Total | |
-------------- ------- ------- ------- ----- | |
Derivative conversion features $137,770 $ -- $ -- $137,770 $137,770 | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis-Januaryl2014 | ' |
Financial assets and liabilities measured at fair value on a recurring basis are | |
summarized below and disclosed on the balance sheet at January 31, 2014: | |
Fair Value Measurement Using | |
Carrying Value Level 1 Level 2 Level 3 Total | |
-------------- ------- ------- ------- ----- | |
Derivative conversion features $214,050 $ -- $ -- $214,050 $214,050 | |
Assets and Liabilities Measured on Recurring basis Using Unobservable Inputs (LEVEL 3) | ' |
Fair Value Measurement Using Level 3 Inputs | |
Derivative | |
Liabilities Total | |
----------- ---------- | |
Balance, January 31, 2014 $ 214,050 $ 214,050 | |
Purchases, issuances and settlements -- -- | |
Total (gains) or losses (realized/unrealized) included | |
in consolidated statements of operations (76,280) (76,280) | |
Transfers in and/or out of Level 3 -- -- | |
---------- ---------- | |
Balance, April 30, 2014 $ 137,770 $ 137,770 | |
====bsp; ====pre> | |
ADVANCES_FROM_STOCKHOLDER_Tabl
ADVANCES FROM STOCKHOLDER (Tables) | 3 Months Ended |
Apr. 30, 2014 | |
ADVANCES FROM STOCKHOLDER | ' |
ADVANCES FROM STOCKHOLDER | ' |
Advances from stockholder consisted of the following: | |
April 30, 2014 January 31, 2014 | |
-------------- ---------------- | |
Advances from stockholders $ 99,951 $ 99,951 | |
-------- -------- | |
Total $ 99,951 $ 99,951 | |
===nbsp; ===/pre> | |
ORGANIZATION_AND_OPERATIONS_De
ORGANIZATION AND OPERATIONS (Details) (USD $) | Apr. 08, 2013 | Nov. 06, 2012 | Mar. 09, 2012 |
ORGANIZATION AND OPERATIONS CONSISTS OF: | ' | ' | ' |
Increase the number of shares of authorized common stock | ' | ' | 300,000,000 |
Shares of blank check preferred stock | ' | ' | 25,000,000 |
Change the par value of the common stock | ' | ' | $0.00 |
Shares of common stock issued and outstanding | 66,000,000 | 45,600,000 | ' |
Surrendered shares of common stock for cancellation | 3,000,000 | ' | ' |
Issued common shares for the acquisition | 3,000,000 | ' | ' |
Acquisition of issued and outstanding shares of Tungsten | 100.00% | ' | ' |
MINERAL_PROPERTIES_As_Follows_
MINERAL PROPERTIES As Follows (Details) (USD $) | Jun. 12, 2014 | Feb. 11, 2014 | Apr. 11, 2013 | Jan. 31, 2013 |
MINERAL PROPERTIES As Follows: | ' | ' | ' | ' |
Paying amounts on or before April 15, 2013 | ' | ' | ' | $150,000 |
Paying amounts on or before February 15, 2014 | ' | ' | ' | 100,000 |
Paying amounts on or before February 15, 2015 | ' | ' | ' | 50,000 |
Exploration expenditures on the property on or before first anniversary | ' | ' | ' | 250,000 |
Exploration expenditures on the property on or before second anniversary | ' | ' | ' | 250,000 |
Exploration expenditures on the property on or before third anniversary | ' | ' | ' | 1,000,000 |
First payment made | ' | ' | 150,000 | 1,000,000 |
Company and Viscount signed an amendment to the Option Agreement and paid | ' | 100,000 | ' | ' |
Exploration expenditures to be made on or before June 15, 2014 | ' | 250,000 | ' | ' |
Viscount was compensated for agreeing to this amendment with the issuance of restricted shares of common stock | 250,000 | 250,000 | ' | ' |
Valued of common stock | 18,025 | 18,025 | ' | ' |
Company and Viscount signed an amendment to the Cherry Creek property Option Agreement keeping the Option in good standing if an amount is paid to Viscount | 100,000 | 100,000 | ' | ' |
Amount of exploration expenditures payment is made on or before sept. 15, 2014 | $250,000 | $250,000 | ' | ' |
Mineral_properties_consisted_o1
Mineral properties consisted of the following (Details) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 |
Mineral properties consisted of the following: | ' | ' |
Cherry Creek Claim | $174,013 | $174,013 |
Idaho Claim | 750,000 | 750,000 |
Less impairment | -750,000 | -750,000 |
Total Mineral properties | 174,013 | 174,013 |
Company impaired the stock value exchange of | ' | $750,000 |
Assets have been impaired and the exchange price based on price per share | ' | $0.25 |
BlackScholes_Option_Pricing_Mo
Black-Scholes Option Pricing Model weighted-average assumptions (Details) | Jan. 02, 2014 |
Black-Scholes Option Pricing Model weighted-average assumptions: | ' |
Expected life (year) | 0.67 |
Expected volatility (*) | 190.12% |
Expected annual rate of quarterly dividends | 0.00% |
Risk-free rate(s) | 0.11% |
Convertible_note_purchase_agre
Convertible note purchase agreement (Details) (USD $) | Jan. 02, 2014 |
Convertible note purchase agreement | ' |
Senior convertible note with an initial principal amount | $127,500 |
Purchase price of convertible note | $85,000 |
Original issue discount rate on convertible note | 33.33% |
Rate of conversion per share | $0.03 |
Fair_Value_of_Conversion_Featu
Fair Value of Conversion Features (Details) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 |
Derivative conversion features. | $137,770 | ' |
Derivative conversion features. | 137,770 | ' |
Derivative conversion features | ' | 214,050 |
Carrying Value | ' | ' |
Derivative conversion features. | 137,770 | ' |
Derivative conversion features. | 137,770 | ' |
Derivative conversion features | ' | 214,050 |
Level 3 | ' | ' |
Derivative conversion features. | 137,770 | ' |
Derivative conversion features. | 137,770 | ' |
Derivative conversion features | ' | $214,050 |
Fair_Value_Measurement_Using_L
Fair Value Measurement Using Level 3 Inputs (Details) (USD $) | Derivative Liabilities | Total. |
Balance of Derivative liabilities at Jan. 31, 2014 | $0 | $0 |
Purchases, issuances and settlements | 214,050 | 214,050 |
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | -76,280 | -76,280 |
Transfers in and/or out of Level 3 | 0 | 0 |
Balance of Derivative liabilities, at Apr. 30, 2014 | $137,770 | $137,770 |
Advances_from_stockholder_cons
Advances from stockholder consisted of the following (Details) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 |
Advances from stockholder consisted of as Follows: | ' | ' |
Advances from stockholders. | $99,951 | $23,000 |
Total Advances from stockholders | $99,951 | $23,000 |
EQUITY_TRANSACTIONS_Details
EQUITY TRANSACTIONS (Details) (USD $) | Apr. 07, 2014 | Feb. 18, 2014 | Oct. 31, 2013 | Apr. 19, 2013 | Apr. 08, 2013 |
EQUITY TRANSACTIONS as Follows: | ' | ' | ' | ' | ' |
Total number of shares of common stock authorized to issue | ' | ' | 50,000,000 | ' | ' |
Total number of shares of common stock authorized to issue par value | ' | ' | $0.00 | ' | ' |
Number of shares of authorized common stock | ' | ' | 300,000,000 | ' | ' |
Closed a private placement shares | ' | ' | ' | ' | 2,000,000 |
Closed a private placement per share | ' | ' | ' | ' | $0.25 |
Private placement aggregate total | ' | ' | ' | ' | $500,000 |
Reverse merger and the private placement issued and outstanding common shares | ' | ' | ' | ' | 71,000,000 |
Lock up agreements shares of the common stock | ' | ' | ' | ' | 3,000,000 |
Released concurrent with the closing of the Transaction | ' | ' | ' | ' | 1,000,000 |
The Company cancelled shares, in the aggregate, of the Company's common stock that was held by two former shareholders | ' | ' | ' | 6,000,000 | ' |
Upon issuance of shares of its common stock to Monfort | ' | ' | ' | 3,000,000 | ' |
Investor is committed to purchase shares as per Purchase Agreement with Hanover Holdings I, LLC (the Investor) | ' | 3,000,000 | ' | ' | ' |
Company's common stock, par value | ' | $0.00 | ' | ' | ' |
Company issued shares of its restricted common stock | ' | 2,065,177 | ' | ' | ' |
Restricted common stock valued at | ' | $150,000 | ' | ' | ' |
Company is required to file a registration statement with the SEC covering the resale of shares of common stock | 21,388,254 | ' | ' | ' | ' |
Initial commitment of shares | 3,750,000 | ' | ' | ' | ' |
Additional commitment of shares, | 9,600,000 | ' | ' | ' | ' |
Restricted_Stock_Award_Agreeme
Restricted Stock Award Agreement (Details) (USD $) | Apr. 30, 2014 | 13-May-13 |
Restricted Stock Award Agreement | ' | ' |
Shares of restricted common stock of the Company issued in consideration for services to be rendered to the Company by Mr. Galda | ' | 750,000 |
Shares of common stock per quarter vesting | ' | 62,500 |
Restricted Shares per share value | ' | $0.81 |
Value of shares amortized over the vesting period | ' | $607,500 |
Value of shares amortized over the vesting period per quarter | ' | 50,625 |
Company recognized in equity based compensation under this Agreement. | $50,625 | ' |
Agreement_with_Carmel_Advisors
Agreement with Carmel Advisors (Details) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 | Jan. 17, 2014 |
Agreement with Carmel Advisors | ' | ' | ' |
Compensated for the services rendered by the issuance of restricted Shares | ' | ' | $2,000,000 |
Shares of the Company's common stock issued as per agreement | ' | 2,000,000 | 144 |
Share value of the shares issued to Carmel Advisors LLC | ' | 0.09 | 0.09 |
The close price on the date of grant and will be amortized over the twelve month period | ' | 180,000 | ' |
Amount amortized per month which will be included in general and administration | ' | 15,000 | ' |
Company recognized in Advertising and Promotion expenses under this Agreement | $45,000 | ' | ' |
Restricted Stock Award Agreement with Joseph P. Galda amended and restated vesting of the Restricted Shares of | 250,000 | ' | ' |
Restricted_Stock_Award_Agreeme1
Restricted Stock Award Agreement with David Bikerman (Details) (USD $) | Apr. 30, 2014 | Jan. 31, 2014 | Jan. 31, 2013 |
Restricted Stock Award Agreement with David Bikerman | ' | ' | ' |
Bikerman was granted shares of restricted common stock of the Company | ' | ' | 750,000 |
The Restricted Shares will vest over a three year period at the rate of shares of common stock per quarter | ' | ' | 62,500 |
First of the Restricted Shares vesting on April 30, 2014 | ' | ' | $187,500 |
Amount to amortized over the vesting period | ' | ' | 56,250 |
Restricted Shares were valued at per share issued to Bikerman | ' | ' | $0.08 |
Amount to amortized per quarter which will be included in officer/directors' compensation | 4,687.50 | ' | 4,687.50 |
Crescendo has agreed to accept restricted shares of common stock of the Company as partial payment of fees owed | ' | ' | 42,799 |
Crescendo has agreed to accept shares of common stock of the Company as partial payment of fees owed | ' | ' | 144 |
Amount paid in satisfaction of the payment for fees owed | ' | 5,250 | ' |
Restricted shares were issued whose total fair value equaled the amount owed | ' | $81,636 | ' |