Exhibit 99.1
BRIDGEPORT VENTURES INC.
CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
OCTOBER 31, 2012 AND 2011
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
Bridgeport Venture Inc. | ||||||
Condensed Consolidated Interim Statements of Financial Position | ||||||
(Expressed in Canadian dollars) | ||||||
(Unaudited) | ||||||
As at | As at | |||||
October 31, | April 30, | |||||
2012 | 2012 | |||||
ASSETS | ||||||
| ||||||
Current assets | ||||||
Cash and cash equivalents (note 5) | $ | 16,739,214 | $ | 17,810,583 | ||
Amounts receivable and other assets (note 6) | 167,508 | 160,455 | ||||
Available-for-sale investments (note 7) | 15,375 | 24,250 | ||||
Total current assets | 16,922,097 | 17,995,288 | ||||
| ||||||
Interest in exploration properties and deferred exploration expenditures (note 8) | 4,275,545 | 4,208,534 | ||||
Equipment (note 9) | - | 17,055 | ||||
Total assets | $ | 21,197,642 | $ | 22,220,877 | ||
| ||||||
EQUITY AND LIABILITIES | ||||||
| ||||||
Current liabilities | ||||||
Amounts payable and other liabilities (notes 10 and 16) | $ | 235,866 | $ | 97,233 | ||
| ||||||
Equity | ||||||
Share capital (note 11) | 31,364,501 | 31,364,501 | ||||
Reserves | 7,884,264 | 8,089,028 | ||||
Accumulated other comprehensive loss | (12,750 | ) | (3,875 | ) | ||
Accumulated deficit | (18,274,239 | ) | (17,326,010 | ) | ||
Total equity | 20,961,776 | 22,123,644 | ||||
Total equity and liabilities | $ | 21,197,642 | $ | 22,220,877 |
The accompanying notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.
Nature of operations and going concern (note 1)
Commitment and contingencies (note 18)
Approved on behalf of the Board:
(Signed) "Hugh Snyder", Director
(Signed) "Graham Clow", Director
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Bridgeport Ventures Inc. | ||||||||||||
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss | ||||||||||||
(Expressed in Canadian dollars) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended | Six months ended | |||||||||||
October 31, | October 31, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Operating expenses | ||||||||||||
General and administrative (note 15) | $ | 704,614 | $ | 504,574 | $ | 1,063,717 | $ | 1,152,703 | ||||
Total general and administrative expenses | (704,614 | ) | (504,574 | ) | (1,063,717 | ) | (1,152,703 | ) | ||||
Interest income | 58,128 | 75,665 | 117,882 | 147,304 | ||||||||
Gain on sale of available-for-sale investment | - | 111,182 | - | 111,182 | ||||||||
Foreign exchange gain (loss) | 531 | 71,430 | 1,375 | (34,786 | ) | |||||||
Write-off of equipment (note 9) | - | - | (15,776 | ) | - | |||||||
Net loss from continued operationsbefore tax | (645,955 | ) | (246,297 | ) | (960,236 | ) | (929,003 | ) | ||||
Deferred income tax (expense) | - | (25,000 | ) | - | (25,000 | ) | ||||||
Net loss from continued operations | (645,955 | ) | (271,297 | ) | (960,236 | ) | (954,003 | ) | ||||
Net loss from discontinuedoperation(note 3) | - | (133,155 | ) | - | (1,218,981 | ) | ||||||
Net loss for the period | $ | (645,955 | ) | $ | (404,452 | ) | $ | (960,236 | ) | $ | (2,172,984 | ) |
| ||||||||||||
Net loss from continued operations | (645,955 | ) | (271,297 | ) | (960,236 | ) | (954,003 | ) | ||||
Unrealized (loss) gain on available-for-sale investment | (750 | ) | 375 | (8,875 | ) | 375 | ||||||
Reclassification on net realized gain on available-for-sale investment, net of tax of $25,000 | - | (175,000 | ) | - | (175,000 | ) | ||||||
Comprehensive loss fromcontinued operations | (646,705 | ) | (445,922 | ) | (969,111 | ) | (1,128,628 | ) | ||||
Comprehensive loss fromdiscontinued operation(note 3) | - | (133,155 | ) | - | (1,218,981 | ) | ||||||
Comprehensive loss for the period | $ | (646,705 | ) | $ | (579,077 | ) | $ | (969,111 | ) | $ | (2,347,609 | ) |
Basic and diluted net loss per share | ||||||||||||
- continued operations(note 12) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) |
Basic and diluted net loss per share | ||||||||||||
- discontinued operation(note 12) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) |
Weighted average number of common sharesoutstanding-basic and diluted | 50,579,600 | 50,579,600 | 50,579,600 | 50,579,600 |
The accompanying notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.
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Bridgeport Ventures Inc. | ||||||
Condensed Consolidated Interim Statements of Cash Flows | ||||||
(Expressed in Canadian dollars) | ||||||
(Unaudited) | ||||||
For the six months ended October 31, | 2012 | 2011 | ||||
| ||||||
Operating activities | ||||||
Net loss for the period | $ | (960,236 | ) | $ | (954,003 | ) |
Adjustments for: | ||||||
Amortization | 1,279 | 3,363 | ||||
Share-based payments | (192,757 | ) | 391,753 | |||
Gain on sale of investment | - | (111,182 | ) | |||
Deferred tax expense | - | 25,000 | ||||
Write-off of equipment | 15,776 | - | ||||
Non-cash working capital items: | ||||||
Amounts receivable and other assets | (7,053 | ) | (22,190 | ) | ||
Amounts payable and other liabilities | 140,567 | 25,893 | ||||
Cash flow used in discontinued operation (note 3) | - | (279,391 | ) | |||
Net cash used in operating activities | (1,002,424 | ) | (920,757 | ) | ||
| ||||||
Investing activities | ||||||
Expenditure on exploration properties | (68,945 | ) | (3,271,505 | ) | ||
Proceeds from sale of investments | - | 191,182 | ||||
Cash flow used in discontinued operation (note 3) | - | (137,152 | ) | |||
Net cash used in investing activities | (68,945 | ) | (3,217,475 | ) | ||
| ||||||
Net change in cash and cash equivalents | (1,071,369 | ) | (4,138,232 | ) | ||
Cash and cash equivalents, beginning of period | 17,810,583 | 22,870,894 | ||||
Cash and cash equivalents, end of period | $ | 16,739,214 | $ | 18,732,662 |
The accompanying notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.
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Bridgeport Ventures Inc. | ||||||||||||||||||
Condensed Consolidated Interim Statements of Changes in Equity | ||||||||||||||||||
(Expressed in Canadian dollars) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Equity attributable to shareholders | ||||||||||||||||||
Accumulated | ||||||||||||||||||
| Reserves | other | ||||||||||||||||
| Share-based | comprehensive | Accumulated | |||||||||||||||
Sharecapital | Warrants | payments | income | deficit | Total | |||||||||||||
| ||||||||||||||||||
Balance, April 30, 2011 | $ | 31,364,501 | $ | 5,604,011 | $ | 2,395,717 | $ | 175,000 | $ | (9,485,653 | ) | $ | 30,053,576 | |||||
Share-based payments | ||||||||||||||||||
Officers and directors | - | - | 445,462 | - | - | 445,462 | ||||||||||||
Employee | - | - | 34,766 | - | - | 34,766 | ||||||||||||
Consultants | - | - | (88,475 | ) | - | - | (88,475 | ) | ||||||||||
Expiration of stock options | - | - | (4,560 | ) | - | 4,560 | - | |||||||||||
Unrealized loss on available-for-sale securities, net of tax | - | - | - | (174,625 | ) | - | (174,625 | ) | ||||||||||
Net loss for the period | - | - | - | - | (2,172,984 | ) | (2,172,984 | ) | ||||||||||
| ||||||||||||||||||
Balance, October 31, 2011 | $ | 31,364,501 | $ | 5,604,011 | $ | 2,782,910 | $ | 375 | $ | (11,654,077 | ) | $ | 28,097,720 |
The accompanying notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.
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Bridgeport Ventures Inc. | ||||||||||||||||||
Condensed Consolidated Interim Statements of Changes in Equity (continued) | ||||||||||||||||||
(Expressed in Canadian dollars) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Equity attributable to shareholders | ||||||||||||||||||
Accumulated | ||||||||||||||||||
Reserves | other | |||||||||||||||||
Sharecapital | Warrants | Share-based payments | comprehensive loss | Accumulated deficit | Total | |||||||||||||
Balance, April 30, 2012 | $ | 31,364,501 | $ | 5,604,011 | $ | 2,485,017 | $ | (3,875 | ) | $ | (17,326,010 | ) | $ | 22,123,644 | ||||
Share-based payments | ||||||||||||||||||
Officers and directors | - | - | (186,649 | ) | - | - | (186,649 | ) | ||||||||||
Employee | - | - | (4,053 | ) | - | - | (4,053 | ) | ||||||||||
Consultants | - | - | (2,055 | ) | - | - | (2,055 | ) | ||||||||||
Expiration of stock options | - | - | (12,007 | ) | - | 12,007 | - | |||||||||||
Unrealized loss on available-for-sale securities, net of tax | - | - | - | (8,875 | ) | - | (8,875 | ) | ||||||||||
Net loss for the period | - | - | - | - | (960,236 | ) | (960,236 | ) | ||||||||||
| ||||||||||||||||||
Balance, October 31, 2012 | $ | 31,364,501 | $ | 5,604,011 | $ | 2,280,253 | $ | (12,750 | ) | $ | (18,274,239 | ) | $ | 20,961,776 |
The accompanying notes to the unaudited condensed consolidated interim financial statements are an integral part of these statements.
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Bridgeport Ventures Inc.
Notes to the Condensed Consolidated Interim Financial Statements
October 31, 2012 and 2011
(Expressed in Canadian dollars)
(Unaudited)
1. | Nature of operations and going concern |
Bridgeport Ventures Inc. (the “Company” or "Bridgeport") was incorporated under the laws of the Province of Ontario, Canada by Articles of Incorporation dated May 10, 2007. The Company is engaged in the acquisition, exploration and development of properties for the mining of precious and base metals. Bridgeport has operations in the United States and Canada. The Company is in the process of exploring its exploration properties for mineral resources and has not determined whether the properties contain economically recoverable reserves. The primary office of the Company is located at 401 Bay Street, Suite 2702, Toronto, Ontario, M5H 2Y4.
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of exploration properties and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values.
Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements. The Company's assets may also be subject to increases in taxes and royalties, renegotiations of contracts, currency exchange fluctuations and restrictions and political uncertainty.
These unaudited condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. The Company has incurred losses in the current and prior periods, with a net loss of $960,236 for the six months ended October 31, 2012 and has an accumulated deficit of $18,274,239 to October 31, 2012 (April 30, 2012 -$17,326,010). As at October 31, 2012, the Company had cash and cash equivalents of $16,739,214 and working capital of $16,686,231. Management of the Company believes that it has sufficient funds to pay its ongoing administrative expenses and to meet its liabilities for the ensuing twelve months as they fall due.
These unaudited condensed consolidated interim financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and condensed consolidated interim statement of financial position classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
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Bridgeport Ventures Inc.
Notes to the Condensed Consolidated Interim Financial Statements
October 31, 2012 and 2011
(Expressed in Canadian dollars)
(Unaudited)
2. | Significant accounting policies |
(a) | Statement of compliance |
The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”). These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.
These unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended April 30, 2012.
The policies applied in these unaudited condensed consolidated interim financial statements are based on IFRSs issued and outstanding as of November 29, 2012, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed consolidated interim financial statements as compared with the most recent annual financial statements as at and for the year ended April 30, 2012. Any subsequent changes to IFRS that are given effect in the Company’s annual financial statements for the year ending April 30, 2013 could result in restatement of these unaudited condensed consolidated interim financial statements.
(b) | New standards not yet adopted and interpretations issued but not yet effective |
There are no relevant changes in accounting standards applicable to future periods other than as disclosed in the most recent annual statements as at and for the year ended April 30, 2012.
3. | Discontinued operation |
During the year ended April 30, 2012, the Company committed to a plan to pursue the sale of its subsidiary Rio Condor Resources S.A. ("Rio Condor") and discontinued this operation since it was no longer in the Company's commercial objectives. Consequently, the operating results and cash flows of Rio Condor have been presented distinctly. The Company sold the interests it owned in Rio Condor on March 31, 2012 for cash consideration of US$62,100 ($61,412). The Company recorded a gain on disposal of $59,657 in the consolidated financial statements during the year ended April 30, 2012.
Statement of loss and comprehensive loss of the discontinued operation for the three and six months ended October 31, 2012 and 2011:
Three months ended | Six months ended | |||||||||||
October 31, | October 31, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
General and administrative | $ | - | $ | (504 | ) | $ | - | $ | 18,716 | |||
Total general and administrative expenses | - | 504 | - | (18,716 | ) | |||||||
Write-off of Rosario exploration property interests and related receivables | - | (10,327 | ) | - | (1,084,899 | ) | ||||||
Foreign exchange gain (loss) | - | (123,332 | ) | - | (115,366 | ) | ||||||
Net loss and comprehensive loss from discontinued operation | - | (133,155 | ) | $ | - | $ | (1,218,981 | ) |
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Bridgeport Ventures Inc.
Notes to the Condensed Consolidated Interim Financial Statements
October 31, 2012 and 2011
(Expressed in Canadian dollars)
(Unaudited)
3. | Discontinued operation (continued) |
Statement of cash flows used in discontinued operation:
Six months ended October 31, | 2012 | 2011 | ||||
Cash flows used in operating activities | $ | - | $ | (279,391 | ) | |
Cash flows used in investing activities | - | (137,152 | ) | |||
$ | - | $ | (416,543 | ) |
4. | Acquisition of Premier Royalty |
On June 28, 2012, the Company entered into a non-binding letter of intent that set forth the basic terms of a business combination pursuant to which Bridgeport would acquire Premier Gold Mines Limited’s ("Premier Gold") wholly-owned subsidiary, Premier Royalty Corporation ("Premier Royalty") (the "Business Combination"). The letter of intent was replaced by a binding business combination agreement (the "Business Combination Agreement") entered into by Premier Gold, Premier Royalty and the Company on August 7, 2012.
In addition, in connection with the Business Combination, the common shares of Bridgeport will be consolidated on the basis of one post-consolidation Bridgeport share for every 4 existing Bridgeport shares. The options and existing warrants of Bridgeport will also be adjusted to reflect the consolidation of Bridgeport shares and the distribution of Bridgeport Warrants.
Pursuant to the Business Combination, Bridgeport will issue shares to Premier Gold in such amount as is equal to 60% of the issued and outstanding shares of Bridgeport (prior to giving effect to any convertible securities or instruments). Bridgeport will also issue warrants to its existing shareholders on the basis of 0.375 of a warrant for each post-consolidation common share of Bridgeport held by such shareholders. Each whole warrant (a “Bridgeport Warrant”) will be exercisable at a price of $2.00 per post-consolidation Bridgeport share for a period commencing on the date that is six months following the completion of the Business Combination and ending on the date that is four years following completion of the Business Combination, subject to early expiry upon the occurrence of certain events.
Premier Gold has previously provided a bridge loan facility to Premier Royalty in connection with the acquisition by Premier Royalty of certain royalties. In addition to stipulated cash payback provisions, Premier Gold will be granted a one-time right in its sole discretion to convert all or a portion of the bridge loan into units of Bridgeport (at a price of $1.40 per unit, on a post-consolidation basis), each such unit consisting of one post-consolidation common share of Bridgeport and 0.375 of a warrant. Each whole warrant exercisable to acquire a post-consolidation Bridgeport share at a price of $2.00 per share. In addition, Premier Gold will receive up to an additional 2.8 million Bridgeport Warrants less the number of Bridgeport Warrants issued to Premier Gold pursuant to the conversion right set out above and an additional 1.4575 million warrants which shall be exercisable at a price of $2.00 per post-consolidation Bridgeport share until October 7, 2014. Also, convertible securities of Premier Royalty granted to certain vendors of royalty interests will convert into common shares or warrants of Bridgeport in connection with the Business Combination.
In addition, in connection with the Business Combination, Bridgeport will change its name to Premier Royalty Inc., the number of directors of Bridgeport will be increased from five to eight, Messrs. Jon North, Wolf Seidler, and Graham Clow will resign as directors and Messrs. Abraham Drost, Ewan Downie, Steven Filipovic, George Faught, Howard Katz, and Ms. Julie Lassonde shall be appointed as directors, in addition to Mr. Hugh Snyder and Ms. Shastri Ramnath who shall remain as directors, and each of the officers of Bridgeport shall resign. Mr. Abraham Drost shall be appointed as President and Chief Executive Officer, Mr. Eugene Lee shall be appointed as Chief Financial Officer, Mr. Shaun Drake shall be appointed as Corporate Secretary and Mr. Ewan Downie shall be appointed as Chairman.
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4. | Acquisition of Premier Royalty (continued) |
On July 10, 2012, Premier Gold announced the closing of a private placement (the "Financing") by Premier Royalty, of an aggregate $11,500,000 principal amount of convertible debentures of Premier Royalty, which accrue interest at a rate of 8% per annum. The convertible debentures mature on May 31, 2013 unless, among other things, they are automatically converted as a result of the occurrence of a going public transaction by Premier Royalty, including the closing of the Business Combination. If the Business Combination is completed, the convertible debentures will convert into Bridgeport units at a price of $1.40 per unit. Each unit will consist of one common share of Bridgeport and 0.375 of a Bridgeport Warrant. The proceeds were used by Premier Royalty for royalty acquisitions and working capital.
In connection with the Business Combination Agreement, all of the outstanding stock options shall expire on or before the 90th day following the effective date of the Business Combination.
The Business Combination is subject to Bridgeport securityholder approval at a meeting to be held on November 30, 2012. The TSX has granted conditional approval of the Business Combination.
5. | Cash and cash equivalents |
As at | As at | |||||
October 31, | April 30, | |||||
2012 | 2012 | |||||
Cash | $ | 159,948 | $ | 79,195 | ||
Cash equivalents | 16,579,266 | 17,731,388 | ||||
Total | $ | 16,739,214 | $ | 17,810,583 | ||
6. | Amounts receivable and other assets |
As at | As at | |||||
October 31, | April 30, | |||||
2012 | 2012 | |||||
Sales tax receivable | $ | 128,803 | $ | 38,459 | ||
Amounts receivable | 612 | 61,513 | ||||
Prepaid expenses | 38,093 | 60,483 | ||||
$ | 167,508 | $ | 160,455 |
7. | Available-for-sale investments |
On October 25, 2011, Bridgeport received 25,000 common shares of Gondwana Gold Inc.("Gondwana") in accordance with the terms of an agreement signed between the Company and Gondwana. The 25,000 common shares received were valued at $10,125 on October 25, 2011 based on the bid price on October 25, 2011. As of October 31, 2012, the bid price of Gondwana was $0.215 resulting in a loss of $250 and $4,375 for the three and six months ended October 31, 2012 which was recorded in other comprehensive loss as at October 31, 2012. At October 31, 2012, the shares of Gondwana were valued at $5,375 using the bid price of the security.
On December 7, 2011, 100,000 common shares of Orsa Ventures Corp. ("Orsa") were received in accordance with an option agreement signed between the Company and Orsa. The 100,000 common shares received were valued at $18,000 on December 7, 2011 based on the bid price on December 7, 2011. As of October 31, 2012, the bid price of the Orsa shares was $0.10 resulting in a loss of $500 and $4,500 for the three and six months ended October 31, 2012 which was recorded in other comprehensive loss as at October 31, 2012. At October 31, 2012, the shares of Orsa were valued at $10,000 using the bid price of the security.
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8. | Interest in exploration properties and deferred exploration expenditures |
Six months ended October 31, 2012 | ||||||
Nevada | ||||||
Properties | ||||||
(USA)(1) | Total | |||||
Opening balance | $ | 4,208,534 | $ | 4,208,534 | ||
Exploration | 67,011 | 67,011 | ||||
Ending balance | $ | 4,275,545 | $ | 4,275,545 |
Six months ended October 31, 2011 | ||||||||||||
Nevada | McCart | Rosario | ||||||||||
Properties | Township | Properties | ||||||||||
(USA) | (Canada) | (Chile) | Total | |||||||||
Opening balance | $ | 6,430,690 | $ | 171,596 | $ | 975,725 | $ | 7,578,011 | ||||
Acquisition | - | - | (94,071 | ) | (94,071 | ) | ||||||
Exploration | 2,768,906 | 351 | (43,922 | ) | 2,725,335 | |||||||
Salaries and benefits | - | 4,667 | - | 4,667 | ||||||||
Option payment received | - | (10,125 | ) | - | (10,125 | ) | ||||||
Write-off of exploration properties | - | - | (837,732 | ) | (837,732 | ) | ||||||
Ending balance | $ | 9,199,596 | $ | 166,489 | $ | - | $ | 9,366,085 |
(1) As at October 31, 2012, Orsa Ventures Corp. has fulfilled its first year obligation by spending $150,000 on exploration expenditures on the Ashby Gold Property, which is part of the Nevada Properties.
9. | Equipment |
Cost | Computer equipment | Software | Office equipment | Structures | Machinery andequipment | Total | ||||||||||||
Balance, April 30, 2011 | $ | 30,234 | $ | 315 | $ | 1,788 | $ | 15,567 | $ | 5,057 | $ | 52,961 | ||||||
Balance, October 31, 2011 | 30,234 | 315 | 1,788 | 15,567 | 5,057 | 52,961 | ||||||||||||
(Disposal) | (2,970 | ) | (315 | ) | (1,788 | ) | (15,567 | ) | (5,057 | ) | (25,697 | ) | ||||||
Balance, April 30, 2012 | 27,264 | - | - | - | - | 27,264 | ||||||||||||
Write-off of equipment | (27,264 | ) | - | - | - | - | (27,264 | ) | ||||||||||
Balance, October 31, 2012 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
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9. | Equipment (continued) |
Accumulated amortization | Computer equipment | Software | Office equipment | Structures | Machinery and equipment | Total | ||||||||||||
Balance, April 30, 2011 | $ | 4,825 | $ | 158 | $ | 219 | $ | 3,207 | $ | 1,650 | $ | 10,059 | ||||||
Amortization | 3,668 | 69 | 153 | 1,205 | 492 | 5,587 | ||||||||||||
Balance, October 31, 2011 | 8,493 | 227 | 372 | 4,412 | 2,142 | 15,646 | ||||||||||||
Amortization | 2,878 | - | - | - | - | 2,878 | ||||||||||||
(Disposal) | (1,162 | ) | (227 | ) | (372 | ) | (4,412 | ) | (2,142 | ) | (8,315 | ) | ||||||
Balance, April 30, 2012 | 10,209 | - | - | - | - | 10,209 | ||||||||||||
Amortization | 1,279 | - | - | - | - | 1,279 | ||||||||||||
Write-off of equipment | (11,488 | ) | - | - | - | - | (11,488 | ) | ||||||||||
Balance, October 31, 2012 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
Carrying value | Computer equipment | Software | Office equipment | Structures | Machinery and equipment | Total | ||||||||||||
Balance, April 30, 2011 | $ | 25,409 | $ | 157 | $ | 1,569 | $ | 12,360 | $ | 3,407 | $ | 42,902 | ||||||
Balance, October 31, 2011 | $ | 21,741 | $ | 88 | $ | 1,416 | $ | 11,155 | $ | 2,915 | $ | 37,315 | ||||||
Balance, April 30, 2012 | $ | 17,055 | $ | - | $ | - | $ | - | $ | - | $ | 17,055 | ||||||
Balance, October 31, 2012 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
10. | Amounts payable and other liabilities |
As at | As at | |||||
October 31, | April 30, | |||||
2012 | 2011 | |||||
Falling due within the year | ||||||
Trade payables | $ | 130,233 | $ | 18,084 | ||
Accrued liabilities | 105,633 | 79,149 | ||||
$ | 235,866 | $ | 97,233 |
11. | Share capital |
a) Authorized share capital
The authorized share capital consisted of unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
b) Common shares issued
There were no changes to the issued share capital during the periods as follows:
Number of | ||||||
common | ||||||
shares | Amount | |||||
Balance, April 30, 2012 and October 31, 2012 | 50,579,600 | $ | 31,364,501 |
- 11 -
12. | Net loss per common share |
The calculation of basic and diluted loss per share from continued operations and discontinued operation for the three and six months ended October 31, 2012 and 2011 was based on the loss attributable to common shareholders from continued operations of $645,955 and $960,236, respectively (three and six months ended October 31, 2011 -$271,297 and $954,003), the loss attributable to common shareholders from discontinued operation of $nil and $nil respectively (three and six months ended October 31, 2011 - $133,155 and $1,218,981), and the weighted average number of common shares outstanding of 50,579,600 and 50,579,600, respectively (three and six months ended October 31, 2011 - 50,579,600 and 50,579,600). Diluted loss per share for the three and six months ended October 31, 2012 did not include the effect of 28,825,000 warrants (2011 - 28,825,000) and 4,420,000 stock options (2011 -5,040,834) as they are anti-dilutive.
13. | Warrants |
The following table reflects the continuity of warrants for the period ended October 31, 2012:
Number of | ||||||
warrants | Amount | |||||
Balance, April 30, 2012 and October 31, 2012 | 28,825,000 | $ | 5,604,011 |
The following table reflects the actual warrants issued and outstanding as of October 31, 2012:
Number ofWarrants Outstanding | Grant date ($) fair value | Exercise Price ($) | Expiry Date | |||||||
6,575,000 | 374,925 | 0.50 | October 7,2014 | |||||||
12,590,000 | 3,225,959 | 1.50 | December 1,2012 | |||||||
8,625,000 | 1,622,699 | 1.40 | December 20,2012 | |||||||
1,035,000(1) | 380,428 | 1.00 | December 20,2012 | |||||||
28,825,000 | 5,604,011 | 1.22 |
(1) Each exercisable to acquire one unit, each unit consisting of one common share and one-half of one warrant with each whole warrant exercisable to acquire one additional common share at an exercise price of $1.40 until December 20, 2012.
14. | Stock options |
The shareholders of the Company approved the stock option plan on December 18, 2007. Up to such number of common shares as is equal to 10% of the aggregate number of common shares issued and outstanding from time to time may be reserved for issue upon the exercise of options granted pursuant to the stock option plan.
The purpose of the stock option plan is to attract, retain and motivate directors, officers, employees and other service providers by providing them with the opportunity, through share options, to acquire a proprietary interest in the Company and benefit from its growth. The options are non-assignable and may be granted for a term not exceeding five years.
- 12 -
14. | Stock options (continued) |
Stock options may be granted under the stock option plan only to directors, officers, employees and other service providers subject to the rules and regulations of applicable regulatory authorities and any Canadian stock exchange upon which the common shares may be listed or may trade from time to time. The total number of common shares which may be reserved for issuance to any one individual under the stock option plan within any one year period shall not exceed 5% of the outstanding issue. The maximum number of common shares which may be reserved for issuance to insiders under the stock option plan, any other employer stock option plans or options for services, shall be 10% of the common shares issued and outstanding at the time of the grant (on a non-diluted basis).
The maximum number of common shares which may be issued to insiders under the stock option plan, together with any other previously established or proposed share compensation arrangements, within any one year period shall be 10% of the outstanding issue. The maximum number of common shares which may be issued to any one insider and his or her associates under the stock option plan, together with any other previously established or proposed share compensation arrangements, within a one year period shall be 5% of the common shares outstanding at the time of the grant (on a non-diluted basis).
The maximum number of stock options which may be granted to any one consultant under the stock option plan, any other employer stock options plans or options for services, within any 12 month period, must not exceed 2% of the common shares issued and outstanding at the time of the grant (on a non-diluted basis). The maximum number of stock options which may be granted to any persons performing investor relations services under the stock option plan, any other employer stock options plans or options for services, within any 12 month period must not exceed, in the aggregate, 2% of the common shares issued and outstanding at the time of the grant (on a non-diluted basis).
The exercise price of options issued may not be less than the fair market value of the common shares at the time the option is granted, less any allowable discounts.
The following reflects the continuity of stock options for the period ended October 31, 2012:
Weighted Average | ||||||
Number of | Exercise Price | |||||
Stock Options | ($) | |||||
Balance, April 30, 2011 | 4,565,000 | 1.06 | ||||
Granted(16)(17)(18) | 687,500 | 0.53 | ||||
Forfeited(5)(14) | (196,666 | ) | 1.34 | |||
Expired(14) | (15,000 | ) | 1.00 | |||
Balance, October 31, 2011 | 5,040,834 | 0.98 | ||||
Expired(1)(5) | (533,334 | ) | 1.01 | |||
Balance, April 30, 2012 | 4,507,500 | 0.98 | ||||
Expired(13)(17)(18) | (31,666 | ) | 0.84 | |||
Forfeited(13)(14)(16)(17)(18) | (55,834 | ) | 0.72 | |||
Balance, October 31, 2012 | 4,420,000 | 0.98 |
(1) On August 20, 2009, the Company granted 700,000 stock options to officers and directors of the Company exercisable for one common share each at a price of $0.35 per share for a five-year period. These stock options vested immediately. 500,000 of these stock options expire on August 20, 2014 and the remaining 200,000 stock options expired on January 7, 2012. During the year ended April 30, 2012, 200,000 stock options expired unexercised and as at April 30, 2012, 500,000 stock options remain outstanding. The grant date fair value of $56,000 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield 0%, expected volatility 100%, risk-free rate of return 2.6% and an expected maturity of 5 years. For the three and six months ended October 31, 2012 $nil and $nil, respectively (three and six months ended October 31, 2011 - $nil and $nil, respectively) was expensed to share-based payments.
- 13 -
14. | Stock options (continued) |
(2) On November 12, 2009, the Company granted 200,000 stock options to a director of the Company pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.20 per share for a five-year period expiring on November 12, 2014. The options vest as to one-third on the date of grant and one-third each on the first and second anniversaries of the date of grant. The grant date fair value of $172,000 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 93%, risk-free rate of return of 2.7% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $7,226 and $14,452, respectively) was expensed to share-based payments.
(3) On November 17, 2009, the Company granted 250,000 stock options to a consultant of the Company pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.20 per share for a period of five years expiring on November 17, 2014. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $205,000 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 93%, risk-free rate of return of 2.6% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $8,612 and $17,224, respectively) was expensed to share-based payments.
(4) On December 8, 2009, the Company granted 300,000 options to a director of the Company pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.40 per share for a period of five years expiring on December 7, 2014. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $300,000 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 92%, risk-free rate of return of 2.5% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 -$12,603 and $25,206, respectively) was expensed to share-based payments.
(5) On December 8, 2009, the Company granted 525,000 options to consultants of the Company pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.40 per share for a period of five years expiring on December 7, 2014. During the year ended April 30, 2011, 16,667 of these options expired and 8,333 of these options were forfeited and during the year ended April 30, 2012, 166,666 options were forfeited, 166,667 options expired on November 30, 2011 and the remaining 166,667 expired on December 12, 2011. As of October 31, 2012, nil options remain outstanding. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $525,000 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 92%, risk-free rate of return of 2.5% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 -($136,302) and ($115,297), respectively) was expensed to share-based payments.
(6) On January 11, 2010, the Company granted 250,000 stock options to a director pursuant to the Company's stock option plan, exercisable for one common share each at a price of $2.15 per share for a period of five years expiring on January 11, 2015. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $379,750 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 90%, risk-free rate of return of 2.7% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $15,953 and $31,906, respectively) was expensed to share-based payments.
- 14 -
14. | Stock options (continued) |
(7) On January 25, 2010, the Company granted 100,000 stock options to a consultant pursuant to the Company's stock option plan, exercisable for one common share each at a price of $2.40 per share for a period of five years expiring on January 25, 2015. During the year ended April 30, 2011, 66,667 of these stock options expired and 33,333 of these stock options were forfeited and as of October 31, 2012, nil options remain outstanding. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $167,900 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 89%, risk-free rate of return of 2.5% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $nil and $nil, respectively) was expensed to share-based payments.
(8) On February 1, 2010, the Company granted 25,000 stock options to an employee pursuant to the Company's stock option plan, exercisable for one common share each at a price of $2.40 per share for a period of five years expiring on February 1, 2015. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $45,150 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 89%, risk-free rate of return of 2.47% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $1,897 and $3,794, respectively) was expensed to share-based payments.
(9) On March 10, 2010, the Company granted 50,000 stock options to a consultant pursuant to the Company's stock option plan, exercisable for one common share each at a price of $2.45 per share for a period of five years expiring on March 10, 2015. During the year ended April 30, 2011, 16,666 of these stock options expired and 33,334 were forfeited and as of October 31, 2012, nil options remain outstanding. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $84,750 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 87%, risk-free rate of return of 2.81% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and $nil, respectively (three and six months ended October 31, 2011 - $nil and $nil, respectively) was expensed to share-based payments.
(10) On September 23, 2010, the Company granted 400,000 stock options to an officer pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.05 per share for a period of five years expiring on September 23, 2015. The options vest as to one-third on the date of grant and one-third on each of the first and second anniversaries of the date of grant. The grant date fair value of $273,600 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 81%, risk-free rate of return of 2.11% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $10,897 and $22,391, respectively (three and six months ended October 31, 2011 - $24,139 and $58,023, respectively) was expensed to share-based payments.
(11) On December 21, 2010, the Company granted 1,600,000 stock options to an officer pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.00 per share for a period of five years expiring on December 21, 2015. The options vest as to one-third on the date of grant and one-third on each of the first and second anniversaries of the date of grant. The grant date fair value of $940,800 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 77%, risk-free rate of return of 2.17% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and ($212,785), respectively (three and six months ended October 31, 2011 -$118,513 and $237,026, respectively) was credited to share-based payments.
- 15 -
14. | Stock options (continued) |
(12) On January 7, 2011, the Company granted 250,000 stock options to a director pursuant to the Company's stock option plan, exercisable for one common share each at a price of $1.00 per share for a period of five years expiring on January 7, 2016. The options vest as to one-third on the date of grant and one-third on the first and second anniversaries of the date of grant. The grant date fair value of $116,500 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 76%, risk-free rate of return of 2.24% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $4,887 and $9,781, respectively (three and six months ended October 31, 2011 -$14,675 and $29,350, respectively) was expensed to share-based payments.
(13) On March 15, 2011, the Company granted 35,000 options exercisable at $0.85 to an employee of the Company with an expiry date of March 15, 2016. On May 15, 2012, 11,667 options were forfeited and on August 13, 2012, 23,333 options expired unexercised. As at October 31, 2012, nil options remain outstanding. The options vest as to on-third on the date of grant and one-third after the first and second anniversaries of the date of grant. The grant date fair value of $11,375 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 74%, risk-free rate of return of 2.22% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and ($2,137), respectively (three and six months ended October 31, 2011 - $1,432 and $2,865, respectively) was credited to share-based payments.
(14) On March 15, 2011, the Company granted 55,000 options exercisable at $1.00 to employees of the Company with an expiry date of March 15, 2016. During the year ended April 30, 2012, 30,000 options were forfeited and 15,000 expired unexercised on September 14, 2011. On October 12, 2012, 3,333 options were forfeited. As at October 31, 2012, 6,667 options remaining outstanding. The options vest as to one-third on the date of grant and one-third after the first and second anniversaries of the date of grant. The grant date fair value of $16,720 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 74%, risk-free rate of return of 2.22% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $518 and ($571), respectively (three and six months ended October 31, 2011 - ($2,202) and ($96), respectively) was credited to share-based payments.
(15)During the year ended April 30, 2011, the expiry date of 200,000 fully vested options granted on August 20, 2009 to a former director was modified. The expiry date changed from August 20, 2014 to January 7, 2012. The former director resigned and became a consultant to the Company. During the year ended April 30, 2012, the 200,000 stock options expired unexercised (see Note 14(1)).
(16)On June 8, 2011, the Company granted 55,000 options exercisable at $0.85 to an employee and a consultant of the Company with an expiry date of June 8, 2016. On October 1, 2012, 18,334 options were forfeited. As at October 31, 2012, 36,666 options remain outstanding. The options vest as to one-third on the date of grant and one-third after the first and second anniversaries of the date of grant. The grant date fair value of $11,550 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 72%, risk-free rate of return of 2.05% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $nil and ($1,722), respectively (three and six months ended October 31, 2011 - $1,454 and $6,142, respectively) was credited to share-based payments.
(17)On July 26, 2011, the Company granted 417,500 options exercisable at $0.50 to certain directors, officers, employees and consultants of the Company with an expiry date of July 26, 2016. On May 15, 2012, 6,667 options were forfeited and on August 13, 2012, 3,333 options expired unexercised. On October 1, 2012, 4,166 options were forfeited and on October 12, 2012, 1,667 options were forfeited. As at October 31, 2012, 401,667 options remain outstanding. The options vest as to one-third on the date of grant and one-third after the first and second anniversaries of the date of grant. The grant date fair value of $119,823 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 71%, risk-free rate of return of 1.93% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, ($957) and ($6,811), respectively (three and six months ended October 31, 2011 - $15,094 and $55,855, respectively) was credited to share-based payments.
- 16 -
14. | Stock options (continued) |
(18)On September 6, 2011, the Company granted 215,000 options exercisable at $0.50 to certain employees of the Company with an expiry date of September 6, 2016. During the six months ended October 31, 2012, 10,000 options were forfeited and 5,000 options expired unexercised on July 29, 2012. As at October 31, 2012, 200,000 options remaining outstanding. The options vest as to one-third on the date of grant and one-third after the first and second anniversaries of the date of grant. The grant date fair value of $61,920 was assigned to the stock options as estimated by using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 70%, risk-free rate of return of 1.24% and an expected maturity of 5 years. For the three and six months ended October 31, 2012, $1,894 and ($903), respectively (three and six months ended October 30, 2011 - $25,303) was credited to share-based payments.
Due to the expected expiry of all unexercised stock options on or before 90 days after the effective date of the Business Combination (see note 4), the Company revised its estimate of the stock option forfeiture rate. This resulted in recording a net credit of $192,757 to share-based payments expense during the six months ended October 31, 2012 (see note 15).
Details of the stock options outstanding at October 31, 2012 are as follows:
Number of stock options | Exercisable stock options | Exercise price ($) | Weighted average remaining contractuallife (years) fornumber of stock options granted | Weighted averagegrant date fairvalue per option ($) | Expiry | ||||||||||
500,000 | 500,000 | 0.35 | 1.80 | 0.08 | August 20, 2014 | ||||||||||
200,000 | 200,000 | 1.20 | 2.03 | 0.86 | November 12, 2014 | ||||||||||
250,000 | 250,000 | 1.20 | 2.05 | 0.82 | November 17, 2014 | ||||||||||
300,000 | 300,000 | 1.40 | 2.10 | 1.00 | December 7, 2014 | ||||||||||
250,000 | 250,000 | 2.15 | 2.20 | 1.52 | January 11, 2015 | ||||||||||
25,000 | 25,000 | 2.40 | 2.25 | 1.81 | February 1, 2015 | ||||||||||
400,000 | 400,000 | 1.05 | 2.90 | 0.68 | September 23, 2015 | ||||||||||
1,600,000 | 1,066,667 | 1.00 | 3.14 | 0.59 | December 21, 2015 | ||||||||||
250,000 | 166,667 | 1.00 | 3.19 | 0.47 | January 7, 2016 | ||||||||||
6,667 | 4,445 | 1.00 | 3.37 | 0.30 | March 15, 2016 | ||||||||||
36,666 | 24,444 | 0.85 | 3.61 | 0.21 | June 8, 2016 | ||||||||||
401,667 | 267,778 | 0.50 | 3.74 | 0.29 | July 26, 2016 | ||||||||||
200,000 | 133,333 | 0.50 | 3.85 | 0.29 | September 6, 2016 | ||||||||||
4,420,000 | 3,588,334 | 0.98 | 2.82 | 0.60 |
The weighted average exercise price of exercisable stock options as at October 31, 2012 is $1.01 (April 30, 2012 -$1.03) .
-17-
15. | General and administrative |
Three months ended | Six months ended | |||||||||||
October 31, | October 31, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Professional fees (note 16)(1) | $ | 530,053 | $ | 79,735 | $ | 591,669 | $ | 128,307 | ||||
Salaries and benefits (note 16) | 48,511 | 58,887 | 79,342 | 201,011 | ||||||||
Reporting issuer costs | 35,350 | 16,819 | 72,773 | 41,365 | ||||||||
Administrative and general | 26,153 | 43,268 | 39,372 | 72,045 | ||||||||
Share-based payments (note 14) | 17,239 | 108,397 | (192,757 | ) | 391,753 | |||||||
Business development | 17,050 | 131,204 | 411,598 | 137,251 | ||||||||
Investor relations | 12,470 | 13,924 | 12,590 | 42,211 | ||||||||
Rent | 10,892 | 34,336 | 28,656 | 68,240 | ||||||||
Insurance | 4,966 | 13,647 | 12,868 | 58,484 | ||||||||
Meals | 1,899 | 2,283 | 5,859 | 3,735 | ||||||||
Travel and accommodation | 31 | 458 | 468 | 4,938 | ||||||||
Amortization (note 9) | - | 1,616 | 1,279 | 3,363 | ||||||||
$ | 704,614 | $ | 504,574 | $ | 1,063,717 | $ | 1,152,703 |
(1) Professional fees of $530,053 and $591,669, respectively include transaction costs related to the Business Combination.
16. | Related party balances and transactions |
Related parties include the Board of Directors, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions. Related party transactions conducted in the normal course of operations are measured at the exchange value (the amount established and agreed to by the related parties). The amounts due to related parties are unsecured, non-interest bearing and due on demand.
(a) the Company entered into the following transactions with related parties:
Three months ended | Six months ended | ||||||||||||||
Notes | October 31, | October 31, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Marrelli Support Services Inc.("MSSI") | (i) | $ | 12,431 | $ | 13,028 | $ | 24,296 | $ | 26,127 | ||||||
DSA Corporate Services Inc. ("DSA") | (ii) | $ | 5,485 | $ | 2,629 | $ | 10,143 | $ | 5,294 | ||||||
H.R. Snyder Consultants | (iii) | $ | 9,375 | $ | 18,799 | $ | 18,750 | $ | 44,310 | ||||||
Orix Geoscience Inc. ("Orix") | (iv) | $ | 30,000 | $ | - | $ | 53,863 | $ | - |
(i) The Chief Financial Officer ("CFO") of the Company is the president of MSSI. Fees relate to accounting services provided by MSSI. These costs are reflected in professional fees in the consolidated statements of loss. As at October 31, 2012, MSSI was owed $30,402 (April 30, 2012 - $25,750) and the amount was included in amounts payable and other liabilities.
(ii) DSA is a private company controlled by Carmelo Marrelli, the CFO of the Company. Carmelo Marrelli is also the corporate secretary and sole director of DSA. Fees relate to corporate secretarial services. These costs are reflected in professional fees in the consolidated statements of loss. As at October 31, 2012, DSA was owed $3,549 (April 30, 2012 - $1,300) and the amount was included in amounts payable and other liabilities.
(iii) Fees were paid to H.R. Snyder Consultants for Hugh Snyder to act as Chairman of the Company. H.R. Snyder Consultants is controlled by Hugh Snyder. These costs are reflected in salaries and benefits in the consolidated statements of loss. There are no amounts payable to H.R. Snyder Consultants as at October 31, 2012 (April 30, 2012 -$nil).
- 18 -
16. | Related party balances and transactions (continued) |
(iv) Orix is beneficially owned by the Chief Executive Officer ("CEO") of the Company. Fees relate to CEO services provided by Shastri M. Ramnath. These costs are reflected in professional fees in the consolidated statements of loss. As at October 31, 2012, Orix was owed $16,738 (April 30, 2012 - $nil) and the amount was included in amounts payable and other liabilities.
(b) In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.
Remuneration of Directors and key management personnel of the Company was as follows: | ||||||||||||
Three months ended | Six months ended | |||||||||||
October 31, | October 31, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Salaries and benefits(1) | 27,035 | 63,950 | 267,734 | 127,450 | ||||||||
Share based payments | 14,935 | 206,484 | (186,649 | ) | 445,462 | |||||||
41,970 | 270,434 | 81,085 | 572,912 |
(1)The board of directors do not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services and officers are entitled to stock options and cash remuneration for their services.
17. | Segmented information |
October 31, 2012 | Canada | United States | Total | ||||||
| |||||||||
Cash and cash equivalents | $ | 16,732,198 | $ | 7,016 | $ | 16,739,214 | |||
Amounts receivable and other assets | 152,523 | 14,985 | 167,508 | ||||||
Available-for-sale investment | 15,375 | - | 15,375 | ||||||
| |||||||||
| 16,900,096 | 22,001 | 16,922,097 | ||||||
Interest in exploration properties and deferred exploration expenditures | - | 4,275,545 | 4,275,545 | ||||||
| |||||||||
| $ | 16,900,096 | $ | 4,297,546 | $ | 21,197,642 | |||
| |||||||||
| |||||||||
April 30, 2012 | Canada | United States | Total | ||||||
| |||||||||
Cash and cash equivalents | $ | 17,797,694 | $ | 12,889 | $ | 17,810,583 | |||
Amounts receivable and other assets | 145,636 | 14,819 | 160,455 | ||||||
Available-for-sale investment | 24,250 | - | 24,250 | ||||||
| |||||||||
| 17,967,580 | 27,708 | 17,995,288 | ||||||
Interest in exploration properties and deferred exploration expenditures | - | 4,208,534 | 4,208,534 | ||||||
Equipment | 17,055 | - | 17,055 | ||||||
| |||||||||
| $ | 17,984,635 | $ | 4,236,242 | $ | 22,220,877 |
- 19 -
18. | Commitment and contingencies |
Environmental contingencies
The Company's activities are subject to environmental regulation (including regular environmental impact assessments and permitting) in each of the jurisdictions in which its mineral properties are located. Such regulations cover a wide variety of matters including, without limitation, prevention of waste, pollution and protection of the environment, labour relations and worker safety. The Company may also be subject under such regulations to clean-up costs and liability for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result of its operations. It is likely that environmental legislation and permitting will evolve in a manner which will require stricter standards and enforcement. This may include increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a higher degree of responsibility for companies, their directors and employees.
The Company has not determined and is not aware whether any provision for such costs is required and is unable to determine the impact on its financial position, if any, of environmental laws and regulations that may be enacted in the future due to the uncertainty surrounding the form that these laws and regulations may take.
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