Globetech Ventures Corp.
(An exploration stage company)
Consolidated Financial Statements
(Unaudited)
For the nine months ended June 30, 2008
in Canadian dollars
Globetech Ventures Corp.
(the "Company")
(An exploration stage company)
Consolidated Financial Statements
For the nine months ended June 30, 2008
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the accompanying unaudited financial statements.
The accompanying unaudited financial statements of the Company have been prepared by and are the responsibility of the management of the Company.
"Casey Forward" | "Ping Shen" |
Chief Executive Officer | Chief Financial Officer |
Globetech Ventures Corp. |
(An exploration stage company) |
Consolidated Balance Sheets |
(in Canadian dollars) |
(unaudited) |
September | ||||||
June 30, 2008 | 30, 2007 | |||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 68,933 | $ | 128 | ||
GST refundable | 895 | 12,491 | ||||
69,828 | 12,619 | |||||
Equipment (note 2) | 850 | 1,076 | ||||
Mineral properties (note 3) | 109,231 | 94,231 | ||||
Investment | 8,216 | - | ||||
$ | 188,125 | $ | 107,926 |
LIABILITIES | ||||||
Current Liabilities | ||||||
Accounts payable and accrued liabilities (note 4) | $ | 163,624 | $ | 145,432 | ||
Loans payable (note 5) | 36,250 | 36,250 | ||||
199,874 | 181,682 | |||||
SHAREHOLDERS' DEFICIENCY | ||||||
Capital stock | ||||||
Authorized | ||||||
Unlimited common shares of no par value | ||||||
Issued and outstanding - (note 6) | 35,354,072 | 35,225,667 | ||||
Private placement | 150,000 | - | ||||
Contributed surplus | 2,831,824 | 2,701,878 | ||||
Deficit accumulated during the exploration stage | (38,347,645 | ) | (38,001,301 | ) | ||
(11,749 | ) | (73,756 | ) | |||
$ | 188,125 | $ | 107,926 |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. | ||||||||||||
(An exploration stage company) | ||||||||||||
Consolidated Statements of Operations and Deficit | ||||||||||||
(in Canadian dollars) | ||||||||||||
(unaudited) | ||||||||||||
For the three months ended | For the nine months ended | |||||||||||
June 30 | June 30 | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Administrative expenses | ||||||||||||
Accounting and legal | $ | 3,497 | $ | 5,863 | $ | 55,779 | $ | 13,804 | ||||
Amortization | 76 | 97 | 227 | 309 | ||||||||
Consulting fees | 71,465 | 116,955 | 81,465 | 192,500 | ||||||||
General exploration | - | 20,213 | - | 20,213 | ||||||||
Interest and bank charges | 182 | 9,049 | 530 | 31,767 | ||||||||
Management fees | 18,000 | 15,000 | 54,000 | 45,000 | ||||||||
Office and miscellaneous | 4,458 | 14,021 | 13,513 | 38,033 | ||||||||
Regulatory and transfer agent fees | 7,263 | 5,148 | 10,505 | 7,510 | ||||||||
Shareholder liaison and public relations | - | 81,107 | - | 81,107 | ||||||||
Stock-based compensation | - | - | 129,946 | - | ||||||||
Telephone | - | 9,411 | 360 | 10,100 | ||||||||
Travel and promotion | - | 61,745 | 19 | 72,200 | ||||||||
Net loss for the period | 104,941 | 338,609 | 346,344 | 512,543 | ||||||||
Deficit, beginning of period | (38,242,704 | ) | (37,574,384 | ) | (38,001,301 | ) | (37,400,450 | ) | ||||
Deficit, end of period | $ | (38,347,645 | ) | $ | (37,912,993 | ) | $ | (38,347,645 | ) | $ | (37,912,993 | ) |
Loss per share | $ | 0.01 | $ | 0.02 | $ | 0.02 | $ | 0.03 | ||||
Weighted average number of shares | ||||||||||||
Basic and diluted | 20,935,683 | 20,321,879 | 20,766,714 | 20,321,879 |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. | |||||||||||||||
(An exploration stage company) | |||||||||||||||
Consolidated Statements of Shareholders' Equity (Deficiency) | |||||||||||||||
(in Canadian dollars) | |||||||||||||||
(unaudited) | |||||||||||||||
Contributed | Deficit | ||||||||||||||
Surplus and | accumulated | ||||||||||||||
Common | Equity portion | during the | |||||||||||||
Number of | Shares issued | of convertible | exploration | ||||||||||||
shares | and fully paid | debentures | stage | Total | |||||||||||
Balance December, 1991 | - | $ | - | $ | - | $ | - | $ | - | ||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 1,280,001 | 159,500 | - | - | 159,500 | ||||||||||
Loss for the period | - | - | - | (32,080 | ) | (32,080 | ) | ||||||||
Balance September 30, 1992 | 1,280,001 | 159,500 | - | (32,080 | ) | 127,420 | |||||||||
Issuance of shares for cash | |||||||||||||||
By way of prospectus | 600,000 | 360,000 | - | - | 360,000 | ||||||||||
Exercise of options | 112,000 | 67,200 | - | - | 67,200 | ||||||||||
Exercise of warrants | 100,000 | 60,000 | - | - | 60,000 | ||||||||||
Issuance of shares for property | 150,000 | 90,000 | - | - | 90,000 | ||||||||||
Share issue costs | - | (83,205 | ) | - | - | (83,205 | ) | ||||||||
Loss for the year | - | - | - | (105,902 | ) | (105,902 | ) | ||||||||
Balance September 30, 1993 | 2,242,001 | 653,495 | - | (137,982 | ) | 515,513 | |||||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 400,000 | 576,000 | - | - | 576,000 | ||||||||||
Share issue costs | - | (60,622 | ) | - | - | (60,622 | ) | ||||||||
Loss for the year | - | - | - | (403,571 | ) | (403,571 | ) | ||||||||
Balance September 30, 1994 | 2,642,001 | 1,168,873 | - | (541,553 | ) | 627,320 | |||||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 418,000 | 1,121,400 | - | - | 1,121,400 | ||||||||||
Exercise of options | 204,000 | 347,440 | - | - | 347,440 | ||||||||||
Issuance of shares for finders fees | 35,069 | 99,570 | - | - | 99,570 | ||||||||||
Share issue costs | - | (108,570 | ) | - | - | (108,570 | ) | ||||||||
Loss for the year | - | - | - | (343,044 | ) | (343,044 | ) | ||||||||
Balance September 30, 1995 | 3,299,070 | 2,628,713 | - | (884,597 | ) | 1,744,116 | |||||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 1,488,000 | 6,178,000 | - | - | 6,178,000 | ||||||||||
Exercise of options | 1,128,584 | 4,161,930 | - | - | 4,161,930 | ||||||||||
Issuance of shares for finders fees | 75,624 | 197,379 | - | - | 197,379 | ||||||||||
Share issue costs | - | (365,874 | ) | - | - | (365,874 | ) | ||||||||
Loss for the year | - | - | - | (1,533,474 | ) | (1,533,474 | ) | ||||||||
Balance September 30, 1996 | 5,991,278 | $ | 12,800,148 | $ | - | $ | (2,418,071 | ) | $ | 10,382,077 |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. | |||||||||||||||
(An exploration stage company) | |||||||||||||||
Consolidated Statements of Shareholders' Equity (Deficiency) (continued) | |||||||||||||||
(in Canadian dollars) | |||||||||||||||
(unaudited) | |||||||||||||||
Contributed | Deficit | ||||||||||||||
Surplus and | accumulated | ||||||||||||||
Common | Equity portion | during the | |||||||||||||
Number of | Shares issued | of convertible | exploration | ||||||||||||
shares | and fully paid | debentures | stage | Total | |||||||||||
Balance forward | 5,991,278 | $ | 12,800,148 | $ | - | $ | (2,418,071 | ) | $ | 10,382,077 | |||||
Issuance of shares for cash | |||||||||||||||
Exercise of options | 243,000 | 639,730 | - | - | 639,730 | ||||||||||
Exercise of warrants | 845,447 | 3,696,723 | - | - | 3,696,723 | ||||||||||
Issued on conversion of debt | 2,464,950 | 4,821,079 | - | - | 4,821,079 | ||||||||||
Issuance of common shares for acquisition of subsidiary | 171,282 | 1,124,745 | - | - | 1,124,745 | ||||||||||
Issuance of shares for finders fees | 65,298 | 457,086 | - | - | 457,086 | ||||||||||
Share issue costs | - | (472,562 | ) | - | - | (472,562 | ) | ||||||||
Equity portion of convertible debentures | - | - | 169,760 | - | 169,760 | ||||||||||
Loss for the period | - | - | - | (2,822,786 | ) | (2,822,786 | ) | ||||||||
Balance September 30, 1997 | 9,781,255 | 23,066,949 | 169,760 | (5,240,857 | ) | 17,995,852 | |||||||||
Contingent consideration on acquisition of subsidiary | - | (1,086,901 | ) | - | - | (1,086,901 | ) | ||||||||
Issued on conversion of debt | 277,776 | 261,679 | (59,219 | ) | - | 202,460 | |||||||||
10,059,031 | 22,241,727 | 110,541 | (5,240,857 | ) | 17,111,411 | ||||||||||
Capital stock consolidation (7.5:1) | (8,717,827 | ) | - | - | - | ||||||||||
Issued on conversion of debt | 221,234 | 519,691 | (110,541 | ) | - | 409,150 | |||||||||
Issued on settlement of debt | 550,000 | 111,152 | - | - | 111,152 | ||||||||||
Loss for year | - | - | - | (20,236,904 | ) | (20,236,904 | ) | ||||||||
Balance September 30, 1998 | 2,112,438 | 22,872,570 | (110,541 | ) | (25,477,761 | ) | (2,605,191 | ) | |||||||
Issued on settlement of debt | 1,433,364 | 1,604,029 | - | - | 1,604,029 | ||||||||||
Loss for the year | - | - | - | (706,147 | ) | (706,147 | ) | ||||||||
Balance September 30, 1999 | 3,545,802 | 24,476,599 | - | (26,183,908 | ) | (1,707,309 | ) | ||||||||
Issuance of shares for cash | |||||||||||||||
Exercise of options | 24,100 | 56,321 | - | - | 56,321 | ||||||||||
Exercise of warrants | 227,273 | 370,612 | - | - | 370,612 | ||||||||||
Issued on conversion of debt | 1,830,073 | 1,078,550 | - | - | 1,078,550 | ||||||||||
Issued on settlement of debt | 220,748 | 489,660 | - | - | 489,660 | ||||||||||
Subscriptions received in advance | - | 369,875 | - | - | 369,875 | ||||||||||
Share issue costs | - | (74,141 | ) | - | - | (74,141 | ) | ||||||||
Loss for the year | - | - | - | (438,663 | ) | (438,663 | ) | ||||||||
Balance September 30, 2000 | 5,847,996 | 26,767,476 | - | (26,622,571 | ) | 144,905 | |||||||||
Issuance of shares for cash | |||||||||||||||
Private placement | 2,000,000 | 456,840 | - | - | 456,840 | ||||||||||
Issued for subscriptions received in advance | 227,273 | 369,875 | - | - | 369,875 | ||||||||||
Subscriptions received in advance | - | (369,875 | ) | - | - | (369,875 | ) | ||||||||
Issued on acquisition of equity investment | 500,000 | 192,075 | - | - | 192,075 | ||||||||||
Issued on settlement of debt | 914,670 | 502,784 | - | - | 502,784 | ||||||||||
Share issue costs | - | (45,492 | ) | - | - | (45,492 | ) | ||||||||
Loss for the year | - | - | - | (1,822,692 | ) | (1,822,692 | ) | ||||||||
Balance September 30, 2001 | 9,489,939 | $ | 27,873,683 | $ | - | $ | (28,445,263 | ) | $ | (571,580 | ) |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. | |||||||||||||||
(An exploration stage company) | |||||||||||||||
Consolidated Statements of Shareholders' Equity (Deficiency) (continued) | |||||||||||||||
(in Canadian dollars) | |||||||||||||||
(unaudited) | |||||||||||||||
Contributed | Deficit | ||||||||||||||
Surplus and | accumulated | ||||||||||||||
Common | Equity portion | during the | |||||||||||||
Number of | Shares issued | of convertible | exploration | ||||||||||||
shares | and fully paid | debentures | stage - | Total | |||||||||||
Balance forward | 9,489,939 | $ | 27,873,683 | $ | - | $ | (28,445,263 | ) | $ | (571,580 | ) | ||||
Loss for the year | - | - | - | (319,713 | ) | (319,713 | ) | ||||||||
Balance September 30, 2002 | 9,489,939 | 27,873,683 | - | (28,764,976 | ) | (891,293 | ) | ||||||||
Loss for the year | - | - | - | (47,171 | ) | (47,171 | ) | ||||||||
Balance September 30, 2003 | 9,489,939 | 27,873,683 | - | (28,812,147 | ) | (938,464 | ) | ||||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 1,797,674 | 1,299,990 | - | - | 1,299,990 | ||||||||||
Issued on conversion of debt | 652,000 | 432,000 | - | - | 432,000 | ||||||||||
Acquisition of Brazil Gold Ltda. | 2,000,000 | 4,050,000 | - | - | 4,050,000 | ||||||||||
Share issue costs | - | (135,690 | ) | - | - | (135,690 | ) | ||||||||
Contributed surplus | - | - | 2,429,100 | - | 2,429,100 | ||||||||||
Loss for the year | - | - | - | (7,302,024 | ) | (7,302,024 | ) | ||||||||
Balance September 30, 2004 | 13,939,613 | 33,519,983 | 2,429,100 | (36,114,171 | ) | (165,088 | ) | ||||||||
Issuance of shares for cash | |||||||||||||||
Private placement - August 4, 2004 - shares | |||||||||||||||
issued due to repricing clause | 302,326 | - | - | - | - | ||||||||||
Acquisition of Gladys Lake option | 50,000 | 18,504 | - | - | 18,504 | ||||||||||
Issued on conversion of debt | 180,000 | 76,704 | - | - | 76,704 | ||||||||||
Contributed surplus | - | - | 579,654 | - | 579,654 | ||||||||||
Loss for the year | - | - | - | (778,853 | ) | (778,853 | ) | ||||||||
Balance September 30, 2005 | 14,471,939 | 33,615,191 | 3,008,754 | (36,893,024 | ) | (269,079 | ) | ||||||||
Warrant shares issued | 257,812 | - | - | - | - | ||||||||||
Acquisition of Gladys Lake option | 50,000 | 10,500 | - | - | 10,500 | ||||||||||
Issued on conversion of debt | 861,000 | 199,270 | - | - | 199,270 | ||||||||||
Loss for the year | - | - | - | (507,426 | ) | (507,426 | ) | ||||||||
Balance September 30, 2006 | 15,640,751 | 33,824,961 | 3,008,754 | (37,400,450 | ) | (566,735 | ) | ||||||||
Acquisition of Gladys Lake option | 50,000 | 16,500 | - | - | 16,500 | ||||||||||
Issued on conversion of debt | 3,731,128 | 780,330 | - | - | 780,330 | ||||||||||
Issued on exercise of stock options | 900,000 | 603,876 | (306,876 | ) | - | 297,000 | |||||||||
Loss for the year | - | - | - | (600,851 | ) | (600,851 | ) | ||||||||
Balance September 30, 2007 | 20,321,879 | 35,225,667 | 2,701,878 | (38,001,301 | ) | (73,756 | ) | ||||||||
Issuance of shares for cash | |||||||||||||||
Private placements | 3,000,000 | 150,000 | - | - | 150,000 | ||||||||||
Issued on conversion of debt | 360,000 | 83,406 | - | - | 83,406 | ||||||||||
Acquisition of Gladys Lake option | 100,000 | 15,000 | 15,000 | ||||||||||||
Issued on conversion of debt | 200,000 | 30,000 | 30,000 | ||||||||||||
Contributed surplus | - | - | 129,945 | - | 129,945 | ||||||||||
Loss for the period | - | - | - | (346,344 | ) | (346,344 | ) | ||||||||
Balance June 30, 2008 | 23,981,879 | $ | 35,504,073 | $ | 2,831,823 | $ | (38,347,645 | ) | $ | (11,749 | ) |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. | ||||||||||||
(An exploration stage company) | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||
(in Canadian dollars) | ||||||||||||
(unaudited) | ||||||||||||
For the three months ended | For the nine months ended | |||||||||||
June 30 | June 30 | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Operating Activities | ||||||||||||
Net loss for the period | $ | (104,941 | ) | $ | (338,609 | ) | $ | (346,344 | ) | $ | (512,543 | ) |
Items not involving cash | ||||||||||||
Amortization | 76 | 97 | 227 | 309 | ||||||||
Shares issued for debt | 113,406 | - | 113,406 | - | ||||||||
Stock-based compensation | - | - | 129,946 | - | ||||||||
Change in non-cash working capital | ||||||||||||
GST refundable and other receivables | 3,641 | (7,287 | ) | 11,596 | (7,054 | ) | ||||||
Accounts payable and accrued liabilities | (89,275 | ) | (23,937 | ) | 18,190 | 130,382 | ||||||
Net cash used in operating activities | (77,093 | ) | (369,736 | ) | (72,979 | ) | (388,906 | ) | ||||
Financing Activities | ||||||||||||
Issuance of share capital | - | 388,904 | - | 388,904 | ||||||||
Funds received from private placement | 150,000 | - | 150,000 | - | ||||||||
Loans payable | - | (22,657 | ) | - | - | |||||||
Net cash provided from financing activities | 150,000 | 366,247 | 150,000 | 388,904 | ||||||||
Investing Activities | ||||||||||||
Investment in shares | (8,216 | ) | - | (8,216 | ) | - | ||||||
Net cash used in investing activities | (8,216 | ) | - | (8,216 | ) | - | ||||||
Change in cash and cash equivalents | 64,691 | (3,489 | ) | 68,805 | (2 | ) | ||||||
Cash and cash equivalents at beginning of period | 4,242 | 3,770 | 128 | 283 | ||||||||
Cash and cash equivalents at end of period | $ | 68,933 | $ | 281 | $ | 68,933 | $ | 281 |
The accompanying notes form an integral part of these consolidated financial statements
Globetech Ventures Corp. |
Notes to Consolidated Financial Statements |
June 30, 2008 |
(in Canadian dollars) |
(unaudited) |
1. | Nature of Operations and Significant Accounting Policies |
The Company is incorporated under the laws of British Columbia, Canada, and its principal business activities included the acquiring and developing of mineral properties and the processing of related mineral resources. During the year ended September 30, 1998, the Company determined that it was not feasible to continue its mineral property operations. The Company is currently pursuing and evaluating potential business ventures in the mineral field. | |
These interim consolidated financial statements should be read in conjunction with the audited September 30, 2007 annual financial statements. | |
These interim financial statements follow the same accounting policies and methods of their application as in the September 30, 2007 annual financial statements. These interim consolidated financial statements do not conform in all respects to the requirements of Canadian generally accepted accounting principles for annual financial statements in that they do not include all note disclosures. | |
The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and expenses for the periods reported. Actual results could differ from those estimates. | |
Recent Accounting Pronouncements | |
Assessing Going Concern: | |
The Canadian Accountability Standards Board (("AcSB")AcSB) amended CICA Handbook Section 1400, to include requirements for management to assess and disclose an entity's ability to continue as a going concern. This section applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008. The Company is currently evaluating the impact of the adoption of the section on its financial statements. | |
Capital Disclosures: | |
The AcSB issued CICA Handbook Section 1535 ("AcSB")Capital Disclosures The section specifies the disclosure of (i) an entity's objectives, policies, and processes for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with capital requirements; and (iv) if it has not complied, the consequences of such non-compliance. The Company is currently evaluating the impact of the adoption of this new Section on its financial statements. This new Section relates to disclosures which did not have an impact on the Company's financial results. This section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company is currently evaluating the impact of the adoption of the section on its financial statements. | |
Goodwill and Intangible Assets: | |
The AcSB issued CICA Handbook Section 3064 which replaces Section 3062, Goodwill and Other Intangible Assets, and Section 3450, Research and Development Costs. This new section establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets. Standards concerning goodwill remain unchanged from the standards included in the previous Section 3062. The section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2008. Accordingly, the Company will adopt the new standards for its fiscal year beginning January 1, 2009. It establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The Company is currently evaluating the impact of the adoption of this new Section on its financial statements. | |
Financial instruments: | |
CICA Handbook Section 3862, Financial Instruments - Disclosure, increases the disclosures currently required to enable users to evaluate the significance of financial instruments for an entity's financial position and performance, including disclosures about fair value. CICA Handbook Section 3863, Financial Instruments - Presentation, replaces the existing requirements on the presentation of financial instruments, which have been carried forward unchanged. These standards are effective for interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company is currently evaluating the impact of the adoption of these changes on the disclosure and presentation within its financial statements. |
Globetech Ventures Corp. |
Notes to Consolidated Financial Statements |
June 30, 2008 |
(in Canadian dollars) |
(unaudited) |
1. | Nature of Operations and Significant Accounting Policies continued |
International financial reporting standards (("AcSB")IFRS): | |
In 2006, AcSB published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada's own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time. | |
2. | Equipment |
September 30, | |||||||||||||
For the nine months ended June 30, 2008 | 2007 | ||||||||||||
Accumulated | |||||||||||||
Cost | amortization | Net book value | Net book value | ||||||||||
Office equipment | $ | 5,191 | $ | 5,015 | $ | 176 | $ | 207 | |||||
Computer equipment | 26,118 | 25,444 | 674 | 869 | |||||||||
$ | 31,309 | $ | 30,459 | $ | 850 | $ | 1,076 |
3. | Mineral Properties and Deferred Resource Property Expenditures |
On February 28, 2005, Globetech announced that it entered into an option agreement whereby the Company can earn a 100% interest in the Gladys Lake porphyry molybdenum property from Mr. John Peter Ross of Whitehorse, Yukon. The Gladys Lake property is situated in northwestern British Columbia approximately 50 km northeast of Atlin and 15 km north of the Adanac molybdenum deposit presently undergoing final engineering studies and permitting.
In order to earn a 100% interest, the Company is required to pay a total of $95,000, in ascending payments over a period of four years. The agreement also calls for the issuing of 400,000 shares of Globetech over this same period. Since April 12, 2005, the Company has issued 150,000 shares from treasury. After the four-year period, the Company agrees to pay an annual advance royalty of $25,000 commencing February 28, 2010. On completion of a bankable feasibility, the Company will issue to the vendor a further 400,000 shares of Globetech. The vendor will retain a 3% Net Smelter Return Royalty, 2% of which can be purchased by the Company on a pro-rata basis for the sum of $2,000,000 at any time within five years of commencement of commercial production.
On November 13, 2007, the Company announced that it had entered into an option agreement with Forbes and Manhattan B.C. Ltd. ("Manhattan"). Under this agreement Manhattan may earn a 65% interest in the Gladys Lake molybdenum property by incurring $1.0 million in exploration and development expense and making cash payments to the vendor. Globetech will continue to issue shares to the vendor as previously agreed.
During 2008, the Company paid $NIL (2007 - $nil) and issued an additional 100,000 (2007 - 50,000) shares. Under the option agreement with Manhattan, the Company no longer needs to make cash payments to the vendor.
The schedule of share issuances is as follows: | Date | Shares | Status | |
March 21, 2007 | 50,000 | Issued | ||
March 21, 2008 | 100,000 | Issued | ||
March 21, 2009 | 150,000 |
Globetech Ventures Corp. |
Notes to Consolidated Financial Statements |
June 30, 2008 |
(in Canadian dollars) |
(unaudited) |
3. | Mineral Properties and Deferred Resource Property Expenditures continued |
For the nine | ||||||||||
To September | months ended | Cumulative to | ||||||||
The Company has incurred the following costs on the Gladys Lake property: | 30, 2007 | June 30, 2008 | June 30, 2008 | |||||||
Acquisition costs | $ | 70,504 | $ | 15,000 | $ | 85,504 | ||||
Exploration costs | ||||||||||
Report | 13,199 | - | 13,199 | |||||||
Assessment work | 1,789 | - | 1,789 | |||||||
Geologist | 4,000 | - | 4,000 | |||||||
Transportation | 4,739 | - | 4,739 | |||||||
Total | $ | 94,231 | $ | 15,000 | $ | 109,231 |
4. | Related Parties |
The Company has entered into the following transactions with related parties which are in the normal course of operations and have been valued in these financial statements at the exchange amount which is the amount of consideration established and agreed to by the related parties. |
For the nine | For the nine | ||||||
months ended | months ended | ||||||
June 30, 2008 | June 30, 2007 | ||||||
Management fees to officers of the Company | $ | 54,000 | $ | 45,000 | |||
Consulting fees paid to a director | 10,000 | - | |||||
Accrued accounting fees to an officer | 6,000 | - | |||||
$ | 70,000 | $ | 45,000 |
Included in accounts payable and accrued liabilities was $10,500 (September 30, 2007 - $13,958) due to a director, and $95,672 (September 30, 2007 - $12,000) due to officers of the Company.
Amounts due to related parties do not bear interest, are unsecured, and have no fixed payment terms. Accordingly the fair value cannot be readily determined.
5. | Loans Payable |
September 30, | ||||||||
June 30, 2008 | 2007 | |||||||
Loans payable which are unsecured, due on demand and bear interest at 10% per annum | $ | 36,250 | $ | 36,250 |
On January 31, 2007 the Company entered into debt settlement agreements to retire loans of $343,098 plus additional interest of $31,678 for a total of $374,776. The debt was settled in part on May 4, 2007 by the issuance of 1,873,880 shares at a price of $0.20 per share. Additional interest of $36,250 has been recognized and the Company has agreed to issue an additional 241,667 shares as payment in full.
Globetech Ventures Corp. |
Notes to Consolidated Financial Statements |
June 30, 2008 |
(in Canadian dollars) |
(unaudited) |
6. | Share Capital | |
a) Common Shares | ||
The authorized share capital of the Company is unlimited without par value. |
b)Issued | Number of Shares | Share Capital | ||||||||
Balance, September 30, 2006 | 15,640,751 | $ | 33,824,961 | |||||||
Acquisition of Gladys Lake option (note 3) | 50,000 | $ | 0.33 | 16,500 | ||||||
Exercise of options | 900,000 | $ | 0.33 | 297,000 | ||||||
Shares issued for debt | 1,873,880 | $ | 0.20 | 374,776 | ||||||
Shares issued for debt | 1,296,745 | $ | 0.20 | 259,349 | ||||||
Shares issued for debt | 271,500 | $ | 0.20 | 54,300 | ||||||
Shares issued for debt | 289,003 | $ | 0.318 | 91,903 | ||||||
Contributed surplus allocated | - | 306,876 | ||||||||
Balance, September 30, 2007 | 20,321,879 | 35,225,665 | ||||||||
Shares issued for debt | 360,000 | $ | 0.23 | 83,407 | ||||||
Shares issued for debt | 200,000 | $ | 0.15 | 30,000 | ||||||
Acquisition of Gladys Lake option (note 3) | 100,000 | $ | 0.15 | 15,000 | ||||||
Balance, June 30, 2008 | 20,981,879 | $ | 35,354,072 |
The Company has issued 20,981,879 common shares of which 25,000 shares are held in escrow as at March 31, 2008.
c) Stock Options
The Company has adopted an incentive stock option plan (the "Plan"). The essential elements of the Plan provide that the aggregate number of shares of the Company's capital stock issuable pursuant to options granted under the Plan may not exceed 5,800,630 shares. Options granted under the Plan may have a maximum term of five (5) years. The exercise price of the options granted under the Plan will not be less than the fair market value of the common stock at the date of grant. The Plan Administrator shall specify the vesting schedule for each stock option granted.
Total options vested at June 30, 2008 were 1,600,000 (September 30, 2007 - 1,200,000).
(i) The changes in stock options were as follows:
For the year | |||||
For the nine | Weighted | ended | Weighted | ||
months ended | Average | September30, | Average | ||
June 30, 2008 | Exercise Price | 2007 | Exercise Price | ||
Balance outstanding, beginning of year | 1,200,000 | $ 0.78 | 2,100,000 | $ 0.54 | |
Options granted | 1,600,000 | 0.15 | - | - | |
Forfeited | (800,000) | 0.30 | (900,000) | 0.30 | |
Forfeited | (400,000) | USD$1.75 | |||
Balance outstanding, end of period | 1,600,000 | $ 0.15 | 1,200,000 | $ 0.78 |
(ii) Using the fair value method for stock-based compensation, stock-based compensation expense of $129,946 was recorded in the consolidated statements of operations and deficit for the period ended June 30, 2008 (June 30, 2007 - $nil).
This amount was determined using the Black Scholes Option Pricing Model assuming no dividends are to be paid, with a weighted average expected stock option life of 3 years, a weighted average volatility of the Company's share price of 107.1% and an average annual risk free interest rate of 3.8% .
(iii) The following table summarizes information about stock options, outstanding at June 30, 2008: | ||||
Number outstanding at June | Weighted average remaining | |||
Range of exercise prices | 30, 2008 | contractual life (years) | ||
$ 0.15 | 1,600,000 | 2.5 | ||
$ 0.15 | 1,600,000 | 2.5 |
Globetech Ventures Corp. |
Notes to Consolidated Financial Statements |
June 30, 2008 |
(in Canadian dollars) |
(unaudited) |
6. | Share Capital continued |
d)Warrants
At June 30, 2008, the Company had nil (September 30, 2007 - nil) common share purchase warrants outstanding to purchase nil common shares of the Company.
7. | Contingencies |
The Company has made a demand for the return of 2,000,000 shares issued in connection with the Amapa property due to breach of the contract. The Company is of the opinion that the breaches incurred by the defendants occurred before any non- performance of the contract on its part and that it should able to exercise its rights under the contract to repurchase the 2,000,000 shares issued for $100.00. The outcome is not determinable. |