Globetech Ventures Corp.
(An exploration stage company)
Consolidated Balance Sheets
(Unaudited - Canadian Dollars)
June 30, 2006 September 30,2005
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ASSETS
Current Assets
Cash and cash equivalents $3,957 $51,085
GST refundable 2,128 10,330
Other receivable - 18,207
Prepaid expenses and deposits - 1,503
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6,085 81,125
Equipment (Note 2) 1,647 2,096
MINERAL PROPERTIES (Note 3) 77,734 50,407
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$85,466 $133,628
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $195,637 $148,496
Loans payable - 254,211
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195,637 402,707
Convertible loans (Note 5) 367,748 -
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563,385 402,707
SHAREHOLDERS' EQUITY
Capital stock
Authorized unlimited common shares
of no par value
Issued and outstanding (Note 6) 33,965,311 33,615,191
Contributed surplus 3,008,754 3,008,754
Deficit accumulated during exploration stage (37,451,984) (36,893,024)
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(477,919) (269,079)
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$85,466 $133,628
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Globetech Ventures Corp.
(An exploration stage company)
Consolidated Statements of Operation and Deficit
(Unaudited - Canadian Dollars)
For the three months For the nine months ended
ended June 30 ended June 30
2006 2005 2006 2005
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Administrative expenses
Accounting and lega 1,815 14,013 13,607 38,862
Amortization 149 210 447 630
Consulting fees 33,000 - 203,350 54,000
Exploration - 10,563 - 12,563
Financing costs - - 165,000 -
Foreign exchange loss 970 7,485 970 7,485
Interest and bank charges 24 6,371 88,952 15,736
Management fees 15,000 - 45,000 18,000
Office and miscellaneous 5,150 2,196 18,120 6,661
PUblic relations 5,850 - 8,676 2,274
Reuglatory and transfer agent 2,216 994 9,594 11,455
Stock-based compensation - - - 671,042
Telephone - 299 624 1,439
Travel and promotino 4,620 2,400 4,620 6,790
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Net loss for the period (68,794) (44,531) (558,960) (846,937)
Deficit, beginning of period (37,383,190) (36,916,574)(36,893,024)(36,114,168)
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Deficit, end of period $(37,451,984) $(36,961,105) $(37,451,984) $(36,961,105)
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loss per share $ - $ - $(0.04) $(0.07)
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Globetech Ventures Corp.
(An exploration stage company)
Consolidated Statement of Shareholders' Equity (Deficiency)
(Unaudited - Canadian Dollars)
Number of Common Shares Contributed Deficit Total
shares issued and surplus accumulated
fully paid and equity during the
portion of exploration
convertibel stage
debentures
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Balance,
December 1991 - $- $- $- $-
Issuance of shares for cash
Private placement 1,280,001 159,500 - - 159,500
Loss for the period (32,080) (32,080)
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Balance,
September30, 1992 1,280,001 159,500 - (32,080) 127,420
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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)
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Balance,
September 30, 1993 2,242,001 653,495 - (137,982) 515,513
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Issuance of shares for cash
Private placement 400,000 576,000 - - 576,000
Share issue costs - (60,622) - - (60,622)
Loss for the year - - - (403,571) (403,571)
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Balance,
September 30, 1994 2,642,001 1,168,873 - (541,553) 627,320
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Issuance of shares for cash
Private placement 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)
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Balance,
September30,1995 3,299,070 2,628,713 - (884,597) 1,744,116
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Issuance of shares for cash
Private placement 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)
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Balance,
September30,1996 5,991,278 12,800,148 - (2,418,071) 10,382,077
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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
Issuance on conversion
of debt 2,464,950 4,821,079 - - 4,821,079
Issuance of common
shares for acqusition
of subsidiary 171,282 1,124,745 - - 1,124,745
Issuance of shares for
finders fee 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 year - - - (2,822,786) (2,822,786)
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Balance,
September30,1997 9,781,255 23,066,949 169,760 (5,240,857) 17,995,852
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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
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10,059,031 22,241,727 110,541 (5,240,857) 17,111,411
Captial 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)
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Balance,
September30,1998 2,112,438 22,872,570 (110,541)(25,477,761) (2,605,191)
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Issued on settlement
of debt 1,433,364 1,604,029 - - 1,604,029
Loss for the year - - - (706,147) (706,147)
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Balance,
September30,1999 3,545,802 24,476,599 - (26,183,908) (1,707,309)
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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)
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Balance,
September30,2000 5,847,996 26,767,476 - (26,622,571) 144,905
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Issuance of shares for cash
Private placement 2,000,000 456,840 - - 456,840
Issued for subscription
received in advance 227,273 369,875 - - 369,875
Subscription received in
advance - (369,875) - - (369,875)
Issued on acqusition 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)
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Balance,
September30,2001 9,489,939 27,873,683 - (28,445,263) (571,580)
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Loss for the year - - - (319,713) (319,713)
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Balance,
September30,2002 9,489,939 27,873,683 - (28,764,976) (891,293)
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Loss for the year - - - (47,171) (47,171)
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Balance,
September30,2003 9,489,939 27,873,683 - (28,812,147) (938,464)
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Issuance of shares for cash
Private placement 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)
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Balance,
September30,2004 13,939,613 33,519,983 2,429,100 (36,114,171) (165,088)
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Issuance of shares for cash
Private placement - shares
issued due to repricing 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)
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Balance,
September30,2005 14,471,939 33,615,191 3,008,754 (36,893,024) (269,079)
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warrant shares issued 257,812 165,000 - - 165,100
Acquisition of Gladys
Lake option 50,000 10,500 - - 10,500
Issued on conversion
of debt 861,000 174,620 - - 174,620
Loss for the year - - - (558,960) (558,960)
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Balance,
June 30,2006 15,640,751 33,965,311 3,008,754 (37,451,984) (477,919)
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Globetech Ventures Corp.
(An exploration stage company)
Consolidated Statements of Cash Flows
(Unaudited - Canadian Dollars)
For the three months For the nine months ended
ended June 30 ended June 30
2006 2005 2006 2005
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OPERATING ACTIVITIES
Net loss fro the period $(63,794) $(44,531) $(558,960) $(846,937)
Items not involving cash:
Amortization 149 210 447 630
Stock-based compensation - - - 671,042
Shares issued for debt 174,620 76,704 174,620 76,704
Shares issued for Glady Lake
option 10,500 - 10,500 -
Exercise of cashless warrants - - 165,000 -
Change in non-cash
working capital
GST refundable and other
receivables 6,051 (1,784) 26,409 (6,361)
Prepaid and deposits - - 1,503 -
Accounts payable and
accrued liabilities 52,078 173,138 47,143 134,063
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Net cash used in
operating activities 174,604 203,737 (133,338) 29,141
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FINANCING ACTIVITIES
Advances from related parties - - - (267,848)
Convertible loans (170,000) - 367,748 -
Loans payable - (240,101) (254,211) -
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Net cash provided from (used in)
financing activities (170,000) (240,101) 113,537 (267,848)
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INVESTING ACTIVITIES
Expenditures on mineral
properties (10,500) - (27,327) (10,000)
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Net cash used in investing
activities (10,500) - (27,327) (10,000)
Change in cash and cash
equivalents (5,896) (36,364) (47,128) (248,707)
Cash and cash equivalents
at beginning of period 9,853 92,044 51,085 304,387
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Cash and cash equivalents
at end of period $3,957 $55,680 $3,957 $55,680
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Globetech Ventures Corp.
Notes to Consolidated Financial Statements
June 30, 2006
(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, 2005 annual financial statements.
These interim financial statements follow the same accounting policies and
methods of their application as in the September 30, 2005 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.
2. Equipment
For the nine months ended June 30, 2006 September 30, 2005
Cost Accumulated Net book Net book
amortization value value
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Office equipment $5,222 $4,948 $274 $323
Computer equipment 26,313 24,940 1,373 1,773
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$31,535 $29,888 $1,647 $2,096
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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.
The Company has issued a total of 100,000 shares to the vendor. 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. An initial
down payment of $10,000 was paid.
The balance of payments and schedule of share issuances is as follows:
Date Amount Shares
- --------------------------------------------------------------------
March 21, 2007 $20,000 50,000
March 21, 2008 25,000 100,000
March 21, 2009 25,000 150,000
The Company has incurred the following costs on the Gladys Lake property:
June 30, 2006 September 30, 2005
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Acquisition costs $54,004 $28,504
Exploration costs
Report 13,199 13,161
Assessment work 1,789 -
Geologist 4,000 4,000
Transportation 4,742 4,742
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Total $77,734 $50,407
4. Related Parties
The Company has entered into the following transactions with related parties:
For the three months ended For the three months ended
June 30, 2006 June 30, 2005
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Management fees to officers
of the Company $45,000 $18,000
Included in accounts payable is $82,231 due to a director.
5. Convertible Loans
Agreements have been negotiated with two old creditors to issue shares
at $0.20 USD to retire indebtedness of $367,748.
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, Setember 30, 2005 14,471,939 $33,615,191
warrant shares issued (Note 6d) 257,812 $0.64 165,000
Shares for property option 50,000 0.21 10,500
Shares issued for debt 861,000 0.20 174,620
Balance, June 30, 2006 15,640,751 $33,965,311
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.
The Company is authorized to grant options to directors, employees and
consultants. Stock option transactions and the number of stock options
outstanding are summarized as follows:
Outstanding and Number of Weighted average
exercisable options exercise price
at Setepmber 30, 2005 2,100,000 US$0.54
Options granted - -
Option cancelled/expired - -
Options exercised - -
Outstanding and exercisable
at June 30, 2006 2,100,000 US$0.54
The Company had 2,100,000 stock options of which 1,700,000 were granted on
February 3,2005 that expire on February 3,2008 and 400,000 were granted on
March 12, 2004, expiring on March 12, 2008.
The following table summarizes information about fixed stock options
outstanding at June 30, 2006:
Options Outstanding Options Exercisable
-------------------------------------------------------------------------
Weighted Weighted Weighted
Number average average Number average
Range of Outstanding remaining exercise exercisable exercise
exercise June 30, contractual price 31, price
prices (USD$) 2006 life (years) (USD$) 2006 (USD$)
--------------------------------------------------------------------------
$0.30-$1.75 2,100,000 3.3 $0.54 2,100,000 $0.54
d) Warrants
Pursuant to a convertible debenture agreement dated July 28, 2004 the
holders held 1,000,000 warrants to purchase shares at $0.475 USD per
share and exercised their right to obtain 257,812 cashless warrants in
lieu of exercising the 1,000,000 warrants. The Company issued 257,812
shares at a deemed value of $0.64 USD per share.
At June 30, 2006, the Company had 600,000 (2005 - 2,100,000) common
share purchase warrants outstanding to purchase 1,100,000 common shares
of the Company.
Issue date Warrants outstanding Purchase price Expiry date
----------------------------------------------------------------------
June 30, 2004 300,000 USD$1.00 June 30, 2007
April 23, 2004 300,000 USD$1.00 April 23,2007
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.