Exhibit 99.1
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
Financial Statements
(Expressed in Canadian dollars)
For the nine months ended June 30, 2010
GLOBETECH VENTURES CORP.
(the "Company")
Financial Statements
NOTICE OF NO AUDITOR REVIEW OF INTERIM 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" "Casey Forward"
- -------------------------------- --------------------------------
Chief Executive Officer Chief Financial Officer
2
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
BALANCE SHEETS
(Expressed in Canadian dollars)
June 30, 2010 September 30, 2009
------------- ------------------
ASSETS
CURRENT
Cash $ 560 $ 546
GST refundable 76 179
------------ ------------
TOTAL CURRENT ASSETS 636 725
MINERAL PROPERTIES (Note 2) 112,007 10,000
------------ ------------
TOTAL ASSETS $ 112,643 $ 10,725
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIENCY)
CURRENT
Accounts payable and accrued liabilities $ 51,439 $ 96,734
Due to related parties (Note 3) 18,663 111,748
------------ ------------
TOTAL CURRENT LIABILITIES 70,102 208,482
------------ ------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Capital stock
Authorized
Unlimited common shares with no par value
Issued and outstanding 36,483,538 36,396,531
Share subscriptions 261,245 --
Contributed surplus 2,925,087 2,925,087
Deficit (39,627,329) (39,519,375)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY) 42,541 (197,757)
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) $ 112,643 $ 10,725
============ ============
On behalf of the Board:
"Casey Forward" Director "Ian Bartholomew" Director
- -------------------------------- --------------------------------
The accompanying notes form an integral part of these financial statements
3
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in Canadian dollars)
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
------------ ------------ ------------ ------------
EXPENSES
Accounting and legal (Note 3) $ 6,000 $ 4,500 $ 37,309 $ 29,633
Amortization -- 265 -- 797
Consulting -- -- 11,785 121,571
Interest and bank charges 22 275 704 550
Management fees (Note 3) 9,000 -- 27,000 36,000
Office and miscellaneous -- 7,577 12,882 43,822
Promotion and travel -- -- 8,609 --
Regulatory and transfer agent fees 2,577 658 9,672 5,906
Development costs -- 12,505 -- 46,505
Write-off of mineral properties -- -- -- 109,231
------------ ------------ ------------ ------------
17,599 25,780 107,961 394,015
------------ ------------ ------------ ------------
NET LOSS BEFORE OTHER ITEM (17,599) (25,780) (107,961) (394,015)
------------ ------------ ------------ ------------
OTHER ITEM
Interest income -- -- 7 --
------------ ------------ ------------ ------------
-- -- 7 --
------------ ------------ ------------ ------------
NET LOSS FOR THE PERIOD $ (17,599) $ (25,780) $ (107,954) $ (394,015)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 34,447,672 32,039,914 34,447,672 32,035,059
============ ============ ============ ============
The accompanying notes form an integral part of these financial statements
4
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
(Expressed in Canadian dollars)
Contributed Deficit
Surplus and Accumulated
Common Shares Equity Portion During the
Number of Issued and of Convertible Exploration
Shares Fully Paid Debentures Stage Total
------ ---------- ---------- ----- -----
Balance September 30, 2006 15,640,751 $33,824,961 $3,008,754 $(37,400,450) $(566,735)
Issuance of shares for cash
Exercise of options 900,000 603,876 (306,876) -- 297,000
Acquisition of Gladys Lake option 50,000 16,500 -- -- 16,500
Issued on conversion of debt 3,731,128 780,330 -- -- 780,330
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
Acquisition of Gladys Lake option 100,000 15,000 -- -- 15,000
Issued on conversion of debt 2,608,484 330,936 -- -- 330,936
Acquisition of technology 6,000,000 600,000 -- -- 600,000
Contributed surplus -- -- 223,209 -- 223,209
Loss for the year -- -- -- (518,856) (518,856)
---------- ----------- ---------- ------------ ---------
Balance September 30, 2008 32,030,363 36,321,603 2,925,087 (38,520,157) 726,533
---------- ----------- ---------- ------------ ---------
Issued for services 850,000 138,175 -- -- 138,175
Treasury shares to be cancelled (375,000) (60,937) -- -- (60,937)
Shares cancelled (11,000) (2,310) -- -- (2,310)
Loss for the year -- -- -- (999,218) (999,218)
---------- ----------- ---------- ------------ ---------
Balance September 30, 2009 32,494,363 36,396,531 2,925,087 (39,519,375) (197,757)
---------- ----------- ---------- ------------ ---------
Acquisition of Goldbuck option 2,100,000 87,007 -- -- 87,007
Share subscriptions -- 261,245 -- -- 261,245
Loss for the period -- -- -- (107,954) (107,954)
---------- ----------- ---------- ------------ ---------
BALANCE, JUNE 30, 2010 34,594,363 $36,744,783 $2,925,087 $(39,627,329) $ 42,541
========== =========== ========== ============ =========
The accompanying notes form an integral part of these financial statements
5
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
Statements of Cash Flows
(in Canadian dollars)
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
---------- ---------- ---------- ----------
OPERATING ACTIVITIES
Net loss for the period $ (17,599) $ (25,780) $ (107,954) $ (394,015)
Items not involving cash
Amortization -- 265 -- 797
Write-off of mineral properties -- -- -- 109,231
Change in non-cash working capital
GST refundable and other receivables 2,103 1,692 103 646
Prepaids -- 12,505 -- --
Accounts payable and accrued liabilities (3,911) 10,849 (45,295) 268,643
---------- ---------- ---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (19,407) (469) (153,146) (14,698)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES
Related parties 18,663 -- (93,085) --
Share subscriptions -- -- 261,245 --
---------- ---------- ---------- ----------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 18,663 -- 168,160 --
---------- ---------- ---------- ----------
INVESTING ACTIVITIES
Acquisition of mineral properties -- -- (15,000) --
---------- ---------- ---------- ----------
NET CASH USED IN INVESTING ACTIVITIES -- -- (15,000) --
---------- ---------- ---------- ----------
CHANGE IN CASH (744) (469) 14 (14,698)
CASH AT BEGINNING OF PERIOD 1,304 1,030 546 15,259
---------- ---------- ---------- ----------
CASH AT END OF PERIOD $ 560 $ 561 $ 560 $ 561
========== ========== ========== ==========
The accompanying notes form an integral part of these financial statements
6
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Globetech Ventures Corp. ("the Company") was incorporated under the laws of
British Columbia, Canada. The Company is involved in the exploration and
development of mineral properties in Canada.
The Company is considered to be in the exploration sate and is in the process of
exploring and developing its mineral properties and has not yet determined
whether the properties contain or reserves that are economically recoverable.
The recoverability of the amounts shown for mineral properties and related
deferred exploration costs is dependent upon the existence of economically
recoverable reserves, the ability of the Company to obtain necessary financing
to complete the developement of those reserves and upon future profitable
production.
These interim financial statements should be read in conjunction with the
audited September 30, 2009 annual financial statements.
These interim financial statements follow the same accounting policies and
methods of their application as in the September 30, 2009 annual financial
statements. These interim 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.
June 30, 2010 September 30, 2009
------------- ------------------
Working capital deficiency (69,466) (207,757)
Deficit (39,627,329) (39,519,375)
FUTURE CHANGES IN ACCOUNTING POLICIES
BUSINESS COMBINATIONS, NON-CONTROLLING INTEREST AND CONSOLIDATED FINANCIAL
STATEMENTS
In January 2009, the CICA issued Handbook Sections 1582 "Business Combinations",
1601 "Consolidated Financial Statements" and 1602 "Non-controlling Interests"
which replace CICA Handbook Sections 1581 "Business Combinations" and 1600
"Consolidated Financial Statements". Section 1582 establishes standards for the
accounting for business combinations that is equivalent to the business
combination accounting standard under IFRS. Section 1582 is applicable for the
Company's business combinations with acquisition dates on or after October 1,
2011. Section 1601 together with Section 1602 establishes standards for the
preparation of consolidated financial statements. Section 1601 is applicable for
the Company's interim and annual consolidated financial statements for its
fiscal year beginning October 1, 2011. Early adoption of these Sections is
permitted and all three Sections must be adopted concurrently.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
In addition to the above new accounting standards, the Accounting Standards
Board ("AcSB"), in 2006, 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 International
Financial Reporting Standards ("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 October 1, 2011
will require the restatement for comparative purposes of amounts reported by the
Company for the year ended September 30, 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.
7
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
2. MINERAL PROPERTIES AND DEFERRED MINERAL PROPERTY EXPENDITURES
FOR THE NINE MONTHS ENDED JUNE 30, 2010 Gold Buck Gladys Lake Total
- --------------------------------------- --------- ----------- -----
BALANCE, BEGINNING OF YEAR $ 10,000 $ -- $ 10,000
ACQUISITION COSTS
Cash 15,000 -- 15,000
Shares 87,007 -- 87,007
--------- --------- ---------
102,007 -- 102,007
--------- --------- ---------
DEFERRED EXPLORATION EXPENDITURES
Mapping -- -- --
Consulting -- -- --
Technical report -- -- --
--------- --------- ---------
TOTAL 112,007 -- 112,007
WRITE-OFFS -- -- --
--------- --------- ---------
BALANCE, END OF PERIOD $ 112,007 $ -- $ 112,007
========= ========= =========
FOR THE YEAR ENDED SEPTEMBER 30, 2009 Gold Buck Gladys Lake Total
- ------------------------------------- --------- ----------- -----
ACQUISITION COSTS, BEGINNING OF YEAR $ -- $ 85,504 $ 85,504
Cash 10,000 -- 10,000
--------- --------- ---------
ACQUISITION COSTS, END OF YEAR 10,000 -- 10,000
--------- --------- ---------
DEFERRED EXPLORATION EXPENDITURES, BEGINNING OF YEAR -- 23,727 --
--------- --------- ---------
DEFERRED EXPLORATION EXPENDITURES, END OF YEAR -- 23,727 --
--------- --------- ---------
TOTAL 10,000 109,231 119,231
WRITEN-OFF -- (109,231) (109,231)
--------- --------- ---------
BALANCE, END OF YEAR $ 10,000 $ -- $ 10,000
========= ========= =========
8
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
2. MINERAL PROPERTIES AND DEFERRED MINERAL PROPERTY EXPENDITURES (continued)
GOLD BUCK CLAIMS
On September 30, 2009, Globetech entered into an option agreement whereby the
Company can earn a 100% interest in the Gold Buck claim located east of Williams
Lake, British Columbia.
In order to earn a 100% interest, the Company is required to pay a total of
$350,000, in ascending payments over a period of three years. The agreement also
calls for the issuing of 2,100,000 shares of Globetech (issued). The vendor
would retain a 3% Net Smelter Return Royalty, half of which can be purchased by
the Company for the sum of $1,000,000 at any time within five years.
Cash terms are:
(i) down payment of $10,000; (paid)
(ii) payment of $20,000 on or before January 31, 2010; ($15,000 paid)
(iii) payment of $50,000 on or before June 12, 2010;
(iv) payment of $10,000 on or before September 30, 2010;
(v) payment of $100,000 on or before June 12, 2011;
(vi) payment of $10,000 on or before September 30, 2011;
(vii) payment of $100,000 on or before June 12, 2012;
(viii) payment of $50,000 on or before September 30, 2012
GLADYS LAKE
On March 21, 2005, Globetech entered into an option agreement whereby the
Company can earn a 100% interest in the Gladys Lake porphyry molybdenum property
located in new Atlin in the province of British Columbia.
In order to earn a 100% interest, the Company was 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 250,000 shares from treasury. After
a four-year period, the Company agreed to pay an annual advance royalty of
$25,000 commencing February 28, 2010. On completion of a bankable feasibility,
the Company would issue to the vendor a further 400,000 shares of Globetech. The
vendor would 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 made.
During September 30, 2009 year-end the Company decided not to proceed with the
acquisition of the property and had written off accumulated costs of $109,231.
9
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
3. 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 For the
nine months nine months
ended ended
June 30, June 30,
2010 2009
-------- --------
Management fees to an officer of the Company $ 27,000 $ 36,000
Accounting fees to an officer 6,000 13,500
-------- --------
$ 33,000 $ 49,500
======== ========
As at June 30, 2010 the amount due to related parties included $18,663
(September 30, 2009 - $111,748) owing to officers and directors for management
and accounting fees. The amounts due are unsecured, non-interest bearing and
have no fixed terms of repayment. Accordingly, fair value is not determinable.
4. SHARE CAPITAL
A) COMMON SHARES
The authorized share capital of the Company is unlimited without par value. All
shares both issued and unissued, are common shares of the same class and rank
equally as to dividends, voting powers and participation in assets upon
liquidation. At any general meeting, subject to the restrictions on joint
registered owners of our common shares, on a show of hands every shareholder who
is present in person and entitled to vote has one vote and on a poll every
shareholder has one vote for each share of which he or she is the rigistered
owner and may exercise such vote either in person or by proxy. Our directors
may, from time to time, declare and authorize payment of dividends. No common
shares have been issued subject to call or assessment. There are no pre-emptive
or conversion rights. There are no provisions for surrender, sinking or purchase
funds.
B) SHARE ISSUANCE
FOR THE NINE MONTHS ENDED JUNE 30, 2010
The Company has accepted share subscriptions pursuant to a private placement of
up to 15 million units at $0.02 per unit.. Each unit consists of one common
share and one share purchase warrant enabling the holder to purchase one
additional common share at a price of $0.03 for a period of two years.
The Company issued 2,100,000 share at a fair value of US$0.04 pursuant to the
acquisition of the Goldbuck option (note 2).
During the year ended September 30, 2009:
The Company issued 850,000 share at an average price of US$0.13 for services of
which 375,000 are being returned to treasury for cancellation. In addition
11,000 shares valued at $2,310 issued in 2006 for services were returned for
cancellation.
During the year ended September 30, 2008:
The Company completed a private placement of 3,000,000 units at $0.05 per unit.
Each unit consists of one common share and one non-transferable share purchase
warrant enabling the holder to purchase one common share for $0.10 exercisable
until June 10, 2009.
The Company entered into debt settlement agreements to retire debt of $330,938
by issuing 2,608,484 shares at an average price of $0.13. Included in this
amount is the issuance of 241,667 shares for interest on loans of $36,250 and
the issuance of 1,155,000 for amounts owing to related parties of $115,500.
10
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
4. SHARE CAPITAL (continued)
C) STOCK OPTIONS
The Company has adopted an incentive stock option plan (the "Plan"). The
essential elements of the Plan provide that the aggregate number of shares of
the Company's capital stock issuable pursuant to options granted under the Plan
may not exceed 6,498,872 shares. Options granted under the Plan may have a
maximum term of five (5) years. The exercise price of the options granted under
the Plan will not be less than the fair market value of the common stock at the
date of grant. The Plan Administrator shall specify the vesting schedule for
each stock option granted.
The Company is authorized to grant options to directors, employees and
consultants. Stock option transactions and the number of stock options
outstanding are summarized as follows:
Weighted
Number of Average
Options Exercise Price
------- --------------
Outstanding and exercisable at September 30, 2006 2,100,000 US$ 0.78
Option exercised (900,000) US$ 0.30
Outstanding and exercisable at September 30, 2007 1,200,000 US$ 0.78
Options granted 1,800,000 $ 0.16
Options cancelled / expired (1,200,000) US$ 0.78
Options exercised -- $ --
---------- ------
Outstanding and exercisable at September 30, 2008, 2009
and June 30, 2010 1,800,000 $ 0.16
========== ======
The Company has 1,800,000 stock options of which 1,600,000, exercisable at a
price of $0.15, were granted on December 20, 2007 that expire on December 20,
2010 and 200,000, exercisable at a price of $0.20, were granted on July 31,
2008, expiring on July 31, 2010.
During 2009 stock-based compensation has been recorded in the amount of $nil
(2008 - $223,209) and included in contributed surplus. The amount is
management's estimate of the fair value of nil (2008 - 1,800,000) stock options
granted and vested during the year, and has been expensed in the statement of
operations.
The aggregate intrinsic value is calculated as the difference between the
exerise price of the underlying stock option awards and the closing market price
of our common stock as quoted on the OTC Bulletin Board as of September 30,
2009. We received cash payments for the exercise of stock options in the amount
of $Nil for the years ended September 30, 2008 and 2009.
The above fair value amounts were calculated using the Black Scholes option
pricing model using the following weighted average assumptions:
2009 2008
---- ----
Risk free interest rate -- 3.8%
Expected life -- 2.86 years
Expected annual volatility -- 145.35%
Expected dividend -- --
Weighted average fair value of each option -- $ 0.12
11
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
4. SHARE CAPITAL (continued)
C) STOCK OPTIONS (continued)
Option pricing models require the input of highly subjective assumptions
including the expected price volatility. Changes in the subjective input
assumptions can materially affect the fair value estimate, and therefore the
existing models do not necessarily provide a reliable single measure of the fair
value of the Company's stock options.
The following table summarizes information about stock options outstanding at
June 30, 2010:
Options Exercisable Options Exercisable
----------------------------------------------- --------------------------------
Weighted
Number Average Number
Outstanding at Remaining Weighted Exercisable at Weighted
June 30, Contractual Average June 30, Average
Range of exercise prices 2010 Life (Years) Exercise Price 2010 Exercise Price
- ------------------------ ---- ------------ -------------- ---- --------------
$0.15 - $0.20 1,800,000 0.50 $ 0.16 1,800,000 $ 0.16
5. SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS
For the For the
nine months nine months
ended ended
June 30, June 30,
2010 2009
-------- --------
Cash paid during the period for interest $ -- $ --
-------- --------
Cash paid during the period for income taxes $ -- $ --
-------- --------
Share issued for:
Mineral property 87,007 --
Debt -- --
Mineral property in due to related parties -- --
12
GLOBETECH VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian dollars)
June 30, 2010
6. CAPITAL DISCLOSURE
The Company considers its capital to consist of its debt and equity. Its
objectives when managing capital are to safeguard the entity's ability to
continue as a going concern and to identify, acquire and explore mineral
properties. The Board of Directors does not establish quantitative return on
capital criteria for management but rather relies on the expertise of the
Company's management to sustain future development of the business. There were
no changes in the Company's approach to capital management during fiscal 2009.
Neither the Company nor its subsidiary are subject to externally imposed capital
requirements.
7. FINANCIAL INSTRUMENTS AND RISK
The Company's financial instruments consist of cash, accounts payable and
accrued liabilities and due to related parties. It is management's opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments. The fair value of these financial
instruments approximates their carrying values, unless otherwise noted.
The Company's risk exposures and the impact on the Company's financial
instruments are summarized below:
(i) Interest rate risk
The Company is not exposed to significant interest rate risk due to the
short-term maturity of its monetary assets and liabilities.
(ii) Credit risk
Credit risk is the risk of loss associated with a counterparty's inability to
fulfill its payment obligations. The Company is not exposed to significant
credit risk on its financial assets due to cash being placed with major
financial institutions and goods and services tax recoverable is due from
government agencies.
(iii) Currency risk
As of June 30, 2010, the Company does not have assets or liabilities in foreign
currency and therefore is not exposed to foreign currency risk.
(iv) Liquidity risk
The Company's approach to managing liquidity risk is to ensure that it will have
sufficient liquidity to meet liabilities when due. As at June 30, 2010, the
Company had a cash balance of $560 to settle current liabilities of $70,102.
There is a risk that the Company may not be able to fulfill its obligation when
a liability have contractual maturities of 30 days or due on demand and are
subject to normal trade terms.
v) Other price and market risk
The Company's financial instruments are all short term and exposed to other
price and market risks should the fair value of future cash flows from financial
instruments fluctuate.
Management does not feel that the Company is exposed to significant risk as its
financial instruments are not expected to significantly fluctuate over the short
term.
8. SUBSEQUENT EVENT
The Company completed a non-brokered private placement of 12,312,200 units at a
price of $0.02 per unit for total proceeds of $246,244. Each unit will consist
of one common share and one share purchase warrant. Each warrant will entitle
the holder to purchase one additional common share at a price of $0.03 at any
time until the date that is 24 months following the closing date.
13