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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Golden Patriot Corporation (CE) | USOTC:GPTC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X]
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended January 31, 2008
[ ]
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 0-33065
GOLDEN PATRIOT, CORP.
(Exact name of Small Business Issuer as specified in its charter)
Nevada 98-0216152
(State or other jurisdiction of
(IRS Employer
incorporation)
Identification No.)
626 RexCorp Plaza, Uniondale, New York 11556
(Address of principal executive offices)
516-522-2823
(Issuers telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ( X ) Yes ( ) No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ( ) Yes (X) No
There were 112,762,853 common shares outstanding of as of March 12, 2008.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2008
(Unaudited)
( Stated in US Dollars )
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED BALANCE SHEETS
January 31, 2008 and April 30, 2007
(Unaudited)
( Stated in US Dollars )
|
January 31, |
April 30, |
|
ASSETS |
2008 |
2007 |
|
|
|
|
|
Current |
|
|
|
Cash |
$ 12,218 |
$ 53,815 |
|
Prepaid fees and expenses |
9,191 |
16,960 |
|
Current portion of deferred financing costs Note 4(b) |
47,561 |
76,125 |
|
|
|
|
|
|
68,970 |
146,900 |
|
Advances receivable Note 3 |
13,362 |
10,200 |
|
Deferred financing costs Note 4(b) |
61,401 |
67,023 |
|
Equipment Note 6 |
710 |
874 |
|
|
|
|
|
|
$ 144,443 |
$ 224,997 |
|
|
|
|
|
LIABILITIES |
|||
|
|
|
|
Current |
|
|
|
Accounts payable and accrued liabilities Note 6 |
$ 250,286 |
$ 117,098 |
|
|
|
|
|
Callable secured convertible notes Note 4 |
959,175 |
877,762 |
|
|
|
|
|
|
1,209,461 |
994,860 |
|
|
|
|
|
STOCKHOLDERS DEFICIENCY |
|||
|
|
|
|
Capital stock Notes 4, 5, 7 and 9 |
|
|
|
Common stock, $0.001 par value |
|
|
|
1,000,000,000 |
authorized |
|
|
110,212,895 |
outstanding (April 30, 2007: 88,112,895) |
110,212 |
88,112 |
Additional paid-in capital |
6,679,734 |
6,360,080 |
|
Deficit accumulated during the exploration stage |
(7,854,964) |
(7,218,055) |
|
|
|
|
|
|
(1,065,018) |
(769,863) |
|
|
|
|
|
|
$ 144,443 |
$ 224,997 |
|
|
|
|
SEE ACCOMPANYING NOTES
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine months ended January 31, 2008 and 2007 and
the period from November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
|
|
November 24, |
|
|
|
|
|
1998 (Date of |
|
|
|
|
|
Inception of |
|
|
|
|
|
the Exploration |
|
Three months ended |
Nine months ended |
Stage) to |
||
|
January 31, |
January 31, |
January 31, |
||
|
2008 |
2007 |
2008 |
2007 |
2008 |
|
|
|
|
|
|
Revenue |
$ - |
$ - |
$ - |
$ - |
$ - |
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
Abandonment of capital assets |
- |
- |
- |
- |
6,773 |
Administration fees Note 6 |
- |
- |
- |
- |
14,527 |
Amortization |
53 |
79 |
164 |
238 |
6,860 |
Audit and accounting fees |
11,415 |
25,848 |
74,685 |
31,889 |
252,555 |
Beneficial conversion feature |
- |
- |
- |
- |
452,916 |
Consulting fees Note 6 |
5,600 |
15,644 |
25,450 |
131,308 |
3,077,994 |
Cost recovery Note 6 |
- |
- |
- |
- |
(11,500) |
Exploration and development costs Note 6 |
44,766 |
75,223 |
130,717 |
319,393 |
1,373,923 |
Filing fees |
482 |
793 |
3,440 |
6,750 |
32,599 |
Finance charges |
20,567 |
18,870 |
73,090 |
96,422 |
206,467 |
Interest expense Note 4 |
43,805 |
44,424 |
240,909 |
454,562 |
852,309 |
Investor relations |
- |
3,885 |
- |
33,950 |
222,268 |
Legal fees |
17,080 |
12,852 |
74,976 |
119,933 |
316,952 |
Management fees Note 6 |
35,000 |
24,999 |
85,000 |
95,332 |
496,161 |
Office and miscellaneous |
252 |
1,741 |
10,022 |
6,712 |
75,278 |
Promotion |
- |
- |
7,220 |
135,896 |
211,479 |
Rent Note 6 |
1,931 |
5,985 |
13,737 |
11,343 |
35,091 |
Mineral property option payments received Note 3 |
- |
- |
- |
- |
(106,940) |
Stock-based compensation Note 5 |
- |
- |
30,000 |
58,000 |
273,044 |
Telephone |
1,121 |
542 |
2,766 |
542 |
7,295 |
Transfer agent fees |
594 |
1,099 |
2,692 |
9,810 |
34,809 |
Travel and automobile |
- |
- |
- |
18,198 |
60,417 |
Write-down and loss on disposal of equity securities |
- |
- |
- |
- |
19,105 |
Write-off of accounts payable |
- |
- |
- |
- |
(1,959) |
Write-off of oil and gas an properties Note 6 |
- |
- |
- |
- |
84,500 |
|
|
|
|
|
|
Loss for the period before other items |
(182,666) |
(216,340) |
(774,868) |
(1,530,278) |
(7,992,923) |
|
|
|
|
|
|
/contd
SEE ACCOMPANYING NOTES
Continued
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine months ended January 31, 2008 and 2007 and
the period from November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
|
|
November 24, |
|
|
|
|
|
1998 (Date of |
|
|
|
|
|
Inception of |
|
|
|
|
|
the Exploration |
|
Three months ended |
Nine months ended |
Stage) to |
||
|
January 31, |
January 31, |
January 31, |
||
|
2008 |
2007 |
2008 |
2007 |
2008 |
|
|
|
|
|
|
Other items: |
|
|
|
|
|
Gain on sale of interest in Lucky Boy |
|
|
|
|
|
Project |
125,000 |
- |
125,000 |
- |
125,000 |
Refund of reclamation costs |
23,159 |
- |
23,159 |
- |
23,159 |
Write off of accounts receivable |
- |
- |
(10,200) |
- |
(10,200) |
|
|
|
|
|
|
Net loss for the period |
$ (34,507) |
$ (216,340) |
$ (636,909) |
$ (1,530,278) |
$ (7,854,964) |
|
|
|
|
|
|
Basic loss per share |
$ (0.00) |
$ (0.00) |
$ (0.01) |
$ (0.02) |
|
|
|
|
|
|
|
Weighted average number of shares outstanding |
106,166,156 |
78,298,265 |
98,171,228 |
76,068,692 |
|
SEE ACCOMPANYING NOTES
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine months ended January 31, 2008 and 2007 and
for the period from November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
November 24, |
|
|
|
1998 (Date of |
|
|
|
Inception of |
|
|
|
Exploration |
|
Nine months ended |
Stage) to |
|
|
January 31, |
January 31, |
|
|
2008 |
2007 |
2008 |
|
|
|
|
Cash Flows provided by (used in) Operating Activities |
|
|
|
Net loss for the period |
$ (636,909) |
$ (1,530,278) |
$ (7,854,964) |
Add (deduct) items not affecting cash |
|
|
|
Amortization |
164 |
238 |
6,860 |
Amortization of deferred financing costs |
72,646 |
96,421 |
204,768 |
Accretion of convertible debt discount |
184,707 |
206,450 |
624,145 |
Abandonment of capital assets |
- |
- |
6,773 |
Beneficial conversion feature |
- |
230,797 |
452,916 |
Mineral property option payments received |
- |
- |
(46,940) |
Write-down and loss on disposal of equity securities |
|
- |
19,105 |
Write-off of accounts payable |
- |
- |
(1,959) |
Write-off of accounts receivable |
10,200 |
- |
10,200 |
Write-off of oil and gas properties |
- |
- |
84,500 |
Issuance of common shares for investor relations |
- |
- |
155,400 |
Issuance of common shares for debt settlement |
- |
- |
3,630 |
Issuance of common shares for consulting fees |
- |
- |
2,775,000 |
Issuance of common shares for exploration and development costs |
- |
- |
513,040 |
Stock-based compensation |
30,000 |
58,000 |
273,044 |
Change in non-cash working capital items related to operations |
|
|
|
Prepaid fees and expenses |
7,769 |
13,975 |
(9,191) |
Advances receivable |
(13,362) |
(10,200) |
(23,562) |
Accounts payable and accrued liabilities |
133,188 |
(40,999) |
355,790 |
Advances payable |
- |
(203,543) |
30,000 |
|
|
|
|
Cash used in operating activities |
(211,597) |
(1,179,139) |
(2,421,445) |
|
|
|
|
/contd
SEE ACCOMPANYING NOTES
Continued
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine months ended January 31, 2008 and 2007 and
for the period from November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
November 24, |
|
|
|
1998 (Date of |
|
|
|
Inception of |
|
|
|
Exploration |
|
Nine months ended |
Stage) to |
|
|
January 31, |
January 31, |
|
|
2008 |
2007 |
2008 |
|
|
|
|
Cash Flows provided by (used in) Financing Activities |
|
|
|
Net proceeds from stock subscriptions |
- |
- |
461,811 |
Common stock issued options |
- |
- |
232,844 |
Convertible notes payable |
200,000 |
1,300,000 |
2,200,000 |
Repayment of convertible notes |
- |
(127,510) |
(109,983) |
Deferred financing costs |
(30,000) |
(140,000) |
(280,000) |
Note payable repayment |
- |
(34,000) |
- |
|
|
|
|
Cash flow provided by financing activities |
170,000 |
998,490 |
2,504,672 |
|
|
|
|
Cash Flows provided by (used in) Investing Activities |
|
|
|
Proceeds from sale of equity securities |
- |
- |
27,834 |
Acquisition of equipment |
- |
- |
(14,343) |
Acquisition of oil and gas properties |
- |
- |
(86,500) |
Proceeds on disposal of oil and gas property |
- |
- |
2,000 |
|
|
|
|
Cash used in investing activities |
- |
- |
(71,009) |
|
|
|
|
Increase (decrease) in cash during the period |
(41,597) |
(180,649) |
12,218 |
|
|
|
|
Cash, beginning of the period |
53,815 |
190,404 |
- |
|
|
|
|
Cash, end of the period |
$ 12,218 |
$ 9,755 |
$ 12,218 |
|
|
|
|
Non-cash Transaction Note 7
SEE ACCOMPANYING NOTES
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)
for the period November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
|
Deficit |
|
|
|
|
|
Accumulated |
|
|
(Note 5) |
Additional |
During the |
|
|
|
Common Shares |
Paid-in |
Exploration |
|
|
|
Number |
Par Value |
Capital |
Stage |
Total |
|
|
|
|
|
|
Stock issued for cash pursuant to private placement agreements at $0.03 |
66,665 |
$ 67 |
$ 1,933 |
$ - |
$ 2,000 |
at $0.45 |
442,475 |
442 |
198,672 |
- |
199,114 |
at $0.60 |
11,110 |
11 |
6,656 |
- |
6,667 |
at $14.98 |
1,335 |
1 |
19,999 |
- |
20,000 |
at $0.45 |
37,500 |
38 |
16,837 |
- |
16,875 |
Net loss for the period |
- |
- |
- |
(184,872) |
(184,872) |
|
|
|
|
|
|
Balance, April 30, 1999 |
559,085 |
559 |
244,097 |
(184,872) |
59,784 |
For cash: |
|
|
|
|
|
Stock rescission at $14.98 |
(1,335) |
(1) |
(19,999) |
- |
(20,000) |
Stock subscriptions at $0.30 |
194,000 |
194 |
58,006 |
- |
58,200 |
Net loss for the year |
- |
- |
- |
(135,022) |
(135,022) |
|
|
|
|
|
|
Balance, April 30, 2000 |
751,750 |
752 |
282,104 |
(319,894) |
(37,038) |
For cash: |
|
|
|
|
|
Stock subscriptions at $0.30 |
16,665 |
16 |
4,984 |
- |
5,000 |
Net loss for the year |
- |
- |
- |
(74,471) |
(74,471) |
|
|
|
|
|
|
Balance, April 30, 2001 |
768,415 |
768 |
287,088 |
(394,365) |
(106,509) |
Net loss for the year |
- |
- |
- |
(77,816) |
(77,816) |
|
|
|
|
|
|
Balance, April 30, 2002 |
768,415 |
768 |
287,088 |
(472,181) |
(184,325) |
For cash: |
|
|
|
|
|
Stock subscriptions at $0.45 |
66,690 |
67 |
29,933 |
- |
30,000 |
Net loss for the year |
- |
- |
- |
(92,354) |
(92,354) |
|
|
|
|
|
|
Balance, April 30, 2003 |
835,105 |
835 |
317,021 |
(564,535) |
(246,679) |
|
|
|
|
|
|
/contd
SEE ACCOMPANYING NOTES
GOLDEN PATRIOT, CORP.
Continued
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)
for the period November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
|
Deficit |
|
|
|
|
|
Accumulated |
|
|
(Note 5) |
Additional |
During the |
|
|
|
Common Shares |
Paid-in |
Exploration |
|
|
|
Number |
Par Value |
Capital |
Stage |
Total |
|
|
|
|
|
|
Balance, April 30, 2003 |
835,105 |
835 |
317,021 |
(564,535) |
(246,679) |
Stock issued pursuant to debt settlement agreements at $0.002 |
51,772,500 |
51,773 |
51,772 |
- |
103,545 |
Stock issued pursuant to consulting agreements at $0.02 |
12,500,000 |
12,500 |
237,500 |
- |
250,000 |
at $0.52 |
2,000,000 |
2,000 |
1,038,000 |
- |
1,040,000 |
at $0.48 |
3,000,000 |
3,000 |
1,437,000 |
- |
1,440,000 |
at $0.45 |
100,000 |
100 |
44,900 |
- |
45,000 |
at $0.54 |
9,890 |
9 |
5,331 |
- |
5,340 |
Stock issued to acquire resource properties at $0.43 |
1,000,000 |
1,000 |
429,000 |
- |
430,000 |
at $0.35 |
222,000 |
222 |
77,478 |
- |
77,700 |
Stock issued for cash pursuant to exercise of options at $0.50 |
250,000 |
250 |
125,094 |
- |
125,344 |
Net loss for the year |
- |
- |
- |
(3,519,771) |
(3,519,771) |
|
|
|
|
|
|
Balance, April 30, 2004 |
71,689,495 |
71,689 |
3,763,096 |
(4,084,306) |
(249,521) |
Stock issued pursuant to investor relations agreements at $0.36 |
275,000 |
275 |
98,725 |
- |
99,000 |
Stock issued pursuant to debt settlement agreements at $0.75 |
48,400 |
48 |
3,582 |
- |
3,630 |
Stock-based compensation |
- |
- |
80,200 |
- |
80,200 |
Net loss for the year |
- |
- |
- |
(364,939) |
(364,939) |
|
|
|
|
|
|
Balance, April 30, 2005 |
72,012,895 |
72,012 |
3,945,603 |
(4,449,245) |
(431,630) |
Stock issued for cash pursuant to exercise of options at $0.07 |
1,250,000 |
1,250 |
86,250 |
- |
87,500 |
at $0.10 |
200,000 |
200 |
19,800 |
- |
20,000 |
Stock issued pursuant to investor relations agreements at $0.079 |
600,000 |
600 |
46,800 |
- |
47,400 |
at $0.09 |
100,000 |
100 |
8,900 |
- |
9,000 |
Stock-based compensation |
- |
- |
104,844 |
- |
104,844 |
Beneficial conversion feature of callable secured convertible notes |
- |
- |
222,119 |
- |
222,119 |
Discount on convertible notes payable |
- |
- |
441,024 |
- |
441,024 |
Net loss for the year |
- |
- |
- |
(774,780) |
(774,780) |
|
|
|
|
|
|
Balance, April 30, 2006 (restated) |
74,162,895 |
74,162 |
4,875,340 |
(5,224,025) |
(274,523) |
|
|
|
|
|
|
/contd
SEE ACCOMPANYING NOTES
GOLDEN PATRIOT, CORP.
Continued
(An Exploration Stage Company)
INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)
for the period November 24, 1998 (Date of Inception of Exploration Stage)
to January 31, 2008
(Unaudited)
( Stated in US Dollars )
|
|
|
|
Deficit |
|
|
|
|
|
Accumulated |
|
|
(Note 5) |
Additional |
During the |
|
|
|
Common Shares |
Paid-in |
Exploration |
|
|
|
Number |
Par Value |
Capital |
Stage |
Total |
|
|
|
|
|
|
Balance, April 30, 2006 (restated) |
74,162,895 |
74,162 |
4,875,340 |
(5,224,025) |
(274,523) |
For cash: |
|
|
|
|
|
Stock subscriptions at $0.05 |
3,900,000 |
3,900 |
191,055 |
- |
194,955 |
Less: share issuance costs |
- |
- |
(21,000) |
- |
(21,000) |
Stock-based compensation |
- |
- |
58,000 |
- |
58,000 |
Discount on convertible notes payable |
- |
- |
452,729 |
- |
452,729 |
Conversion of notes payable Note 4 |
10,050,000 |
10,050 |
547,890 |
- |
557,940 |
Beneficial conversion feature on convertible notes payable |
- |
- |
230,797 |
- |
230,797 |
Warrants issued as finders fees |
|
- |
25,269 |
- |
25,269 |
Net loss for the year |
- |
- |
- |
(1,994,030) |
(1,994,030) |
|
|
|
|
|
|
Balance, April 30, 2007 |
88,112,895 |
88,112 |
6,360,080 |
(7,218,055) |
(769,863) |
Conversion of notes payable Note 4 |
22,100,000 |
22,100 |
281,193 |
- |
303,293 |
Stock-based compensation |
- |
- |
30,000 |
- |
30,000 |
Warrants issued as finders fees |
|
- |
8,461 |
- |
8,461 |
Net loss for the period |
- |
- |
- |
(636,909) |
(636,909) |
|
|
|
|
|
|
Balance, January 31, 2008 |
110,212,895 |
$ 110,212 |
$ 6,679,734 |
$ (7,854,964) |
$ (1,065,018) |
|
|
|
|
|
|
GOLDEN PATRIOT, CORP.
(An Exploration Stage Company)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2008
(Unaudited)
( Stated in US Dollars )
Note 1
Interim Reporting
While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. These interim consolidated financial statements follow the same accounting policies and methods of their application as the Companys April 30, 2007 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Companys April 30, 2007 annual financial statements.
Note 2
Continuance of Operations
These interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At January 31, 2008, the Company had not yet achieved profitable operations, has accumulated a deficit of $7,854,964 since its inception, has a working capital deficiency of $181,316 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.
Note 3
Mineral Properties
Scoonover Properties
By an acquisition agreement dated March 1, 2004, the Company agreed to acquire 100% ownership of the unpatented mining claims and the net smelter royalties throughout five properties (the Dun Glen (28 claims), Debut (16 claims), SMH (20 claims) and Gold View properties (76 claims)) located in Pershing and Eureka Counties, Nevada, in consideration for $10,000 (paid) and 1,000,000 common shares (issued) valued at $441,200. The vendor is a related party by virtue of a former common director.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 2
Note 3
Mineral Properties (contd)
Scoonover Properties (contd)
By an option agreement dated October 26, 2004, the Company granted Minterra Resources Corp. (Minterra) the option to earn a 50% ownership interest in the Gold View and Dun Glen properties (including the Sierra claims). As consideration Minterra was required to reimburse the Company its costs up to $30,000 per property or $60,000 (paid), issue to the Company 100,000 common shares per property or 200,000 common shares valued at $46,940 (issued) and incur Cdn$1,000,000 of exploration costs per property or Cdn$2,000,000 of exploration costs within three years. Minterra was also responsible for all of the advance royalty payments and net smelter return royalties on these properties. Minterra terminated its option in the Dun Glen property during the year ended April 30, 2006 and terminated the Gold View claims during the year ended April 30, 2007. The Company has also abandoned its interest in these claims.
By an option agreement dated November 3, 2006, the Company granted Canasia Industries Corporation the option to earn an undivided 50% interest in the Debut Prospect for consideration of the Optionor incurring exploration expenditures aggregating Cdn$1,000,000 over ten years from the execution of the agreement and to make all necessary payments to keep the property in good standing. The optionor is a related party by virtue of a common director and a common officer.
Lucky Boy Project
By an option agreement dated March 17, 2005 and amended March 17, 2006, the Company was granted the option to acquire a 100% interest in 14 mineral claims and an 80 acre State Lease (the Lucky Boy Uranium Project) located in Gila County, Arizona in consideration for property payments of $75,000 and incurring exploration and development costs totalling $925,000 as follows:
|
Exploration and |
|
Property Payments |
Development Costs |
Due Date |
|
|
|
$ 25,000 (paid) |
$ - |
On execution |
25,000 (paid) |
- |
April 17, 2006 |
25,000 |
500,000 (incurred) |
March 17, 2007 |
- |
425,000 |
March 17, 2008 |
|
|
|
$ 75,000 |
$ 925,000 |
|
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 3
Note 3
Mineral Properties (contd)
Lucky Boy Project (contd)
Once the Company spends a cumulative amount of $500,000 on the Lucky Boy project, it has the right to earn up to a 60% interest on the property and the right to earn an additional 8% for each $100,000 spent on the project.
As of January 31, 2008, the Company has paid $50,000 in property payments and in excess of $500,000 in exploration and development costs toward this project. After accumulating the required $500,000 on the Lucky Boy Project, the Company exercised its option to acquire a 60% interest on the property.
On January 29, 2008, the Company sold to Rodinia Minerals Inc. (Rodinia) its right to acquire the remaining 40% interest in the Lucky Boy Project. In consideration, Rodinia agreed to pay the balance of $125,000 owing by the Company to Handley Minerals, Inc. (also know as Ashworth Explorations Ltd) for exploration costs on the project. As part of this agreement, the Company also received a refund of $9,797 from reclamation bonds and expects the balance of the bonds outstanding, totalling $13,362, to be refunded to due course.
The agreement is subject to a 3% uranium oxide royalty.
By an option agreement dated March 17, 2005, the Company granted Rodinia the option to acquire up to a 40% interest of the Companys interest in the Lucky Boy Project in consideration of Rodinia deferring its acquisition of an interest in the Lucky Boy Project in favour of the Company. The option shall be exercisable from time to time, as to 40% of the interest in respect of which the Company has exercised its right to acquire pursuant to the terms of the above-noted option agreement. During the period ending January 31, 2008, Rodinia exercised this option and now holds a 64% interest in the property leaving the Company a 36% interest.
The Company staked an additional 12 mineral claims that are not subject to either option agreement referred to above. A company has indicated it holds an interest in these claims, which is disputed by the Company. The Company is unable to determine the amount of loss, if any, which would result from the dispute.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 4
Note 4
Callable Secured Convertible Notes
a)
Callable Secured Convertible Notes
On April 12, 2006, the Company entered into a Securities Purchase Agreement to sell callable secured convertible notes (the notes) having an aggregate principal amount of $2,000,000. On the same day the Company issued notes totalling $700,000, maturing on April 12, 2009, and warrants to purchase 11,000,000 shares of the common stock at $0.30 per share, subject to adjustment for the effects of dilutive issuance, exercisable until April 12, 2013. On May 19, 2006, the Company issued notes totalling $600,000, maturing on May 19, 2009, and warrants to purchase 11,000,000 shares of common stock at $0.30 per share, subject to adjustment for the effects of dilutive issuance, exercisable until May 19, 2013. On August 22, 2006, the Company issued notes totalling $700,000 with terms identical to the above-noted notes except that there were no warrants attached.
The notes bear interest at 6%, are secured by all of the assets of the Company, are payable quarterly provided that no interest shall be due and payable for any month in which the trading price of the Companys common stock on the OTC Bulletin Board is greater than $0.1125 per share for each trading day of the month and are convertible into shares of common stock of the Company at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 60% as a registration statement was declared effective by the SEC on August 18, 2006. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
In the event of default, the notes will become due and payable and the Company shall pay to the holder the greater of 14% of the principal and interest and the highest number of common shares issued on conversion multiplied by the highest closing price of the Companys stock during the default period. If the Company does not pay the above-noted amount within 5 days of notice, then the holder may cause the Company, upon written notice, to immediately issue the number of common shares equal to the default amount divided by the conversion price then in effect.
The notes contain a provision whereby no holder is able to convert any part of the note into shares of the Companys common stock, if such conversion would result in beneficial ownership of the holder and its affiliates of more than 4.99% of the Companys then outstanding shares of common stock. The convertible feature of the notes provide for a rate of conversion that is below market value.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 5
Note 4
Callable Secured Convertible Notes (contd)
a)
Callable Secured Convertible Notes (contd)
A finders fee of 10% cash was paid on the sale of the notes. In addition, warrants to purchase up to 1,000,000 shares, exercisable at $0.30 per share for a five-year term, were issued to the finder. The warrants were recorded at their fair value upon issuance and recorded as a deferred financing charge (Note 4(b)).
On December 19, 2007, the Company entered into a Securities Purchase Agreement to sell callable secured convertible notes (the notes) having an aggregate principal amount of $200,000. On the same day the Company issued notes totalling $200,000, maturing on December 19, 2010, and warrants to purchase 15,000,000 shares of the common stock at $0.003 per share, subject to adjustment for the effects of dilutive issuance, exercisable until December 19, 2014. Legal costs of $10,000 and a finders fee of $20,000 were paid in cash pursuant to this note.
These December 19, 2007 notes bear interest at 8%, are secured by all of the assets of the Company, are payable quarterly provided that no interest shall be due and payable for any month in which the trading price of the Companys common stock on the OTC Bulletin Board is greater than $0.1125 per share for each trading day of the month and are convertible into shares of common stock of the Company at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 60% as a registration statement was declared effective by the SEC on August 18, 2006. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
During the nine months ended January 31, 2008, $240,550 of the convertible notes were converted into shares of the Companys common stock at prices ranging between $0.0024 per share and $0.0259 per share for a total of 22,100,000 common shares issued.
At January 31, 2008, the principle balance of the convertible notes was $1,291,527 after giving consideration to the conversions noted above and the repayment of $109,982 in principle and $35,574 in interest during the year ended April 30, 2007.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 6
Note 4
Callable Secured Convertible Notes (contd)
b)
Deferred Financing Costs
Deferred financing costs with respect to the above-noted convertible debentures totalling $313,730 ($60,000 for legal fees and $245,269 for finders fees including warrants issued with a fair value of $33,730) have been capitalized and are being amortized over three years, being the term of the convertible notes. If the convertible note, or any part thereof, is converted or repaid, then the unamortized deferred financing charges related to the extinguished debt are expensed at the date of conversion or repayment.
|
January 31, |
April 30, |
|
2008 |
2007 |
|
|
|
Total deferred finance costs |
$ 313,730 |
$ 275,269 |
Less: amortization |
(109,556) |
(70,793) |
converted notes |
(85,723) |
(51,839) |
repayment |
(9,489) |
(9,489) |
|
|
|
|
108,962 |
143,148 |
Less: current portion |
(47,561) |
(76,125) |
|
|
|
Long-term portion of deferred finance costs |
$ 61,401 |
$ 67,023 |
The amortization of deferred finance costs is included in finance charges in the consolidated statement of operations.
c)
Summary of Callable Secured Convertible Notes
The accompanying financial statements comply with current requirements relating to warrants and embedded derivatives as described in EITF 98-5, EITF 00-19 and APB 14 as follows:
·
The Company allocated the proceeds received between convertible debt and detachable warrants based upon the relative fair values on the date the proceeds were received. The discount on the debt recorded as a result of allocating the proceeds to the detachable warrants is netted against the face value of the debt for financial statement presentation purposes.
·
The Company recorded beneficial conversion features on the remaining amount allocated to the convertible debt based on an evaluation in accordance with EITF 00-27 using the effective conversion price.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 7
Note 4
Callable Secured Convertible Notes (contd)
c)
Summary of Callable Secured Convertible Notes (contd)
·
The Company accreted debt principal of $184,707 during the nine months ended January 31, 2008, which is included in interest expense.
The following table summarizes the various components of convertible debentures as at January 31, 2008:
|
January 31, |
April 30, |
|
2008 |
2007 |
|
|
|
Callable secured convertible notes |
$ 2,200,000 |
$ 2,000,000 |
Less: repayment |
(109,982) |
(109,982) |
conversions |
(798,490) |
(557,940) |
debt discounts |
(956,497) |
(893,754) |
|
|
|
|
335,031 |
438,324 |
Accretion of discount |
624,144 |
439,438 |
|
|
|
Balance January 31, 2008 |
$ 959,175 |
$ 877,762 |
Note 5
Capital Stock Notes 4, 7 and 9
On March 24, 2003, the Company consolidated its common stock on a 150 old for 1 new basis. On September 29, 2003, the Company forward split its common stock on a 5 new for 1 old basis and increased its authorized capital from 50,000,000 to 150,000,000 common shares with a par value of $0.001. The number of shares issued and outstanding has been restated to give retroactive effect to this forward split of common stock.
By amended consulting agreements dated August 1, 2003, the Company retained the services of two consultants for a twelve-month period to provide technical, business and/or management services to the Company. In consideration for these services, the Company issued a total of 12,500,000 common shares to these consultants, which are recorded at a fair value of $250,000.
The Company also agreed to issue up to an additional 12,500,000 common shares as additional consideration for services should the Company and the consultants determine such consideration is appropriate. These shares were issued into escrow at that time. During the year ended April 30, 2004, 5,000,000 of these common shares have been released from escrow and were recorded at a fair value of $2,480,000. The balance of the escrow shares were cancelled during the year ended April 30, 2006.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 8
Note 5
Capital Stock Notes 4, 7 and 9 (contd)
As approved by the shareholders of the Company, effective June 6, 2006, the Company increased its authorized capital to 1,000,000,000 shares.
Share Purchase Options
The Company has share purchase option plans, which authorizes the board of directors to grant shares as incentive share purchase options to directors, officers, employees and consultants. The exercise price of the options is determined by the fair market value of the shares at the closing price on the date of the grant.
During the nine months ended January 31, 2008 and the year ended April 30, 2007, the change in share purchase options outstanding is as follows:
|
January 31, 2008 |
April 30, 2007 |
||
|
|
Weighted |
|
Weighted |
|
|
Average |
|
Average |
|
|
Exercise |
|
Exercise |
|
Shares |
Price |
Shares |
Price |
|
|
|
|
|
Options outstanding, beginning of period |
2,100,000 |
$0.10 |
3,350,000 |
$0.10 |
Granted |
2,500,000 |
$0.04 |
- |
|
Forfeited |
(1,000,000) |
|
(1,250,000) |
$0.10 |
|
|
|
|
|
Options outstanding and exercisable, end of the period |
3,600,000 |
$0.06 |
2,100,000 |
$0.10 |
At January 31, 2008 and April 30, 2007, the share purchase options were outstanding as follows:
|
January 31, 2008 |
April 30, 2007 |
||||
|
|
Exercise |
|
|
Exercise |
|
|
Number |
Price |
Expiry |
Number |
Price |
Expiry |
|
|
|
|
|
|
|
Directors and employees |
2,500,000 |
$0.04 |
Jun 19/08 |
1,000,000 |
$0.10 |
Jun 19/07 |
Consultant |
1,100,000 |
$0.10 |
Mar 17/09 |
1,100,000 |
$0.10 |
Mar 17/09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,600,000 |
|
2,100,000 |
At January 31, 2008, the weighted average contractual life remaining is 0.6 years relating to the 3,600,000 share purchase option.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 9
Note 5
Capital Stock Notes 4, 7 and 9 (contd)
Share Purchase Options (contd)
All share purchase options vest immediately at the date of the grant with the exception of 1,100,000 share purchase options granted to a consultant. 200,000 of these share purchase options vest immediately with the remaining 900,000 share purchase options to vest at 100,000 shares per month until fully vested. At January 31, 2008 and April 30, 2007, these share purchase options have fully vested. On June 18, 2007, the 1,000,000 options to directors and employees were re-priced from $0.10 per share to $0.04 per share and the expiry date was extended to June 19, 2008. No additional stock-based compensation expense was recorded in this period since the fair value of the stock-based compensation determined using the Black-Scholes option valuation model was lower than the previous granted option. On the same date, 1,500,000 options to directors and employees were granted at $0.04 per share expiring on June 19, 2008. The company has recorded $30,000 of compensation expense for stock based compensation awarded to directors and employees during the period ended January 31, 2008.
The fair value of the stock-based compensation has been determined using the Black-Scholes option valuation model with the following assumptions:
|
January 31 and |
|
April 30, |
|
2007 |
|
|
Expected dividend yield |
0.0% |
Expected volatility |
124% |
Risk-free interest rate |
4.74% |
Weighted average expected term in years |
1 year |
The expected volatility was calculated based on the Companys historical share prices.
The Black-Scholes option valuation model requires 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 Black-Scholes valuation model does not necessarily provide a reliable single measure of the fair value of the Companys share purchase options.
The compensation charge associated with consultants option in the amount of $Nil is included in the statement of operations for the nine months ended January 31, 2008 (January 31, 2007: $58,000).
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 10
Note 5
Capital Stock Notes 4, 7 and 9 (contd)
Share Purchase Warrants
During the nine months ended January 31, 2008 and the year ended April 30, 2007, the change in share purchase warrants outstanding is as follows:
|
January 31, 2008 |
April 30, 2007 |
||
|
|
Weighted |
|
Weighted |
|
|
Average |
|
Average |
|
|
Exercise |
|
Exercise |
|
Shares |
Price |
Shares |
Price |
|
|
|
|
|
Options outstanding, beginning of period |
26,000,000 |
$0.28 |
11,000,000 |
$0.30 |
Granted |
16,500,000 |
$0.003 |
15,000,000 |
$0.26 |
|
|
|
|
|
Options outstanding and exercisable, end of the period |
42,500,000 |
$0.17 |
26,000,000 |
$0.28 |
At January 31, 2008 and April 30, 2007, the share purchase warrants were outstanding as follows:
January 31, 2008 |
April 30, 2007 |
||||
|
Exercise |
|
|
Exercise |
|
Number |
Price |
Expiry |
Number |
Price |
Expiry |
|
|
|
|
|
|
1,000,000 |
$0.30 |
March 31, 2012 |
1,000,000 |
$0.30 |
March 31, 2012 |
11,000,000 |
$0.30 |
April 12, 2013 |
11,000,000 |
$0.30 |
April 12, 2013 |
11,000,000 |
$0.30 |
May 19, 2013 |
11,000,000 |
$0.30 |
May 19, 2013 |
3,000,000 |
$0.10 |
March 28, 2014 |
3,000,000 |
$0.10 |
March 28, 2014 |
16,500,000 |
$0.003 |
December 19, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,500,000 |
|
26,000,000 |
|
|
2,500,000 of the above share purchase warrants were issued as a finders fee. The 1,000,000 of the warrants were valued at $0.0253 per share and included in the financial statements for the year ended April 30, 2007, as a $25,269 financing expense. 1,500,000 of the warrants, issued on December 19, 2007 and valued at $.0056, were recorded as a $8,461 financing expense.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 11
Note 6
Related Party Transactions Note 3
The Company was charged the following amounts by directors of the Company or companies with directors or officers in common:
|
|
|
November 24, |
|
|
|
1998 (Date of |
|
|
|
Inception of |
|
|
|
Exploration |
|
Nine Months Ended |
Stage) to |
|
|
January 31, |
January 31, |
|
|
2008 |
2007 |
2008 |
|
|
|
|
Accounting fees |
$ 11,045 |
$ - |
$ 11,045 |
Administration fees |
- |
- |
14,527 |
Equipment |
- |
- |
3,547 |
Consulting fees |
25,450 |
44,900 |
268,487 |
Cost recovery |
- |
- |
(4,000) |
Exploration and development costs |
- |
- |
16,492 |
Management fees |
85,000 |
95,332 |
496,161 |
Rent |
13,737 |
9,890 |
30,099 |
Write-off of oil and gas properties |
- |
- |
45,000 |
|
|
|
|
|
$ 135,232 |
$ 150,122 |
$ 881,358 |
At January 31, 2008, accounts payable includes $80,531 (April 30, 2007: $9,806) owing to companies with an officer in common.
Note 7
Non-cash Transactions
Investing and financing activities that do not have a direct impact on current cash flows are excluded from the investing and financing activities sections of the statements of cash flows.
During the nine months ended January 31, 2008:
-
the Company issued 22,100,000 common shares having a value of $303,293 pursuant to the conversion of callable secured notes.
-
the Company issued 1,500,000 warrants having a fair value of $8,461 in respect of fees associated with the issuance of callable secured convertible notes.
This transaction was excluded from the investing and financing sections of the statements of cash flows.
Golden Patriot, Corp.
(An Exploration Stage Company)
Notes to the Interim Consolidated Financial Statements
January 31, 2008
(Unaudited)
( Stated in US Dollars ) Page 12
Note 8
Comparative Figures
Certain of the comparative figures have been reclassified to conform with the presentation used in the current year.
Note 9
Subsequent Events
Subsequent to January 31, 2008 the Company converted $3,655 of convertible debt into 1,700,000 common shares at prices ranging from $0.0024 to $0.0019 per share.
On January 28, 2008, the Company entered into a Securities Purchase Agreement to sell callable secured convertible notes (the notes) having an aggregate principal amount of $350,000. Theses notes were funded on February 1, 2008 and are therefore subsequent to the period ending January 31, 2008. The Company issued notes totalling $350,000, maturing on January 28, 2011, and warrants to purchase 10,000,000 shares of the common stock at $0.003 per share, subject to adjustment for the effects of dilutive issuance, exercisable until January 28, 2015.
The notes bear interest at 8%, are secured by all of the assets of the Company, are payable quarterly provided that no interest shall be due and payable for any month in which the trading price of the Companys common stock on the OTC Bulletin Board is greater than $0.1125 per share for each trading day of the month and are convertible into shares of common stock of the Company at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 40% as defined in these notes. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
Item 2
|
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS |
Cautionary Note Regarding Forward Looking Statements
The following information specifies forward-looking statements of our management. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "could", "expect", "estimate", "anticipate", "probable", "possible", "should", "continue", or similar terms, variations of those terms or the negative of those terms. Actual results may differ materially from those contemplated by the forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.
PLAN OF OPERATIONS
As of January 31, 2008, we had cash reserves of $12,218. As of March 12, 2008, we had cash reserves of approximately $48,841.
Our plan with respect to our Lucky Boy and Debut claims that we currently hold an interest in is entirely dependent upon other partners on both properties. We are carried on the properties and it is up to our partners to spend funds to further explore and develop the properties. There is no guarantee that either of our partners will spend funds on exploration and development of either property.
We plan to use our minimal remaining funds to pay a portion of our general operating and corporate expenses. Our anticipated general operating and corporate expenses for the remainder of the fiscal year are as follows and are approximations:
-
Management fees $55,000
-
Office Rent $5,700
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Consulting expenses $15,000
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Accounting fees $15,000
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Legal fees $10,000
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Transfer agent $750
We currently do not have sufficient funds to pay our anticipated general operating and corporate expenses for the remainder of the fiscal year and we intent to try to raise funds but there is no assurance that we will be able to raise adequate capital.
Over the remainder of the fiscal year, we plan to raise funds through the sale of our common stock, through loans or convertible debentures. There is no guarantee that we will be successful in arranging the required financing. Unless we raise funds through the sale of our common stock or through loans, we cannot further explore or develop our properties or pay our anticipated general operating and corporate expenses. There is no assurance that we will be able to raise adequate capital.
Our future success will be materially dependent upon our ability to satisfy additional financing requirements. We are reviewing our options to raise equity capital. It is unlikely that we will begin to realize any revenue in the next twelve months. In order to raise funds, we have held and will continue to conduct negotiations with various investors. We cannot predict whether these negotiations will result in additional investment income for us.
Funding for our operations may not be available under favorable terms, if at all. If adequate funds are not available, we may not be able to continue as a going concern or we may be required to curtail our operations significantly or to obtain funds by entering into arrangements with collaborative partners or others that may require us to relinquish rights that we would not otherwise relinquish.
On or about April 12, 2006, we entered into certain financing transactions with AJW Partners, LLC; AJW Offshore, Ltd.; AJW Qualified Partners, LLC; and New Millennium Capital Partners II, LLC. In connection with those transactions we delivered to those parties certain secured convertible promissory notes. The next interest payments pursuant to those notes are due May 2008. We currently have sufficient funds to pay those interest payments. The secured convertible notes are secured by all of our assets and property. As such, if we default on the secured convertible notes, we could be forced to forfeit all of our assets and property to the noteholders.
On or about January 31, 2008 we exchanged for interest due to New Millennium Capital
Partners II, LLC, AJW Partners, LLC and AJW Master Fund, LTD in the amount of $117,947 Interest Rate debenture notes in the same amount due January 31, 2011 at the rate of 2%. These notes are secured by all of our assets, and are payable quarterly and are
convertible into shares of our common stock at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 50%. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
OUR PLAN OF OPERATIONS FOR NEXT 12 MONTHS
We are an exploration stage company and we do not have any proven or probable reserves on any of our properties.
Arizona Property
We held a 60% interest in the Lucky Boy Prospect, which comprises 14 mineral claims and an 80 acre State Lease located in Gila County, Arizona. Handley Minerals Inc. (Handley) holds the other 40% interest. The Lucky Boy Prospect is subject to a 3% yellow cake royalty. The Lucky Boy Prospect is situated 13 miles SSW of Globe, Arizona.
On January 29, 2008, we reached an agreement with Rodinia Minerals Inc. (Rodinia) to dispose of our right to earn an additional 10% for each $100,000 we spent on the Lucky Boy Prospect. By was of this agreement Rodinia also backed-in for 40% interest of our 60% interest in the Lucky Boy Prospect. This leaves us with a total of 36% undivided right, title and interest in and to the Lucky Boy Prospect and gives Rodinia a total acquisition of 24% interest. In consideration, Rodinia agreed to pay the balance of $125,000 owing by us for exploration costs on the project. As part of this agreement, we also received a refund of $9,797 from reclamation bonds and expects the balance of the bonds outstanding, totaling $13,362, to be refunded.
We also hold a 100% interest in an additional 12 lode claims, the Get Lucky Claims, which are located in the same vicinity as the Lucky Boy Prospect. They are also situated 13 miles SSW of Globe, Arizona. We will be exploring for uranium on the Lucky Boy Prospect and the Get Lucky Claims if we commence a work program
In August 2007, we paid $3,250 to the BLM in claims fee to maintain the Lucky Boy Prospect.
We currently do not have the funds to pay for a work program on this property, however Rodinia is obligated to spend $400,000 on the work program while we pay nothing and our interest does not change. Once Rodina spends $400,000 on a work program, then we may enter into a joint venture agreement to continue development the property, at which point we would be responsible for 36% of all exploration and development costs. If we do not come to a contractual agreement with Rodina after they spend $400,000 on a work program, then neither party has the right to perform any further work on the property. Currently, if we do not pay further costs and we will not lose our existing interest, except for $1,170 (which represents out 36% of the total $3,250 in claim fees) for the claim maintenance fees payable to the BLM in August 2008. However if we receive adequate financing we do intend on utilizing them on a work program on the Lucky Boy Prospect. Handley will remain the operator on the property.
A full geological and geochemical report has been prepared and contains the results along with a recommendation for definition drilling which would test to determine the resources of the strike land. The progress report on the geological, radiometric and geochemical investigation and summary of drilling results on the Lucky Boy Prospect also details the results from the Plan of Operations that was completed during the last quarter of 2006. The Plan of Operations included a 25-hole drilling program intended to define economic uranium mineralization. After several months of compiling all the data from various sources it has been determined that a strike length of several hundred feet with a thickness of approximately 5 to 10 feet with intercepted grades of .1% U or greater warrants us to submit a further Plan of Operation to the various state and government agencies for further drilling and to consider small-scale mining. This will include potentially putting the probable and proven
mineralization into production, while at the same time continuing the drill testing phase on other areas on the property that have showed potential from either the MMI geochemical surveys and/or the anomalous Into XRF readings taken at surface and underground. A random survey has been completed and a new work program is being developed based upon it by Rodinia.
Our intended plan of operations for the next twelve months is to allow Rodinia to conduct plan and conduct a work program on the Lucky Boy Prospect. There is no guarantee that Rodinia will further explore or develop the Lucky Boy Prospect.
Nevada Property
In 2003, we entered into a quitclaim deed with Scoonover Exploration, LLC, (Scoonover) whereby we acquired a 100% interest in 16 mineral claims covering 320 acres in north central Nevada, known as the Debut. The Debut property is located 96 miles south east of Elko, Nevada. We will be exploring for gold on the Debut property if we commence exploration.
On November 3, 2006, we entered into an option agreement with Canasia Industries Corp. (Canasia). We granted Canasia the option to earn an undivided 50% interest in the Debut Prospect for consideration of Canasia incurring exploration expenditures aggregating CDN$1,000,000 over ten years from the execution of the agreement and making all necessary payments to maintain the property in good standing. Canasia was a related party at the time the agreement was entered into, by virtue that our president, Bradley Rudman, was a director of Canasia and our former Secretary, Negar Towfigh, is Canasias President and a director. Canasia had not yet made any payments on in regards to this agreement and we do not know if they will make any payments over the next twelve months, as they have the option but are not obligated to do so.
Over the next twelve months in order to maintain these claims in good standing claim maintenance fees of $2,000 are due with the U.S. Bureau of Land Management by September 1, 2008, and $144 is due to Elko County on November 1, 2008. There are no other costs involved in maintaining the Debut Prospect in good standing over the next twelve months. According to the terms on the option agreement with Canasia, they are obligated to make these payments. If Canasia defaults on the option agreement, then we are responsible for these payments. We currently do have sufficient funds in the bank to make these payments.
We have not initiated any exploration activities on this property as of the date of this Report. We have no operator in place to assist us in the exploration and development of those claims and we have not decided whether we will utilize any additional funds to explore or develop that property in the next twelve months. We are in discussions to hire Handley to become the operator of this property but have not done so as of the date of this Report. If Canasia chooses to make payments for expenditures on the Debut Prospect, then we will jointly retain an operator and initiate a work program, however Canasia is not obligated to do so. If Canasia chooses not to make payments for expenditures on the Debut Prospect, it is unlikely that we will commence exploration activities on this property over the next twelve months.
Research and Development; Employees
We do not anticipate any significant research and development within the next 12 months, nor do we anticipate that we will lease or purchase any significant equipment within the next 12 months. We do not anticipate a significant change in the number of our employees within the next 12 months. We anticipate that we will rely on the contracting of independent consultants during our exploration stage, rather than hiring employees.
OFF BALANCE SHEET ARRANGEMENTS
None.
Item 3
CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. Management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14(c) and 15d-14(c). This evaluation was conducted as of January 31, 2008. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. Our Officers have concluded that our disclosure controls and procedures are also effective to ensure that information required to be disclosed by us in reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, as appropriate. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.
(b) Changes in Internal Control Over Financial Reporting. Our Chief Executive Officer and Chief Financial Officer have indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses. There have been no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during the latest quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting as required by Item 308(c) of Regulation S-B.
PART II OTHER INFORMATION
Item 1
LEGAL PROCEEDINGS.
We are not aware of any pending litigation nor do we have any reason to believe that any such
litigation exists except for the following:
We believe we have a 100% interest in our Get Lucky Prospect. However, US Minerals, LLC has indicated that they hold an interest in the claims comprising the Get Lucky Prospect and they contend that our Get Lucky Prospect claims were staked over the top of their claims. US Minerals has provided us with information regarding their interest in the claims and Ashworth,
the operator of Lucky Boy Prospect, is currently reviewing the information provided by US Minerals on our behalf. We may or may not have proper title to these claims and we anticipate the matter to be resolved in us retaining a 100% interest in the claims, in us losing the claims or in us conducting a joint venture with US Minerals on these claims.
Item 2
UNREGISTERED SALES OF EQUITY SECURITIES
There were no unregistered sales of our securities during the period November 1, 2007 to January 31, 2008.
Item 3
DEFAULTS UPON SENIOR SECURITIES.
None
Item 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
Item 5
OTHER INFORMATION .
On December 19, 2007, we entered into a Securities Purchase Agreement with AJW Partners, LLC, AJW Master Fund Ltd, and New Millennium Capital Partners II, LLC, to sell callable secured convertible notes having an aggregate principal amount of $200,000. On the same day we issued notes totalling $200,000, maturing on December 19, 2010, and warrants to purchase 15,000,000 shares of the common stock at $0.003 per share, subject to adjustment for the effects of dilutive issuance, exercisable until December 19, 2014. Legal costs of $10,000 and a finders fee of $20,000 were paid in cash pursuant to this note.
These December 19, 2007 notes bear interest at 8%, are secured by all of our assets, and are payable quarterly provided that no interest shall be due and payable for any month in which the trading price of our common stock on the OTC Bulletin Board is greater than $0.1125 per share for each trading day of the month and are convertible into shares of our common stock at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 60% as defined in the amendment. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
On January 28, 2008, we entered into a Securities Purchase Agreement with AJW Partners, LLC, AJW Master Fund Ltd, and New Millennium Capital Partners II, LLC, to sell callable secured convertible notes having an aggregate principal amount of $350,000. Theses notes were funded on February 1, 2008. We issued notes totalling $350,000, maturing on January 28, 2011, and warrants to purchase 10,000,000 shares of the common stock at $0.006 per share, subject to adjustment for the effects of dilutive issuance, exercisable until January 28, 2015.
The notes bear interest at 8%, are secured by all of our assets, and are payable quarterly provided that no interest shall be due and payable for any month in which the trading price of
our common stock on the OTC Bulletin Board is greater than $0.1125 per share for each trading day of the month and are convertible into shares of our common stock at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 40% as defined in these notes. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
On or about January 31, 2008 we exchanged for interest due to New Millennium Capital
Partners II, LLC, AJW Partners, LLC and AJW Master Fund, LTD in the amount of $117,947 Interest Rate debenture notes in the same amount due January 31, 2011 at the rate of 2%. These notes are secured by all of our assets, and are payable quarterly and are
convertible into shares of our common stock at the rate of the Applicable Percentage multiplied by the Market Price which is defined as the average of the lowest three trading prices for the common stock during the 20 day period prior to conversion. The Applicable Percentage is 50%. Any amount of principal or interest on the notes which is not paid when due shall bear interest at 15%.
On January 29, 2008, we disposed of our right to acquire the remaining 40% interest in the Lucky Boy Project to Rodinia. In consideration, Rodinia agreed to pay the balance of $125,000 owing by us for exploration costs on the project to Ashworth. As part of this agreement, we also received a refund of $9,797 from reclamation bonds and expects the balance of the bonds outstanding, totalling $13,362, to be refunded.
By an option agreement dated March 17, 2005, we had granted Rodinia the option to acquire up to a 40% interest of our interest in the Lucky Boy Project in consideration of Rodinia deferring its acquisition of an interest in the Lucky Boy Project in favour of us. The option shall be exercisable from time to time, as to 40% of the interest in respect of which we have exercised our right to acquire pursuant to the terms of the above-noted option agreement.
During the period ending January 31, 2008, Rodinia exercised this option and now holds a 24% interest in the property with an option to acquire a further 40% interest (total 64% interest) leaving us a 36% interest.
We entered into a financial services agreement dated February 11, 2008, with Med Gen Inc., whereby we agreed to pay a total fee of $250,000 ($125,000 was paid on signing of the agreement and the remaining is due on week ten of the contract) for financial and business consulting services.
Item 6
EXHIBITS
Exhibit 10.1
Exhibit 10.2
Agreement with Rodinia Minerals Inc. and Handley Minerals dated January 29, 2008
Exhibit 10.3
Callable Secured Convertible Note to AJW Master Fund, Ltd. dated January 31, 2008
Exhibit 10.4
Callable Secured Convertible Note to New Millennium Capital Partners II, LLC dated January 31, 2008
Exhibit 10.5
Callable Secured Convertible Note to AJW Partners, LLC dated January 31, 2008
Exhibit 99.1
Press Release dated March 13, 2008
Exhibit 31
Exhibit 32
Exhibit 33
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 19, 2008
GOLDEN PATRIOT, CORP.
By: /s/ Bradley Rudman
Bradley Rudman
President, CFO, Director
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