Black River Petroleum Corp. (formerly American Copper Corp.)
(The Accompanying Notes are an Integral
Part of These Financial Statements)
(The Accompanying
Notes are an Integral Part of These Financial Statements)
(The Accompanying Notes are an Integral
Part of These Financial Statements)
(The Accompanying Notes are an Integral
Part of These Financial Statements)
Notes to the Financial Statements
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS
DESCRIPTION OF BUSINESS AND HISTORY
The Company was incorporated on October
26, 2009 in the State of Nevada. The Company is an exploration stage corporation and is engaged in the search mineral deposits
or reserves which are not in the development or production stage. The Company intends to explore for oil and gas on its acreage.
The Company does not have any revenues
and has incurred losses since inception. Currently, the Company has no operations, has been issued a going concern opinion and
relies upon the sale of our securities and loans from its sole officer and director to fund operations.
GOING CONCERN - These financial statements
have been prepared on a going concern basis, which implies Black River Petroleum Corp. will continue to meet its obligations and
continue its operations for the next fiscal year. Realization value may be substantially different from carrying values
as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset
amounts and classification of liabilities that might be necessary should Black River Petroleum Corp. be unable to continue as a
going concern. As at April 30, 2014 Black River Petroleum Corp. has a working capital deficiency, has not generated
revenues and has accumulated losses of $3,825,789 (2013: $2,892,502) since inception. The continuation of Black
River Petroleum Corp. as a going concern is dependent upon the continued financial support from its shareholders, the ability of
Black River Petroleum Corp. to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These
factors raise substantial doubt regarding the Black River Petroleum Corp. ability to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION -These financial statements and related
notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S.
dollars. The Company’s fiscal year-end is October 31.
USE OF ESTIMATES - The preparation of financial
statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of
net revenue and expenses in the reporting period. We regularly evaluate our estimates and assumptions related to the useful life
and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances. We base our
estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us July
differ materially and adversely from our estimates. To the extent there are material differences between our estimates and the
actual results, our future results of operations will be affected.
CASH AND CASH EQUIVALENTS - The Company
considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. We
had no cash equivalents at April 30, 2014 or October 31, 2013.
EXPLORATION STAGE ENTITY – The Company complies with FASB
guidelines for its description as an exploration stage company.
Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
–
Continued
IMPUTED INTEREST – The Company calculates imputed interest
at a rate of 8% per annum. Imputed interest of $85 was recorded as donated capital for the three months ended April 30, 2014.
IMPAIRMENT POLICY
–
In 2013, the Company authorized the issuance of 5,000,000 shares of restricted shares of common stock and paid $10,000 for
the mineral property. At October 31, 2013, the Company did an assessment of whether this payment would meet the characteristics
required to record it as an asset at year-end and determined that an impairment charge of $2,500,000 should be reflected as of
October 31, 2013 because the Company could not substantiate that there would be a future economic benefit arising from this payment.
INCOME TAXES -
The Company
accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The Company computes tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses
has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will
utilize the net operating losses carried forward in future years.
MINERAL CLAIM EXPENDITURES – The
Company capitalizes all direct costs related to the acquisition and exploration of specific mining properties as incurred. These
costs will be amortized against the income generated from the property. If the property is abandoned or impaired, an appropriate
impairment charge will be made.
LOSS PER COMMON SHARE
-
The
Company reports net loss per share in accordance with provisions of the FASB. The provisions require dual presentation
of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss
per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.
As of April 30, 2014 and October 31, 2013, there were no common stock equivalents outstanding.
FAIR VALUE OF FINANCIAL INSTRUMENTS - Pursuant
to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all
financial instruments included on its balance sheet as of April 30, 2014 and October 31, 2013. The Company’s financial instruments
consist of cash. The Company considers the carrying value of such amounts in the financial statements to approximate
their fair value due to the short-term nature of these financial instruments.
RECENTLY ISSUED ACCOUNTING STANDARDS –
In July 2013, FASB issued ASU No. 2013-11,
"Presentation
of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists."
The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement
of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward,
with certain exceptions related to availability. ASU No. 2013-11 is effective for interim and annual reporting periods beginning
after December 15, 2013. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's Consolidated
Financial Statements.
In February 2013, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02,
Comprehensive Income (Topic 220): Reporting of
Amounts Reclassified Out of Accumulated Other Comprehensive Income
, to improve the transparency of reporting these reclassifications.
Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those
gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU
do not change the current requirements for reporting net income or other comprehensive income in financial statements.
Black River Petroleum Corp. (formerly
American Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- Continued
RECENTLY ISSUED ACCOUNTING STANDARDS – Continued
All of the information that this ASU requires
already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization
to:
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Present (either on the face of the statement where net income is presented or in the notes) the
effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but
only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting
period; and
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Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification
items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting
period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially
transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
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The amendments apply to all public and
private companies that report items of other comprehensive income. Public companies are required to comply with these amendments
for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15,
2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact
on our financial position or results of operations.
In January 2013, the FASB issued ASU No.
2013-01,
Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities
, which clarifies
which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11.
The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed
unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope
of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while
still giving financial statement users sufficient information to analyze the most significant presentation differences between
financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in
this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected
to have a material impact on our financial position or results of operations.
NOTE 3 -INCOME TAXES
Deferred income taxes arise from temporary
differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred
taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current
or non-current depending on the periods in which the temporary differences are expected to reverse. The company
does not have any uncertain tax positions.
The Company currently has net operating loss carryforwards aggregating
$652,977 (2013: $392,502), which expire through 2030. The deferred tax asset related to the carryforwards has been fully reserved.
Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 3 -INCOME TAXES - Continued
The Company has deferred income tax assets, which have been
fully reserved, as follows as of April 30, 2014:
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2014
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2013
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Deferred tax assets
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$
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222,012
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$
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133,451
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Valuation allowance for deferred tax assets
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(222,012
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)
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(133,451
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)
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Net deferred tax assets
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$
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-
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$
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NOTE 4 – FAIR VALUE MEASUREMENTS
The Company adopted ASC No. 820-10 (ASC 820-10), Fair Value
Measurements. ASC 820-10 relates to financial assets and financial liabilities.
ASC 820-10 defines fair value, establishes a framework for measuring
fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair
value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value
measurements and are to be applied prospectively with limited exceptions.
ASC 820-10 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as
defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions,
about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable
inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three
levels of the fair value hierarchy under ASC 820-10 are described below:
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Level 1
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Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or liabilities.
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Level 2
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Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
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•
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Level 3
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Inputs that are both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based on the best information available in the circumstances and July include the Company's own data.)
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Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 4 – FAIR VALUE MEASUREMENTS - Continued
The following presents the Company's fair value hierarchy for
those assets and liabilities measured at fair value on a non-recurring basis as of April 30, 2014 and October 31, 2013:
Level 1: None
Level 2: None
Level 3: None
Total Gain (Losses): None
NOTE 5 - RELATED PARTY TRANSACTIONS
During the six month period ended April 30, 2014 the Company
recognized a total of $3,000 (2013: $3,000) for rent and services from directors for rent at $250 per month and at $250 per month
for consulting services provided by the President and Director of the Company. These transactions are recorded at the exchange
amount which is the amount agreed to by the transacting parties.
On December 1, 2013, the Company entered
into an employment agreement with Alexander Stanbury, the Company’s President, Chief Executive Officer, Secretary, Treasurer,
Chief Financial Officer and sole member of the Board of Directors (the “Employment Agreement”).
Pursuant to the Employment Agreement, Mr.
Stanbury will receive annual base compensation of $120,000, which may be increased but not decreased from time to time as determined
by the Board of Directors of the Company. Mr. Stanbury is entitled to receive 3,000,000 shares (the “Employment Shares”)
of the Company’s Common Stock, 1,000,000 to vest on the date of the Employment Agreement, 1,000,000 to vest on the first
anniversary of the Employment Agreement, and 1,000,000 to vest on the second anniversary of the Employment Agreement. The Employment
Agreement also provides for bonus awards, as well as a benefit package, including medical, disability, and other equity programs.
The term of the Employment Agreement is three (3) years and shall automatically be renewed for successive one (1) year terms thereafter,
unless otherwise notified in writing three (3) months prior to the termination of the agreement. As of April 30, 2014, 1,410,959
shares have been vested and compensation expense of $634,931 was recorded based on the closing price of the shares on the date
of grant.
The Employment Agreement may be terminated
by the Company and by Mr. Stanbury. Should the Employment Agreement be terminated by the Company without cause, by Mr. Stanbury
for good reason, or pursuant to a change of control, Mr. Stanbury is entitled to receive one times his base salary and other benefits
at the time of termination (including any bonus); any earned but unpaid base salary, and accrued but unpaid vacation time. Should
the Employment Agreement be terminate by the Company for cause or by Mr. Stanbury other than for good reason, Mr. Stanbury is entitled
to receive any earned but unpaid base salary, including any bonus and accrued but unpaid vacation time.
On December 11, 2013, the Company issued 367,489 shares of our
common stock, pursuant to a debt settlement agreement (the “Settlement Agreement”) with Mr. Stanbury, the sole officer
and director of the Company, in exchange for a settlement of $148,833 owed to Mr. Stanbury. The common stock issued had a fair
value of $165,370, which resulted in a loss of $16,537.
NOTE 6 – ACQUISITION OF MINERAL CLAIMS
The Company does not intend to conduct exploration
activities on the Ridgetake Copper-Gold Prospect, which is located 125 kilometers south-west of Williams Lake in the
Cariboo-Chilcotin region of south central British Columbia (BC), Canada. The Property comprised 7 mineral claims, Taseko 1
and Taseko 2, and Cu, Cu1, Cu2, Cu3, and Cu4 totaling 7,733 acres (3,129.48 ha). All these claims have now expired. On
March 25, 2013, the Company authorized the issuance of 5,000,000 restricted shares of common stock.
Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 6 – ACQUISITION OF MINERAL CLAIMS - Continued
The share consideration is recorded at fair market value at
the date of the transaction. As of April 30, 2014, 2,000,000 common shares have been issued. The remaining 3,000,000 common shares
have not been issued and the share consideration is recorded as a stock payable. Management has determined to record an impairment
charge of $2,500,000 because the property is not revenue producing and the future economic benefits are not substantiated.
NOTE 7 – LEASE OF OIL AND GAS CLAIMS
On October 17, 2013, the company entered into an agreement with
American Land and Exploration Company (“American Land”) to purchase 100% working interest in the 1,840.69 M/L acres
in the oil and gas leases in Henderson, Tennessee. The Company agreed to pay $250,000 as follows:
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$25,000 within 10 days of the agreement (paid)
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$25,000 within 45 days of the agreement (paid)
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$100,000 within 135 days of the agreement (paid)
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$100,000 within 225 days of the agreement
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American Land will hold the lease interest in trust for Black
River Petroleum Corp. until such time as the agreement is completed or terminated. In the event of non-payment, the Company will
forfeit its lease interest. American Land is entitled to receive a 7.5% royalty on all production.
The Company has an option to purchase additional 2,000 acres
within a 5 mile radius of the property for $100,000 with 315 days of the date of the agreement.
NOTE 8 – IMPAIRMENT OF MINING CLAIMS
Mineral property claims are tested for impairment when facts
and circumstances suggest that the carrying amount of the mineral property interests exceed their recoverable amounts. The Company
has determined that due to present market conditions, it was necessary to record an impairment of the carrying value of its Ridgestake
Copper-Gold Prospect property as at October 31, 2013. The non-cash loss attributable to the impairment is $2,500,000.
NOTE 9 - COMMON STOCK
On November 28, 2012, the Company filed an Amendment to its
Articles of Incorporation for a 33 for 1 forward stock split (the “Forward Split”). Except as otherwise indicated,
all of the share and per share information referenced in this Report has been adjusted to reflect the Forward Split of our common
stock.
The Company issued 5,000,000 shares (165,000,000 shares post
Forward Split) of stock as founder’s shares to the President and Director of the Company on October 30, 2009.
1,000,000 shares (33,000,000 shares post Forward Split) were
issued in 2011 at $0.04 per share for the total proceeds of $40,000.
As of October 31, 2012, American Copper Corporation had issued
common shares 6,000,000 (198,000,000 common shares post Forward Split).
On November 19, 2012, Irina Cudina cancelled
3,900,000 shares of common stock (128,700,000 shares post Forward Split) (the “Share Cancellation”). Following the
Share Cancellation, Ms. Cudina held 1,100,000 shares of common stock (36,300,000 shares post Forward Split).
Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 9 - COMMON STOCK - Continued
On December 17, 2012, the Company, Irina
Cudina (the “Seller”) and Alexander Stanbury (the “Purchaser”) entered into and closed a stock purchase
agreement (the “Stock Purchase Agreement”), whereby the Purchaser purchased from the Seller, 1,100,000 shares of common
stock (36,300,000 post , par value $0.00001 per share, of the Company (the “Shares”), representing approximately 52%
of the issued and outstanding shares of the Company, for an aggregate purchase price of $40,000 (the “Purchase Price”)
(the “Stock Purchase”).
On March 25, 2013, the company entered
into an agreement to purchase mineral claim for $10,000 and 5,000,000 common shares. The share consideration is recorded at fair
market value at the date of the transaction. As of October 31, 2013, 2,000,000 common shares have been issued. The remaining 3,000,000
common share consideration is recorded as a stock payable.
On July 9, 2013, the company entered into
an agreement to sell 111,111 common shares for total proceeds of $50,000.
On September 24, 2013, the company entered
into an agreement to sell 148,148 common shares for total proceeds of $60,000.
On October 11, 2013, the company entered
into an agreement to sell 166,666 common shares for total proceeds of $75,000.
On November 4, 2013, the company entered
into an agreement to sell 222,222 common shares for total proceeds of $100,000.
On December 11, 2013, the Company issued 367,489 shares of our
common stock, pursuant to a debt settlement agreement (the “Settlement Agreement”) with Mr. Stanbury, the sole officer
and director of the Company, in exchange for a settlement of $148,833 owed to Mr. Stanbury. The common stock issued had a fair
value of $165,370, which resulted in a loss of $16,537.
On January 8, 2014, the company entered
into an agreement to sell 246,913 common shares for total proceeds of $100,000.
On February 1, 2014, the company entered
into an agreement to sell 370,370 common shares for total proceeds of $150,000. As of April 30, 2014, the common shares have not
been issued and the share consideration is recorded as a stock payable.
On March 1, 2014, the company entered into
an agreement to sell 148,148 common shares for total proceeds of $60,000. As of April 30, 2014, the common shares have not been
issued and the share consideration is recorded as a stock payable.
On April 3, 2014, the company entered into
an Employment Agreement with Tim Gognat. Pursuant to the agreement, Tim Gognat is entitled to receive 150,000 of the company’s
common stock on the date of the agreement. As of April 30, 2014, 150,000 shares have been issued. The value of the shares $32,746
was based on the closing price of the stock on the date of the agreement.
As of April 30, 2014, 1,410,959 common
shares have vested as per Employment Agreement with Mr. Stanbury. As of April 30, 2014, the shares have not yet been issued. The
value of the shares $634,931 was based on the closing price of the stock on the date of grant and is recorded as a stock payable.
As of April 30, 2014, Black River Petroleum
Corp. (formerly American Copper Corp.) has issued 72,712,549 common shares.
Black River Petroleum Corp. (formerly American
Copper Corp.)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
NOTE 10 – SUBSEQUENT EVENT
The Company has evaluated subsequent events from the balance
sheet date through the date the financial statements were issued and has determined that there are no events to disclose.