Attached files
| file | filename |
|---|---|
| EX-32.2 - CERTIFICATION - First Liberty Power Corp | ex322.htm |
| EX-32.1 - CERTIFICATION - First Liberty Power Corp | ex321.htm |
| EX-31.1 - CERTIFICATION - First Liberty Power Corp | ex311.htm |
| EX-31.2 - CERTIFICATION - First Liberty Power Corp | ex312.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment #2)
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(Mark One)
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended July 31, 2010
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________ to __________
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000-52928
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Commission File Number
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FIRST LIBERTY POWER CORP.
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(Exact name of registrant as specified in its charter)
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Nevada
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45-0560329
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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7251 W. Lake Mead Blvd, Suite 300, Las Vegas, NV
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89128
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(Address of principal executive offices)
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(Zip Code)
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(800) 709-1196
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Exchange Act:
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Title of each class
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Name of each exchange on which registered
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n/a
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n/a
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Securities registered pursuant to Section 12(g) of the Exchange Act:
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Common Stock
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Title of class
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Yes
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[ ]
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No
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[X]
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
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Yes
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[ ]
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No
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[X]
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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.
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Yes
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[X]
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No
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[ ]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Yes
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[ ]
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No
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[ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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Yes
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[ ]
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No
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[X]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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[ ]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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[X]
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes
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[ ]
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No
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[X]
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The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant was approximately $42,000 (based on 840,000 shares held by non-affiliates and a closing market price of $0.05 per share on January 31, 2010) as of January 31, 2010 (the last business day of the registrant’s most recently completed second quarter), assuming solely for the purpose of this calculation that all directors, officers and greater than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.
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APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST 5 YEARS:
Indicate by check mark whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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Yes
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[ ]
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No
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[ ]
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APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
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68,425,000 common shares outstanding as of March 17, 2011
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DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g. Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes.
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None
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Explanatory Note
This Form 10-K/A (Amendment No.2) (“Current Filing”) is being filed by First Liberty Power Corp. (the “Company”) to amend the Company’s Form 10-K/A (Amendment #1) for the year ended July 31, 2010, which was filed with the Securities and Exchange Commission (“SEC”) on December 16, 2010.
On March 3, 2011, the Company received a letter from Etania Audit Group P.C. (“Etania”) (formerly Davis Accounting Group P.C.) stating that it was resigning as the registered independent auditor of the Company. Subsequently, and also on March 3, 2011, the Company received from the SEC a letter stating that its auditor, Etania, was not duly licensed when it issued an audit opinion on the Company’s financial statements included in the Company’s Form 10-K for fiscal year ending July 31, 2010, and accordingly those financial statements are not considered to be audited.
On March 7, 2011, the Board engaged the accounting firm of De Joya Griffith & Company, LLC (“De Joya”) and appointed it as the Company’s new independent registered public accounting firm. De Joya undertook a re-audit of the Company’s financial statements as of and for the year ended July 31, 2010, and such statements, including De Joya’s auditor’s report, are included as part of this Current Filing.
Except as noted above, no attempt has been made in this Amendment to modify or update the other disclosures presented in this Current Filing, which does not reflect events occurring after the filing of the original 10-K (i.e., those events occurring after July 31, 2010 or subsequent event disclosure therein) or modify or update those disclosures that may be affected by subsequent events. Such subsequent matters are addressed in subsequent reports filed with the SEC. Accordingly, this Amendment should be read in conjunction with the Form 10-K, the Form 10-K/A Amendment #1 and our other filings with the SEC.
The Company will be filing a further amendment to this Current Filing in order to amend aspects of the management discussion and analysis and other elements of the Current Filing impacted by the adjustments made to the audited financial statements as a result of the re-audit. The Company will also address comments raised in a letter received from the SEC on February 25, 2011.
As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our current principal executive officer and principal financial officer are filed as exhibits to this Amendment.
1
PART I
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
2
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXLORATION STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
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Page
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Index to Financial Statements July 31, 2010 and 2009
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F-1
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Report of Independent Registered Public Accounting Firm
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F-2
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Balance Sheets as of July 31, 2010, and 2009
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F-3
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Statements of Operations for the Years Ended July 31, 2010, and 2009, and Cumulative from Inception through July 31, 2010
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F-4
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Statement of Stockholders’ Equity (Deficit) for the Period from Inception through July 31, 2010
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F-5
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Statements of Cash Flows for the Years Ended July 31, 2010, and 2009, and Cumulative from Inception through July 31, 2010
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F-6
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Notes to Financial Statements July 31, 2010, and 2009
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F-7 to F-14
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F-1
De Joya Griffith & Company, LLC
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
First Liberty Power Corp.
We have audited the accompanying balance sheet of First Liberty Power Corp. (An Exploration Stage Company) as of July 31, 2010 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the year ended July 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of First Liberty Power Corp. for the year ended July 31, 2009 and from inception (March 28, 2007) to July 31, 2009. Those statements were audited by other auditors.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Liberty Power Corp. (An Exploration Stage Company) as of July 31, 2010 and the results of its operations and cash flows for the year ended July 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ De Joya Griffith & Company, LLC
Henderson, Nevada
March 22, 2011
Member Firm with
Russell Bedford International
2580 Anthem Village Dr., Henderson, NV 89052
Telephone (702) 563-1600 ● Facsimile (702) 920-8049
F-2
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
AS OF JULY 31, 2010 AND 2009
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July 31,
2010
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July 31,
2009
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ASSETS
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CURRENT ASSETS:
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Cash in bank
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$ | 179,791 | $ | 138 | ||||
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Prepaid consulting fees
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121,414 | - | ||||||
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Total current assets
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301,205 | 138 | ||||||
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PROPERTY AND EQUIPMENT:
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Deposit on mineral properties
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195,000 | - | ||||||
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Total property and equipment
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195,000 | - | ||||||
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TOTAL ASSETS
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$ | 496,205 | $ | 138 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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CURRENT LIABILITIES:
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Accounts payable – Trade
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$ | 14,592 | $ | 4,705 | ||||
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Accrued liabilities
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18,624 | 3,500 | ||||||
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Due to stockholder
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9,761 | 1,000 | ||||||
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Loan payable
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264,378 | - | ||||||
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Total current liabilities
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307,355 | 9,205 | ||||||
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Total liabilities
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307,355 | 9,205 | ||||||
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Commitments and Contingencies
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STOCKHOLDERS’ EQUITY (DEFICIT)
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Common stock, par value $0.001 per share; 540,000,000 shares authorized; 68,425,000 and 68,175,000 shares issued and outstanding in 2010, and 2009, respectively
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68,425 | 68,175 | ||||||
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Additional paid in capital
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195,500 | 8,250 | ||||||
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Common stock payable
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324,973 | - | ||||||
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Deficit accumulated during the exploration stage
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(400,048 | ) | (85,492 | ) | ||||
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Total stockholders' equity (deficit)
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188,850 | (9,067 | ) | |||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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$ | 496,205 | $ | 138 | ||||
The accompanying notes are an integral part of these financial statements.
F-3
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
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Cumulative
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July 31,
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from
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2010
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2009
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Inception (March 28, 2007) to July 31, 2010
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REVENUES
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$ | - | $ | - | $ | - | ||||||
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EXPENSES:
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Exploration costs
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95,211 | - | 95,211 | |||||||||
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General and administrative-
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Accounting and audit fees
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16,900 | 9,500 | 34,400 | |||||||||
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Legal fees – Other
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20,014 | 3,024 | 38,205 | |||||||||
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Transfer agent fees
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1,311 | 1,450 | 15,280 | |||||||||
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SEC filing fees
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620 | 4,622 | 9,395 | |||||||||
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Consulting fees
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161,060 | - | 161,060 | |||||||||
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Office rent
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1,440 | 1,441 | 4,321 | |||||||||
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Legal fees – Incorporation fees
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- | - | 475 | |||||||||
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Bank and currency exchange fees
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(4,478 | ) | 159 | (4065 | ) | |||||||
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Office supplies and miscellaneous
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8,100 | - | 8,188 | |||||||||
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Total general and administrative expenses
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300,178 | 20,196 | 362,470 | |||||||||
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LOSS FROM OPERATIONS
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(300,178 | ) | (20,196 | ) | (362,470 | ) | ||||||
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OTHER EXPENSE:
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Interest expense
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(14,378 | ) | - | (14,378 | ) | |||||||
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NET LOSS
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$ | (314,556 | ) | $ | (20,196 | ) | $ | (376,848 | ) | |||
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LOSS PER COMMON SHARE:
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Loss per common share – basic
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC
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68,229,795 | 68,175,000 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-4
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE PERIOD FROM INCEPTION (MARCH 28, 2007)
THROUGH JULY 31, 2010
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Deficit
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Accumulated
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Additional
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During the
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Common Stock
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Paid-in
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Stock
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Exploration
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Shares
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Amount
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Capital
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Payable
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Stage
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Totals
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Balance – March 28, 2007
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- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
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Common stock issued for cash
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43,200,000 | 43,200 | - | - | (23,200 | ) | 20,000 | |||||||||||||||||
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Net (loss) for the period
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- | - | - | - | (520 | ) | (520 | ) | ||||||||||||||||
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Balance - July 31, 2007
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43,200,000 | 43,200 | - | - | (23,720 | ) | 19,480 | |||||||||||||||||
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Common stock issued for cash
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24,975,000 | 24,975 | 21,525 | - | - | 46,500 | ||||||||||||||||||
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Deferred offering costs
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- | - | (13,750 | ) | - | - | (13,750 | ) | ||||||||||||||||
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Forgiveness of related party debt
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- | - | 475 | - | - | 475 | ||||||||||||||||||
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Net (loss) for the period
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- | - | - | - | (41,576 | ) | (41,576 | ) | ||||||||||||||||
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Balance July 31, 2008
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68,175,000 | 68,175 | 8,250 | - | (65,296 | ) | 11,129 | |||||||||||||||||
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Net (loss) for the period
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- | - | - | - | (20,196 | ) | (20,196 | ) | ||||||||||||||||
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Balance July 31, 2009
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68,175,000 | 68,175 | 8,250 | - | (85,492 | ) | (9,067 | ) | ||||||||||||||||
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Common stock subscribed for cash- 720,000 shares
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- | - | - | 260,000 | - | 260,000 | ||||||||||||||||||
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Common stock to be issued for services
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- | - | - | 64,973 | - | 64,973 | ||||||||||||||||||
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Common stock issued for services
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250,000 | 250 | 187,250 | - | - | 187,500 | ||||||||||||||||||
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Net (loss) for the period
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- | - | - | - | (314,556 | ) | (314,556 | ) | ||||||||||||||||
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Balance July 31, 2010
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68,425,000 | $ | 68,425 | $ | 195,500 | $ | 324,973 | $ | (400,048 | ) | $ | 188,850 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
F-5
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
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July 31,
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Cumulative From
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|||||||||||
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2010
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2009
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Inception (March 28, 2007) to July 31, 2010
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OPERATING ACTIVITIES:
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Net (loss)
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$ | (314,556 | ) | $ | (20,196 | ) | $ | (376,848 | ) | |||
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Adjustments to reconcile net (loss) to net cash (used in) operating activities:
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Debt forgiven
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- | - | 475 | |||||||||
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Stock subscribed and issued for consulting services
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131,241 | - | 131,241 | |||||||||
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Changes in net assets and liabilities -
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Accrued interest
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14,378 | 14,378 | ||||||||||
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Prepaid
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(182 | ) | - | (182 | ) | |||||||
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Accounts payable - Trade
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9,887 | 4,505 | 14,592 | |||||||||
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Accrued liabilities
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15,124 | (120 | ) | 18,624 | ||||||||
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NET CASH USED IN OPERATING ACTIVITIES
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(144,108 | ) | (15,811 | ) | (197,720 | ) | ||||||
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INVESTING ACTIVITIES:
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Deposit on mineral properties
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(195,000 | ) | - | (195,000 | ) | |||||||
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NET CASH USED IN INVESTING ACTIVITIES
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(195,000 | ) | - | (195,000 | ) | |||||||
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FINANCING ACTIVITIES:
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Proceeds from unit subscriptions
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260,000 | - | 260,000 | |||||||||
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Proceeds from the issuance of common stock
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- | - | 66,500 | |||||||||
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Proceeds from former shareholder loan
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8,761 | 1,000 | 9,761 | |||||||||
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Proceeds from loan
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250,000 | - | 250,000 | |||||||||
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Deferred offering costs
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- | - | (13,750 | ) | ||||||||
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NET CASH PROVIDED BY FINANCING ACTIVITIES
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518,761 | 1,000 | 572,511 | |||||||||
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NET INCREASE (DECREASE) IN CASH
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179,653 | (14,811 | ) | 179,791 | ||||||||
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CASH – BEGINNING OF PERIOD
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138 | 14,949 | - | |||||||||
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CASH – END OF PERIOD
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$ | 179,791 | $ | 138 | $ | 179,791 | ||||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Cash paid during the period for:
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||||||||||||
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Interest
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$ | - | $ | - | $ | - | ||||||
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Income taxes
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$ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
F-6
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(1) Summary of Significant Accounting Policies
Basis of Presentation and Organization
First Liberty Power Corp. (“First Liberty Power” or the “Company” and formerly Quuibus Technology, Inc.) is a Nevada corporation in the exploration stage. The Company was incorporated under the laws of the State of Nevada on March 28, 2007. The original business plan of the Company was focused on developing and offering a server-based software product for the creation of wireless communities. In December 2009, the Company changed its business direction. The Company’s primary focus is on exploration of domestic strategic energy and mineral properties to supply the emerging demand for clean energy. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.
In addition, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the Securities and Exchange Commission, and raise capital of up to $60,000 from a self-underwritten offering of 1,200,000 shares of newly issued common stock in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed an offering of its registered common stock as explained in Note 4.
On December 22, 2009, the Company declared a 1 for 27 forward stock split of its issued and outstanding common stock. The Company authorized common stock increased from 20,000,000 shares of common stock with a par value of $0.001 to 540,000,000 shares of common stock with a par value of $0.001, and correspondingly, the Company’s issued and outstanding shares of common stock increased from 2,525,000 shares of common stock to 68,175,000 shares of common stock. All references in the financial statements and notes to financial statements to number of shares price per share, and weighted average number of shares outstanding prior to the stock split on a retroactive basis.
Effective December 22, 2009, the Company changed its name from “Quuibus Technology, Inc.” to “First Liberty Power Corp.” by way of a merger with its wholly owned subsidiary First Liberty Power Corp., which was formed solely for the change of name.
Cash and Cash Equivalents
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Mineral Properties
The Company is primarily engaged in the business of the acquisition, exploration, development, mining, and production of domestic strategic energy and mineral properties, with emphasis on lithium, vanadium, and uranium. Mineral claim and other property acquisition costs are capitalized as incurred. Such costs are carried as an asset of the Company until it becomes apparent through exploration activities that the cost of such properties will not be realized through mining operations. Mineral exploration costs are expensed as incurred, and when it becomes apparent that a mineral property can be economically developed as a result of establishing proven or probable reserve, the exploration costs, along with mine development cost, are capitalized. The costs of acquiring mineral claims, capitalized exploration costs, and mine development costs are recognized for depletion and amortization purposes under the units-of-production method over the estimated life of the probable and proven reserves. If mineral properties, exploration, or mine development activities are subsequently abandoned or impaired, any capitalized costs are charged to operations in the current period.
F-7
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(1) Summary of Significant Accounting Policies (continued)
Revenue Recognition
The Company is in the exploration stage and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.
Long-lived assets
The Company accounts for its long-lived assets in accordance with FASB ASC 360-10, “Property, Plant and Equipment” which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposal value.
Loss per Common Share
Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding during the years ended July 31, 2010, and 2009.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of July 31, 2010, and 2009, the carrying value of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.
F-8
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(1) Summary of Significant Accounting Policies (continued)
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
Estimates
The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of July 31, 2010, and 2009, and expenses for the years ended July 31, 2010, and 2009, and cumulative from inception. Actual results could differ from those estimates made by management.
(2) Exploration Stage Activities and Going Concern
The Company is currently in the exploration stage as defined by ASC 915, and has engaged in limited operations. Initial operations through July 31, 2010, include capital formation activities, organization, target market identification, and marketing plans. The original business plan of the Company was focused on developing and offering a server-based software product for the creation of wireless communities. In December 2009, the Company changed its business direction to the exploration and development of domestic strategic energy and mineral properties. The Company’s goal is to seek mineral resources to capitalize on the anticipated explosive demand for sustainable clean power.
During the period from inception (March 28, 2007) through July 31, 2010, the Company was incorporated and issued 43,200,000 shares to its Directors for cash proceeds of $20,000. In addition, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $60,000 from a self-underwritten offering of 32,400,000 shares of newly issued common stock in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed an offering of its registered common stock as explained in Note 4. The Company also intends to conduct additional capital formation activities through the issuance of its common stock and to further conduct its operations.
While management of the Company believes that the Company will be successful in its planned operating activities, there can be no assurance that it will be successful in the development of its product, sale of its planned product, and services that will generate sufficient revenues to sustain its operations.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception and has no revenues to offset its operating costs. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
F-9
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(3) Change in Management
On November 26, 2009, Mr. Yavuz Konur resigned as Chief Technical Officer and a Director of the Company.
On November 26, 2009, Mr. Hossein Mohseni resigned as the President, Secretary, Treasurer, and a Director of the Company.
On November 26, 2009, the Company appointed Mr. Glyn R. Garner as the President, Secretary, Treasurer, and a Director of the Company.
On March 1, 2010, the Company appointed Mr. John Rud as Vice President of Exploration of the Company.
On May 13, 2010, the Company appointed Mr. John Hoak as a Director of the Company.
(4) Common Stock
The Company is authorized to issue 540,000,000 shares of $0.001 par value common stock. All common stock shares have equal voting rights, are non-assessable, and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the Directors of the Company.
On July 6, 2007, the Company issued 43,200,000 shares of common stock to its Directors at a price of $0.00046 per share for cash proceeds of $20,000.
In addition, in 2007, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $60,000 from a self-underwritten offering of 32,400,000 shares (post forward stock split) of newly issued common stock at a price of $0.0019 per share in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed the self-underwritten offering of 24,975,000 shares of its registered common stock, par value of $0.001 per share, at an offering price of $0.0019 per share for proceeds of $46,500.
On December 22, 2009, the Company declared a 1 for 27 forward stock split of its issued and outstanding common stock. The Company authorized common stock increased from 20,000,000 shares of common stock with a par value of $0.001 to 540,000,000 shares of common stock with a par value of $0.001, and correspondingly, the Company’s issued and outstanding shares of common stock increased from 2,525,000 shares of common stock to 68,175,000 shares of common stock. All references in the financial statements and notes to financial statements to number of shares price per share, and weighted average number of shares outstanding prior to the stock split on a retroactive basis.
On December 24, 2009, the Company agreed to issue 500,000 shares of common stock to GeoXplor Corp. pursuant to the Mineral Property Purchase Agreement. (See Note 8 for additional information). As of July 31, 2010, these shares have not been issued.
On March 1, 2010, the Company entered into a consulting agreement with Mr. John Rud, wherein Mr. Rud has agreed to provide, among other things, consulting services to the Company for a period of 12 months. The Company agreed to issue to Mr. Rud 250,000 shares of the Company common stock for services to be provided. Compensation expense is calculated by dividing the number of days for which services were provided by 365, multiplying by the number of shares issuable under the contract (250,000), then multiplying by the average closing share price for the entire duration of the calculation. Prior periods expensed are deducted from a current period calculation to determine current period expenses. As of July 31, 2010, these shares of common stock have not been issued.
On March 11, 2010, the Company subscribed 720,000 units in a private placement at $0.50 per unit. Each unit consisted of one common share and one detachable non-transferrable warrant. Each whole common share purchase warrant entitles the holder to purchase one share of common stock at a price of $0.50 for a period of twenty-four months commencing from
F-10
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(4) Common Stock (continued)
closing. As of January 31, 2011, the subscribed stock had not been issued and has been valued at $0.50 per share. As of January 31, 2011, the warrants had not been issued and, therefore, not valued.
On May 3 2010, we entered into a consulting agreement with Mr. John Hoak, wherein Mr. Hoak has agreed to provide, among other things, consulting services to the Company. The agreement was effective March 24, 2010 and continues to March 24, 2012. In consideration for agreeing to provide such consulting services, we have issued to Mr. Hoak 250,000 shares of our common stock valued at $187,500. During each period, a compensation expense is determined based on the number of days for which services were provided relative to 365 days, multiplied by the common stock valuation. This amount is deducted from the pre-paid expense (initially $187,500 on inception) accordingly each period. A further 250,000 shares will become due in March 24, 2011 should Mr. Hoak remain as a director at that time.
(5) Income Taxes
The provision (benefit) for income taxes for the years ended July 31, 2010, and 2009, was as follows (assuming a 35 percent effective tax rate):
|
Year Ended July 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Current Tax Provision:
|
||||||||
|
Federal-
|
||||||||
|
Taxable income
|
$ | - | $ | - | ||||
|
Total current tax provision
|
$ | - | $ | - | ||||
|
Deferred Tax Provision:
|
||||||||
|
Federal-
|
||||||||
|
Loss carryforwards
|
$ | 110,000 | $ | 7,000 | ||||
|
Change in valuation allowance
|
(110,000 | ) | (7,000 | ) | ||||
|
Total deferred tax provision
|
$ | - | $ | - | ||||
The Company had deferred income tax assets as of July 31, 2010, and 2009, as follows:
|
July 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Loss carryforwards
|
$ | 131,800 | $ | 21,800 | ||||
|
Less - Valuation allowance
|
(131,800 | ) | (21,800 | ) | ||||
|
Total net deferred tax assets
|
$ | - | $ | - | ||||
The Company provided a valuation allowance equal to the deferred income tax assets for the years ended July 31, 2010, and 2009, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards. As of July 31, 2010, the Company had approximately $376,848 (July 31, 2009 - $62,292) in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and begin to expire in the year 2027.
(6) Related Party Transactions
During the year ended July 31, 2008, an officer, Director, and stockholder of the Company personally paid for expenses on behalf of the Company in the amount of $475. As of July 31, 2008, this individual forgave the Company of this debt.
As of July 31, 2010, an officer, former Director and stockholder of the Company loaned $9,761 (July 31, 2009 - $1,000) to the Company for working capital purposes. The loan is unsecured, non-interest bearing, and has no specific terms for repayment.
F-11
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(7) Loan Payable
On December 24, 2009, the Company borrowed $200,000 from a third party under a promissory note. The loan is unsecured, bears interest at 10 percent per annum, and is due and payable on or before December 23, 2010. On February 1, 2010, the Company borrowed an additional $50,000. The loan is unsecured, bears interest at 10 percent per annum, and is due on or before January 31, 2011. As of July 31, 2010, $14,378 of interest related to the loans was accrued.
(8) Contracts and Agreements
Mineral Property Purchase Agreement
On December 24, 2009, the Company entered into two property purchase agreements with GeoXplor Corp. (“GeoXplor”), which granted exclusive exploration licenses to the mineral properties described in the agreements.
One property purchase agreement is in regards to claims located in Esmeralda County, Nevada, for Lithium and Lithium Carbonate exploration (the “Lithium Agreement”). Under the Lithium Agreement, the Company is required to:
|
1.
|
Make cash payments of $490,000 over a four-year period
|
|
a.
|
Initial cash payments of $115,000 were made in November and December of 2009
|
|
2.
|
Issue a total of 1,000,000 restricted shares of common stock over a three-year period
|
|
a.
|
250,000 shares of common stock were issuable upon execution of the agreement (not issued as of July 31, 2010)
|
|
3.
|
Comply with a work commitment of $1,000,000 within four years of the date of the agreement.
|
|
a.
|
As of July 31, 2010, a total of $85,717 has been expended on exploration and claim maintenance activities.
|
Another property purchase agreement is in regards to claims located in San Juan County, Utah, for Vanadium and Uranium exploration (the “Van-Ur Agreement”). In regards to the Van-Ur Agreement, the Company is required to:
|
1.
|
Make cash payments of $480,000 over a four-year period
|
|
a.
|
Initial cash payments of $80,000 were made in November and December of 2009
|
|
2.
|
Issue a total of 1,000,000 restricted shares of common stock over a three-year period
|
|
a.
|
250,000 shares of common stock were issuable upon execution of the agreement (not issued as of July 31, 2010)
|
|
3.
|
Comply with a work commitment of $1,000,000 within four years of the date of the Agreement.
|
|
a.
|
As of January 31, 2010, a total of $9,494 has been expended on exploration and claim maintenance activities.
|
All outstanding share issuances due and payable under the two agreements are to be issued prior to March 31, 2011. There have been no notices of default to date provided to the Company under the agreements in respect to the delivery of shares.
Pursuant to both Agreements, upon the completion of the required payments and work commitments, GeoXplor shall transfer title to the properties to the Company, and will retain a three percent (3%) royalty, on which, the Company will have the option to purchase two percent (2%), each percentage point for $1,000,000. Furthermore, if the Company, an assignee or a joint venture including the Company, (i) delivers to its Board of Directors or applicable other management a feasibility study recommending mining from the respective Properties and such Board of management authorizes implementation of a mining plan, or (ii) sells, options, assigns, disposes or otherwise alienates all or a portion of its interest in the Property, the Company shall pay GeoXplor an additional bonus of Five Hundred Thousand Dollars ($500,000) in cash or Shares of the Company. The election to obtain cash or shares shall be at the sole election of GeoXplor.
F-12
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(9) Recent Accounting Pronouncements
In June 2009, the FASB issued FASB Statement No. 168, (FASB ASC 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162.” SFAS No. 168 (FASB ASC 105) establishes the FASB Accounting Standards Codification (the "Codification") to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (“GAAP”). The Codification did not change GAAP, but reorganizes the literature.
SFAS No. 168 (FASB ASC 105) is effective for interim and annual periods ending after September 15, 2009. The management of First Liberty Power Corp. does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-6, “Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures
In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855), amending guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements for the period ended May 31, 2010. The adoption of this guidance did not have a material impact on our financial statements.
(10) Subsequent events
On February 3, 2011 we entered into and closed an agreement with New America Energy Corp. (“New America”) and GeoXplor Inc. (“NECA Agreement”), pertaining to the assignment of the Company’s interest in the mining claims associated with our December 24, 2009, Van-Ur Agreement with GeoXplor, and we granted an option, as well as exploration rights, in these claims. Pursuant to the terms of the NECA Agreement, the consideration for entering into this agreement with New America is as follows:
|
1.
|
$10,000 on the execution of the agreement; $33,333 within 120 days of the execution of the agreement; $33,333 within 240 days of the execution of the agreement; and $33,334 within 360 days of the execution of the agreement;
|
|
a.
|
The amount of $10,000 was received by the Company on February 8, 2011
|
|
2.
|
500,000 shares of New America common stock
|
|
a.
|
These shares were issued to the Company on February 11, 2011
|
|
3.
|
A 0.5% net smelter royalty on all net revenue derived from production from the Property.
|
This NECA Agreement fully releases the Company from its obligations under the December 24, 2009, UraVan Agreement, including the December 24, 2010 payment of $100,000 (deferred until February 7, 2011) and all future payments, work program commitments, and stock issuances including the December 24, 2010 issuance for 250,000 shares. The value of the mining property asset associated with this agreement will be divested from the Company’s financial statements.
F-13
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010 AND 2009
(10) Subsequent events (continued)
If New America is unable to make any of the ongoing share issuances or payments under the agreements with GeoXplor and the Company, the property rights would revert to the Company who would be responsible for any remaining payments to GeoXplor which are as follows:
|
1.
|
$50,000 on February 28, 2011; $50,000 on May 31, 2011; $100,000 on the 1st year anniversary of the agreement; $100,000 on the 2nd year anniversary of the agreement; $100,000 on the 3rd year anniversary of the agreement; and $100,000 on the 4th year anniversary of the agreement;
|
|
2.
|
250,000 shares of common stock on or before the date one year from the date of the agreement; 250,000 shares of common stock on or before the date two years from the date of the agreement; and 250,000 shares of common stock on or before the date three years from the date of the agreement; and
|
|
3.
|
A 2.5% net smelter royalty on all net revenue derived from production from the Property.
|
As of the date of this report, New America is current in its payment obligations to the Company and to GeoXplor.
On March 3, 2011 the Company received a letter from Etania Audit Group P.C. (“Etania”) (formerly Davis Accounting Group P.C.) stating that it was resigning as the registered independent auditor of the Company. Subsequently, also on March 3, 2011, the Company received from the Securities and Exchange Commission a letter stating that its auditor, Etania, was not duly licensed when it issued an audit opinion on the Company’s financial statements included in the Company’s Form 10-K for fiscal year ending July 31, 2010, and accordingly those financial statements are not considered to be audited. The Company has filed, on March 22, 2011, an amended Form 10-K report to include audited financial statements by a firm which is duly registered and in good standing.
On March 7, 2011, the Board engaged the accounting firm of De Joya Griffith & Company, LLC (“De Joya”) and appointed it as the Company’s new independent registered public accounting firm.
F-14
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit
|
Description
|
|
31.1
|
Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
FIRST LIBERTY POWER CORP.
|
|||
|
Date:
|
March 22, 2011
|
By:
|
/s/ Don Nicholson
|
|
Name:
|
Don Nicholson
|
||
|
Title:
|
President, Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Date:
|
March 22, 2011
|
By:
|
/s/ Don Nicholson
|
|
Name:
|
Don Nicholson
|
||
|
Title:
|
President, Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
||
|
Date:
|
March 22, 2011
|
By:
|
/s/ John Hoak
|
|
Name:
|
John Hoak
|
||
|
Title:
|
Director
|
4