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EXCEL - IDEA: XBRL DOCUMENT - First Liberty Power CorpFinancial_Report.xls
EX-32.1 - CERTIFICATION - First Liberty Power Corpex321.htm
EX-31.2 - CERTIFICATION - First Liberty Power Corpex312.htm
EX-31.1 - CERTIFICATION - First Liberty Power Corpex311.htm
EX-32.2 - CERTIFICATION - First Liberty Power Corpex322.htm
EX-10.17 - SECURITIES PURCHASE AGREEMENT DATED AUGUST 31, 2012, BETWEEN THE COMPANY AND TANGIERS CAPITAL - First Liberty Power Corpex1017.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the quarterly period ended October 31, 2012
   
[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________

000-52928
Commission File Number
 
FIRST LIBERTY POWER CORP.
(Exact name of registrant as specified in its charter)
   
Nevada
90-0748351
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
7251 W. Lake Mead Blvd, Suite 300, Las Vegas, NV
89128
(Address of principal executive offices)
(Zip Code)
 
(702) 675-8198
(Registrant’s  telephone number, including area code)
 
(Former name, former address and former fiscal year, if changed since last report)

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.

 
Yes [X]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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).

 
Yes [  ]  No [  ]

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.

Large accelerated filer
[  ]
Accelerated filer
[  ]
       
Non-accelerated filer
[  ]
Smaller reporting company
[X]
(Do not check if a smaller reporting company)
     
 
 

 
 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 
Yes [  ] No [ X ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant 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.

 
Yes [  ]  No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

169,723,457 share of common stock issued and outstanding as of December 20,  2012.
(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.)


 
2

 

FIRST LIBERTY POWER CORP

TABLE OF CONTENTS

   
Page
 
PART I – Financial Information
 
Item 1.
Consolidated Financial Statements
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
5
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
8
Item 4.
Controls and Procedures
8
     
 
PART II – Other Information
 
Item 1.
Legal Proceedings
10
Item 1A.
Risk Factors
10
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
10
Item 3.
Defaults Upon Senior Securities
11
Item 4.
Mine Safety Disclosures
11
Item 5.
Other Information
11
Item 6.
Exhibits
12
 
Signatures
13


 
3

 

PART I

ITEM 1.  FINANCIAL STATEMENTS

The accompanying unaudited Consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the three months period ended October 31, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2013.  For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2012.


 
Page
Unaudited Consolidated Financial Statements
 
Consolidated Balance Sheets
F -1
Consolidated Statements of Operations and Comprehensive Loss
F -2
Consolidated Statements of Cash Flows
F -3
Notes to Consolidated Financial Statements
F-4 to F-15

 
4

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
 (Unaudited)

   
October 31, 2012
   
July 31, 2012
 
ASSETS
           
CURRENT ASSETS:
           
Cash in bank
  $ 28,470     $ 35,984  
Prepaid expense
    85,072       251,848  
      Available for sale securities
    5,500       20,000  
      Unamortized financing fees
    36,642       54,050  
                      Total current assets
    155,684       361,882  
                 
PROPERTY & EQUIPMENT:
               
Property & equipment, net
    4,314       -  
Mill-site land
    527,000       -  
Mineral properties
    319,950       319,950  
                      Total property & equipment
    851,264       319,950  
                 
TOTAL ASSETS
  $ 1,006,948     $ 681,832  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
               
                 
 CURRENT LIABILITIES:
               
      Accounts payable
  $ 105,447     $ 81,590  
      Accrued interest
    31,087       12,730  
      Due to related parties – current portion
    229,618       158,058  
      Notes payable – current portion
    350,000       -  
      Convertible notes payable, net of unamortized discount of $114,370 and $163,055, as of October 31, 2012 and July 31, 2012, respectively
    611,664       541,719  
                      Total current liabilities
    1,327,816       794,097  
                 
LONG TERM LIABILITIES:
               
       Note payable
    120,000       -  
       Due to related party
    99,025       42,866  
                      Total liabilities
    1,546,841       836,963  
                 
Commitments and Contingencies
               
                 
STOCKHOLDERS’ DEFICIT:
               
Common stock, par value $0.001 per share; 540,000,000 shares authorized;  166,808,870 and 82,001,834 shares issued and outstanding as of October 31, 2012, and July 31, 2012, respectively
    166,809       82,002  
Additional paid-in capital
    2,017,309       2,270,872  
Advances to related party
    (7,700 )     (206,500 )
Accumulated other comprehensive loss
    (14,500 )     -  
Deficit accumulated during the exploration stage
    (2,663,393 )     (2,301,505 )
Non-controlling interest
    (38,418 )     -  
                     Total stockholders' deficit
    (539,893 )     (155,131 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
  $ 1,006,948     $ 681,832  

The accompanying notes are an integral part of these consolidated financial statements.


 
F-1

 

FIRST LIBERTY POWER CORP.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS
(Unaudited)

         
Cumulative
 
   
Three Months Ended
   
From Inception
 
   
October 31,
   
(March 28, 2007) to
 
   
2012
   
2011
   
October 31, 2012
 
                   
REVENUES
  $ -     $ -     $ -  
                         
EXPENSES:
                       
       Exploration costs
    -       10,125       314,236  
       General and administrative - management & consulting fees
    96,649       143,702       1,345,081  
       Professional fees
    175,167       39,852       616,068  
       General and administration
    90,233       1,798       222,541  
   Total expenses
    362,049       195,477       2,497,926  
                         
LOSS FROM OPERATIONS
    (362,049 )     (195,477 )     (2,497,926 )
                         
OTHER INCOME (EXPENSE):
                       
     Gain on sale of mineral property
    -       -       155,000  
     Loss on investment
    -       -       (230,000 )
     Interest expense
    (27,934 )     (6,919 )     (92,640 )
     Exchange loss
    (1,089 )     (1,744 )     (3,811 )
 
                       
TOTAL OTHER EXPENSE
    (29,023 )     (8,663 )     (171,451 )
                         
NET LOSS
  $ (391,072 )   $ (204,140 )   $ (2,669,377 )
                         
NET LOSS ATTRIBUTABLE to Non-controlling interest
    (29,184 )     -       (29,184 )
NET LOSS ATTRIBUTABLE to the Company
    (361,888 )     (204,140 )     (2,640,193 )
                         
COMPREHENSIVE LOSS
                       
     Change in market value of securities
    (14,500 )     (5,000 )     (89,500 )
                         
COMPREHENSIVE LOSS
  $ (405,572 )   $ (209,140 )   $ (2,758,877 )
                         
LOSS PER COMMON SHARE:
                       
      Loss per common share – basic
  $ (0.00 )   $ (0.00 )        
      Comprehensive loss per common share - basic
  $ (0.00 )   $ (0.00 )        
                         
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC
    145,655,213       76,153,847          

The accompanying notes are an integral part of these consolidated financial statements.

 
F-2

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)

         
Cumulative
 
   
Three Months Ended
   
From Inception
 
   
October 31,
   
(March 28, 2007)
 
   
2012
   
2011
   
to October 31, 2012
 
 OPERATING ACTIVITIES:
                 
                   
Net loss
  $ (391,072 )   $ (204,140 )   $ (2,669,377 )
                         
  Adjustments to reconcile net loss to net cash used in operating activities
                       
 Debt forgiven
    -       -       475  
 Gain on sale of property
    -       -       75,000  
 Stock based compensation, consulting services
    102,396       128,703       1,197,659  
 Convertible note issued for service
    67,500       -       90,000  
 Financing fees
    91,098       -       162,367  
      Changes in net assets and liabilities
                       
Accrued interest
    18,357       6,919       83,060  
Prepaid expense
    (1,019 )     (5,000 )     (11,204 )
Change in unamortized fees
    17,408       (7,500 )     (34,092 )
Accounts Payable
    14,970       14,242       96,560  
Accounts payable – related parties
    -       7,500       92,138  
NET CASH USED IN OPERATING ACTIVITIES
    (80,362 )     (59,276 )     (917,414 )
 
                       
INVESTING ACTIVITIES:
                       
    Proceeds on sale of property
    -       -       (185,000 )
    Cash acquired from acquisitions
    1,748       -       1,748  
    Loan to other entity
    -       -       (206,500 )
NET CASH USED IN INVESTING ACTIVITIES
    1,748       -       (389,752 )
                         
FINANCING ACTIVITIES:
                       
   Proceeds from the issuance of common stock
    -       -       566,500  
   Proceeds from notes/loans payable
    95,000       -       698,000  
   Payments on notes/loans payable
    (50,000 )     -       (50,000 )
   Proceeds from Related Party Debt
    27,100       -       155,861  
   Payments on Related Party Debt
    (1,000 )     -       (20,975 )
   Deferred offering costs
    -       -       (13,750 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
    71,100       -       1,335,636  
                         
NET INCREASE (DECREASE) IN CASH
    (7,514 )     (59,276 )     28,470  
                         
CASH – BEGINNING OF PERIOD
    35,984       74,576       -  
CASH – END OF PERIOD
  $ 28,470     $ 15,300     $ 28,470  
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND NON-CASH ACTIVITIES
                       
   Cash paid during the period for:
                       
      Interest
  $ -     $ -     $ -  
      Shares issued for acquisition (see Note 1)
  $ (234,910 )   $ -     $ (234,910 )
      Change in prepaid, net
  $ -     $ -     $ 73,077  
      Conversion of debt to equity
  $ 46,154     $ -     $ 348,127  
      Convertible note issued for prepaid
  $ -     $ 15,000     $ 135,000  
      Shares issued for deposit on mineral property
  $ -     $ (128,703 )   $ 79,950  
                         
The accompanying notes are an integral part of these consolidated financial statements.


 
F-3

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 1 – Organization and summary of significant accounting policies

Basis of Presentation and Organization

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the three month period ended October 31, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2013.  For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2012.

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. 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.

In December 2009, the Company changed its business direction, and 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.

On December 22, 2009, the Company declared a 27 for 1 forward stock split of its authorized and issued and outstanding common stock. The Company’s 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. The effect of the stock split has been recognized retroactively in the stockholders’ equity accounts as of March 28, 2007, the date of our inception, and in all shares and per share data in the financial statements.

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 name change.

On August 22, 2012, the Company entered into an agreement with Group8 Minerals, a Nevada Corporation ("Group8”), and Group8 Mining Innovations, a Nevada Corporation (“G8MI”), the sole Shareholder of Group8, whereby G8MI transferred 81% of the total issued and outstanding shares of Group8 in exchange for the issuance of 83,000,000 shares of the Company to G8MI plus one hundred thousand dollars ($100,000) cash payment to G8MI. Further, pursuant to the Agreement, the Company is required to undertake certain loan payments to Group8 aggregating a total of $2,000,000 for associated property payments and exploration costs as follows: (a) $500,000 on or before October 30, 2012; (b) $500,000 on or before December 31, 2012; (c) $500,000 on or before February 28, 2013; and (d) $500,000 on or before April 30, 2013.

In accordance with ASC 805, “Business Combinations”, and in particular ASC 805-50-25, the acquisition of Group8 is accounted for as an asset purchase without goodwill as Group8 did not meet the definition of a business per ASC 805 at the time of the acquisition. The acquisition is between related parties; therefore, the assets and liabilities assumed are recorded at their cost basis with no goodwill recorded.
 
 
F-4

 


FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 1 – Organization and summary of significant accounting policies (continued)

A summary of the purchase price allocation is as follows:

Assets acquired:
     
Cash and cash equivalents
 
$
35,623
 
Prepaid expenses and other
   
2,100
 
Advances to related party
   
7,700
 
Property and equipment, net
   
4,314
 
Mill-site land
   
527,000
 
Total assets acquired
 
$
576,737
 
         
Liabilities assumed:
       
Accounts payable
 
$
8,887
 
Due to related party
   
241,994
 
Note payable
   
470,000
 
Total liabilities assumed
 
$
720,881
 
Non-controlling interest
   
   9,234
 
Net assets acquired
 
$
(134,910)
 
         
Purchase price
 
$
(134,910)
 

As of October 31, 2012, the Company made a $41,575 cash payment to G8MI which was applied against the $100,000 obligation under the agreement to acquire Group8, and a payable to related party of $58,425 has been recorded. The 83,000,000 shares of the Company issued to G8MI are valued at $(234,910), the net assets acquired less the $100,000 cash payment. The fair value of the 83,000,000 shares at the acquisition date was $2,490,000, which represents a deemed distribution to related party of $2,724,910.

Basis of Presentation

As a result of the acquisition, the accompanying consolidated financial statements include the operations of G8 Minerals since August 23, 2012.  The accompanying consolidated financial statements also include the operations of the Company, its 50% owned subsidiary Central Nevada Processing Co. LLC (CNPC) and its 50% owned subsidiary Stockpile Reserves LLC (SRL).   CNPC and SRL are both considered variable interest entities (VIE) for which the Company is the primary beneficiary.  

The Company consolidates all entities in which the Company holds a “controlling financial interest.” For voting interest entities, the Company is considered to hold a controlling financial interest when the Company is able to exercise control over the investees’ operating and financial decisions. For variable interest entities (“VIEs”), the Company is considered to hold a controlling financial interest when it is determined to be the primary beneficiary. For VIEs, a primary beneficiary is a party that has both: (1) the power to direct the activities of a VIE that most significantly impact that entity's economic performance, and (2) the obligation to absorb losses, or the right to receive benefits, from the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE is based on the amount and characteristics of the entity's equity.
 
All significant inter-company balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, without being audited, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered


 
F-5

 



FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 1 – Organization and summary of significant accounting policies (continued)

necessary to make the financial statements not misleading have been included. Operating results for the three months ended October 31, 2012 are not necessarily indicative of the results that may be expected for the year ending July 31, 2013. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended July 31, 2012 filed with the Securities and Exchange Commission

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 a current emphasis on lithium carbonate.  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.

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.

Business Combinations – Valuation of Acquired Assets and Liabilities
 
Allocations of purchase price for business combinations are based on estimates of the fair value of consideration paid and the net assets acquired. Accounting for business combinations requires estimates and judgments as to expectations of future cash flows for acquired businesses and the allocation of those cash flows to identifiable tangible and intangible assets in determining the estimated fair values of assets acquired and liabilities assumed. The fair values assigned to tangible and intangible assets and liabilities, including contingent consideration, are based on management’s estimates and assumptions, utilizing customary valuation procedures and techniques. Contingent consideration is measured at its estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in earnings as a component of other income or expense. If actual results differ significantly from the estimates and judgments used in determining the estimated fair values of assets and liabilities recorded as of the date of acquisition, these differences could result in a possible impairment of recorded assets, including intangible assets and goodwill, or require acceleration of amortization expense of finite-lived intangible assets.

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


 
F-6

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 1 – Organization and summary of significant accounting policies (continued)

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.
 
Investments

The Company holdings in marketable securities classified as available-for-sale are carried at fair value. The carrying value of marketable securities is reviewed each reporting period for declines in value that are considered to be other-than temporary and, if appropriate, the investments are written down to their estimated fair value. Realized gains and losses and declines in value judged to be other-than-temporary on available for sale securities are included in the Company’s statements of operations. Unrealized gains and unrealized losses deemed temporary are included in accumulated other comprehensive income (loss).

Effective February 8, 2011, the Company acquired 500,000 shares of New America Energy common stock pursuant to an Agreement between the Company, New America Energy and GeoXplor (refer to Note 3) for the deemed value of $250,000. The equity investment will be periodically reviewed to determine if impairment is required. As of October 31, 2012, the Company realized $14,500 in loss on investment, and reduced the value of the 500,000 shares of New American Energy common stock to $5,500.

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.

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 October 31, 2012, and July 31, 2012, the carrying value of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.

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 October 31, 2012, and July 31, 2012, and expenses for the quarters ended October 31, 2012, and 2011, and cumulative from inception.  Actual results could differ from those estimates made by management.
 

 
F-7

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 1 – Organization and summary of significant accounting policies (continued)

Asset retirement obligations

The Company has adopted the provisions of FASB ASC 410-20 “Asset Retirement and Environmental Obligations,” which requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related oil and gas properties. As of October 31, 2012, there has been no asset retirement obligations recorded.

Reclassification

Certain amounts in the consolidated balance sheets as of July 31, 2012 have been reclassified to be consistent with the current period presentation. Unamortized financing fee of $54,050, previously included in other assets is now included in the current assets. The reclassification had no impact on the Company’s financial condition, results of operations or cash flows.

Note 2 – Going concern

The Company is currently in the exploration stage and has engaged in limited 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 able to 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 of $(2,669,377)  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.
 
Note 3 – Mineral properties

A) Lithium Agreement:

On May 31, 2012, the Company entered into a new purchase agreement with GeoXplor Corp. (the “Lithium Agreement”), which is effective as of March 15, 2012. Under this Agreement, the Company has been granted an exclusive four year exploration license in regards to the two mineral properties described in the Agreement. One property encompasses 58 placer claims (9280 acres) located in Lida Valley, Esmeralda County, Nevada for Lithium and Lithium Carbonate exploration (the "Lida Valley Property"), and the other encompasses 70 placer claims (11,200 acres) located in Smokey Valley, Esmeralda County, Nevada for Lithium and Lithium Carbonate exploration (the "Smokey Valley Property"). Pursuant to the Agreement, upon the completion of the required payments and work commitments, GeoXplor shall transfer title to the properties to the Company and shall retain a 5% royalty, on which we shall have the option to purchase up to 4%, for $1,000,000 per 1%.

The Lithium Agreement is a replacement of all prior agreements pertaining to the Lida Valley claims contained within the Purchase Agreement dated December 24, 2009 between GeoXplor and the Company. This Agreement supersedes and replaces all prior agreements in respect to those claims.


 
F-8

 


FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 3 – Mineral properties (continued)

Under the new Lithium Agreement, the Company is required to:

Make Cash Payments - First Liberty shall pay GeoXplor in consideration of the grant of the exploration license and other rights granted under this Agreement a total of $725,000, according to the following schedule:

 
(1)
Twenty-Five Thousand Dollars ($25,000.00) within 5 days of the execution of this agreement, which amount was paid during the year ended July 31, 2012;
 
(2)
One-hundred Thousand Dollars ($100,000) to GeoXplor on or before December 31, 2012;
 
(3)
Two-hundred Thousand Dollars ($200,000) to GeoXplor on or before December 31, 2013;
 
(4)
Two-hundred Thousand Dollars ($200,000) to GeoXplor on or before December 31, 2014;
 
(5)
Two-hundred Thousand Dollars ($200,000) to GeoXplor on or before December 31, 2015;

Stock Issuance – As additional consideration, the Purchase Price shall include the issuance of 2,000,000 Shares, subject to such conditions as may be imposed by the rules and regulations of the United States Securities and Exchange Commission, as follows:

 
(1)
Five-hundred Thousand (500,000) Shares to GeoXplor on or before December 31, 2012;
 
(2)
Five-hundred Thousand (500,000) Shares to GeoXplor on or before December 31, 2013;
 
(3)
Five-hundred Thousand (500,000) Shares to GeoXplor on or before December 31, 2014;
 
(4)
Five-hundred Thousand (500,000) Shares to GeoXplor on or before December 31, 2015;

Work Commitment – First Liberty shall expend not less than One Million Five-Hundred Thousand Dollars ($1,500,000) in Mineral Exploration and Development Testing ("Work"). The Work shall be scheduled according to the following schedule:

 
(1)
One Hundred Thousand Dollars ($100,000.00) on or before November 15, 2012, which amount remains outstanding as of the date of this filing;
 
 (2)
Four-hundred Thousand Dollars ($400,000) on or before December 31, 2012;
 
(3)
Five-hundred Thousand Dollars ($500,000) on or before December 31, 2013;
 
(4)
Five-hundred Thousand Dollars ($500,000) on or before December 31, 2014;

As of date of this report, the Company has expended approximately $80,000 towards the required work program.

Conditions for Transfer of Title and Subsequent Limitations

 
(1)
At such time as the Company has completed the required payments, work program and stock transfers, the Properties shall be transferred to the Company by Quitclaim Deed.

 
(2)
Concurrently with the transfer of title to First Liberty, First Liberty shall convey to GeoXplor a “Net Value Royalty” on production of lithium carbonate and other lithium minerals from the Properties measured by five percent (5%) of the gross proceeds received by the First Liberty from the sale or other disposition of lithium carbonate or other lithium compounds less (i) transportation of the product from the place of treatment to the purchaser, (ii) all handling and insurance charges associated with the transportation, and (iii) any taxes associated with the sale or disposition of the product (excluding any income taxes of First Liberty). First Liberty shall have the further right to purchase up to four percent (4%) of the Net Value Royalty, in whole percentage points, for One Million Dollars ($1,000,000) for each one percent (1%).

 
F-9

 


FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
 
Note 3 – Mineral properties (continued)

 
(3)
If First Liberty, its assignee or a joint venture including First Liberty, (i) delivers to its Board of Directors or applicable other management a feasibility study recommending mining of lithium carbonate or other lithium compound from the 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 Properties, First Liberty shall pay GeoXplor an additional bonus of Five Hundred Thousand Dollars ($500,000) in cash or Shares of First Liberty.  The election to obtain cash or shares of First Liberty shall be at the sole election of GeoXplor.

As of October 31, 2012, a total of $326,448 has been expended on exploration and claim maintenance activities.

B) San Juan Agreement:

Subsequent to the end of the current reporting period, on November 6, 2012, we entered into a purchase agreement with GeoXplor Corp. (“Agreement”). Under this Agreement, we have been granted an exclusive five year exploration license in regards to a mineral property described in the Agreement. The mineral property encompasses 13 lode claims (260 acres) located in the Canyon Country District, San Juan County, Utah for Vanadium and Uranium exploration (the "San Juan Property").  Pursuant to the Agreement, upon the completion of the required payments and work commitments, GeoXplor shall transfer title to the San Juan Property to the Company and shall retain a 3% royalty, on which we shall have the option to purchase up to 2%, for $1,000,000 per 1%.

We are required to (1) make cash payments of $500,000 over a five year period; (2) issue a total of 3,000,000 restricted shares of common stock over a five year period; and (3) comply with a work commitment of $1,000,000 within three years.

The San Juan Property encompasses certain claims previously included in agreements between the Company and GeoXplor, and this Agreement supersedes and replaces all prior agreements in respect to those claims.
 
Note 4 – Convertible notes payable

Tangiers Investors, LLC (“Tangiers”)

On February 23, 2012, the Company entered into an agreement with Tangiers Investors, LP, a Delaware limited partnership, an accredited investor, whereby Tangiers Investors loaned the Company the aggregate principal amount of $102,500, less $2,500 for legal related costs and $10,000 fee to be paid to a third party, together with interest at the rate of eight percent (8%) per annum, until the maturity date of February 22, 2013. On March 7, 2012, the Company entered into another agreement with Tangiers for the same amount and terms with the maturity of March 6, 2013. On August 31, 2012 the Company entered into a third agreement with Tangiers for $20,000 with an interest rate of ten percent (10%) per annum, until the maturity date of February 8, 2013.  The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part.

If the Note is not paid in full with interest on the maturity date, Tangiers has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall be equal to 65% multiplied by  the average of the two lowest closing prices during the ten (10) trading days prior to conversion notice.

Note 1 and Note 2 are original issue discount notes valued for $315,385 consisting of principal of $205,000 and a discount of $110,385 which was valued based on the 65% conversion rate. During the quarter ended October 31, 2012, the Company converted $30,000 principal amount of Note 1 to shares of common stock, which reduced $46,154 from the value of the notes. See Note 6 for share conversion. For the quarter ended October 31, 2012, $42,211 discount and $9,250 financing fee had been amortized and expensed.

 
F-10

 


FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 4 – Convertible notes payable (continued)

Note 3 provides Tangier the option until the repayment date, to convert the note to shares of the Company’s common stock at a fixed price of $0.02 per share. The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $20,000. For the quarter ended October 31, 2012, $7,578 financing fees had been amortized and expensed.

The Company may prepay all or any portion of the aggregate principal amount and accrued interest within ninety (90) days of the date of issuance in an amount equal to one hundred twenty percent (120%) of face value plus accrued interest; or after ninety-one (91) days after the date of issuance of this Note but not later than one hundred eighty (180) days in an amount equal to one hundred forty percent (140%) of face value plus accrued interest; or if on or after one hundred eighty-one (181) days from the date of issuance, upon the express written consent from Tangiers. The Company has provided Tangiers with 896,593 shares of New America as collateral for the Notes. 

Asher Enterprises Inc. (“Asher”)

On June 27, 2012, the Company entered into an agreement with Asher Enterprises, a Delaware corporation, an accredited investor, whereby Asher Enterprises loaned the Company the aggregate principal amount of $63,000, less $3,000 for legal related costs, together with interest at the rate of eight percent (8%) per annum, until the maturity date of March 27, 2013.  On August 2, 2012, the Company entered into another agreement with Asher Enterprises for $27,500, less $2,500 for legal related cost, together with an interest rate of eight present (8%) and with the maturity of May 6, 2013. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part. If the Note is not paid in full with interest on the maturity date, Asher has the right to convert this Note into restricted common shares of the Company.

The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 58% multiplied by  the average of the three lowest closing prices during the ten (10) trading days prior to conversion notice.

The two (2) original issue discount notes valued for $156,035, consisting of principal of $90,500 and a discount of $38,282 which wasvalued based on the 58% conversion rate for both notes. For the quarter ended October 31, 2012, $21,677 discount and $5,825 financing fee had been amortized and expensed.

The Company may prepay all or any portion of the aggregate principal amount and accrued interest within thirty (30) days of the date of execution of this Note, this Note may be prepaid in an amount equal to one hundred thirty percent (130%) of face value plus accrued interest; or after thirty-one (31) days after the execution of this Note but not later than sixty (60) days from the date of execution of this Note, this Note may be prepaid  in an amount  equal to  one  hundred thirty five percent  (135%)
of  face  value plus accrued interest; or after sixty-one (61) days after the execution of this Note but not later than ninety (90) days from the date of execution of this Note, this Note may be prepaid  in an amount  equal to  one  hundred forty percent  (140%)  of  face  value plus accrued interest; or after ninety-one (91) days after the execution of this Note but not later than one hundred fifty (150) days from the date of execution of this Note, this Note may be prepaid  in an amount  equal to  one  hundred forty five percent  (145%)  of  face  value plus accrued interest; or after fifty-one (151) days after the execution of this Note but not later than one hundred eighty (180) days from the date of execution of this Note, this Note may be prepaid  in an amount  equal to  one  hundred fifty percent  (150%)  of  face  value plus accrued interest. After the expiration of one hundred eightieth (180) days following the date of the Note, the Company shall have no right of prepayment.


 
F-11

 


FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2012 AND 2011

Note 4 – Convertible notes payable (continued)

Denali Equity Croup LLC. (“Denali”)

On June 28, 2012, the Company entered into a Consulting Service Agreement with Denali Equity Group, LLC, a Nevada limited liability company, that in consideration of the service, the Company shall issue a convertible note of $135,000 to Denali. The Consulting Service Agreement has a term of two (2) years. During the quarter ended October 31, 2012, the Company recorded $67,500 in consulting expense, leaving a prepaid expense balance of $45,000. The Convertible Note Agreement with Denali is for the principal amount of $135,000 with interest at the rate of eight percent (8%) per annum, until the maturity date of June 30, 2014. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part. If the Note is not paid in full with interest on the maturity date, Denali has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall equal to 90% multiplied by  the average of the two lowest closing prices during the ten (10) trading days prior to conversion notice.

The issued discount note was valued for $150,000, consisting of principal of $135,000 and a discount of $15,000 which was valued based on the 90% conversion rate. For the quarter ended October 31, 2012, $1,875 discount had been amortized and expensed.

The Company may prepay all or any portion of the aggregate principal amount and accrued interest within ninety (90) days of the date of execution of this Note, this Note may be prepaid in an amount equal to one hundred ten percent (110%) of face value plus accrued interest; or after ninety-one (91) days after the execution of this Note but not later than one hundred eighty (180) days from the date of execution of this Note, this Note may be prepaid  in an amount  equal to  one  hundred twenty percent  (120%)  of  face  value plus accrued interest; or on or after one hundred eighty-one (181) days from the date of execution of this Note, this Note may be prepaid in an amount equal to one hundred twenty five percent (125%) of face value plus accrued interest.

Tonaquint Inc. (“Tonaquint”)

On July 19, 2012, the Company entered into an agreement with Tonaquint Inc., a Utah corporation, an accredited investor, whereby Tonaquint Inc. loaned the Company the aggregate principal amount of $85,000, less $2,500 for legal related costs and $7,500 fee to be paid to a third party, together with interest at the rate of eight percent (8%) per annum, until the maturity date of April 19, 2013. The original issue discount note, as described in ASC 480-55, may not be prepaid in whole or in part. If the Note is not paid in full with interest on the maturity date, Tonaquint has the right to convert this Note into restricted common shares of the Company. The Company at its option may elect to convert all or part of the principal and any accrued unpaid interest on these notes at any time or times on or before the maturity based on a conversion price. The conversion price (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower) shall be equal to 65% multiplied by  the average of the two lowest closing prices during the ten (10) trading days prior to conversion notice.

The issued discount note was valued for $130,769, consisting of principal of $85,000 and a discount of $45,769 which was valued based on the 65% conversion rate. For the quarter ended October 31, 2012, $15,256 discount and $7,333 financing fee had been amortized and expensed.

The Company may prepay prior to the maturity date by paying an amount equal to the outstanding principal of the Note multiplied by one hundred fifty (150%) percent together with accrued and unpaid interest thereon, upon the express written consent from Tonaquint. 

As of October 31, 2012, the Company had a balance of convertible notes payable of $726,034 net of unamortized discount of $114,370 and a balance of unamortized financing fee of $36,642. As of October 31, 2012, the Company had accrued and expensed $28,027 interest.

 
F-12

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 5 – Related parties transactions

On May 3, 2010, the Company 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 continued to March 24, 2012. In consideration for agreeing to provide such consulting services, on May 3, 2010, we issued to Mr. Hoak 250,000 shares of our common stock valued at $187,500, which has been fully earned and expensed as of March 24, 2012. The agreement also contains a provision for the cash payment of $2,500 a month during the term of the agreement. Mr. Hoak has resigned as a director in March 2012. The Company has a payable to Mr. Hoak of $55,798 and 55,798 as of October 31, 2012 and July 31, 2012, respectively.

As of October 31, 2012, the Company has a payable of $46,100 to a former officer and Director of the Company, which consists of an outstanding loan amount to the Company of $9,910 and expenses paid by this former officer and Director on behalf of the Company for a total of $36,190. The loan is unsecured, non-interest bearing, and has no specific terms for repayment.

On November 29, 2010, Mr. Don Nicholson was appointed as a member of the board of directors of the Company, and on December 28, 2010, effective January 1, 2011; Mr. Nicholson was appointed Chief Executive Officer, President, and Secretary-Treasurer. The Company entered into an agreement on July 2, 2011, effective November 15, 2010, with LTV International Holdings Ltd. (“LTV”), to provide management services to the Company over a two year period. The terms of which required the issuance of 5,000,000 shares to LTV, issued on July 15, 2011 valued at $750,000, and a monthly fee of $2,500 payable to LTV. Mr. Don Nicholson is the designated service provider under the agreement with LTV. During each period, a compensation expense was 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 prepaid expense (initially $750,000 from the initial issuance) accordingly each period. The Company has recorded a total of $93,750 as consulting expenses during the quarter ended October 31, 2012 and 2011, leaving a prepaid expense balance of $15,625 and $109,375 as of October 31, 2012 and July 31, 2012respectively. As of October 31, 2012, there are no outstanding amounts owing under this agreement.

On April 1, 2012, the Company entered into a consulting agreement with Mr. Robert B. Reynolds Jr., wherein Mr. Reynolds agreed to provide, among other things, services associated with performing duties associated with being a director of the Company. The agreement was effective April 1, 2012, and continues to March 30, 2013. In consideration for agreeing to provide such services, in April 2012, we issued to Mr. Reynolds 250,000 shares of our common stock, valued at $11,500. 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 prepaid expense accordingly in each period, which amount of $2,889 was recorded as consulting expense during the quarter ended October 31, 2012, leaving a prepaid expense balance of $4,788.

On June 12, 2012, the Company entered into a loan agreement with Sanning Management, Ltd., wherein Sanning Management agrees to loan a sum of $119,000 to the Company with interest at the rate of eight percent (8%) per annum, until the maturity date of June 12, 2014. As of October 31, 2012, the Company has a note payable to Sanning Management of $99,025 and accrued interest of $3,060.   Sanning Management is the 100% owner of Group8 Mining Innovations.

Note 6 – Common stock

The Company is authorized to issue 540,000,000 shares of $.001 par value common stock. As of October 31, 2012 and July 31, 2012, 166,808,870 and 82,001,834 shares were issued and outstanding.

On August 22, 2012, the Company issued 83,000,000 shares, in exchange for 81% interest in G8MI.  The 83,000,000 shares of the Company issued to G8MI are valued at $(234,910), the net asset acquired less the $100,000 cash payment. The fair value of the 83,000,000 shares at the acquisition date was at $0.03/share for a total valuation of $2,490,000, which represents a deemed distribution to related party of $2,724,910
 
 
 
F-13

 

FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 6 – Common stock (continued)

Tangiers Capital (as detailed in Note 4 – Convertible Debentures) has exercised its right to convert portions of its Secured Convertible Promissory Note dated February 23, 2012, as follows;

 
i.
Under the Conversion Notice dated September 6, 2012, Tangiers converted a portion of the debt equal to $5,000 in exchange for shares at a rate of $0.01628 per share, for a total of 307,125 shares, which were valued at $7,692.
 
ii.
Under the Conversion Notice dated September 20, 2012, Tangiers converted a portion of the debt equal to $10,000 in exchange for shares at a rate of $0.01658 per share, for a total of 603,318 shares, which were valued at $15,385.
 
iii.
Under the Conversion Notice dated October 24, 2012, Tangiers converted a portion of the debt equal to $15,000 in exchange for shares at a rate of $0.01673 per share, for a total of 896,593 shares, which were valued at $23,077.

Subsequent to the period end, Tangiers Capital exercised its right to convert portions of its Secured Convertible Promissory Note dated February 23, 2012, as follows;

 
i.
Under a Conversion Notice dated December 7, 2012, Tangiers converted a portion of the debt equal to $15,000 in exchange for shares at a rate of $0.01202 per share, for a total of 1,247,920 shares.

As of the date of this filing, a total of $45,000 has been converted for a total issuance of 3,054,956 shares.

Note 7 –Marketable Securities and Investments

The following is a summary of available-for-sale marketable securities as of October 31, 2012 and 2011:

   
October 31, 2012
 
   
Cost
   
Unrealized
(Gain)
   
Unrealized
(Losses)
   
Market or
Fair Value
 
Equity securities
  $ 20,000     $ -     $ (14,500 )   $ 5,500  
Total
  $ 20,000     $ -     $ (14,500 )   $ 5,500  

   
July 31, 2012
 
   
Cost
   
Unrealized
Gain
   
Realized
(Losses)
   
Market or
Fair Value
 
Equity securities
  $ 250,000     $ -     $ (230,000 )   $ 20,000  
Total
  $ 250,000     $ -     $ (230,000 )   $ 20,000  

The cost of available-for-sale marketable securities was originally valued at $250,000 based on the fair value of the shares on the issuance date. During the fiscal year ended July 31, 2012, the Company realized an other-than-temporary loss of $230,000 on the securities, which resulted in an adjusted cost basis of $20,000. The Company classifies securities that have a readily determinable fair value and are not bought and not held principally for the purpose of selling them in the near term as securities available-for-sale, pursuant to FASB ASC 320-10, Investments-Debt & Equity Securities. Under FASB ASC 320-10, unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported in other comprehensive income until realized.

 
F-14

 


FIRST LIBERTY POWER CORP.
 (AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

Note 8 –Subsequent Note

Subsequent to the end of the current reporting period, on November 6, 2012, we entered into a purchase agreement with GeoXplor Corp. (“Agreement”). Under this Agreement, we have been granted an exclusive five year exploration license in regards to a mineral property described in the Agreement. The mineral property encompasses 13 lode claims (260 acres) located in the Canyon Country District, San Juan County, Utah for Vanadium and Uranium exploration (the "San Juan Property").  Pursuant to the Agreement, upon the completion of the required payments and work commitments, GeoXplor shall transfer title to the San Juan Property to the Company and shall retain a 3% royalty, on which we shall have the option to purchase up to 2%, for $1,000,000 per 1%.

We are required to (1) make cash payments of $500,000 over a five year period; (2) issue a total of 3,000,000 restricted shares of common stock over a five year period; and (3) comply with a work commitment of $1,000,000 within three years.

The San Juan Property encompasses certain claims previously included in agreements between the Company and GeoXplor, and this Agreement supersedes and replaces all prior agreements in respect to those claims.

 
On August 31, 2012, the Company entered into a Securities Purchase Agreement with Tangiers Investors, LP. Under the agreement, amongst other terms, The Company is obligated to issue certain shares in payment of a Commitment Fee.  Subsequent to the period ending October 31, 2012, on December 7, 2012, the Company issued 1,666,667 shares pursuant to the first tranche of this requirement.
 
Subsequent to the year end, Tangiers Capital exercised its right to convert portions of its Secured Convertible Promissory Note dated February 23, 2012, as follows;

 
i.
Under a Conversion Notice dated December 7, 2012, Tangiers converted a portion of the debt equal to $15,000 in exchange for shares at a rate of $0.01202 per share, for a total of 1,247,920 shares.


 
F-15

 

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements relating to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Given these uncertainties, readers of this Quarterly Report on Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements.  The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
 
All dollar amounts stated herein are in US dollars unless otherwise indicated.

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended July 31, 2011, together with notes thereto.

As used in this quarterly report, the terms "we", "us", "our", and the "Company" mean First Liberty Power Corp.

Our Current Business

We are an exploration stage company engaged in the exploration and development of mineral properties.

On May 31, 2012, we entered into a purchase agreement with GeoXplor Corp. (“Lithium Agreement”). Under this Lithium Agreement, we have been granted an exclusive four year exploration license in regards to the two mineral properties described in the Lithium Agreement. One property encompasses 58 placer claims (9280 acres) located in Lida Valley, Esmeralda County, Nevada for Lithium and Lithium Carbonate exploration (the "Lida Valley Property"), and the other encompasses 70 placer claims (11,200 acres) located in Smokey Valley, Esmeralda County, Nevada for Lithium and Lithium Carbonate exploration (the "Smokey Valley Property").

On August 22, 2012, the Company entered into an agreement with Group8 Minerals, a Nevada Corporation ("Group8”), and Group8 Mining Innovations, a Nevada Corporation (“G8MI”), the sole Shareholder of Group8, whereby the Company acquired 81% of the total issued and outstanding shares of Group8. Group8 holds a 50% interest in Central Nevada Processing Co. LLC (CNPC) and a 50% interest in Stockpile Reserves LLC (SRL).  As a result of the acquisition, the Company has an effective 40.5% interest in each of CNPC and SRL.   SRL is a Antimony mining company having a mineral property known as the Fencemaker mine, located in the Stillwater Range of west central Nevada, approximately 194 kilometers northeast of the city of Reno, Nevada, and more locally approximately 60 kilometers east-southeast of the town of Lovelock, and which consists of five unpatented contiguous mining claims that cover a total of 100.0 acres (40.47 hectares).  The Fencemaker Mine was established and first shipped antimony ore in the 1880s, with intermittent minor production continuing until the 1990's.

 
5

 
 
SRL recently completed a Phase 1 program of reverse circulation (RC) drilling that was initiated in July 2012 to test the down dip and strike extension of mineralization known to be present in the Fencemaker Mine. This program consisted of a total of 2350 feet (716 m) from thirteen (13) holes collared in the hanging wall of the structure.  Highest value recorded was 18.65% Sb (Stibnite or Antimony ore) from drill hole FM-02 at the 35 to 40 foot (10.7 to 12.2 m) interval below surface. High-grade mineralization exists to a depth of a minimum of 110 feet (33.5 m) below surface. A cut-off grade of 0.40% Sb was selected for an NI43-101 and SEC compliant Inferred Mineral Resource. That Inferred Mineral Resource is from five individual blocks totaling 34,125 short tons with an average grade of 2.92% Sb. Within this estimated total resource higher grade blocks, up to 10,500 tons of 4.17% Sb are present.  Analysis for gold in the drill samples shows a zone of anomalous (up to 294 ppb Au; 0.294 g/t Au).
 
All necessary permitting has been established to commence mining operations, and the Fencemaker mine could be in operation as early as late March 2013, subject to receiving additional funding from the Company.

CNPC, with a property permitted for mineral processing in Lovelock, Nevada, will undertake the milling of the Stibnite (Antimony) ore extracted from the Fencemaker mine, and refine it to approximately 55 to 60% purity, at which point it will be sold at market price for grade.   This milling operation, again subject to additional funding from the Company, can be operational as early as late March, 2013.

Subsequent to the end of the current reporting period, on November 6, 2012, we entered into a purchase agreement with GeoXplor Corp. (“San Juan Agreement”). Under this Agreement, we have been granted an exclusive five year exploration license in regards to a mineral property described in the San Juan Agreement. The  property is comprised of 13 lode claims, totaling 260 acres (the "San Juan Property"), located within the Colorado Plateau near the Utah-Colorado border. A preliminary radon survey was completed on the San Juan Property in 2009 and it indicated an anomalous east-west radiometric trend. The sizes of the anomalies appear to be very similar to the size of the high grade vanadium-uranium beds mined from the nearby Firefly, Gray Daun and Vanadium Queen Mines. This channel system, which was already delineated by a previously completed radon survey, is part of the system that hosts the Pandora and Beaver Shaft mines - both of which are producing Uranium and Vanadium ore that is transported to and processed at the Dennison Mill located near Blanding Utah.

The claims identified in the Lithium and San Juan Agreements are situated on undeveloped raw land.  Exploration work has been undertaken on all of the claims, and we intend to undertake further exploration in the expectation of finding commercially viable deposits of Lithium brine, Vanadium and Uranium, respectively.  In respect to these exploration properties, exploration will continue to be our principal activity, until and if our minerals of interest are discovered in commercially viable quantities, which would then become our principal products.   For the Fencemaker Project and related milling operation, the Company, subject to completing its funding obligations, expects to be able to commence mining and milling operations through SRL and CNPC, initially on a trial scale, in the first and second calendar quarters of 2013.  Based on those results, we would anticipate being able to ramp up to the permitted capacity of 36,500 tonnes/year of ore.

Our exploration programs will be exploratory in nature and there is no assurance that a commercially viable mineral deposit, a reserve, exists until further exploration, particularly drilling, is undertaken and a comprehensive evaluation concludes economic and legal feasibility. Our mining and milling operations are not yet established and operational, and are subject to further funding by the Company in order to be completed and initiated, and are subject to start-up risks associated with initiating underground mining operations and milling operations, which may delay or prevent our mining and milling operations.  We have not yet generated or realized any revenues from our business operations.

Should we be successful in raising sufficient funds in order to conduct our additional exploration programs, the full extent and cost of which is not presently known beyond that required by our proposed drilling program and mandatory work programs as noted below, and such exploration programs results in an indication that production of our minerals of interest is economically feasible, then at that point in time we would make a determination as to the best and most viable approach for mineral extraction.


 
6

 

Material Changes in Financial Condition

Liquidity & Capital Resources

As of October 31, 2012, our cash balance was $28,470 which is a decrease from our cash balance of $35,984 at July 31, 2012.

As of October 31, 2012, our total current assets are $155,684 ($361,882 - July 31, 2012), which decrease is primarily attributable to the decrease in prepaid expenses from $251,848 at July 31, 2012 to $85,072, primarily as a result of the expensing of stock based compensation.  Our current liabilities are $1,327,816 ($794,097 – July 31, 2012), the increase of which is primarily as a result of $350,000 of notes payable (compared to $nil as at July 31, 2012) maturing within the next two fiscal quarters. Borrowings from related parties increased too from $158,058 at July 31, 2012 to $229,618 at the end of the current period

At present, the Company’s cash position is insufficient to meet its obligations through to the end of the fiscal year, as we are not currently generating any revenues, and, over the next 12 months, we will require additional funds to meet our operating obligations and property payment / work program obligations, as well as the repayment of the convertible notes should they not be converted to equity prior to the maturity dates in February 22, 2013 and March 6, 2013.  At present, we anticipate our funding requirements to be approximately $3,200,000.   This estimate is comprised of $600,000 for required and additional exploration and maintenance expenditures on our Lithium properties, $100,000 for required and additional exploration and maintenance expenditures on our Vanadium/Uranium property, approximately $1,700,000 for required development expenditures on our Antimony property, and a further $800,000 to cover operating, debt and overhead costs.  Additional amounts will be required if we identify additional acquisition targets, or determine that additional exploration / development on our properties are required to accelerate their development.

This amount may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. We need to raise additional funds in the near future in order to proceed with our exploration program, as our available cash is insufficient.

The Company intends to pursue all available and reasonable avenues to raise the additional funds required to continue the exploration and development of its properties.

There is no assurance we will be able to identify or acquire these additional funds, or additional funds on a commercially reasonable basis.

Results of Operations

Our revenues since inception (March 28, 2007) to date have been $nil.   For the quarter ended October 31, 2012, our comprehensive net loss increased to $405,572 from $209,140 in October 31, 2011.   The increase in net loss occurred primarily from professional fees increasing from $39,852 in the comparable prior quarter to $175,167 in the current quarter, which increase is reflective of additional costs associated with recent acquisitions, as well as certain stock based compensation costs for professional fees.

Should the Company be successful in raising additional capital and completing its payment obligations, and the Fencemaker mine and related milling operation become operation as planned within the first and second calendar quarters of 2013, the Company would anticipate obtaining its first revenues from operations.  The profitability of such operations can’t yet be determined until all cost structures are known, and operations ramp up to full production levels.

We have incurred recurring losses from operations. The continuation of our Company is dependent upon attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have successfully raised additional capital through equity offerings and loan transactions in the past, and presently believe we will be able to do so in the future, though we can offer no assurance of this outcome as no specific arrangements are in place.
 
 
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Going Concern

In their audit report relating to our financial statements for the period ended July 31, 2012, our independent accountants indicated that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our lack of revenue resulting in a net loss position and insufficient funds to meet our business objectives. All of these factors continue to exist and raise doubt about our status as a going concern.

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
ITEM 4.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under supervision and with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).  Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of October 31, 2012, because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that required information to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that required information to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f).  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation.  In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of October 31, 2012.  In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.   Based on its assessment, management concluded that, as of October 31, 2012, our internal control over financial reporting was not effective and that material weaknesses in ICFR existed as more fully described below.

 
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As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.  In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of October 31, 2012:

 
1)
Lack of an independent audit committee or audit committee financial expert, and no independent directors.  We do not have any members of the Board who are independent directors and we do not have an audit committee.  These factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management;
 
2)
Inadequate staffing and supervision within our bookkeeping operations.  We have one consultant involved in bookkeeping functions, who provides two staff members.  The relatively small number of people who are responsible for bookkeeping functions and the fact that they are from the same firm of consultants prevents us from segregating duties within our internal control system.  The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. This may result in a failure to detect errors in spreadsheets, calculations or assumptions used to compile the financial statements and related disclosures as filed with the SEC;
 
3)
Outsourcing of our accounting operations.  Because there are no employees in our administration, we have outsourced all of our accounting functions to an independent firm.  The employees of this firm are managed by supervisors within the firm and are not answerable to the Company’s management.  This is a material weakness because it could result in a disjunction between the accounting policies adopted by our Board of Directors and the accounting practices applied by the independent firm;
 
4)
Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements;
 
5)
Ineffective controls over period end financial disclosure and reporting processes.

Management's Remediation Initiatives

As of October 31, 2012, management assessed the effectiveness of our internal control over financial reporting.  Based on that evaluation, it was concluded that during the period covered by this report, the internal controls and procedures were not effective due to deficiencies that existed in the design or operation of our internal controls over financial reporting.  However, management believes these weaknesses did not have an effect on our financial results.  During the course of their evaluation, we did not discover any fraud involving management or any other personnel who played a significant role in our disclosure controls and procedures or internal controls over financial reporting.

Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses.  We will not be able to do so until, if ever, we acquire sufficient financing and staff to do so.  We will implement further controls as circumstances, cash flow, and working capital permits.  Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the period ended October 31, 2012, fairly presents our financial position, results of operations, and cash flows for the periods covered, as identified, in all material respects.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and intrinsic to our small size.  Management also believes that these weaknesses did not have an effect on our financial results.

We are committed to improving our financial organization.   As part of this commitment, we will, as soon as funds are available to the Company (1) appoint outside directors to our board of directors sufficient to form an audit committee and who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and to increase our personnel resources.  We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary, and as funds allow.

This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None

ITEM 1A.  RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On August 22, 2012, the Company entered into an agreement with Group8 Minerals, a Nevada Corporation ("Group8”), and Group8 Mining Innovations, a Nevada Corporation (“G8MI” or “Seller”), the sole Shareholder of Group8, whereby G8MI transferred 81% of the total issued and outstanding shares of Group8 in exchange for the issuance of 83,000,000 shares of First Liberty to G8MI, together with a cash payment to G8MI in the amount of $100,000, which amount has been paid in full.  Furthermore, the Company is obligated to provide by the way of loans to Group8, funds for property payments and exploration costs, i) $500,000 on or before October 30, 2012; ii)   $500,000 on or before December 31, 2012; iii)   $500,000 on or before February 28, 2013, and; iv)   $500,000 on or before April 30, 2013.  Group8 holds a fifty percent (50%) interest in and to certain Nevada limited liability companies, which hold interests in certain mining properties and milling operations in Nevada, pertaining to the mineral ore Stibnite (Antimony).  Approximately $180,000 has been provided as of the date of this filing towards the payment and development obligations under the Agreement.

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended,  for the issuance of 83,000,000 shares to Group8 Mining Innovations, pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities.

During the current reporting period ending October 31, 2012, Tangiers Capital exercised its right to convert portions of its Secured Convertible Promissory Note dated February 23, 2012, as follows;

 
i.
Under a Conversion Notice dated September 6, 2012, Tangiers converted a portion of the debt equal to $5,000 in exchange for shares at a rate of $0.01628 per share, for a total of 307,125 shares, which were valued at $7,692.
 
ii.
Under a Conversion Notice dated September 20, 2012, Tangiers converted a portion of the debt equal to $10,000 in exchange for shares at a rate of $0.01658 per share, for a total of 603,318 shares, which were valued at $15,385.
 
iii.
Under a Conversion Notice dated October 24, 2012, Tangiers converted a portion of the debt equal to $15,000 in exchange for shares at a rate of $0.01673 per share, for a total of 896,593 shares, which were valued at $23,077.

Subsequent to the year end, Tangiers Capital exercised its right to convert portions of its Secured Convertible Promissory Note dated February 23, 2012, as follows;

 
i.
Under a Conversion Notice dated December 7, 2012, Tangiers converted a portion of the debt equal to $15,000 in exchange for shares at a rate of $0.01202 per share, for a total of 1,247,920 shares.

As of the date of this filing, a total of $45,000 has been converted for a total issuance of 3,054,956 shares.

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended, for the issuance of shares to Tangiers Capital pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchaser is an “accredited investor” and/or qualified institutional buyer, the purchaser has access to information about the Company and its purchase, the purchaser will take the securities for investment and not resale.

On August 31, 2012, the Company entered into a Securities Purchase Agreement with Tangiers Investors, LP. Under the agreement, amongst other terms, The Company is obligated to issue certain shares in payment of a Commitment Fee.  Subsequent to the period ending October 31, 2012, on December 7, 2012, the Company issued 1,666,667 shares pursuant to the first tranche of this requirement.

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended,  for the issuance of 1,666,667 shares to Tangiers Capital, pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the purchasers are “accredited investors” and/or qualified institutional buyers, the purchasers have access to information about the Company and its purchase, the purchasers will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities.

 
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ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

ITEM 5.  OTHER INFORMATION

On August 31, 2012, the Company entered into a Securities Purchase Agreement (“SPA”) with Tangiers Investors, LP (“Tangiers”). Under the agreement, the Company would agree to issue and sell its common stock to Tangiers for an aggregate purchase price of up to $2,000,000 (“Commitment Amount”). The funding obligates Tangiers to buy the Company’s stock in amounts of $5,000 up to $100,000 per draw down, at the Company’s discretion over a period of 24 months after an effective registration statement. The purchase and sale of common stock is predicated upon the Company filing a S1 Registration with the Securities and Exchange Commission, which at December 20, 2012, was not yet completed.  As part of the SPA, the Company has an obligation for a Commitment Fee, in that it is required to sell to Tangiers five percent (5%) of the total Commitment Amount worth of restricted Common Stock as a commitment fee. The commitment fee shares shall be issued in tranches in accordance with the following schedule:  50% of the Commitment Fee worth of Common Stock shall be sold upon the execution of the Securities Purchase Agreement (“Tranche #1”). Tranche #1 shall carry a minimum Formula Price of three cents ($.03) per share; b) 25% of the Commitment Fee worth of Common Stock shall be sold to the Investor 90 days following the sale of the Common Stock in Tranche #1 (“Tranche #2”); b) 25% of the Commitment Fee worth of Common Stock shall be sold to the Investor 180 days following the sale of the Common Stock in Tranche #2 (“Tranche #3”); The number of Investor Shares issued to the Investor in each of aforementioned Tranches shall be calculated by dividing the dollar amount of each such Tranche by the Formula Price. The purchase price of each Tranche shall be set at one (1%) percent of the dollar value of each tranche.

 
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ITEM 6.  EXHIBITS

#
Exhibit
Reference
3.1
Articles of Incorporation.
Incorporated by reference to Registration Statement on Form SB-2 filed with the SEC on Nov 13, 2007
3.2
Bylaws.
Incorporated by reference to Registration Statement on Form SB-2 filed with the SEC on Nov 13, 2007
10.1
Purchase Agreement dated effective December 24, 2009 between GeoXplor Corp. and Quuibus Technology Inc.
Incorporated by reference to Form 8-K filed with the SEC on January 21, 2010.
10.2
Purchase Agreement dated effective December 24, 2009 between GeoXplor Corp. and Quuibus Technology Inc.
Incorporated by reference to Form 8-K filed with the SEC on January 21, 2010.
10.3
Consulting Agreement between First Liberty and John Rud dated March 1, 2010
Incorporated by reference to Form 10-K/A3 filed with the SEC on November 14, 2011
10.4
Unsecured promissory notes in the amount of $200,000 and $50,000 dated December 24, 2009  and March 15, 2010 respectively
Incorporated by reference to Form 10-K/A3 filed with the SEC on November 14, 2011
10.5
Consulting Agreement between First Liberty and John H. Hoak dated May 3, 2010
Incorporated by reference to Form 8-K filed with the SEC on August 4, 2010.
10.6
Property assignment and acquisition agreement between First Liberty, GeoXplor and New America dated February 3, 2011
Incorporated by reference to Form 8-K filed with the SEC on February 7, 2011
10.7
Extension agreement between First Liberty, GeoXplor Corp. And New America Energy Corp. dated effective May 31, 2011
Incorporate by reference to Form 8-K filed with the SEC on August 4, 2011
10.8
Consulting Agreement dated effective November 15, 2010 between LTV International Holdings and First Liberty dated July 2, 2011.
Incorporated by reference to Form 10-K filed with the SEC on November 15, 2011
10.9
Letter of Agreement dated effective December 15, 2011, between GeoXplor and the Company
Incorporated by reference to Form 10-Q filed with the SEC on March 16, 2012.
10.10
Loan Conversion Agreement dated effective December 23, 2011 between the Company and lender
Incorporated by reference to Form 10-Q filed with the SEC on March 16, 2012.
10.11
Note Purchase Agreement dated February 23, 2012 between the Company and lender
Incorporated by reference to Form 10-Q filed with the SEC on March 16, 2012.
10.12
Secured Convertible Promissory Note #1 dated February 23, 2012 between the Company and lender
Incorporated by reference to Form 10-Q filed with the SEC on March 16, 2012.
10.13
Security Agreement for Note #1 dated February 23, 2012 between the Company and lender
Incorporated by reference to Form 10-Q filed with the SEC on March 16, 2012.
10.14
Consulting Agreement dated effective April 1, 2012 between First Liberty and Mr. Robert Reynolds
Incorporated by reference to Form 8-K filed with the SEC on April 17, 2012.
10.15
Purchase Agreement dated May 31, 2012, effective March 15, 2012, between the Company and GeoXplor Corp.
Incorporated by reference to Form 8-K filed with the SEC on June 4, 2012.
10.16
Purchase Agreement dated Aug 19, 2012, between Group8 Mining Innovations, Group8 Minerals, and the Company
Incorporated by reference to Form 8-K filed with the SEC on August 28, 2012.
10.17
Securities Purchase Agreement dated August 31, 2012, between the Company and Tangiers Capital
Filed herewith
10.18
Purchase Agreement dated November 6, 2012, between the Company and GeoXplor Corp.
Incorporated by reference to Form 8-K filed with the SEC on November 19, 2012.
31.1
Section 302 Certification - Principal Executive Officer
Filed herewith
31.2
Section 302 Certification - Principal Financial Officer
Filed herewith
32.1
Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Principal Executive Officer
Filed herewith
32.2
Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Principal Financial Officer
Filed herewith
101.SCH
XBRL Taxonomy Extension Schema Document
Filed herewith
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
Filed herewith
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
Filed herewith
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
Filed herewith
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
Filed herewith

 
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SIGNATURES

Pursuant to the requirements 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:
December 24, 2012
By:
/s/ Don Nicholson
   
Name:
Don Nicholson
   
Title:
President, Director, Principal Executive Officer
 
       
Date:
December 24, 2012
By:
/s/ Mario Beckles
   
Name:
Mario Beckles
   
Title:
Principal Financial and Accounting Officer




 
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