Attached files
file | filename |
---|---|
EX-32.2 - CERTIFICATION - Soltera Mining Corp. | slta_ex322.htm |
EX-32.1 - CERTIFICATION - Soltera Mining Corp. | slta_ex321.htm |
EX-31.2 - CERTIFICATION - Soltera Mining Corp. | slta_ex312.htm |
EX-31.1 - CERTIFICATION - Soltera Mining Corp. | slta_ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
1st Amendment
[X] | ANNUAL REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For the fiscal year ended October 31, 2012 | |
| |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For the transition period from ___________ to _____________ | |
| |
Commission file number 000-51841 |
SOLTERA MINING CORP. |
(Exact name of registrant as specified in its charter) |
Nevada (State or other jurisdiction of incorporation or organization) | 00-0000000 (I.R.S. Employer Identification No.) |
|
|
20801 Biscayne Boulevard, 4th Floor, Aventura, Florida (Address of principal executive offices) | 33180 (Zip Code) |
Registrants telephone number, including area code: 303 800 5752
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered |
|
|
None | N/A |
Securities registered pursuant to Section 12(g) of the Act:
common stock - $0.001 par value |
(Title of Class) |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
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 last 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
Page 1
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 (§ 229.405 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 [X] No
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
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.
Larger accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes [X] No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on April 30, 2013, the last business day of the registrants most recently completed second fiscal quarter, based on the closing price on that date of $0.13on the Pink Sheets, was $4,229,482.
State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.
Class | Outstanding at September 25, 2013 |
common stock - $0.001 par value | 98,167,597 |
Documents incorporated by reference: Exhibit 3.1 (Articles of Incorporation) and Exhibit 3.2 (By-laws) both filed as exhibits to Solteras registration statement on Form SB-2 on January 24, 2006; Exhibit 3.4 (Articles of Incorporation of Incas) filed as an exhibit to Solteras Form 8-K (Current Report) on February 21, 2007; Exhibit 10.5 (Stock Acquisition Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on August 2, 2007; Exhibit 10.6 (First Option Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on August 2, 2007; Exhibit 10.7 (Second Option Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on August 2, 2007; Exhibit 10.9 (Loan Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on August 2, 2007; Exhibit 10.12 (Bare Trust) filed as an exhibit to Solteras Form 10-KSB (Annual Report) on February 21, 2008; Exhibit 10.13 (Assignment Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on March 10, 2008; Exhibit 10.14 (Option Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on March 10, 2008; Exhibit 10.15 (Stock Acquisition Agreement) filed as an exhibit to Solteras Form 8-K (Current Report) on March 10, 2008; Exhibit 10.18 (Irrevocable Offer) filed as an exhibit to Solteras Form 8-K (Current Report) on May 13, 2009; Exhibit 10.22 (Financing Agreement) filed as an exhibit to Solteras Form 8-K Report (Current Report) on June 18, 2010 Exhibit 14 (Financial Code of Ethics) filed as an exhibit to Solteras Form 10-QSB (Quarterly Report) on September 18, 2007; and Exhibit 99.1 (Disclosure Committee Charter) filed as an Exhibit to Solteras Form 10-K (Annual Report) on August 28, 2009.
2
Soltera Mining Corp.
Form 10-K/A
1st Amendment
EXPLANATORY NOTE
This Form 10-K/A - 1st Amendment for the fiscal year ended October 31, 2012, which was originally filed on September 30, 2013 (the Report), is being filed (1) to revise Part II to include a signed report from Solteras independent registered accounting firm in Item 8 - Financial Statements and Supplementary Data, and (2) to include updated certifications in Exhibit 31 and Exhibit 32.
This amendment to the Report does not alter any part of the content of the Report, except for the changes and additional information provided in this amendment, and this amendment continues to speak as of the date of the Report. Soltera Mining Corp. has not updated the disclosures contained in this amendment to reflect any events that occurred at a date subsequent to the filing of the Report. The filing of this amendment is not a representation that any statements contained in the Report or this amendment are true or complete as of any date subsequent to the date of the Report. This amendment does not affect the information originally set forth in the Report, the remaining portions of which have not been amended. Accordingly, this Form 10-K/A should be read in conjunction with Soltera Mining Corp.s filings made with the SEC subsequent to the filing of the original Form 10-K on September 30, 2013 (SEC Accession No. 0001393905-13-000546)..
3
PART II
Item 8. Financial Statements and Supplementary Data.
SOLTERA MINING CORP.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
October 31, 2012 and 2011
| Index |
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F-1 | |
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F-2 | |
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F-3 | |
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F-4 | |
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F-5 | |
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F-6 |
4
Report of Independent Registered Public Accounting Firm
To the Stockholders of
Soltera Mining Corp.
(An Exploration Stage Company)
We have audited the accompanying consolidated balance sheets of Soltera Mining Corp. (An Exploration Stage Company) as of October 31, 2012 and 2011, and the related consolidated statements of comprehensive loss, cash flows and stockholders' equity (deficit) for the years then ended, and accumulated from September 21, 2005 (Date of Inception) to October 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform an audit of the Companys internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Soltera Mining Corp. (An Exploration Stage Company) as of October 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended, and accumulated from September 21, 2005 (Date of Inception) to October 31, 2012 in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated any revenues, has a working capital deficit at October 31, 2012 and has incurred operating losses since inception. These factors raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Manning Elliot LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
September 9, 2013
F-1
Soltera Mining Corp.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Expressed in U.S. dollars)
| October 31, 2012 |
| October 31, 2011 | ||
ASSETS |
|
|
| ||
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash | $ | 685,712 |
| $ | 526,868 |
Prepaid expenses |
| - |
|
| 94 |
Amounts receivable |
| 3,244 |
|
| 18,962 |
Note receivable (Note 5) |
| 26,000 |
|
| - |
|
|
|
|
|
|
TOTAL CURRENT ASSETS |
| 714,956 |
|
| 545,924 |
|
|
|
|
|
|
Mineral property (Note 6) |
| 750,000 |
|
| 450,000 |
Property and equipment (Note 7) |
| 162,283 |
|
| 123,147 |
|
|
|
|
|
|
TOTAL ASSETS | $ | 1,627,239 |
| $ | 1,119,071 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |
|
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|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
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|
|
|
Accounts payable | $ | 42,498 |
| $ | 12,328 |
Accrued liabilities |
| 156,059 |
|
| 187,561 |
Due to related parties (Note 8) |
| 591,978 |
|
| 515,278 |
Note payable (Note 9) |
| 6,783 |
|
| 6,783 |
|
|
|
|
|
|
TOTAL LIABILITIES |
| 797,318 |
|
| 721,950 |
|
|
|
|
|
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|
|
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|
|
|
STOCKHOLDERS EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
Common Stock, 200,000,000 shares authorized, $0.001 par value; 95,834,594 shares issued and outstanding (2011 - 76,833,510) |
| 95,834 |
|
| 76,834 |
Stock subscriptions received |
| - |
|
| 900,096 |
Additional paid-in capital |
| 5,601,941 |
|
| 3,220,826 |
Donated capital |
| 17,250 |
|
| 17,250 |
Accumulated other comprehensive income |
| 120,070 |
|
| 28,139 |
Deficit accumulated during the exploration stage |
| (5,005,174) |
|
| (3,846,024) |
|
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
| 829,921 |
|
| 397,121 |
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 1,627,239 |
| $ | 1,119,071 |
Contingencies and Commitments (Notes 1 and 12)
Subsequent Events (Note 17)
(The accompanying notes are an integral part of these consolidated financial statements)
F-2
Soltera Mining Corp.
(An Exploration Stage Company)
Consolidated Statements of Comprehensive Loss
(Expressed in U.S. dollars)
| For the Year Ended October 31, 2012 |
| For the Year Ended October 31, 2011 |
| Accumulated from September 21, 2005 (Date of Inception) to October 31, 2012 | |||
|
|
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|
|
| |||
EXPENSES |
|
|
|
|
| |||
Depreciation | $ | 33,137 |
| $ | 5,368 |
| $ | 42,651 |
General and administrative |
| 119,868 |
|
| 38,614 |
|
| 394,894 |
Professional fees |
| 148,115 |
|
| 129,563 |
|
| 685,127 |
Management fees (Note 8) |
| 162,000 |
|
| 162,000 |
|
| 911,428 |
Impairment of mineral property costs |
| - |
|
| - |
|
| 1,534,013 |
Travel accommodation |
| 42,884 |
|
| 35,839 |
|
| 175,600 |
Exploration and mining expenses |
| 531,591 |
|
| 131,695 |
|
| 957,124 |
|
|
|
|
|
|
|
|
|
Total expenses |
| 1,037,595 |
|
| 503,079 |
|
| 4,700,837 |
|
|
|
|
|
|
|
|
|
LOSS BEFORE OTHER ITEMS |
| (1,037,595) |
|
| (503,079) |
|
| (4,700,837) |
|
|
|
|
|
|
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|
|
OTHER ITEMS |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Interest income |
| - |
|
| - |
|
| 3,668 |
Foreign exchange gain |
| 2,370 |
|
| - |
|
| 2,370 |
Provision for amounts receivable (Note 16) |
| (123,925) |
|
| - |
|
| (155,561) |
Loss from operations of discontinued Atzek Mineral SA de CV |
| - |
|
| - |
|
| (154,814) |
|
|
|
|
|
|
|
|
|
NET LOSS |
| (1,159,150) |
|
| (503,079) |
|
| (5,005,174) |
|
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|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
Foreign currency translation adjustment |
| 91,931 |
|
| (13,388) |
|
| 120,070 |
|
|
|
|
|
|
|
|
|
Total other comprehensive income (loss) |
| 91,931 |
|
| (13,388) |
|
| 120,070 |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS | $ | (1,067,219) |
| $ | (516,467) |
| $ | (4,885,104) |
|
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|
Loss per share - basic and diluted | $ | (0.01) |
| $ | (0.01) |
|
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Weighted average shares outstanding |
| 85,487,232 |
|
| 76,214,611 |
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements)
F-3
Soltera Mining Corp.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
| For the Year Ended October 31, 2012 |
| For the Year Ended October 31, 2011 |
| Accumulated from September 21, 2005 (Date of Inception) to October 31, 2012 | |||
|
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| |||
OPERATING ACTIVITIES |
|
|
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| |||
Net loss | $ | (1,159,150) |
| $ | (503,079) |
| $ | (5,005,174) |
Adjustments for non-cash items: |
|
|
|
|
|
|
|
|
Depreciation |
| 33,137 |
|
| 5,368 |
|
| 42,651 |
Donated rent |
| - |
|
| - |
|
| 7,750 |
Donated services |
| - |
|
| - |
|
| 9,500 |
Impairment of mineral property costs |
| - |
|
| - |
|
| 1,537,963 |
Provision for amounts receivable |
| 123,925 |
|
| - |
|
| 172,772 |
Loss from disposal of Aztek Mineral SA de CV |
| - |
|
| - |
|
| 633 |
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses |
| 94 |
|
| (94) |
|
| 5,156 |
Amounts receivable |
| (108,207) |
|
| (18,962) |
|
| (172,206) |
Accounts payable and accrued liabilities |
| (1,332) |
|
| 82,871 |
|
| 200,946 |
NET CASH USED IN OPERATING ACTIVITIES |
| (1,111,533) |
|
| (433,896) |
|
| (3,200,009) |
|
|
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|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Net cash paid on acquisition of Atzek Mineral SA de CV |
| - |
|
| - |
|
| (49,654) |
Note receivable |
| (26,000) |
|
| - |
|
| (26,000) |
Payments for mineral property acquisition |
| (300,000) |
|
| (150,000) |
|
| (950,000) |
Purchase of property and equipment |
| (72,273) |
|
| (120,325) |
|
| (204,206) |
NET CASH USED IN INVESTING ACTIVITIES |
| (398,273) |
|
| (270,325) |
|
| (1,229,860) |
|
|
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|
|
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FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Due to related parties |
| 76,700 |
|
| 130,790 |
|
| 591,978 |
Proceeds from promissory notes |
| - |
|
| - |
|
| 6,783 |
Share subscription received |
| - |
|
| 900,096 |
|
| 900,096 |
Proceeds from issuance of common stock, net |
| 1,500,019 |
|
| 99,955 |
|
| 3,497,729 |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 1,576,719 |
|
| 1,130,841 |
|
| 4,996,586 |
|
|
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EFFECT OF EXCHANGE RATE CHANGES ON CASH |
| 91,931 |
|
| (13,388) |
|
| 118,995 |
|
|
|
|
|
|
|
|
|
INCREASE IN CASH |
| 158,844 |
|
| 413,232 |
|
| 685,712 |
|
|
|
|
|
|
|
|
|
CASH - BEGINNING |
| 526,868 |
|
| 113,636 |
|
| - |
CASH - END | $ | 685,712 |
| $ | 526,868 |
| $ | 685,712 |
|
|
|
|
|
|
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|
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Non-cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
Shares issued to acquire Atzek Mineral SA de CV | $ | - |
| $ | - |
| $ | 864,000 |
Shares issued for mineral property acquisition costs |
| - |
|
| - |
|
| 435,950 |
|
|
|
|
|
|
|
|
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
|
Interest paid |
| - |
|
| - |
|
| - |
Income taxes paid |
| - |
|
| - |
|
| - |
(The accompanying notes are an integral part of these consolidated financial statements)
F-4
Soltera Mining Corp.
(An Exploration Stage Company)
Consolidated Statements of Stockholders Equity (Deficit)
(Expressed in U.S. dollars)
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Shares |
| Par Value |
| Additional Paid-In Capital |
| Share Subscriptions Received |
| Donated Capital |
| Accumulated Other Comprehensive Income (Loss) |
| Deficit Accumulated During the Exploration Stage |
| Total | ||||||||
Balance - September 21, 2005 (Date of Inception) |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
Common stock issued for mineral property at $0.001/share |
|
| 23,700,000 |
|
| 23,700 |
|
| (19,750) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,950 |
Common stock issued for cash at $0.02/share |
|
| 16,065,000 |
|
| 16,065 |
|
| 37,485 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 53,550 |
Donated services and expenses |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 750 |
|
| - |
|
| - |
|
| 750 |
Net loss for the period |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (10,225) |
|
| (10,225) |
Balance - October 31, 2005 |
|
| 39,765,000 |
|
| 39,765 |
|
| 17,735 |
|
| - |
|
| 750 |
|
| - |
|
| (10,225) |
|
| 48,025 |
Donated services and expenses |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 9,000 |
|
| - |
|
| - |
|
| 9,000 |
Net loss for the year |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (30,581) |
|
| (30,581) |
Balance - October 31, 2006 |
|
| 39,765,000 |
|
| 39,765 |
|
| 17,735 |
|
| - |
|
| 9,750 |
|
| - |
|
| (40,806) |
|
| 26,444 |
Common stock issued for cash at $0.17/share, net of issuance cost of $1,300 |
|
| 600,000 |
|
| 600 |
|
| 98,100 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 98,700 |
Common stock issued for cash at $0.40/share |
|
| 1,000,000 |
|
| 1,000 |
|
| 399,000 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 400,000 |
Common stock issued for cash at $0.5/share |
|
| 1,200,000 |
|
| 1,200 |
|
| 598,800 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 600,000 |
Donated services and expenses |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 5,250 |
|
| - |
|
| - |
|
| 5,250 |
Foreign exchange currency translation |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (361) |
|
| - |
|
| (361) |
Net loss for the year |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (231,995) |
|
| (231,995) |
Balance - October 31, 2007 |
|
| 42,565,000 |
|
| 42,565 |
|
| 1,113,635 |
|
| - |
|
| 15,000 |
|
| (361) |
|
| (272,801) |
|
| 898,038 |
Common stock issued for cash at $0.15/share |
|
| 333,333 |
|
| 333 |
|
| 49,667 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 50,000 |
Common stock issued for acquisition and subsidiary |
|
| 16,000,000 |
|
| 16,000 |
|
| 848,000 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 864,000 |
Common stock issued for mineral option |
|
| 8,000,000 |
|
| 8,000 |
|
| 424,000 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 432,000 |
Donated services and expenses |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,250 |
|
| - |
|
| - |
|
| 2,250 |
Foreign exchange currency translation |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 18,201 |
|
| - |
|
| 18,201 |
Share issuance costs |
|
| - |
|
| - |
|
| (1,250) |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (1,250) |
Net loss for the year |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (2,121,391) |
|
| (2,121,391) |
Balance - October 31, 2008 |
|
| 66,898,333 |
|
| 66,898 |
|
| 2,434,052 |
|
| - |
|
| 17,250 |
|
| 17,840 |
|
| (2,394,192) |
|
| 141,848 |
(The accompanying notes are an integral part of these consolidated financial statements)
F-5
Soltera Mining Corp.
(An Exploration Stage Company)
Consolidated Statements of Stockholders Equity (Deficit)
(Expressed in U.S. dollars)
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Shares |
| Par Value |
| Additional Paid-In Capital |
| Share Subscriptions Received |
| Donated Capital |
| Accumulated Other Comprehensive Income (Loss) |
| Deficit Accumulated During the Exploration Stage |
| Total |
Balance - October 31, 2008 |
| 66,898,333 |
| 66,898 |
| 2,434,052 |
| - |
| 17,250 |
| 17,840 |
| (2,394,192) |
| 141,848 |
Share subscriptions received |
| - |
| - |
| - |
| 24,309 |
| - |
| - |
| - |
| 24,309 |
Foreign exchange currency translation |
| - |
| - |
| - |
| - |
| - |
| 3,227 |
| - |
| 3,227 |
Net loss for the year |
| - |
| - |
| - |
| - |
| - |
| - |
| (378,790) |
| (378,790) |
Balance - October 31, 2009 |
| 66,898,333 |
| 66,898 |
| 2,434,052 |
| 24,309 |
| 17,250 |
| 21,067 |
| (2,772,982) |
| (209,406) |
Common stock issued for cash at $0.05/share |
| 3,936,140 |
| 3,937 |
| 192,870 |
| (24,309) |
| - |
| - |
| - |
| 172,498 |
Common stock issued for cash at $0.10/share |
| 4,999,487 |
| 4,999 |
| 494,949 |
| - |
| - |
| - |
| - |
| 499,948 |
Foreign exchange currency translation |
| - |
| - |
| - |
| - |
| - |
| 20,460 |
| - |
| 20,460 |
Net loss for the year |
| - |
| - |
| - |
| - |
| - |
| - |
| (569,963) |
| (569,963) |
Balance - October 31, 2010 |
| 75,833,960 |
| 75,834 |
| 3,121,871 |
| - |
| 17,250 |
| 41,527 |
| (3,342,945) |
| (86,463) |
Common stock issued for cash at $0.10/share |
| 999,550 |
| 1,000 |
| 98,955 |
| - |
| - |
| - |
| - |
| 99,955 |
Share subscriptions received |
| - |
| - |
| - |
| 900,096 |
| - |
| - |
| - |
| 900,096 |
Foreign exchange currency translation |
| - |
| - |
| - |
| - |
| - |
| (13,388) |
| - |
| (13,388) |
Net loss for the year |
| - |
| - |
| - |
| - |
| - |
| - |
| (503,079) |
| (503,079) |
Balance - October 31, 2011 |
| 76,833,510 |
| 76,834 |
| 3,220,826 |
| 900,096 |
| 17,250 |
| 28,139 |
| (3,846,024) |
| 397,121 |
Common stock issued for cash at $0.10/share |
| 9,000,963 |
| 9,000 |
| 891,096 |
| (900,096) |
| - |
| - |
| - |
| - |
Common stock issued pursuant to exercise of warrants at $0.15/share |
| 10,000,121 |
| 10,000 |
| 1,490,019 |
| - |
| - |
| - |
| - |
| 1,500,019 |
Foreign exchange currency translation |
| - |
| - |
| - |
| - |
| - |
| 91,931 |
| - |
| 91,931 |
Net loss for the year |
| - |
| - |
| - |
| - |
| - |
| - |
| (1,159,150) |
| (1,159,150) |
Balance - October 31, 2012 |
| 95,834,594 |
| 95,834 |
| 5,601,941 |
| - |
| 17,250 |
| 120,070 |
| (5,005,174) |
| 829,921 |
(The accompanying notes are an integral part of these consolidated financial statements)
F-6
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS
Soltera Mining Corp. (the Company) was incorporated in the State of Nevada on September 21, 2005. The Company is an Exploration Stage Company, as defined by Accounting Standards Codification (ASC) 915, Development Stage Entities. The Companys principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Companys interests in the underlying properties, and the attainment of profitable operations. As at October 31, 2012, the Company has a working capital deficit of $82,362 and has accumulated losses of $5,005,174 since inception. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. The Company plans to raise equity and/or debt financing to fund its operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Consolidated Financial Statements and Basis of Presentation
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These financial statements consolidate the Company with its Argentinean wholly-owned subsidiary, Incas Mineral, S.A. (Incas). All intercompany transactions have been eliminated. The Companys fiscal year end is October 31.
b) Use of Estimates
The preparation of these consolidated financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, recoverability of amounts receivable and mineral property acquisition costs, deferred income tax asset valuation allowances, and any contingent liabilities. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c) Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at October 31, 2012 and 2011, there were 15,000,392 potentially dilutive securities outstanding.
F-7
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Comprehensive Income (Loss)
ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive income (loss) and its components in the consolidated financial statements. As at October 31, 2012 and 2011, the Companys only component of comprehensive income (loss) was foreign currency translation adjustments.
e) Cash and Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
f) Mineral Property Costs
The Company has been in the exploration stage since its formation on September 21, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal year end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
g) Property and Equipment
Property and equipment are recorded at cost. Depreciation is recorded over the useful lives on a straight-line basis over 3 to 10 years as follows:
Automobile | 4 years |
Computer equipment | 3 years |
Furniture and fixtures | 10 years |
Machinery and equipment | 5 years |
Tools and small items | 3 years |
Leasehold improvements | 3 years |
h) Long-lived Assets
In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
F-8
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
i) Asset Retirement Obligations
The Company follows the provisions of ASC 440, Asset Retirement and Environmental Obligations, which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The Company did not have any asset retirement obligations as of October 31, 2012 and 2011.
j) Financial Instruments
Financial instruments, which include cash, note receivable, accounts payable, amounts due to related parties and note payable were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Companys operations are in Argentina, which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to the Companys operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
k) Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company recognizes and measures tax positions taken or expected to be taken in its tax return based on their technical merit and assesses the likelihood that the positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. Interest and penalties on tax liabilities, if any, would be recorded in operating expenses.
l) Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Compensation Stock Based Payments and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.
ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Companys stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Companys expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
F-9
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
m) Foreign Currency Translation
The Companys functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
The functional currency of the wholly-owned subsidiary, Incas, is the Argentine Peso. The financial statements of the subsidiary are translated to United States dollars in accordance with ASC 830 using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders equity. Foreign currency transaction gains and losses are included in current operations.
n) Marketable Securities
The Company defines marketable securities as income yielding securities that can be readily converted into cash. Examples of marketable securities include U.S. Treasury and agency obligations, commercial paper, corporate notes and bonds, time deposits, foreign notes and certificates of deposit. The Company accounts for its investment in debt and equity instruments under Statement of Financial Accounting Standards, or ASC 320, Investments - Debt and Equity Securities. The Company follows the guidance provided by ASC 320 to assess whether our investments with unrealized loss positions are other than temporarily impaired. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense). Management determines the appropriate classification of such securities at the time of purchase and re-evaluates such classification as of each balance sheet date. As at October 31, 2012, the Company did not have any marketable securities.
o) Recently Issued Accounting Pronouncements
In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which amends the ASC Topic 820, Fair Value Measures and Disclosures. ASU No. 2010-06 amends the ASC to require disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The new disclosures and clarifications of existing disclosures were effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures concerning purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures were effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. This guidance requires expanded disclosures only, and did not have a material impact on the Companys financial statements.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
F-10
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
3. ACQUISITION OF INCAS
On July 24, 2007, the Company entered into a Stock Acquisition Agreement to acquire all of the issued and outstanding shares of Incas for consideration of $1,500. Pursuant to this agreement, the Company entered into a Management Agreement with the President and CEO of the Company to provide management services in consideration of $8,500 per month. In addition, the Company agreed to issue 10% of the then issued and outstanding shares to the President of the Company upon the Company: (1) receiving a bankable feasibility study on any group of mineral properties the Company has an interest in and which the President of the Company is responsible for bringing to the Company; and (2) selling any such properties before a bankable feasibility study is completed, provided that the President does not own more than 65% of the then issued and outstanding shares of the Company. This acquisition has been accounted for using the purchase method of accounting. The purchase price of $1,500 was allocated entirely to mineral property costs as the net book value of Incas was $nil.
4. JOINT VENTURE
On October 17, 2008, the Company formed a joint venture company named the Albanian Mines Company sh.a. with two Albanian companies to tender for the rights to mineral properties in Albania. The Company has a 25% interest in the joint venture company which is accounted for under the equity method of accounting. As at October 31, 2012 and 2011, the joint venture has not incurred any costs.
5. NOTE RECEIVABLE
During the year ended October 31, 2012, the Company advanced $26,000 to a minority shareholder of the Company. The amount is unsecured, non-interest bearing and is due on demand. The amount is due on or before October 31, 2013. As at October 31, 2012, the balance of the note receivable is $26,000 (2011: $nil).
6. MINERAL PROPERTIES
a)
On July 6, 2007, the Companys wholly owned subsidiary, Incas, entered into a mineral property exploration and option agreement, which was amended on December 30, 2008, whereby Incas has the exclusive right to explore five minerals claims in Argentina until December 30, 2013 with an option to acquire a 100% interest in the mineral claims in Argentina (the El Torno Project), upon fulfilling the conditions set forth:
(1)
Incas is obliged to submit to the vendor a quarterly report with technical data and detailed expenses on the mineral claim;
(2)
Incas will pay to the vendor a 1% Foundry Net Return, which can be purchased by Incas for $1,000,000 anytime after production commences on the mineral claim;
(3)
upon completion of the option payments, Incas will pay the vendor $3,500,000, less any payments made by Incas during the option period;
(4)
Incas will also pay the vendor the following payments:
1.
$50,000 on or before June 30, 2008 (Paid)
2.
$100,000 on or before June 30, 2009 (Paid)
3.
$200,000 on before June 30, 2010 (Paid)
4.
$150,000 every six months with the first payment due on or before June 30, 2011(June 30, 2011 paid; December 31, 2011 paid; June 30, 2012 paid)
F-11
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
6. MINERAL PROPERTIES (continued)
(5)
Incas will make an investment of $1,000,000 in exploration of the El Torno Project on or before July 6, 2009, which was extended to December 31, 2011 (completed).
b)
On July 6, 2007, prior to the Companys acquisition of Incas, Incas entered into a mineral property exploration and option agreement with the vendor whereby the Company has the exclusive right to explore one mineral claim in Argentina with an option to acquire a 100% interest in the mineral claim upon fulfilling the conditions set forth: (1) Incas is obliged to submit a quarterly report to the vendor with technical data and detailed expenses on the mineral claim; (2) Incas will pay to the vendor a 1% Foundry Net Return, which can be purchased by Incas for $1,000,000 anytime after production commences on the mineral claim; (3) upon completion of the option payments, Incas will pay the vendor $3,500,000, less any payments made by Incas during the option period; (4) Incas will also pay the vendor $20,000 on June 30, 2008 (unpaid), $40,000 on June 30, 2009 (unpaid), and $80,000 on June 30, 2010 (unpaid).
Additional terms of the agreement were: (1) Within 12 months of signing the option agreement, Incas will conduct a geological and mining inspection and audit of the mineral claim; (2) Within 36 months of signing the option agreement, Incas will make an investment of $1,000,000 in the exploration of the mineral claim; (3) From June 30, 2011 until the mineral claim is put into production, Incas will pay the vendor $100,000 bi-annually, with the first payment due on June 30, 2011 (unpaid).
Since October 31, 2009, the Companys rights to explore the claim were under dispute. As a result, the Company has suspended all required payments and exploration activity on the claim until the dispute has been resolved.
7. PROPERTY AND EQUIPMENT
| October 31, 2012 |
|
| October 31, 2011 | ||
Automobile | $ | 181,922 |
|
| $ | 118,952 |
Computer equipment |
| 4,048 |
|
|
| 1,081 |
Furniture and fixtures |
| 10,247 |
|
|
| 5,541 |
Machinery and equipment |
| 4,639 |
|
|
| 3,632 |
Tools and small items |
| 341 |
|
|
| 508 |
Leasehold improvements |
| 792 |
|
|
| - |
|
|
|
|
|
|
|
|
| 201,989 |
|
|
| 129,714 |
Less accumulated depreciation |
| (39,706) |
|
|
| (6,567) |
|
|
|
|
|
|
|
Net Book Value | $ | 162,283 |
|
| $ | 123,147 |
8. RELATED PARTY TRANSACTIONS AND BALANCES
a)
On July 24, 2007, the Company entered into a management agreement with the President of the Company to provide management services in exchange for $8,500 per month. During the year ended October 31, 2012, the Company recorded $102,000 (2011 - $102,000) of management services provided by the President of the Company.
b)
As at October 31, 2012, the Company owes $371,978 (2011 - $331,002) to the President of the Company which consists of accumulated expenses of $13,478 (2011 - $31,528) paid on behalf of the Company and accumulated management fees of $358,500 (2011 - $299,474) owing to the President for services rendered. The amount owing is unsecured, non-interest bearing and due on demand.
F-12
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
8. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
c)
As at October 31, 2012, the Company owes $220,000 (2011 - $172,000) to a director of the Company which consists of $48,000 (2011 $48,000) of management fees for the year pursuant to an agreement entered into on November 18, 2009. The amount owing is unsecured, non-interest bearing and due on demand.
9. NOTE PAYABLE
During the year ended October 31, 2009, the Company received a loan of $6,783 from a shareholder of the Company. The amount is unsecured, non-interest bearing and is due on demand. As of October 31, 2012 and 2011, the loan has outstanding principal of $6,783.
10. COMMON STOCK
Transactions during the years ended October 31, 2012 and 2011:
a)
On September 6, 2012, the Company issued 3,999,992 restricted shares of common stock for the exercise of 3,999,992 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $599,999.
b)
On June 8, 2012, the Company issued 3,000,000 restricted shares of common stock for the exercise of 3,000,000 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $450,000.
c)
On April 22, 2012, the Company issued 2,000,138 restricted shares of common stock for the exercise of 2,000,138 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $300,021.
d)
On February 23, 2012, pursuant to a June 9, 2010 agreement with Goldlake Italia S.p.A. (Goldlake), the Company issued 9,000,963 units of common stock at $0.10 per unit for proceeds of $900,096. Each restricted unit consists of one restricted common stock and one restricted share purchase warrant. Each full warrant enables Goldlake to purchase two additional shares at a price of $0.15 per share for a period of two years.
e)
On February 23, 2012, the Company issued 999,991 restricted shares of common stock for the exercise of 999,991 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $149,999.
f)
On June 15, 2011, pursuant to a June 9, 2010 agreement with Goldlake, the Company issued 999,550 units of common stock at $0.10 per unit for proceeds of $99,955. Each restricted unit consists of one restricted common stock and one restricted share purchase warrant. Each full warrant enables Goldlake to purchase two additional shares at a price of $0.15 per share for a period of two years.
F-13
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
11. SHARE PURCHASE WARRANTS
a)
During the year ended October 31, 2012, the Company issued 10,000,121 restricted common stock pursuant to the exercise of share purchase warrants, at an exercise price of $0.15, for total proceeds of $1,500,018.
b)
On February 23, 2012, the Company granted 18,001,926 restricted share purchase warrants pursuant to the agreement relating to the share capital increase of Soltera with Goldlake. Each warrant enables Goldlake to purchase two additional shares at a price of $0.15 per share for a period of two years.
c)
On June 15, 2011, the Company granted 1,999,100 restricted share purchase warrants pursuant to the agreement relating to the share capital increase of Soltera with Goldlake. Each warrant enables Goldlake to purchase two additional shares at a price of $0.15 per share for a period of two years.
The following table summarizes the continuity of the Companys share purchase warrants:
|
| Number of Shares Issuable for Warrants |
| Weighted Average Exercise Price |
Balance - October 31, 2010 |
| 6,957,557 |
| $ 0.14 |
Issued |
| 1,999,100 |
| 0.15 |
Balance - October 31, 2011 |
| 8,966,657 |
| 0.14 |
Issued |
| 18,001,926 |
| 0.15 |
Exercised |
| (10,000,121) |
| 0.15 |
Expired |
| (1,968,070) |
| 0.10 |
Balance - October 31, 2012 |
| 15,000,392 |
| $ 0.15 |
As at October 31, 2012, the Company has the following share purchase warrants outstanding:
Number of Shares Issuable for warrants |
| Exercise Price |
| Remaining Contractual Life |
| Expiry Date |
15,000,392 |
| $0.15 |
| 1.31 |
| February 22, 2014 |
12. COMMITMENTS AND CONTINGENCY
a)
On July 24, 2007, the Company entered into a management agreement with the President of the Company to provide management services in exchange for $8,500 per month. In addition, the Company committed to issuing 10% of the issued and outstanding common shares of the Company once the Company: (i) receives a bankable feasibility study on any group of mineral properties which the President of the Company is responsible for bringing to the Company; and (ii) sells any such properties before a bankable feasibility study is completed, provided that the President of the Company does not own more than 65% of the issued and outstanding common shares of the Company at any time. As at October 31, 2012 and 2011, the Company has not issued any common shares to the President of the Company with respect to the management agreement.
b)
In July 2010 the Company was served with a lawsuit by Ambrian Resources AG. Ambrian is suing Soltera for damages on the alleged grounds that Ambrian had negotiated and finalized a binding funding agreement with Soltera during the period April to June 2010 but instead Soltera chose to enter a financing agreement with another company (Goldlake). Ambrian also claims that Soltera used a strategy developed by Ambrian and used information provided by a South African mining engineer who visited the project at Ambrians expense. Ambrian is seeking damages in excess of $20 million dollars.
F-14
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
12. COMMITMENTS AND CONTINGENCY (continued)
Soltera denies all claims in the lawsuit and has retained a Nevada litigator to defend the action brought against it by Ambrian in the State of Nevada. Soltera is also seeking to have the lawsuit dismissed on the grounds that there was no binding agreement with Ambrian. The Company intends to continue to vigorously challenge and defend these claims.
The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. In the opinion of management, the resolution of these matters will not have a material effect on the Companys financial position or results of operations.
No future legal costs that may be incurred have been accrued as an expense and no loss or gain from any lawsuits and claims can be reasonably estimated or recorded at this time.
Subsequent to the year ended October 31, 2012, the lawsuit was dismissed in consideration of $nil.
13. INCOME TAXES
The Companys deferred income taxes reflect the net effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The Company is subject to U.S. federal and statement income tax and has concluded substantially all U.S. federal and state income tax matters for tax years through October 31, 2006. The tax filings for years from 2007 to 2012 are subject to be audited by U.S. jurisdictions. The Companys Argentinean subsidiary is subject to Argentinean income tax, the tax filing for years from 2007 to 2012 are subject to be audited by Argentinean jurisdictions.
The Companys potential deferred tax assets arise primarily from net operating loss carryovers. The Company has a net operating loss carry forward of $4,376,453 available to offset taxable income in future years which commence expiring in fiscal 2026. The Company has recorded a full valuation allowance for the deferred tax assets as the Companys ability to realize these benefits does not meet the more likely than not required criteria.
The Company is subject to United States federal and state income taxes at statutory rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Companys income tax expense as reported is as follows:
|
| October 31, 2012 $ |
| October 31, 2011 $ |
|
|
|
|
|
Income tax recovery at statutory rate |
| (405,703) |
| (176,078) |
|
|
|
|
|
Provision for other receivables |
| 43,374 |
| - |
|
|
|
|
|
Net operating loss expired |
| - |
| - |
|
|
|
|
|
Valuation allowance change |
| 362,329 |
| 176,078 |
|
|
|
|
|
Provision for income taxes |
| |
| |
The significant components of deferred income tax assets and liabilities at October 31, 2012 and 2011 are as follows:
F-15
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
13. INCOME TAXES (continued)
|
| October 31, 2012 $ |
| October 31, 2011 $ |
|
|
|
|
|
Net operating loss carryforward |
| 1,531,829 |
| 1,169,500 |
|
|
|
|
|
Valuation allowance |
| (1,531,829) |
| (1,169,500) |
|
|
|
|
|
Net deferred income tax asset |
| |
| |
14. FAIR VALUE MEASUREMENTS
ASC 820 requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
·
Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
·
Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
·
Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Companys financial instruments consist principally of cash, note receivable, accounts payable, due to related parties and note payable. Pursuant to ASC 820, the fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets.
Assets measured at fair value on a recurring basis were presented on the Companys balance sheet as of October 31, 2012, as follows:
| Fair Value Measurements Using | |||
| Quoted Prices | Significant |
|
|
| In Active Markets | Other | Significant | Balance as of |
| For Identical | Observable | Unobservable | October 31, |
| Instruments | Inputs | Inputs | 2012 |
| (Level 1) | (Level 2) | (Level 3) |
|
| $ | $ | $ | $ |
|
|
|
|
|
Cash | 685,712 | - | - | 685,712 |
|
|
|
|
|
Total assets measured at fair value | 685,712 | - | - | 685,712 |
F-16
Soltera Mining Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements as of October 31, 2012 and October 31, 2011
(Expressed in U.S. dollars)
15. SEGMENT DISCLOSURES
The Company operates in one reportable segment, being the acquisition and exploration of mineral properties. Segmented information has been compiled based on the geographic regions of the Company and its subsidiary. Assets by geographical segment as at October 31, 2011 and 2012, are as follows:
| United States | Argentina | Total |
| $ | $ | $ |
|
|
|
|
Current assets | 376,119 | 169,805 | 545,924 |
Mineral property | - | 450,000 | 450,000 |
Property and equipment, net | - | 123,147 | 123,147 |
|
|
|
|
Total assets, at October 31, 2011 | 376,119 | 742,952 | 1,119,071 |
Current assets | 695,792 | 19,164 | 714,956 |
Mineral property | - | 750,000 | 750,000 |
Property and equipment, net | - | 162,283 | 162,283 |
|
|
|
|
Total assets, at October 31, 2012 | 695,792 | 931,447 | 1,627,239 |
16. PROVISION FOR AMOUNTS RECEIVABLE
The provision for amounts receivable is a write down of the VAT sales tax receivable claimed in Argentina of $123,925 (2011: $nil) due to uncertainty in recovery. The VAT may be collected after the Company commences commercial mining production.
17. SUBSEQUENT EVENTS
a)
On April 3, 2013, the Company issued 999,670 restricted shares of common stock for the exercise of 999,670 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $149,951.
b)
On January 23, 2013, the lawsuit brought against the Company by Ambrian Resources AG in July 2010 (see Note 12b), was dismissed following a Stipulation and Order for Dismissal, which was entered by both parties, in which all outstanding claims were dismissed in consideration of $NIL.
c)
On November 26, 2012, the Company issued 1,333,333 restricted shares of common stock for the exercise of 1,333,333 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $200,000.
F-17
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Soltera Mining Corp. has caused this report to be signed on its behalf by the undersigned duly authorized person.
| SOLTERA MINING CORP. |
|
|
|
|
Dated: December 23, 2013 | By: /s/ Fabio Montanari |
| Name: Fabio Montanari |
| Title: Director, CEO, and CFO |
| (Principal Executive Officer and |
| Principal Financial Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of Soltera Mining Corp. and in the capacities and on the dates indicated have signed this report below.
Signature | Title | Date |
/s/ Fabio Montanari | President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Treasurer, Corporate Secretary, Principal Financial Officer, Principal Accounting Officer, and Member of the Board of Directors | December 23, 2013 |
|
|
|
/s/ Dr. Kevan Ashworth | Member of the Board of Directors | December 23, 2013 |
|
|
|
/s/ Dr. Stefano Capaccioli | Member of the Board of Directors | December 23, 2013 |
|
|
|
/s/ Alessandro Murroni | Member of the Board of Directors | December 23, 2013 |
|
|
|
/s/ Arnaldo Massini | Member of the Board of Directors | December 23, 2013 |
5