Item 1.
Business
We are primarily engaged in acquiring mineral assets and applying green innovation to traditional mining methods and combining renewable energy and technology into the process.
Overview
We were incorporated in the State of Nevada on July 21, 2005, under the name “Nava Resources, Inc.” for the purpose of conducting mineral exploration activities. We were authorized to issue 400,000,000 shares of common stock, having a par value of $0.001 per share. On January 4, 2007, we obtained written consent from our shareholders to amend our Articles of Incorporation to change the par value of our common stock from $0.001 to $0.00001 per share, which change was effected on February 28, 2007. Effective July 30, 2013, we changed our name from “Nava Resources, Inc.” to “Blox Inc.”.
Description of Property
Mansounia Property, Guinea, West Africa
On August 6, 2014, we announced that we entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 (the "Assumption Agreement") with Joseph Boampong Memorial Institute Ltd. ("JBMIL") and Equus Mining Ltd. ("EML"), Burey Gold Guinee sarl ("BGGs") and Burey Gold Limited ("BGL") and, collectively with EML and BGGs, (the "Vendors"), pursuant to which we agreed to assume JBMIL's right to acquire a 78% beneficial interest in the Mansounia Concession (the "Mansounia Property") from the Vendors, which right was exercised.
The Mansounia Property lies in the southwest margin of the Siguiri Basin, in the Kouroussa Prefecture, Kankan Region, in Guinea, West Africa and covers a surface area of 145 square kilometres. The Mansounia Property is located approximately 80 kilometres west, by road, from the country's third largest city, Kankan. The Mansounia Property has a mineral resource estimate of 1.29Moz above a 0.4 g/t Au cut-off grade classified as indicated and inferred (reported by Runge Limited in accordance with the JORC guidelines and code for the Reporting or Mineral Resource Estimates, 2011). The total concession covers an area of 145km2 and is largely unexplored.
An exploration permit for the Mansounia Property was granted by the Ministère des Mines et de la Géologie on August 20, 2013. On October 25, 2016, an exploration permit extension was granted for a period of 12-months. The purpose of the extension was to provide time to complete the required feasibility study and environmental impact assessment that will be submitted to Ministre des Mines et de la Géologie and the La Ministre de l’Environnement, des Eaux et Forêts. Work has commenced on the feasibility study and a consultant has been engaged to prepare the environmental impact assessment. It is our intention to obtain an exploitation permit, which would give us the exclusive right to mine and dispose of minerals for 15 years, with a possible five-year extension. In February 2017, our directors and management teams from Vancouver and Guinea met in Accra, Ghana, to further the process of advancing a project viability study for the Mansounia Property. The environmental impact assessment of the concession is in progress. Once completed, the results of these two studies will be presented to the Guinea Ministry of Mines and Geology and the Environmental Protection Agency in Guinea, with a view to advancing towards an exploitation license. In December of 2017, the exploration license was extended yet again for 12-months. It is anticipated that by the end of October 2018 all the necessary documentation and paperwork will be submitted to the Ministère des Mines et de la Géologie to support our application for a mining license at the Mansounia Gold Project. In May 2018, Blox Guinea, SARL was set up in Guinea, under Blox Minerals (USA) as a parent company for our operations in Guinea. At the beginning of June 2018, the process to establish Mansounia Gold Company, SARL was initiated and this will ultimately be the vehicle that the mining license is passed into, once granted. At that time Mansounia Gold Company, SARL will have shared ownership: Blox Minerals 78%; In-Country Partner 7% and the Guinea Government 15%.
In consideration for the acquisition of the interest in the Mansounia Property, we paid $100,000 to BGL and $40,000 to EML and on July 31, 2014, issued BGL and EML an aggregate of 6,514,350 shares of common stock of our company (the "First Tranche Shares"), at a deemed price of $0.1765 per share, for an aggregate deemed value of $1,150,000. The First Tranche Shares were issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively. For accounting purposes, we recorded the cash payment of $150,000 plus $781,722 as the fair value of the First Tranche Shares in mineral interest. The fair value of the First Tranche Shares was based on the closing price of our shares on the OTCQB on July 24, 2014.
Within 14 days of commercial gold production being publicly declared from ore mined from the Mansounia Property, we will issue BGL and EML a second tranche of shares of our common stock (the "Second Tranche Shares"). The number of Second Tranche Shares to be issued shall be calculated by dividing $1,150,000 by the volume weighted average share price of our common stock over a 20-day period preceding the issuance date. The Second Tranche Shares shall be issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively.
In July 2017, we announced the completion of field activities associated with a detailed Environmental and Social Impact Assessment (ESIA), which concludes a significant stage toward obtaining a Mining License for the Mansounia Gold Project in Guinea.
The ESIA document is used to communicate and discuss details of the project to all stakeholders, including government departments, environmental and other regulators, local communities as well as current and prospective shareholders. Apart from assessing the project's environmental impact, the document also covers risk mitigation and potential benefits to local residents. The ESIA is the beginning of an ongoing process of involvement on all social and environmental fronts.
We engaged the internationally credentialed SAMEC (Security Africa Mining and Environmental Consulting) based in Conakry, to undertake the field-associated aspects of the ESIA program, which included - but was not limited to - addressing the following aspects:
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Physical environment.
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Biological environment.
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Characterization of flora and fauna.
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Characterization of aquatic species.
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Characterization of habitat critical for ecological processes.
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Inventories:
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Botanical inventory.
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Inventory of mammals.
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Inventory of birds.
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Herpetological inventory.
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Inventory of ants.
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Ecological study of freshwater.
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Fish sampling.
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Freshwater macroinvertebrates.
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Social and Environmental Aspects:
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Issues of the project.
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Consultation of stakeholders.
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Identification and analysis of the impacts of the project.
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Proposal of mitigation of environmental impacts.
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Management of risks and accidents.
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Development of an environmental and social management plan (ESMP).
Based on the highly encouraging results obtained from historical soils geochemical programs and in-line with recent desktop and field studies undertaken by Spiers Geological Consultants (SGC 2016), a number of key target areas were identified for follow-up field activities. Our understanding of the deposit and surrounding areas continues to grow with each field season, and, to date, robust geological and structural context for the area/s have been developed using modelling software. The model is based on, and continually refined, using the pre-existing regional geochemical soil and rock chip sampling and drill-hole data from the Mansounia Property area. Further funding is required to explore these new target areas, which is now a priority for management.
We retained the consulting group, Scott-Taylor Ltd., to undertake a thorough site visit as part of the process of further examining the
economic potential of the Mansounia Property. Scott-Taylor Ltd. undertook a field visit to the Mansounia Property to focus on areas where significant outcrops exist, in addition to the verification of collar locations for selected previously drilled RC and Diamond holes.
The deep weathering and extensive lateritic cover has resulted in limited outcrop of Birimian lithologies within the project area. Reconnaissance mapping located outcrops of weathered brecciated granitoid, volcano sedimentary and metasedimentary lithologies. A number of outcrops with extensive quartz veining were identified, particularly within the brecciated granitoid and were sampled.
Previous structural analysis has identified a number of target areas for further exploration. The rock chip samples reported in this new release are located with target area 5, as shown below.
Mansounia Project: Current target areas.
In total, 15 samples were collected for assays during the field visit. Four samples returned gold grades from 0.49g/t to 3.04g/t are shown below.
The most encouraging aspect of the assay results from the outcrop samples is the fact that these samples are located approximately five kilometers south of the Mansounia resource area and indicate that gold mineralization occurs to the south of the currently identified Mansounia deposit. These outcrop sampling assays are very encouraging and warrant further exploration to unlock the full potential of the Mansounia license area.
A program to commence auger drilling and regolith mapping proximal to the currently drilled Mansounia resource, including the area where the rock chip samples were collected, was in the process of being carried out at the time this report was being compiled. No results are available at this time. In the event of positive results from the auger drilling program, it is anticipated that RC and Aircore drilling will then be carried out to follow up any identified geochemical anomalies identified by the auger drilling program.
Pramkese, Osenase and Asamankese, Ghana, West Africa
On June 22, 2013, we entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) whereby we agreed to purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, we agreed to issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah, owns and operates gold and diamond mining properties in Ghana.
The closing of the agreement was subject to the completion of a private placement financing of up to US$1,500,000, which private placement was completed in April 2018. We issued 30,000,000 units (the “Units”) at a price of US$0.05 per unit for aggregate gross proceeds of US$1,500,000. US$1,100,000 of the proceeds were advanced as non-interest bearing loans since 2014 and were utilized to cover general and administrative expenses, as well as to carry out exploration work on our mineral properties. The remaining balance of US$400,000 was received by April 2018. Each Unit consists of one common share and one share purchase warrant entitling the holder thereof to purchase one additional common share at a price of $0.05 per share for a term of five years from the date of issuance.
Closing the Agreement is also conditional upon receiving legal opinions of Ghana counsel confirming various matters relating to the laws of Ghana, including corporate and title opinions; the Company receiving legal opinions of Australian counsel confirming various matters relating to the laws of Australia, including corporate and title opinions; completion of certain ongoing transactions by Quivira relating to the transfer of title to certain assets and to an assignment of debt; and preparation of U.S. GAAP consolidated financial statements for Quivira.
Our directors conducted their first visit to Ghana in August 2015, when they visited the Birim Region where the three Ghanaian concessions are located. The objective was to carry out a geological reconnaissance over the areas to identify potentially favourable lithologies. The directors inspected the existing field programs in Ghana and oversaw the planning and implementation of programs for the near future.
Ashanti Sankofa Inc.
In April 2018, we entered into a Strategic Alliance Agreement with Ashanti Sankofa Inc., a TSX Venture Exchange listed company trading under the symbol “ASI” (“Ashanti”). Pursuant to the terms of the Strategic Alliance Agreement both parties have agreed to grant to the other party a right of first refusal to enter into a joint venture on any of their respective properties and/or projects and that any future acquisition of natural resource properties that may be acquired by either party that contains, but is not limited to, gold, precious metals, technology metals or diamonds (“Natural Resource Properties”), the acquiring party will grant to the other party a right of first refusal to participate in a joint venture on such Natural Resource Property, which shall be at the sole discretion of the acquiring party.
As part of our strategic alliance with Ashanti, we agreed to collaborate to explore and develop natural resource properties in West Africa, to undertake joint research projects and to consider joint commercial exploitation of any new property or project that may be acquired resulting from their joint research.
The strategic alliance with Ashanti will allow us to make our respective technical expertise in the field of exploration, exploitation and management of natural resources available to the other party.
In connection with the strategic alliance with Ashanti, we acquired by way of a private placement transaction, a total of 4,333,333 units in the capital stock of Ashanti for a total cost of CAD$130,000, with each unit consisting of one common share (the “Share”) and one transferable share purchase warrant (the “Warrant”) exercisable for a term of two-years at a price of CAD$0.05 per share.
Research and Development Activities
In addition to activities associated with the Mansounia Project, we have been involved with research and development studies relating to the other key pillars of the business, namely: technology, energy and expansion in Africa. Management is keen to develop new businesses in these key areas as they form part of our overall mandate. Diversifying into new (non-mining) markets, such as energy and technology, and expanding our presence in Africa offers a range of potential benefits. It is the opinion of management that establishing
new revenue streams in several arenas will not only benefit our company as a whole but will also help insulate it from fluctuations in the price of precious metals.
We are currently working closely with strategic partners to develop our own, in-house tenement management software system to provide semi-automated, accurate, timely and compliant reporting on our four mining concessions in West Africa. As part of the Quivira Gold acquisition that also included Strategic Marketing Australia and the bespoke ERP software system, Abacus, we also have the right to acquire a 49% interest in Post One, an electronic document transfer system. Although Post One is still in the research and development stage, management believes that it has the potential to fill a gap in the manner in which professionals exchange sensitive and notarised documents and could create a potential future income stream for the Company.
Since inception, we have been committed to greening the mining process through the utilisation of new, clean and sustainable technologies. Our aim is to significantly reduce the carbon emissions from any future mining operations, where possible and efficacious, to produce ‘green gold’ and market it as such. Initially, this can be partially achieved with the use of alternative energy sources at the mine site and camp. Guinea is the watershed of West Africa and we plan to work with experts to explore the option of investing in hydro-electric power for our Mansounia Property, to initially replace part, and ultimately all, of the conventional diesel power generation or coal-fired grid power that will be utilised in our future operations.
Green or small-scale hydropower is deemed in the USA to be a plant that generates less than 30MW. Hydropower utilizes moving water to generate electricity and has been used - particularly in isolated areas - for many decades. Small-scale hydropower systems can be installed in small rivers, streams or in the existing water supply networks. As opposed to large-scale hydropower systems, small-scale hydropower can be installed with negligible environmental impact on existing ecosystems.
In the first instance, we will aim to supply approximately 2.5MW to satisfy the demand of the initial power requirements of the project. With additional funding, it may be possible to scale this up to 10MW to allow for expansion of our production. A 20MW hydroelectric power plant would offer the potential to sell excess power (surplus to mine requirements) into the Guinean power grid and return an additional income to our company. A scoping study to examine the opportunities for small-scale hydropower around Mansounia will be commenced in the near future.
We also have a strong commitment to wealth creation, prosperity and education for locals within the catchment areas of our concessions both in Guinea and Ghana. Part of our mandate includes:
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providing education and training to allow locals to gain employment on our future mine sites;
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offering English language and mathematics courses;
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providing additional infrastructure such as housing, roads and energy where possible, in accordance with our sustainability goals; and
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implementing the United Nations’ 17 goals for Sustainable Development and Growth (UN17 SDG) across all our projects for the benefit of locals and as examples of how green, responsible mining can be carried out.
Geological and Technical Consultants
Daniel Amoakoh, is a member of the American Institute of Professional Geologists and the Society for Mining, Metallurgy and Exploration. Mr. Amoakoh has more than 5-years’ experience relevant to the style of mineralization and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined by the NI 43-101. Daniel Amoakoh is a consulting geologist to our company.
We have also retained qualified persons on a contract basis as needed to assist us with our exploration activities, including the survey, exploration, excavation of any mineral property we may acquire.
Competitive Conditions
The mineral exploration business is an extremely competitive industry. We are competing with many other exploration companies looking for minerals. We are a very early stage mineral exploration company and a very small participant in the mineral exploration business. Being a junior mineral exploration company, we compete with other companies like ours for financing and joint venture partners. Additionally, we compete for resources such as professional geologists, camp staff, helicopters and mineral exploration supplies.
Government Approvals and Recommendations
Mining operations and exploration activities are subject to various national and local laws and regulations in West Africa, which govern prospecting, development, exploitation, production, export, taxes, labour standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We intend to secure all necessary permits for the Mansounia Property.
Our activities are also subject to various federal and state/provincial laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. We intend to conduct business with a view to safeguarding public health and the environment and operating in compliance with applicable laws and regulations. We will generally be required to mitigate long-term environmental impacts by stabilizing, contouring, resloping and revegetating various portions of a site after mining operations are completed. These reclamation efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies. Changes to current l laws and regulations in West Africa could in the future require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.
Guinea’s National Transition Council (CTN) amended its mining code in April 2013, in an effort to improve its investment record. The amendments brought profit taxes down to 30 percent, and cut the tax on bauxite to 0.15 percent of the international market price for aluminum. However, the new version still contains the controversial clause, which grants the government a free 15-percent stake in mining projects, as well as the option of purchasing an additional 20 percent stake. The clause is designed to encourage companies to process raw materials inside the sovereign’s borders, rather than just shipping the ore out. The state’s stake in the projects is said to shrink as the portion of value added inside the country’s borders increases.
Under the new mining code, an industrial exploitation or operating permit will be granted for 15 years. It can be renewed for five-year periods, provided the holder of the title complies with its obligations. Upon non-commencement of work within a year of the issuance of an exploitation permit for industrial operations, the previous monthly fine of GNF5m has been revised to GNF10m, imposed for the first three months, with a monthly increase of 10 percent of the penalty amount thereafter.
Mining convention: The granting of a mining concession and an exploitation permit must be accompanied by the mining convention. The maximum duration of a mining convention is 25 years, renewable for one or several periods of 10 years. Mining conventions are subject to an executive order and will be signed by the Minister of Mines, following the advice of the National Mining Committee and the authorization of the Council of Ministers. Mining conventions will then be submitted for the legal opinion of the Supreme Court and ratified by Parliament.
Costs and Effects of Compliance with Environmental Laws
Although we currently have no costs to comply with environmental laws concerning our mineral property, we will have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to a natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused, i.e. refilling trenches after sampling or cleaning up fuel spills. At this time, we do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground. The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake. Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.
Employees
We currently have no employees. Our officers and directors provide consulting services to us on a part time basis. We intend to retain the services of geologists, prospectors and consultants on a contract basis to conduct the exploration programs on our mineral claims and to assist with regulatory compliance and preparation of financial statements.
Item 1A.
Item 1A.
Risk Factors
Much of the information included in this annual report on Form 10-K includes, or is based upon, estimates, projections or other forward-looking statements. Forward-looking statements are statements that relate to future events or future financial performance. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include any projections and estimates made by our management in connection with our business operations. These statements speak only as of the date of this overview. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements.
The material risks and uncertainties that may affect our forward-looking statements include, among other things: (1) our ability to obtain any necessary financing on acceptable terms; (2) timing and amount of capital expenditures; (3) timely receipt of regulatory approvals; (4) our management team’s ability to implement our business plan; (5) effects of government regulation; (6) general economic and financial market conditions; and (8) other factors beyond our control.
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this report in evaluating our company and our business, before purchasing shares of our common stock. Additional risks not presently known to us may also impair our business operations. You could lose all or part of your investment due to any of these risks.
Risks Relating to Our Company
Our auditors have expressed doubt about our ability to continue as a going concern.
Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred a net loss and comprehensive loss of $1,489,775 and $439,563 for the years ended March 31, 2018 and March 31, 2017, respectively, and have incurred cumulative losses since inception of $10,854,427 as of March 31, 2018. These factors raise substantial doubt about our ability to continue as going concern. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital.
Our ability to continue as a going concern is dependent on our ability to continue obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations. We will need to raise additional funds to finance continuing operations. However, there are no assurances that we will be successful in raising additional funds. Without sufficient additional financing, it would be unlikely for us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in this annual report and eventually secure other sources of financing and attain profitable operations.
We will require additional funds which we plan to raise through the sale of our common stock, which requires favorable market conditions and interest in our activities by investors. We may not be able to sell our common stock and funding may not be available for continued operations.
Our ability to continue is dependent on our ability to raise additional capital and our operations could be curtailed if we are unable to obtain required additional funding when needed. We have a working capital deficit of $127,529 as of March 31, 2018 (March 31, 2017 - $70,961) and we do not have sufficient funds to complete any work on the Mansounia Property. Subsequent exploration activities will require additional funding. Our only present means of funding is through the sale of our common stock and shareholder loans. The sale of common stock requires favorable market conditions for junior exploration companies like ours, as well as specific interest in our stock, neither of which may exist. If we are unable to raise additional funds in the future, we may have to cease our operations.
Our exploration activities are highly speculative and involve substantial risks.
Our Mansounia Property is in the exploration stage and no proven mineral reserves have been established. Our exploration work may not result in the discovery of mineable deposits of ore in a commercially economical manner. There may be limited availability of water, which is essential to milling operations, and interruptions may be caused by adverse weather conditions. Our future operations, if any, are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls.
We have uninsurable risks.
We may be subject to unforeseen hazards such as unusual or unexpected formations and other conditions. We may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
We depend on consultants and engineers for our exploration programs.
We have relied on and will continue to rely upon consultants for exploration development, construction and operating expertise. Substantial expenditures are required to construct mines, to establish ore reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the exploration infrastructure at any site chosen for exploration. We may not be able to discover minerals in sufficient quantities to justify commercial operation, and we may not be able to obtain funds required for exploration on a timely basis.
We may not have clear title to our property.
Acquisition of title to mineral properties is a very detailed and time-consuming process, and our title to our properties may be affected by prior unregistered agreements or transfers, or undetected defects. There is a risk that we may not have clear title to its mineral property interests, or they may be subject to challenge or impugned in the future.
Mining exploration, development and operating activities are inherently hazardous.
If we experience mining accidents or other adverse conditions, our mining operations could be materially adversely affected. Our exploration activities may be interrupted by any or all of the following mining accidents such as cave-ins, rock falls, rock bursts, pit wall failures, fires or flooding. In addition, exploration activities may be reduced if unfavorable weather conditions, ground conditions or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment, dilution increases or electrical power is interrupted. Occurrences of this nature and other accidents, adverse conditions or operational problems in future years may result in our failure to achieve current or future exploration and production estimates.
Due to the speculative nature of mineral property exploration, there is substantial risk that no commercially viable mineral deposits will be found on our Mansounia Property or other mineral properties that we may acquire.
In order for us to even commence mining operations we face a number of challenges which include finding qualified professionals to conduct our exploration program, obtaining adequate financing to continue our exploration program, locating a viable mineral body, partnering with a senior mining company, obtaining mining and exploitation permits, and ultimately selling minerals in order to generate revenue. Moreover, exploration for commercially viable mineral deposits is highly speculative in nature and involves substantial risk that no viable mineral deposits will be located on any of our present or future mineral properties. There is a substantial risk that the exploration program that we will conduct on the Mansounia Property may not result in the discovery of any significant mineralization, and therefore no commercially viable mineral deposit. There are numerous geological features that we may encounter that would limit our ability to locate mineralization or that could interfere with our exploration programs as planned, resulting in unsuccessful exploration efforts. In such a case, we may incur significant costs associated with an exploration program, without any benefit. This would likely result in a decrease in the value of our common stock.
Due to the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.
The search for minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or may elect not to insure. We currently have no such insurance nor do we
expect to obtain such insurance for the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets and cease operations, resulting in the loss of your entire investment.
The market price for precious metals is based on numerous factors outside of our control. There is a risk that the market price for precious metals will significantly decrease, which will make it difficult for us to fund further mineral exploration activities, and would decrease the probability that any significant mineralization that we locate can be economically extracted.
Numerous factors beyond our control may affect the marketability of minerals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital and you may lose your entire investment in our company.
Changes in the exchange rates between the United States dollar and foreign currencies may be volatile and may negatively impact our costs, which in turn could adversely affect our operating results.
When operating in foreign countries, such as Canada and Africa, we expect to incur a certain amount of our expenses from our operations in foreign currency and translate these amounts into United States dollars for purposes of reporting operating results. As a result, fluctuations in foreign currency exchange rates may adversely affect our expenses and results of operations, as well as the value of our assets and liabilities. Fluctuations may adversely affect the comparability of period-to-period results. In addition, we anticipate holding foreign currency balances, which will create foreign exchange gains or losses, depending upon the relative values of the foreign currency at the beginning and end of the reporting period, which may affect our net income and earnings per share. Although we may use hedging techniques in the future (which we currently do not use), we may not be able to eliminate the effects of currency fluctuations. Thus, exchange rate fluctuations could have a material adverse impact on our operating results and stock price.
Since the majority of our shares of common stock are owned by one significant stockholder our other stockholders may not be able to influence control of our company or decision making by our management.
One significant shareholder beneficially owns approximately 57% of our outstanding common stock. The interests of this stockholder may not be, at all times, the same as that of our other shareholders. This significant shareholder will have the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including our merger with or into another company, the sale of all or substantially all of our assets and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of our company, which may be disadvantageous to minority shareholders.
Since our directors and officers have the ability to be employed by or consult for other companies, their other activities could slow down our operations.
Our directors and officers may work with other mineral exploration companies. They are not required to work exclusively for us and do not devote all of their time to our operations. Therefore, it is possible that a conflict of interest with regard to their time may arise based on their employment by other companies. Their other activities may prevent them from devoting full-time to our operations which could slow our operations and may reduce our financial results because of the slowdown in operations. It is expected that our directors and officers will devote between 10 and 20 hours per week to our operations on an ongoing basis, and when required will devote whole days and even multiple days at a stretch when property visits are required or when extensive analysis of information is needed. We do not have any written procedures in place to address conflicts of interest that may arise between our business and the business activities of our directors and officers.
Because our directors and officers may work for other companies engaged in mineral exploration, a potential conflict of interest could negatively impact our ability to acquire properties to explore and to run our business.
Our directors and officers may work for other mining and mineral exploration companies. Due to time demands placed on them and due to the competitive nature of the exploration business, the potential exists for conflicts of interest to occur from time to time that could adversely affect our ability to conduct our business. Their employment with other entities in addition to limiting the amount of time they can dedicate to us as a director or officer, may present a conflict of interest in helping us identify and obtain the rights to mineral properties and as to other business opportunities because they may also be considering the same properties or opportunities for other companies they may work or consult for.
Damage to the environment could result from our operations. If our business is involved in one or more of these hazards, we may be subject to claims of a significant size which could force us to cease our operations.
Mineral resource exploration, production and related operations are subject to extensive rules and regulations. Failure to comply with these rules and regulations can result in substantial penalties. Our cost of doing business may be affected by the regulatory burden on the mineral industry since the rules and regulations frequently are amended or interpreted. We cannot predict the future cost or impact of complying with these laws.
Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulation could expand and have a greater impact on future mineral exploration operations. Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the cost of which could harm our results of operations. We cannot be sure that our proposed business operations will not violate environmental laws in the future.
We are subject to extensive regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. We will also have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work. Other potential pollution or damage must be cleaned and renewed. Our initial programs do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground. The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake, beyond completion of the recommended phases. Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.
Risks Relating to Our Common Stock
Since public trading in our common stock is limited and sporadic, there can be no assurance that our stockholders will be able to liquidate their holdings of our common stock.
Our common stock price is currently quoted on the OTCQB under the symbol “BLXX”. However, trading has been limited and sporadic and we can provide no assurance that the market for our common stock will be sustained. We cannot guarantee that any stockholder will find a willing buyer for our common stock at any price, much less a price that will result in realizing a profit on an investment in our shares. There may be limited opportunity for stockholders to liquidate any of their holdings in common stock of our company. Trading volume may be insignificant and stockholders may be forced to hold their investment in our shares for an extended period of time. The lack of liquidity may also cause stockholders to lose part or all of their investment in our common stock.
Since public trading in our common stock is limited and sporadic, the market price of our common stock may be subject to wide fluctuations.
There is currently a limited public market for our common stock and we can provide no assurance that the market for our common stock will be sustained. If a market is sustained, however, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, including:
·
actual or anticipated variations in our results of operations;
·
our ability or inability to generate revenues;
·
increased competition; and
·
conditions and trends in the mining industry.
Further, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations, may adversely affect the market price of our common stock.
Our common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Under U.S. federal securities legislation, our common stock will constitute “penny stock”. Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or dealer
receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.
We may, in the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.
Our Articles of Incorporation authorize the issuance of 400,000,000 shares of common stock. As of June 28, 2018, we had 138,611,814 shares of common stock outstanding. Accordingly, we may issue up to an additional 261,388,186 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of our common stock.
Secondary trading in our common stock will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or an exemption from registration is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of our common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.
Our company is subject to Multilateral Instrument 51-105 as adopted by all jurisdictions in Canada except the Province of Ontario which, among other things, imposes certain resale restrictions and legending requirements on our shares.
As a reporting issuer in the Province of British Columbia, our company is subject to Multilateral Instrument 51-105 which regulates companies with certain connections to any jurisdiction in Canada other than the Province of Ontario that have a class of securities that has been assigned a ticker symbol by the Financial Industry Regulatory Authority in the United States for use on any of the over-the-counter markets in the United States and includes a class of securities whose trades have been reported in the grey market. In addition to disclosure and reporting obligations required under MI 51-105, the instrument imposes certain resale requirements of private placement securities acquired after the ticker-symbol date including the following:
·
a four month period has passed from the date of distribution of the security (unless the person is a control person of the issuer in which case the person must hold the security for a period of at least 6 months);
·
the number of securities the person proposed to trade, plus the number of securities of the same class that the person has traded in the prior 12 months does not exceed 5% of the issuer’s outstanding securities of the same class;
·
the person trades the securities through an investment dealer registered in a jurisdiction in Canada;
·
the investment dealer executes the trade through any of the over-the-counter markets in the United States; and
·
the certificate representing the security bears a legend which states that the holder must not trade the securities of the issuer unless the conditions in Section 13 of MI 51-105 are met.
As a result, it may be difficult for our shareholders to resell their securities and may result in reducing demand for our shares and reduced trading activity of our stock.
Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.
Item 1B.
Item 1B.
Unresolved staff comments
None.
Item 2.
Item 2.
Properties
We do not own any real estate or other property used in the operation of our current business. Our principal executive offices are located at #202, 5626 Larch Street, Vancouver, British Columbia, Canada V6M 4E1. We are utilizing the corporate office of our Corporate Secretary at no cost to our company. We believe that this space is sufficient until we are able to generate significant revenues, if at all, and hire more employees.
We do not have any ownership or lease interests in any property other than our mineral property interests described above in Item 1.
Item 3.
Item 3.
Legal Proceedings
There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of our company, or any owner of record or beneficially of more than 5% of any class of voting securities of our company is a party adverse to us or has a material interest adverse to our company. Our property is not the subject of any pending legal proceedings.
Item 4.
Item 4.
Mine Safety Disclosures
Not applicable.
PART II
Item 5.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Quotation of our shares of common stock on the OTCQB was approved on July 18, 2008 under the symbol “NAVA”. On July 31, 2013, our quotation symbol on the OTCQB changed to “BLXX”, to reflect our name change to “Blox Inc.”. The following table sets forth the high and low bid prices of our common stock for our fiscal years ended March 31, 2018 and March 31, 2017 as reported on the OTCQB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Set forth below are the range of high and low bid quotations for the periods indicated as reported by the OTC Bulletin Board. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.
On June 27, 2018, the price of our common stock as reported by the OTCQB was $0.1621 per share.
Transfer Agent
Our shares of common stock are issued in registered form. The transfer agent and registrar for our common shares is Computershare Trust Company, 510 Burrard Street, 2nd Floor, Vancouver, British Columbia V6C 3B9, Tel: 604-661-9400, Fax: 604-661-9549.
Holders of Common Stock
As of June 28, 2018, we had 138,611,814 shares of our common stock issued and outstanding held by 42 holders of record.
Dividends
The payment of dividends, if any, in the future, rests within the sole discretion of our board of directors. The payment of dividends will depend upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. We have not declared any cash dividends since our inception and have no present intention of paying any cash dividends on our common stock in the foreseeable future.
There are no restrictions in our articles of incorporation or bylaws, nor are we subject to any contractual restrictions, that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1.
We would not be able to pay our debts as they become due in the usual course of business; or
2.
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
Securities Authorized Under Equity Compensation Plans
The following table summarizes certain information regarding our equity compensation plans as of March 31, 2018.
On February 27, 2014, our board of directors adopted a new Stock Option Plan (the “Plan”). The Plan provides for the grant of incentive stock options to purchase shares of our common stock to our directors, officers, employees and consultants. The Plan is administered by our board of directors, except that it may, in its discretion, delegate such responsibility to a committee comprised of at least two directors. A maximum of 10,000,000 shares are reserved and set aside for issuance under the Plan. Each option, upon its exercise, entitles the optionee to acquire one share of our common stock, upon payment of the applicable exercise price. The exercise price will be determined by the board of directors at the time of grant. Stock options may be granted under the Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the Plan.
Recent Sales of Unregistered Securities
Since the beginning of our fiscal year ended March 31, 2018, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 6.
Item 6.
Selected Financial Data
Not applicable.
Item 7.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report on Form 10-K.
Overview
We were incorporated in the State of Nevada on July 21, 2005 and are engaged in the exploration of early-stage mineral properties. On August 6, 2014, we announced that we entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 with Joseph Boampong Memorial Institute Ltd. and Equus Mining Ltd., Burey Gold Guinee sarl and Burey Gold Limited and, collectively with EML and BGGs, pursuant to which we agreed to assume JBMIL's right to acquire a 78% beneficial interest in the Mansounia Concession. We also announced that we had exercised that right and had acquired a 78% beneficial interest in the Mansounia Property.
Plan of Operation
Our plan of operation for the next twelve months is to commence a feasibility study on our Mansounia Property in order to obtain an exploitation permit, which management anticipates will allow us the exclusive right to mine and dispose of minerals for fifteen years, with a possible five year extension, subject to our obtaining the necessary funding.
In the coming year, we also plan to initiate exploration programs for our three concessions in the Birim Region of Ghana. In particular, our Osenase tenement, which shares a boundary with GCD - a company that has produced millions of carats of diamonds. Systematic exploration at Osenase by Cornucopia in the 1990s showed massive meta-ultramafic occurs in several horizons from which GCD have already produced diamonds. Diamonds from the bulk samples at several site streams contained diamonds that have been reported by Kaminsky 1996 to have been derived from a nearby bedrock source. The diamonds are of large size and have surface features that are easily removed by transport.
Going Concern
Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. As of March 31, 2018, we had an accumulated deficit of $10,854,427. Our ability to continue as a going concern is dependent on our ability to continue obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations.
We will need to raise additional funds to finance continuing operations. However, there are no assurances that we will be successful in raising additional funds. Without sufficient additional financing, it would be unlikely for us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in this annual report and eventually secure other sources of financing and attain profitable operations.
Results of Operations
Years Ended March 31, 2018 and 2017
The following summary of our results of operations should be read in conjunction with our audited consolidated financial statements for the years ended March 31, 2018 and 2017 which are included herein.
Expenses
Our operating expenses were as follows:
We incurred a net loss of $1,489,775 ($0.01 per share) for the year ended March 31, 2018 (“Fiscal 2018”), compared to $439,563 ($0.00 loss per share) for the year ended March 31, 2017 (“Fiscal 2017”). The following is a breakdown of the operating expenses during Fiscal 2018, compared to Fiscal 2017: consulting and professional fees decreased slight from $367,750 in Fiscal 2017 to $328,171 in Fiscal 2018; office and administration expenses likewise decreased slight from $37,298 in Fiscal 2017 to $30,095 in Fiscal 2018; stock based compensation of $878,944 in Fiscal 2018, compared to $Nil for Fiscal 2017; foreign exchange increased from ($10,863) for Fiscal 2017 top $56,827 in Fiscal 2018; travel costs were significantly reduced from $29,009 in Fiscal 2017 to $11,820 in Fiscal 2018; and the most significant increase was explorations costs, which were $70,600 for Fiscal 2017, compared to $196,567 in Fiscal 2018 due to increased activity on the Mansounia Property.
Management anticipates operating expenses will materially increase in future periods as we focus on green mineral development and
incur the associated costs as a result of carrying out work on our Mansounia Property.
Liquidity and Capital Resources
Working Capital
Current Assets
The increase in current assets as of March 31, 2018 compared to March 31, 2017 was primarily due to an increase in cash of $14,396.
Current Liabilities
Current liabilities as at March 31, 2018 increased by $69,582 due to a modest increase in accounts payable and accrued liabilities and a shareholder loan from a significant shareholder in the sum of $56,200.
Cash Flow
Our cash flow for the years ended March 31, 2018 and 2017 was as follows:
Operating activities
The increase in net cash used in operating activities from Fiscal 2017 to Fiscal 2018 was primarily as a result of increased activity related to the Mansounia Property and foreign exchange.
Financing activities
The increased net cash provided by financing activities for Fiscal 2018 compared to Fiscal 2017 was mainly attributable to proceeds from a loan provided by a shareholder.
Critical Accounting Policies
(i)
Determination of functional currencies
In determining our functional currency, we periodically review our primary and secondary indicators to assess the primary economic environment in which we operate in determining our functional currencies. We analyze the currency that mainly influences labor, material and other costs of providing goods or services which is often the currency in which such costs are denominated and settled. We also analyze secondary indicators such as the currency in which funds from financing activities such as equity issuances are generated and the funding dependency of the parent company whose predominant transactional currency is the Canadian dollar. Determining our predominant economic environment requires significant judgment.
(ii)
Going Concern
Our consolidated financial statements have been prepared on a going concern basis, which implies we will continue to realize our assets and discharge our liabilities in the normal course of business. We have incurred a net and comprehensive loss of $1,469,472 and $439,563 for the years ended March 31, 2018 and March 31, 2017, respectively, and have incurred cumulative losses since inception of $10,854,427 as at March 31, 2018. These factors raise substantial doubt about the ability of our company to continue as a going concern. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain the necessary debt and/or equity financing to continue operations. Our 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 we be unable to continue as a going concern. Management of our company has undertaken steps as part of a plan to sustain operations for the next fiscal year, including plans to raise additional equity financing, control costs and reduce operating losses.
Cash Requirements
Our current cash position is not sufficient to meet our present and near-term cash needs. We will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements. For the next 12 months we estimate that our capital needs will be $250,000 to $500,000 and we currently have approximately $28,481 in cash. We will seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.
Contractual Obligations
Not applicable.
Item 7A.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8.
Item 8.
Financial Statements and Supplementary Data
Blox, Inc.
Consolidated Financial Statements
For the Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
Blox, Inc.
Consolidated Statements of Financial Positions
(Expressed in U.S. Dollars)
See accompanying notes to the consolidated financial statements.
Blox, Inc.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in U.S. Dollars)
See accompanying notes to the consolidated financial statements.
Blox, Inc.
Consolidated Statements of Changes in Stockholders’ Equity
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
See accompanying notes to the consolidated financial statements.
Blox, Inc.
Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
See accompanying notes to the consolidated financial statements.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
1.
Description of Business
Blox, Inc. (the "Company") was incorporated on July 21, 2005 under the laws of the state of Nevada. The address of the Company is #202, 5652 Larch Street, Vancouver, British Columbia, V6M 4E1, Canada. The Company is primarily engaged in developing mineral exploration projects in West Africa.
The Company is primarily engaged in developing mineral exploration projects in West Africa and applying green innovation to traditional mining methods and combining renewable energy and technology into the process.
2.
Basis of Presentation
(a)
Statement of Compliance
These financial statements are presented in accordance with generally accepted accounting principles in the United States ("US GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") and are expressed in U.S. dollars. The Company's fiscal year-end is March 31.
(b)
Basis of Presentation
The consolidated financial statements of the Company comprise the Company and its subsidiaries. These consolidated financial statements are prepared on the historical cost basis. These consolidated financial statements have also been prepared using the accrual basis of accounting, except for cash flow information. In the opinion of management, all adjustments (including normal recurring ones) considered necessary for fair value have been included. All intercompany balances and transactions have been eliminated upon consolidation.
(c)
Reporting and Functional Currencies
The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company is the Canadian dollar (“CAD”). The Company’s reporting currency is the US dollar.
Transactions:
Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies of the Company and its subsidiaries using period end foreign currency exchange rates and expenses are translated using the exchange rate approximating those in effect on the date of the transactions during the reporting periods in which the expenses were transacted. Non-monetary assets and liabilities are translated at their historical foreign currency exchange rates. Gains and losses resulting from foreign exchange transactions are included in the determination of net income or loss for the period.
Translations:
Foreign currency financial statements are translated into the Company’s reporting currency, the US dollar as follows:
(i)
All of the assets and liabilities are translated at the rate of exchange in effect on the balance sheet date;
(ii)
Expenses are translated at the exchange rate approximating those in effect on the date of the transactions; and
(iii)
Exchange gains and losses arising from translation are included in other comprehensive income.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
2.
Basis of Presentation (continued)
(d)
Significant Accounting Judgments and Estimates
The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual outcomes could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised and may affect both the period of revision and future periods.
In applying the Company's accounting policies, management has made certain judgments that may have a significant effect on the consolidated financial statements. Such judgments include the determination of the functional currencies and use of the going concern assumption.
i)
Determination of Functional Currencies
In determining the Company's functional currency, it periodically reviews its primary and secondary indicators to assess the primary economic environment in which the entity operates in determining the Company's functional currencies. The Company analyzes the currency that mainly influences labor, material and other costs of providing goods or services which is often the currency in which such costs are denominated and settled. The Company also analyzes secondary indicators such as the currency in which funds from financing activities such as equity issuances are generated and the funding dependency of the parent company whose predominant transactional currency is the Canadian dollar. Determining the Company's predominant economic environment requires significant judgment.
ii)
Going Concern
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 incurred a net loss of $1,489,775 and $439,563 for the years ended March 31, 2018 and 2017, respectively, and has incurred cumulative losses since inception of $10,854,427 (2017 - $9,364,652) as at March 31, 2018.
These factors raise substantial doubt about the ability of the Company to continue as a going concern. 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 debt and/or equity financing to continue 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. Management of the Company has undertaken steps as part of a plan to sustain operations for the next fiscal year including plans to raise additional equity financing, control costs and reduce operating losses.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
3.
Significant Accounting Policies
(a)
Foreign Currency Accounting
i)
Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Company's entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on the translation of available-for-sale financial instruments, which are recognized in other comprehensive income.
ii)
Foreign Operations
The assets and liabilities of foreign operations are translated to U.S. dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to U.S. dollars at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income. When a foreign operation is disposed of, the relevant amount in the accumulated other comprehensive income is transferred to profit or loss as part of the gain or loss on disposal.
(b)
Cash
Cash includes cash deposited at banks and highly liquid investments with original maturities of three months or less when purchased.
(c)
Financial Instruments
Financial assets
All financial assets are initially recorded at fair value and classified upon inception into one of the following four categories: held to maturity, available for sale, loans and receivables or at fair value through profit or loss (“FVTPL”).
Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through earnings. The Company’s cash is classified as FVTPL. Financial assets classified as loans and receivables and held to maturity assets are measured at amortized cost. Financial assets classified as available for sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income and loss except for losses in value that are considered other than temporary which are recognized in earnings.
Transaction costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the original effective interest rate.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
3.
Significant Accounting Policies (continued)
(c)
Financial Instruments (continued)
Financial assets (continued)
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, this reversal is recognized in profit or loss.
Financial liabilities
All financial liabilities are initially recorded at fair value and classified upon inception as FVTPL or other financial liabilities.
Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. The Company’s liabilities are classified as other financial liabilities.
Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives are also classified as held for trading and recognized at fair value with changes in fair value recognized in earnings unless they are designated as effective hedging instruments. Fair value changes on financial liabilities classified as FVTPL are recognized in earnings.
(d)
Equipment
Equipment is carried at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided at rates and methods designed to write off cost of the assets over their estimated useful lives as follows:
Office equipment
30%
declining balance
Management reviews the depreciation method, useful lives and residual values annually and accounts for any changes in estimates on a prospective basis. Where an item of plant and equipment comprises major components with different useful lives, the components are accounted for as separate items of production facility, and depreciated separately.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
3.
Significant Accounting Policies (continued)
(e)
Impairment of Non-Financial Assets
The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB’) Accounting Standards Codification (“ASC”) 360 “Property Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.
Impairment tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its fair value, the asset is written down accordingly.
(f)
Decommissioning Liabilities
A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the operation of an alternative energy plant. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized to the carrying amount of the asset, as soon as the obligation to incur such costs arises. A pre-tax discount rate that reflects the time value of money and the risks specific to the liability are used to calculate the net present value of the expected future cash flows. These costs are charged to profit on loss over the economic life of the related asset, through depreciation expense using relevant amortization method. The related liability is progressively increased each period as the effect of discounting unwinds, creating an expense recognized in profit or loss. The liability is assessed at each reporting date for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.
The Company has no material restoration, rehabilitation and environmental costs as the disturbance to date is minimal.
(g)
Income Taxes
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.
The FASB has issued ASC 740 “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.
As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of March 31, 2018.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
3.
Significant Accounting Policies (continued)
(h)
Loss per Share
The Company computes loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted loss per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted loss per share 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 loss per share, the average stock price for the period issued in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive.
(i)
Stock Based Compensation
The Company accounts for Stock-Based Compensation under ASC 718 “Compensation - Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.
The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees”. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ equity over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.
The Company issues stock to consultants for various services. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.
(j)
Exploration and evaluation
The Company 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 when incurred. An impairment loss is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value.
4.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company 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.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
5.
Long Term Investment
On March 28, 2018, the Company participated in a private placement offering by its strategic partner, Ashanti Sankofa Inc (TSX.V- ASI), which shares the same management group and board of directors as the Company. The Company purchased 3,333,333 units at CAD$0.03 per unit for a total cost of $77,510 (CAD$100,000). Each unit consists of one common share and one transferable share purchase warrant, with each warrant entitling the holder to acquire one additional common share at a price of $0.05 for a period of 24 months from the closing of the private placement. On the date of issuance, the Company determined the fair value of the common share and warrants to be $44,331 and $33,179, respectively.
As at March 31, 2018, the fair value of common shares was $64,633 which resulted in an unrealized gain of $20,303 that was recorded to other comprehensive income. In addition, the fair value of warrants was $48,375, which resulted in an unrealized gain of $15,195 that was recorded in net loss (Note 16).
The March 31, 2018 fair value of the warrants was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 1.82%, volatility of 183%, annual rate of dividend of 0%, and expected life of 2 years.
6.
Equipment
Office Equipment
Machinery
Total
Cost
Balance at March 31, 2017 and 2016
$
8,760
$
232,620
$
241,380
Additions (disposals)
(8,760)
-
(8,760)
Balance at March 31, 2018
$
-
$
232,620
$
232,620
Accumulated Depreciation
Balance at March 31, 2016
$
5,086
161,060
166,146
Depreciation for the year
1,102
-
1,102
Balance at March 31, 2017
6,188
$
161,060
$
167,248
Depreciation for the year
-
Disposal for the year
(6,574)
-
(6,574)
Balance at March 31, 2018
$
-
$
161,060
$
160,060
Carrying amounts
As at March 31, 2018
$
-
$
71,560
$
71,560
Carrying amounts
As at March 31, 2017
$
2,572
$
71,560
$
74,132
Equipment in the amount of $71,560 has not been placed into production and is not currently being depreciated.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
7.
Mineral Property Interest
The Company entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 (the "Assumption Agreement") among Joseph Boampong Memorial Institute Ltd. ("JBMIL") and Equus Mining Ltd. ("EML"), Burey Gold Guinee sarl ("BGGs") and Burey Gold Limited ("BGL") and, collectively with EML and BGGs, (the "Vendors"), pursuant to which the Company has agreed to assume JBMIL's right to acquire a 78% beneficial interest in the Mansounia Concession (the "Property") from the Vendors. The Company exercised that right and acquired a 78% beneficial interest in the Property.
The Property lies in the southwest margin of the Siguiri Basin, in the Kouroussa Prefecture, Kankan Region, in Guinea, West Africa and covers a surface area of 145 square kilometres. The Property is located approximately 80 kilometres west, by road, from the country's third largest city, Kankan.
An exploration permit for the Property was granted by the Ministère des Mines et de la Géologie on August 20, 2013. As part of its due diligence, the Company obtained a legal opinion which confirmed that the license was in good standing at the time of acquisition. It is the Company's intention to obtain an exploitation permit to allow the Company the right to mine and dispose of minerals for 15 years, with a possible 5-year extension. The Company has commenced work on the feasibility study and environmental impact assessment required for obtaining this permit.
In consideration for the acquisition of the interest in the Property, the Company paid $100,000 to BGL and $40,000 to EML and issued BGL and EML an aggregate of 6,514,350 shares of common stock of the Company (the "First Tranche Shares"), at a deemed price of $0.1765 per share, for an aggregate deemed value of $1,150,000. The First Tranche Shares were issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively. For accounting purposes, the Company recorded the cash payment of $140,000, and $10,000 for an independent valuation of the Property. Additionally, $781,722 was capitalized to mineral property interests, being the fair value of the first tranche of shares. The fair value of the first tranche shares was based on the closing price of the Company’s shares on the OTCQB on July 24, 2014.
Within 14 days of commercial gold production being publicly declared from ore mined from the Property, the Company will issue BGL and EML a second tranche of shares of common stock of the Company (the "Second Tranche Shares"). The number of Second Tranche Shares to be issued shall be calculated by dividing $1,150,000 by the volume weighted average share price of the Company's common stock over a 20-day period preceding the issuance date. The Second Tranche Shares shall be issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively.
The mining exploration license for the Company was renewed for twelve months on December 11, 2017, and the Company is now proceeding with the feasibility study phase.
During the year ended March 31, 2018, the Company spent $196,567 (2017 - $70,600) on the property.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
7.
Mineral Property Interest (continued)
A summary of exploration and evaluation expenditures included in comprehensive loss are as follows:
March 31, 2018
March 31, 2017
Exploration Cost
$
$
Feasibility
6,720
2,933
General and admin costs
23,384
7,926
Geologist consulting fees
24,278
44,298
Licenses and permits
142,185
9,643
Property maintenance
-
5,800
Total cost during the year
196,567
70,600
8.
Income Taxes
The Company is subject to income taxes on its unconsolidated financial statements in Canada and the United States. The consolidated provision for income taxes varies from the amount that would be computed from applying the combined statutory income tax rates to net loss before taxes were approximately as follows:
Combined statutory rate
21%
34%
Expected income tax recovery
$ (313,000)
$ (149,000)
Non-deductible differences and other
507,000
(5,000)
Deferred tax assets not recognized
(194,000)
154,000
Income tax provision
$ -
$ -
The significant components of the Company’s deferred income tax assets were approximately:
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
8.
Income Taxes (continued)
The Company has non-capital losses of approximately $4,765,000 which may be carried forward and applied against taxable income in future years and expire as follows:
Canada
United States
$
-
$
1,000
-
16,000
-
35,000
-
30,000
-
78,000
237,000
24,000
813,000
53,000
462,000
511,000
11,000
1,688,000
-
312,000
-
907,000
2,000
621,000
$
1,525,000
$
4,276,000
9.
Common Stock
(a)
Private placement
On September 29, 2017, the Company entered into an agreement with Waratah Capital Ltd. (“Waratah”), a controlling shareholder, whereby Waratah and the Company agreed that in order to allow the Company to finalize its acquisition of Quivira Gold Ltd. pursuant to the Share Purchase Agreement dated June 22, 2013 among the Company, Quivira Gold Ltd. and Waratah (the “Quivira Agreement”), the Bridge Loan Agreement dated as of April 17, 2015, and amended on April 28, 2016 and November 1, 2016 between the Company and Waratah would be cancelled and the Company will utilize the loan proceeds advanced to close a private placement of $1,500,000 required to consummate the Company’s acquisition of Quivira Gold Ltd.
The private placement was to consist of up to 30,000,000 units at a price of $0.05 per share, with each unit consisting of one common share and one share purchase warrant entitling the holder thereof to purchase one additional common share at a price of $0.05 per share for a term of five years from the date of issuance. (Note 16)
(b)
Warrants
The Company had 88,000,000 outstanding warrants as at March 31, 2018 and 2017, which warrants are exercisable at $0.05 per share until February 27, 2019 (0.9 years).
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
9.
Common Stock (continued)
(c)
Stock Options
On February 15, 2018, the Company granted 3,000,000 stock options to two officers. These stock options have an exercise price of $0.27 and expire on February 15, 2023 vesting on the date of grant. The weighted average fair value of stock options was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 2.65%, volatility of 199%, annual rate of dividend of 0% and expected life of options of 5 years.
The following table summarizes historical information about the Company’s incentive stock options:
Number of Options
Weighted Average Exercise Price
Balance, March 31, 2017 and 2016
4,650,000
$0.03
Granted
3,000,000
$0.27
Balance, March 31, 2018
7,650,000
$0.12
At March 31, 2018, the following stock options were outstanding and exercisable:
Exercise Price
Expiry Date
Options Outstanding
Weighted Average Remaining Life in Years
Options Exercisable
$0.01
21-Jul-20
4,000,000
2.3
4,000,000
$0.15
07-Aug-19
650,000
1.4
650,000
$0.27
15-Feb-23
3,000,000
4.9
3,000,000
7,650,000
3.2
7,650,000
10.
Fair Value of Financial Instruments
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:
Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
10.
Fair Value of Financial Instruments (continued)
Level 2 and 3 financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.
The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy:
Level 1
Level 2
Level 3
Total March 31, 2018
Cash
$ 28,481
$ -
$ -
$ 28,481
Long-term investment - Shares
64,633
-
-
64,633
Long-term investment - Warrants
-
-
48,375
48,375
Total
$ 93,114
$ -
$ -
$ 141,489
Level 1
Level 2
Level 3
Total March 31, 2017
Cash
$ 14,085
$ -
$ -
$ 14,085
11.
Loans Payable
The Company entered into a bridge loan agreement with Waratah Capital Ltd. (“Waratah”), a controlling shareholder, dated as of April 17, 2015, amended on April 28, 2016 and again on November 1, 2016 (the “Loan Agreement”), whereby Waratah agreed to provide a bridge loan to the Company in order to fund its obligations and for general working capital purposes for a total of CAD$1,500,000 (the “Loan Proceeds”) on the terms and conditions set out in the Loan Agreement.
On September 29, 2017, the Company entered into an agreement with Waratah whereby Waratah and the Company agreed that in order to allow the Company to finalize its acquisition of Quivira Gold Ltd. pursuant to the Share Purchase Agreement dated June 22, 2013 among the Company, Quivira Gold Ltd. and Waratah (the “Quivira Agreement”), the Loan Agreement would be cancelled and the Company will utilize the loan proceeds advanced to close the required private placement of $1,000,000 to $1,500,000 required to consummate the Company’s acquisition of Quivira Gold Ltd. As a condition of entering into the agreement with Waratah, Waratah agreed to provide the remaining balance of funds required to close the private placement, which was completed on April 24, 2018 (Note 16).
On September 29, 2017, the $825,120 (CAD$1,073,923) proceeds of loans payable were reclassified to share subscriptions received and the balance of the loans payable was $Nil as at March 31, 2018 (2017 - $825,120/CAD$1,083,020).
12.
Due to Shareholder
The Company was indebted to Waratah Investment Limited, a controlling shareholder of the Company, in the amount of $56,200 (2017 - $Nil). The advance from shareholder are unsecured, non-interest bearing and have no fixed repayment terms.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
13.
Commitment
On June 22, 2013, the Company entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) where the Company agreed to purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, the Company will issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah Investments, owns and operates gold and diamond mining properties in Ghana.
The closing of the agreement is subject to the completion of due diligence and the completion of a private placement for $1,500,000. As of the issuance date of these financial statements, the due diligence has not yet been completed.
14.
Related Party Transactions
The Company’s related parties include its subsidiaries, and key management personnel, controlling shareholders, and strategic partner. Transactions with related parties for goods and services are based on the exchange amount as agreed to by the related parties.
The Company incurred the following expenses with related parties during the years ended March 31, 2018 and 2017:
During the year ended March 31, 2018, $8,834 (2017 - $8,646) was paid for bookkeeping services to a company owned by an officer of the Company.
As at March 31, 2018, the Company was indebted to its related parties for the amounts as below:
These amounts owing are unsecured, non-interest bearing and have no fixed repayment terms.
Blox, Inc.
Notes to Consolidated Financial Statements
Years ended March 31, 2018 and 2017
(Expressed in U.S. Dollars)
15.
Geographical Area Information
Canada
Africa
Total
March 31, 2018:
Current assets
$
32,648
$
-
$
32,648
Long term investment
113,008
-
113,008
Equipment
-
71,560
71,560
Mineral property interest
-
931,722
931,722
Total assets
$
145,656
$
1,003,282
$
1,148,938
Total liabilities
$
160,177
$
-
$
160,177
March 31, 2017:
Current assets
$
19,634
$
-
$
19,634
Equipment
2,572
71,560
74,132
Mineral property interest
-
931,722
931,722
Total assets
$
22,206
$
1,003,282
$
1,025,488
Total liabilities
$
915,715
$
-
$
915,715
16.
Subsequent Events
On April 16, 2018, the Company participated in a second tranche of the private placement offering by its strategic partner, Ashanti Sankofa Inc (TSX.V- ASI). The Company purchased an additional 1,000,000 units at CAD$0.03 per unit for a total cost of CAD$30,000. Each unit consists of one common share and one transferable share purchase warrant. Each warrant entitles the holder to acquire one additional common share at a price of $0.05 for a period of 24 months from the closing of the private placement.
On April 24, 2018, the Company closed the $1,500,000 private placement as part of the Quivira acquisition and issued 30,000,000 units at a price of $0.05 per unit for gross proceeds of $1,500,000. Each unit consists of one common share and one transferable share purchase warrant exercisable price of $0.05 per share for a term of five years.
Item 9.
Item 9.
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Item 9A.
Controls and Procedures
Disclosure Controls and Procedures
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, we evaluated our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(c) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Annual Report on Form 10-K, these disclosure controls and procedures were adequate to ensure that the information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management conducted an assessment, based upon criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting were effective as of March 31, 2018.
Our system of 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the year ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B.
Other Information
None.
PART III
Item 10.
Item 10.
Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
All directors of our company hold office until the next annual meeting of our stockholders or until their successors have been elected and qualified, or until their death, resignation or removal. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Our directors and executive officers, their ages, positions held, and duration of such, are as follows:
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Ronald Renne
Ronald Renne has been a director of our company since December 5, 2013. From December 5, 2013 to February 27, 2014, Mr. Renne was also the President, Chief Executive Officer and Chief Financial Officer. Mr. Renne has over 10 years’ experience in the banking sector and managing information technology resources. He has worked at HFC Bank in London and Royal Bank of Scotland as Branch Manager. Mr. Renne graduated from the Manchester Metropolitan University in 2000 with a Bachelor of Arts (Hons). He also holds all the required retail banking certificates to allow him to practice banking services in the United Kingdom.
Trevor Pickett
Trevor Pickett was appointed to the board in July 2015 and is also the Chief Operating Officer of Blox, Inc. He is responsible for day-to-day operations, including compliance reporting, budgeting, ongoing funding and investor relations. Mr Pickett’s role also includes the development of Blox, Inc.’s interests in software as a service, smart technology and sustainable energy. Born in Africa, Mr Pickett has a keen interest in the development and prosperity of the continent and its people. He holds an Honours Degree in Economics and Commerce and has a strong marketing and customer relations background that draws on over 25-years of experience in business, as both a founder and director of successful companies in Australia. Mr. Pickett also currently holds the position of Chief Executive Officer of Ashanti Sankofa, Inc. - a TSX:V listed company.
Nancy Zhao
Nancy Zhao is a CPA with over eight years of experience with various industries including mining, realtor developer, property management, sports entertainment, hockey pool website, marketing and farming.
Donna M. Moroney
Donna Moroney has over 30-years of experience in regulatory and corporate compliance in both Canada and the United States, and as a senior officer of various public companies. As President and owner of Wiklow Corporate Services Inc. since 2008, she assists companies in the resource, financial and technology sectors in maintaining the securities and exchange demands on public companies, as well as keeping them up-to-date on relevant issues, policies and working practices. Ms. Moroney assists companies reporting in the U.S. in preparing registration statements, quarterly and annual financial filings and other various facets of meeting U.S. securities requirements. She also leads workshops that provide a practical guide for public companies in meeting their securities regulatory compliance requirements. She currently serves as a director or senior officer for six public companies.
Involvement in Certain Legal Proceedings
None of our directors and executive officers has been involved in any of the following events during the past ten years:
(a)
any petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal agent or similar officer by a court for the business or property of such person, or any partnership in which such person was a general partner at or within two years before the time of such filing, or any corporation or business association of which such person was an executive officer at or within two years before the time of such filing;
(b)
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
(c)
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining such person from, or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
(d)
being the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph I(i) above, or to be associated with persons engaged in any such activity;
(e)
being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission to have violated a federal or state securities or commodities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been reversed, suspended, or vacated;
(f)
being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(g)
being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(h)
being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons we believe that during the year ended March 31, 2018 all filing requirements applicable to our executive officers and directors, and persons who own more than 10% of our common stock were complied with, with the exception of Nancy Zhao and Nicholas Taylor.
Code of Ethics
We have not adopted a code of ethics because our board of directors believes that our small size does not merit the expense of preparing, adopting and administering a code of ethics. Our board of directors intends to adopt a code of ethics when circumstances warrant.
Committees of Board of Directors
We do not presently have a separately constituted compensation committee, nominating committee, or any other committees of our board of directors, other than our Audit Committee. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our board of directors.
We do not have any defined policy or procedure requirements for our stockholders to submit recommendations or nominations for directors. We do not currently have any specific or minimum criteria for the election of nominees to our board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors assesses all candidates, whether submitted by management or stockholders, and makes recommendations for election or appointment.
A stockholder who wishes to communicate with our board of directors may do so by directing a written request to the address appearing on the first page of this annual report.
Audit Committee Financial Expert
Our board of directors has determined that Ronald Renne qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.
Item 11.
Item 11.
Executive Compensation
Summary Compensation
The particulars of compensation paid to the following persons:
·
all individuals serving as our principal executive officer during the year ended March 31, 2018;
·
all individuals service as our principal financial officer during the year ended March 31, 2018;
·
each of our three most highly compensated executive officers who were serving as executive officers at the end of the year ended March 31, 2018; and
·
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at March 31, 2018,
who we will collectively refer to as the named executive officers, for all services rendered in all capacities to our company and subsidiaries for the years ended March 31, 2018, March 31, 2017 and March 31, 2016 are set out in the following summary compensation table:
SUMMARY COMPENSATION TABLE
(1)
Robert Spiers was appointed as CEO and a director on July 31, 2015 and resigned on November 20, 2017.
(2)
Trevor Pickett was appointed as a director on July 31, 2015 and as Interim CEO on November 20, 2017.
(3)
Nancy Zhao was appointed as CFO on September 10, 2015.
(4)
Professional fees paid to Samina Capital Ltd., which company employs Nancy Zhao.
(5)
Donna Moroney was appointed as Corporate Secretary on July 31, 2015.
(6)
Professional fees paid to Wiklow Corporate Services Inc., a company owned by Donna Moroney.
Employment or Consulting Agreements
There are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or our subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of our company.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of March 31, 2018:
Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide retirement or similar benefits for our directors and officers.
Resignation, Retirement, Other Termination, or Change in Control Arrangements
We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change of control.
Compensation of Directors
The table below shows the compensation of our directors who were not our named executive officers for the fiscal year ended March 31, 2018:
Except as set out herein, no director who is not otherwise a named executive officer, received or accrued any compensation for his services as a director during the years ended March 31, 2018 and 2017. We have no formal plan for compensating our directors for their services in their capacity as directors. Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses
incurred in connection with the attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.
Item 12.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of June 28, 2018, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of any class of our voting securities and by each of our current directors, our named executive officers and by our current executive officers and directors as a group.
In the following tables, we have determined the number and percentage of shares beneficially owned in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 based on information provided to us by our controlling stockholder, executive officers and directors, and this information does not necessarily indicate beneficial ownership for any other purpose. In determining the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we include any shares as to which the person has sole or shared voting power or investment power, as well as any shares subject to warrants or options held by that person that are currently exercisable or exercisable within 60 days.
(1)
Based on 138,611,814 shares of common stock issued and outstanding as of June 28, 2018. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
(2)
Consists of 650,000 stock options, with each option being exercisable into one common share at a price of $0.15 per share, expiring on August 7, 2019 and 4,000,000 stock options, with each option being exercisable into one common shares at a price of $0.01 per share, expiring on July 21, 2020.
(3)
Consists of 1,500,000 stock options, with each option being exercisable into one common share at a price of $0.27 per share, expiring on February 15, 2023.
(4)
Consists of 91,596,935 common shares and 91,596,935 share purchase warrants. Of the securities indirectly held, 52,930,214 common shares and 52,930,214 share purchase warrants (exercisable at a price of $0.05 per share, expiring on February 27, 2019) are indirectly held through Waratah Investments Limited, a Ghana corporation, and 38,666,721 common shares and 38,666,721 share purchase warrants are indirectly held through Waratah Capital Ltd., a British Columbia corporation. 16,207,601 warrants are exercisable at a price of $0.05 per share, expiring on February 27, 2019 and the balance of 22,459,120 warrants are exercisable at $0.05 per share, expiring on February 15, 2023. Mr. Taylor controls both private companies.
(5)
Consists of 11,402,496 common shares and 10,168,636 share purchase warrants, with each warrant is exercisable into one common share at an exercise price of $0.05 per share, expiring on February 27, 2019.
(6)
Consists of 14,500,000 common shares and 5,000,000 share purchase warrants, with each warrant exercisable into one common share at an exercise price of $0.05 per share, expiring on April 26, 2023.
Item 13.
Item 13.
Certain Relationships and Related Transactions
Transactions with Related Persons
Other than as disclosed below, there has been no transaction, since April 1, 2017, or currently proposed transaction, in which our company was or is to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of our total assets at March 31, 2018, and in which any of the following persons had or will have a direct or indirect material interest:
(a)
any director or executive officer of our company;
(b)
any person who beneficially owns, directly or indirectly, more than 5% of any class of our voting securities;
(c)
any person who acquired control of our company when it was a shell company or any person that is part of a group, consisting of two or more persons that agreed to act together for the purpose of acquiring, holding, voting or disposing of our common stock, that acquired control of our company when it was a shell company; and
(d)
any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.
Compensation for Executive Officers and Directors
For information regarding compensation for our executive officers and directors, see “Executive Compensation”.
Director Independence
Our board currently consists of two directors, being Ronald Renne, Chairman, and Trevor Pickett, Interim Chief Executive Officer. Our common stock is quoted on the OTC Bulletin Board operated by FINRA (the Financial Industry Regulatory Authority), which does not impose any director independence requirements. Under NASDAQ rule 5605(a)(2), a director is not independent if he or she is also an executive officer or employee of the corporation or was, at any time during the past three years, employed by the corporation. Using this definition of independent director, we do not currently have any independent directors.
Item 14.
Item 14.
Principal Accounting Fees and Services
The following table sets forth the fees billed to our company for the years ended March 31, 2018 and 2017 for professional services rendered by Morgan and Company LLP, our independent registered public accounting firm:
All of the above services and fees were reviewed and approved by our board of directors before the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by Morgan and Company LLP, and believe that the provision of services for activities unrelated to the audit is compatible with maintaining its respective independence.
Audit Committee Disclosure
Under Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) reporting issuers are required to provide disclosure with respect to its Audit Committee.
Audit Committee
Our board has an Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act. It currently consists of both directors, being Ronald Renne and Trevor Pickett, and oversees and reports to the Board of Directors on various auditing and accounting-related matters, including the maintenance of the integrity of our financial statements, reporting process and internal controls; the selection, evaluation, compensation and retention of our independent registered public accounting firm; the performance of internal audit; legal and regulatory compliance, including our disclosure controls and procedures; and oversight over our risk management policies and procedures.
Ronald Renne serves as chairman of this committee and has been determined by our Board to be an “audit committee financial expert” as defined under the rules of the SEC.
Audit Committee Oversight
At no time since the commencement of our most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by our board.
Reliance on Certain Exemptions
At no time since the commencement of our most recently completed financial year have we relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.
Pre-Approval Policies and Procedures
The Audit Committee is authorized by the Board to review the performance of our external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including a review of the range of services provided in the context of all consulting services bought by our company.
Corporate Governance
General
Our board believes that good corporate governance improves corporate performance and benefits all shareholders. Canadian National Policy 58-201 Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as our company. In addition, Canadian National Instrument 58-101 Disclosure of Corporate Governance Practices prescribes certain disclosure by us of its corporate governance practices. This disclosure is presented below.
Directorships
Our directors currently hold directorships and/or offices with other reporting issuers (or equivalent) as follows:
The participation of the current directors in other reporting issuers is as follows:
Orientation and Continuing Education
New board members receive an orientation package which includes reports on operations and results, and any public disclosure filings by us, as may be applicable. We do not take any steps to provide continuing education for directors.
Ethical Business Conduct
We have found that the fiduciary duties placed on individual directors by our governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director’s participation in decisions of our board in which the director has an interest have been sufficient to ensure that the board operates in the best interests of our company.
Nomination of Directors
We consider our size each year when we consider the number of directors to recommend to the shareholders for election at the annual meeting of shareholders, taking into account the number required to carry out our board’s duties effectively and to maintain a diversity of view and experience.
We do not have a nominating committee, and these functions are currently performed by our board as a whole.
Compensation
Our board is responsible for determining compensation for the directors of our company to ensure it reflects the responsibilities and risks of being a director of a public company.
Other Board Committees
We have no committees other than our Audit Committee.
Assessments
We have no formal policy to monitor the effectiveness of the directors, our board and our committees.
Disclosure of Outstanding Share Data
Our shares are quoted for trading on the OTCQB under the symbol “BLXX”. As of June 28, 2018, our share capital was as follows:
Stock Option Plan
As at June 28, 2018, the following stock options were outstanding:
Warrants
As at June 28, 2018, the following warrants were outstanding:
PART IV
Item 15.
Item 15.
Exhibits, Financial Statement Schedules
* Filed herewith
(1)
Incorporated by reference to the registration statement on Form S-1, as filed with the SEC on May 1, 2008.
(2)
Incorporated by reference to the annual report on Form 10-K, as filed with the SEC on September 17, 2013.
(3)
Incorporated by reference to the current report on Form 8-K, as filed with the SEC on February 24, 2014.
(4)
Incorporated by reference to the current report on Form 8-K, as filed with the SEC on March 5, 2014.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLOX, INC.
By:
/s/ Trevor Pickett
By:
/s/ Nancy Zhao
Name:
Trevor Pickett
Name:
Nancy Zhao
Title:
Interim Chief Executive Officer
Title:
Chief Financial Officer
Date:
June 28, 2018
Date:
June 28, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:
/s/ Trevor Pickett
By:
/s/ Nancy Zhao
Name:
Trevor Pickett
Name:
Nancy Zhao
Title:
Interim Chief Executive Officer
Title:
Chief Financial Officer
Date:
June 28, 2018
Date:
June 28, 2018