Delaware
|
7389
|
98-0360062
|
||
(State or other jurisdiction of incorporation or
organization) |
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
Shivbir
S. Grewal, Esq.
Michael
L. Lawhead, Esq.
Stradling
Yocca Carlson & Rauth
660
Newport Center Drive, Suite 1600
Newport
Beach, California 92660
(949)
725-4000
|
Large
accelerated filer £
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company R
|
(Do
not check if a smaller reporting company)
|
Title of Each Class of
Securities to be Registered
|
Amount to
be Registered (1)
|
Proposed Maximum
Offering Price
Per Share(2)
|
Proposed Maximum
Aggregate
Offering Price
|
Amount of
Registration Fee(3)
|
|||||||||
Common
Stock, $0.0001 par value per share
|
17,727,500
|
$$
|
1.19
|
$
|
21,095,725.00
|
$
|
647.64
|
(1)
|
All
shares of common stock registered pursuant to this registration statement
are to be offered by the selling stockholders. In accordance with
Rule 416 under the Securities Act, the registrant is also registering
hereunder an indeterminate number of shares that may be issued and
resold
resulting from stock splits, stock dividends or similar
transactions.
|
(2)
|
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933,
as
amended, based on the average of the high and low sales prices of
our
common stock as reported by the National Association of Securities
Dealers’ Over-The-Counter Bulletin Board on May 9,
2007.
|
(3)
|
Previously
paid.
|
Prospectus
Summary
|
3 | |
Risk
Factors
|
5 | |
Use
of Proceeds
|
10 | |
Market
for Common Equity and Related Stockholder Matters
|
10 | |
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18 | |
Business
|
11 | |
Directors,
Executive Officers, Promoters and Control Persons
|
24 | |
Executive
Compensation
|
26 | |
Security
Ownership of Certain Beneficial Owners and Management
|
30 | |
Certain
Relationships and Related Transactions
|
29 | |
Description
of Securities
|
31 | |
Selling
Stockholders
|
32 | |
Plan
of Distribution
|
33 | |
Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure
|
34 | |
Legal
Matters
|
34 | |
Experts
|
34 | |
Where
You Can Find Additional Information
|
34 | |
Index
to Financial Statements
|
F-1 |
·
|
paid
Klondike Bay Resources $7,500 (paid upon the execution of the option
agreement); and
|
·
|
incurred
an aggregate of $200,000 of property exploration expenditures on
the
Manchester South Property within the following
periods:
|
·
|
$25,000
on or before December 31, 2004; and
|
·
|
a
further $175,000 on or before December 31, 2005.
|
Common
stock which may be sold by
|
|
17,727,500
shares
|
the
selling stockholders
|
|
|
|
|
|
Number
of selling stockholders
|
|
38
|
|
|
|
Use
of proceeds
|
|
We
will not receive any proceeds from the sale of our common stock by
the
selling stockholders. Any proceeds from the sale of our common stock
offered pursuant to this prospectus will be received by the selling
stockholders.
|
|
|
|
OTC
Bulletin Board symbol
|
|
KALG.OB
|
|
|
|
Risk
factors
|
|
See
“Risk Factors” and the other information included in this prospectus for a
discussion of factors you should carefully consider before deciding
to
invest in shares of our common
stock.
|
·
|
technological
innovations or new products and services by us or our
competitors;
|
·
|
additions
or departures of key personnel;
|
·
|
limited
“public float” following the reorganization transaction, in the hands of a
small number of persons whose sales or lack of sales could result
in
positive or negative pricing pressure on the market price for the
common
stock;
|
·
|
our
ability to execute our business
plan;
|
·
|
operating
results that fall below
expectations;
|
·
|
loss
of any strategic relationship;
|
·
|
industry
developments;
|
·
|
economic
and other external factors; and
|
·
|
period-to-period
fluctuations in our financial
results.
|
Fiscal
Year Ending
|
High
|
Low
|
|||||
May
31, 2007
|
|||||||
First
Quarter
|
0.48
|
0.38
|
|||||
Second
Quarter
|
0.51
|
0.36
|
|||||
Third
Quarter
|
1.35
|
0.40
|
|||||
Fourth
Quarter
|
1.51
|
0.80
|
|||||
May
31, 2008
|
|||||||
First
Quarter
|
1.48
|
0.46
|
|||||
Second
Quarter
|
0.64
|
0.17
|
|||||
Third
Quarter
|
0.45
|
0.25
|
|||||
Fourth
Quarter
|
0.40
|
0.19
|
|||||
May
31, 2009
|
|||||||
First
Quarter
|
0.31
|
0.08
|
Plan
category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights |
Weighted average
exercise price of outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance
|
|||||||
Equity
compensation plans approved by security holders
|
12,000,000
|
$
|
0.38
|
2,441,667
|
||||||
Equity
compensation plans not approved by security holders
|
-
|
-
|
-
|
|||||||
Total
|
12,000,000
|
$
|
0.38
|
2,441,667
|
·
|
paid
Klondike Bay Resources $7,500 (paid upon the execution of the option
agreement); and
|
·
|
incurred
an aggregate of $200,000 of property exploration expenditures on
the
Manchester South Property within the following
periods:
|
·
|
$25,000
on or before December 31, 2004; and
|
·
|
a
further $175,000 on or before December 31,
2005.
|
·
|
a
share of the proceeds of production totaling $0.45 per ton pursuant
to
production share agreements entered into among GPK, Ferdinandus Hanye,
Eko
Purwanto, Rudiansyah and Laurensius Hajang, and between GPK and Laurensius
Hajang, for production under the KP held by GPK. This share of production
proceeds will be paid to the recipients in return for providing assistance
to GPK relating to the development of the mining project (particularly
in
the area of local community relations);
and
|
·
|
a
share of the proceeds of production totaling $0.45 per ton pursuant
to
production share agreements entered into among BBM, Kristiana Neny,
Eko
Purwanto and Laurensius Hajang, and between BBM and Laurensius Hajang,
for
production under the KP held by BBM. This share of production proceeds
will be paid to the recipients in return for providing assistance
to BBM
relating to the development of the mining project (particularly in
the
area of local community relations).
|
Epoch
|
Division
|
Map Ref
|
Facies
|
Formation
|
||||||||||
Holocene
|
|
Qa
|
Alluvium
|
|
||||||||||
Pleistocene
|
|
Tpkb
|
Mixed
with lignite
|
Kampung
Baru
|
||||||||||
Pliocene
|
|
—
|
—
|
—
|
||||||||||
Late
|
Tmbp
|
Mixed
with lignite/coal
|
Balikpapan
|
|||||||||||
Unconformity
|
||||||||||||||
Miocene
|
Middle
|
Tmpb
Tmm
|
Sandstone
and mixed, with coal.
Tmm – andesite
|
Palau Balang
|
Tmm
Maragoh
|
|||||||||
Unconformity
|
||||||||||||||
Early
|
Tomp
|
Sandstone
and mixed, with coal
|
Pamaluan
|
|||||||||||
Late
|
||||||||||||||
Oligocene
|
Unconformity
|
|||||||||||||
Early
|
Toty
|
Mixed
with lignite/coal
|
Tuyu
|
|||||||||||
Eocene
|
—
|
—
|
—
|
|
Graha Seam Quality
|
||||||||||||||||||||||||||||||
Stats
|
TM
ar %
|
IM
ad %
|
Ash
ad %
|
VM
ad %
|
FC
ad %
|
RD
ad
|
TS ad
%
|
CV ad
kcal/kg
|
CV db
kcal/kg
|
CV daf
kcal/kg
|
|||||||||||||||||||||
Average
|
39.9
|
19.4
|
4.9
|
40.9
|
34.8
|
1.33
|
0.18
|
5,189
|
6,415
|
6,856
|
|||||||||||||||||||||
Minimum
|
33.9
|
12.9
|
1.4
|
35.4
|
29.4
|
1.29
|
0.03
|
4,346
|
5,536
|
6,499
|
|||||||||||||||||||||
Maximum
|
43.3
|
27.6
|
15.1
|
47.1
|
40.0
|
1.42
|
0.37
|
5,873
|
6,945
|
7,242
|
Name
|
|
Age
|
|
Director/Officer
Since
|
|
Position(s) Held
|
|
|
|
|
|
|
|
William
Bloking
|
|
57
|
|
June
26, 2007
|
|
Chairman
of the Board and President
|
|
|
|
|
|
|
|
Jorge
Nigaglioni
|
|
35
|
|
February
9, 2007
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
Andrew
Caminschi
|
|
34
|
|
February
9, 2007
|
|
Senior
Vice President of Business Development and Director
|
|
|
|
|
|
|
|
Antonio
Varano
|
|
51
|
|
April
20, 2007
|
|
Director
|
Name
|
Fees Earned or
Paid in Cash
($)
|
Stock Awards
($)
|
Option Awards
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||
Laith
Reynolds (1)
|
43,065
|
—
|
639,248
|
—
|
682,313
|
|||||||||||
|
||||||||||||||||
Andrew
Caminschi
|
72,000
|
315,000
|
—
|
—
|
387,000
|
|||||||||||
|
||||||||||||||||
Antonio
Varano
|
36,000
|
58,000
|
—
|
—
|
94,000
|
|||||||||||
|
||||||||||||||||
Martin
Hurley (2)
|
120,312
|
145,000
|
—
|
—
|
—
|
|||||||||||
|
||||||||||||||||
William
Bloking
|
25,226
|
48,333
|
—
|
—
|
73,559
|
(1) |
Mr.
Reynolds resigned from our board of directors on May 12,
2007.
|
(2)
|
Mr.
Hurley resigned from our board of directors on May 21, 2008. His
fees paid
during the year were $21,733 for his director fees through November
13,
2007 and $98,578 for his salary as our president and chief executive
officer.
|
·
|
Provide
competitive levels of total compensation which will enable us to
attract
and retain the best possible executive talent within our
industry;
|
·
|
Motivate
executive officers to achieve optimum individual
performance;
|
·
|
Align
the financial interest of our executive officers and stockholders
through
equity-based plans;
|
·
|
Provide
a compensation program that recognizes individual contributions as
well as
our overall business results; and
|
·
|
Ensure
that executive compensation-related disclosures are made to the public
on
a timely basis.
|
·
|
Reviewing
and establishing compensation and benefits practices and policies
to
ensure that they provide appropriate motivation for corporate performance
and increased stockholder value.
|
·
|
Overseeing
the administration of our 2007 Stock Incentive
Plan.
|
·
|
Reviewing
and approving compensation for our executive officers, including
base
salary and equity-based awards.
|
·
|
Base
salary; and
|
·
|
Long-term
equity incentive compensation.
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Total
($)
|
|||||||||||
William
Bloking, President
|
2008
2007 |
4,290.32
—
|
48,333.14
—
|
—
—
|
52,623.46
—
|
|||||||||||
Martin
Hurley, President and Chief Executive Officer (1)
|
2008
2007 |
104,068.10
—
|
145,000.00
—
|
35,777.53
—
|
284,845.63
—
|
|||||||||||
Cameron
Reynolds, President and Chief Executive Officer (2)
|
2008
2007 |
29,883.33
20,429.00 |
—
— |
—
— |
29,883.33
20,429.00 |
|||||||||||
Jorge
Nigaglioni, Chief Financial Officer
|
2008
2007 |
90,000.00
27,589.00 |
108,750.00
—
|
—
— |
198,750.00
27,589.00 |
|||||||||||
David
Pope, Chief Operations Officer Thatcher (3)
|
2008
2007 |
80,000.00
—
|
—
— |
319,623.83
—
|
389,623.83
—
|
(1) |
Mr.
Hurley was appointed to serve as our president and chief executive
officer
effective November 13, 2007. Mr. Hurley resigned as our president
and
chief executive
officer effective May 20, 2008.
|
(2) |
Mr.
Reynolds resigned as our president and chief executive officer effective
as of November 13, 2007.
|
(3) |
Mr.
Pope resigned as chief operations officer of Thatcher effective February
14, 2008.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||
Name
|
Number of
Securities Underlying Unexercised Options
(#) (1)
|
Number of
Securities
Underlying
Unexercised
Options
(#) (1)
|
Option
Exercise Price
($)
|
Option
Expiration
Date (2)
|
Number of
Shares or Units
of Stock That
Have Not
Vested
(#)(1)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
|||||||||||||
Exercisable
|
Unexercisable
|
||||||||||||||||||
William
Bloking
|
—
|
—
|
—
|
—
|
166,667
|
45,000
|
|||||||||||||
Martin
Hurley (3)
|
250,000
|
—
|
0.30
|
8/20/08
|
—
|
—
|
|||||||||||||
Cameron
Reynolds (4)
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Jorge
Nigaglioni
|
—
|
—
|
—
|
—
|
375,000
|
101,250
|
|||||||||||||
David
Pope (5)
|
500,000
|
—
|
0.50
|
7/29/08
|
—
|
—
|
(1) |
Each
option or restricted stock award vests 25% upon the first six month
anniversary of the grant date and then in equal monthly installments
over
the next
three years. Options and restricted stock awards are fully vested
upon the
fourth anniversary of the grant
date.
|
(2) |
Options
expire ten years from the grant
date.
|
(3) |
Mr.
Hurley resigned as our president and chief executive officer effective
May
20, 2008.
|
(4) |
Mr.
Cameron Reynolds resigned as our president and chief executive officer
effective November 13, 2007.
|
(5) |
Mr.
Pope resigned as chief operations officer of Thatcher effective February
14, 2008.
|
Shares
Beneficially Owned(2)
|
|||||||
Name
and Address of Beneficial Owner(1) Number
|
Percent
|
||||||
Newland
Resources Ltd
|
13,333,333
|
9.65
|
%
|
||||
Strato
Malamas
|
6,000,000
|
6.68
|
%
|
||||
Jorge
Nigaglioni(3)
|
1,500,000
|
1.10
|
%
|
||||
Andrew
Caminschi(4)
|
1,000,000
|
*
|
|||||
Antonio
Varano(5)
|
837,500
|
*
|
|||||
William
Bloking(6)
|
1,333,333
|
*
|
|||||
Cameron
Reynolds (7)
|
2,750,000
|
2.01
|
%
|
||||
Martin
Hurley(8)
|
4,833,333
|
3.54
|
%
|
||||
David
Pope(9)
|
8,172
|
*
|
|||||
All
directors and executive officers as a group (4 persons)(10)
|
4,670,833
|
3.42
|
%
|
* |
Less
than 1% of the outstanding shares of common
stock.
|
(1) |
Unless
indicated otherwise, the address of each stockholder listed in the
table
is: c/o KAL Energy, Inc., World Trade Center 14th Floor, Jl.
Jenderal Sudirman Kav. 29-31, Jakarta, Indonesia
12920.
|
(2) |
Beneficial
ownership is based on information furnished by the individuals or
entities
and is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares
of
common stock subject to options or warrants currently exercisable,
or
exercisable within 60 days of September 30, 2008 are deemed outstanding
for computing the percentage of the person holding such options or
warrants but are
not deemed outstanding for computing the percentage of any other
person.
As of September 30, 2008, we had a total of 134,416,172 shares of
common
stock
issued and outstanding. Except as indicated by footnote and subject
to
community property laws where applicable, to our knowledge, the
companies
and persons named in this table have sole voting and investment power
with
respect to all shares of common stock shown to be beneficially
owned
by them.
|
(3) |
Includes
375,000 shares of unvested restricted stock. The shares of restricted
stock vest in equal six-month installments of 25% beginning November
1,
2007.
|
(4) |
Includes
125,000 shares of unvested restricted stock. The shares of restricted
stock vest in equal six-month installments of 25% beginning May 1,
2007.
|
(5) |
Includes
600,000 shares of unvested restricted stock and 37,500 shares subject
to
options exercisable
within 60 days of September 30, 2008. The
shares of restricted stock vest in equal six-month installments of
25%
beginning November 1, 2007. The shares of restricted stock vest in
equal
six-month installments of 25% beginning May 1, 2008.
|
(6) |
Includes
1,166,667 shares of unvested restricted stock. The shares of restricted
stock vest in equal six-month installments of 25% beginning November
1,
2007.
|
(7) |
Mr.
Reynolds resigned as our president and chief executive officer effective
November 13, 2007.
|
(8) |
Mr.
Hurley resigned as our president and chief executive officer and
as a
member of our board of directors effective May 20,
2008.
|
(9) |
Mr.
Pope resigned as chief operations officer of Thatcher effective February
14, 2008.
|
(10) |
Includes
37,500 shares subject to options exercisable within 60 days of September
30, 2008 and 2,266,667 shares of unvested restricted
stock..
|
Selling
Stockholders
|
Common Shares Owned
Prior To Offering
|
Common Shares
Registered
|
Common Shares
Owned After Offering |
Percentage of Shares
Following Offering |
|||||||||
Dr.
Martin Charles Faulkes
|
500,000
|
500,000
|
—
|
—
|
|||||||||
Rene'
Simon
|
1,250,000
|
1,250,000
|
—
|
—
|
|||||||||
Aton
Ventures Fund Ltd.(1)
|
1,250,000
|
1,250,000
|
—
|
—
|
|||||||||
Chew
Hua Seng
|
10,000,000
|
10,000,000
|
—
|
—
|
|||||||||
Barbara
J. Moriarty
|
500,000
|
500,000
|
—
|
—
|
|||||||||
Kelly
Johnson
|
150,000
|
150,000
|
—
|
—
|
|||||||||
Edward
Bowes
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Christopher
Bonkowski
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Dana
Taylor
|
25,000
|
25,000
|
—
|
—
|
|||||||||
Ulrich
Bleiker
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Walter
Voros
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Jeremy
Ross
|
150,000
|
150,000
|
—
|
—
|
|||||||||
H.
Howard Wills Jr.
|
200,000
|
200,000
|
—
|
—
|
|||||||||
Michele
Ross
|
100,000
|
100,000
|
—
|
—
|
|||||||||
Rick
Langer
|
200,000
|
200,000
|
—
|
—
|
|||||||||
Rocknest
Corp.(2)
|
100,000
|
100,000
|
—
|
—
|
|||||||||
Corville
Leasenbacher Investments Inc.(3)
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Kaimar
Investment Corp.(4)
|
100,000
|
100,000
|
—
|
—
|
|||||||||
Lorrie
Archibald
|
62,500
|
62,500
|
—
|
—
|
|||||||||
Logan
Anderson
|
62,500
|
62,500
|
—
|
—
|
|||||||||
Michael
C. Huggins
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Fastboyz
Ventures Ltd.(5)
|
50,000
|
50,000
|
—
|
—
|
|||||||||
3688
Investments Ltd.(6)
|
250,000
|
250,000
|
—
|
—
|
|||||||||
Admiralt
Investment Inc.(7)
|
50,000
|
50,000
|
—
|
—
|
|||||||||
610670
B.C. Ltd.(8)
|
250,000
|
250,000
|
—
|
—
|
|||||||||
Geoffrey
Goodall
|
25,000
|
25,000
|
—
|
—
|
|||||||||
Ronald
Chong
|
40,000
|
40,000
|
—
|
—
|
|||||||||
David
Yue
|
100,000
|
100,000
|
—
|
—
|
|||||||||
DRS
Investments Ltd.(9)
|
1,500,000
|
1,500,000
|
—
|
—
|
|||||||||
James
E. Yates
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Stephen
O'Neil
|
62,500
|
62,500
|
—
|
—
|
|||||||||
Michelle
O'Neil
|
62,500
|
62,500
|
—
|
—
|
|||||||||
Brad
Merecer
|
50,000
|
50,000
|
—
|
—
|
|||||||||
Susan
Hand
|
125,000
|
125,000
|
—
|
—
|
|||||||||
HighTech
International S.A.(10)
|
50,000
|
50,000
|
—
|
—
|
|||||||||
34911
B.C. Ltd.(11)
|
59,500
|
59,500
|
—
|
—
|
|||||||||
Lindsay
Semple
|
15,500
|
15,500
|
—
|
—
|
|||||||||
Canaccord
Capital Corp.(12)
|
37,500
|
37,500
|
—
|
—
|
* |
Based
on 134,416,172 shares of our common stock outstanding as of October
21,
2008.
|
(1) |
Werner
Keicher has voting and dispositive power over the shares held by
Aton
Ventures Fund Ltd.
|
(2) |
Brian
Wilson has voting and dispositive power over the shares held by Rocknest
Corp.
|
(3) |
Curtis
Redel has voting and dispositive power over the shares held by Corville
Leasenbacher Investments, Inc.
|
(4) |
P.
M. Kains has voting and dispositive power over the shares held by
Kaimar
Investment Corp.
|
(5) |
Ken
Dugger has voting and dispositive power over the shares held by Fastboyz
Ventures Ltd.
|
(6) |
Michael
Louie has voting and dispositive power over the shares held by 3688
Investments Ltd.
|
(7) |
Phillip
Durell has voting and dispositive power over the shares held by Admiralt
Investment Inc.
|
(8) |
Dan
Mosher has voting and dispositive power over the shares held by 610670
B.C. Ltd.
|
(9) |
Ed
Sampson has voting and dispositive power over the shares held by
DRS
Investments Ltd.
|
(10) |
Joylan
Gulfston has voting and dispositive power over the shares held by
HighTech
International S.A.
|
(11) |
Greg
Ledding has voting and dispositive power over the shares held by
34911
B.C. Ltd.
|
(12) |
Canaccord
Capital Corp., or Canaccord, is a broker-dealer. Canaccord obtained
the
shares being registered for resale as compensation for services
rendered
in connection with a private placement offering of shares of our
common
stock. Ken Macpherson has voting and dispositive power over the
shares
held by Canaccord.
|
·
|
directly
by any selling stockholder to one or more
purchasers;
|
·
|
ordinary
brokerage transactions and transactions in which the broker—dealer
solicits purchasers;
|
·
|
block
trades in which the broker—dealer will attempt to sell the shares as agent
but may position and resell a portion of the blocks as principal
to
facilitate
the transaction;
|
·
|
purchases
by a broker—dealer as principal and resale by the broker—dealer for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
settlement
of short sales entered into after the date of this
prospectus;
|
·
|
broker—dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
·
|
a
combination of any of these methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
|
||
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2 | |
|
||
Consolidated
Balance Sheet as of May 31, 2008
|
F-3 | |
|
||
Consolidated
Statements of Operations for the Years Ended May 31, 2008 and 2007
and for
the Period From February 21, 2001 (Inception) to May 31,
2008
|
F-4 | |
|
||
Consolidated
Statements of Cash Flows for the Years Ended May 31, 2008 and 2007
and for
the Period From February 21, 2001 (Inception) to May 31,
2008
|
F-5 | |
|
||
Statement
of Stockholders’ Deficit for the Period From February 21, 2001 (Inception)
to May 31, 2008
|
F-6 | |
|
||
Notes
to Consolidated Financial Statements
|
F-7 | |
|
||
Financial
Statements (unaudited)
|
||
|
||
Consolidated
Balance Sheet — August 31, 2008
|
F-17 | |
|
||
Consolidated
Statements of Operations — Three Month Periods Ended August 31, 2008 and
2007 and the Period From February 21, 2001 (Inception) to August
31,
2008
|
F-18 | |
|
||
Consolidated
Statements of Cash Flows — Three Month Periods Ended August 31, 2008 and
2007 and the Period From February 21, 2001 (Inception) to August
31,
2008
|
F-19 | |
|
||
Consolidated
Statements of Stockholders’ Equity/(Deficit) - From February 21, 2001
(Inception) to August 31, 2008
|
F-20 | |
Notes
to Unaudited Consolidated Financial Statements
|
F-21 |
|
Los
Angeles, California
|
August
31,
2008
|
Current
assets:
|
|
|||
Cash
& cash equivalents
|
$
|
1,944,567
|
||
Other receivable
|
75,945
|
|||
Prepaid
expenses and other current assets
|
123,307
|
|||
Total
Current Assets
|
2,143,819
|
|||
|
||||
Intangible
Assets, net
|
6,613,326
|
|||
|
||||
TOTAL
ASSETS
|
$
|
8,757,144
|
||
|
||||
LIABILITIES
& STOCKHOLDERS’ DEFICIT
|
||||
|
||||
Current
liabilities:
|
||||
Accounts
payable and accrued liabilities
|
$
|
597,459
|
||
Shares
to be issued
|
700,000
|
|||
Total
current liabilities
|
1,297,459
|
|||
|
||||
COMMITMENTS
AND CONTINGENCIES
|
||||
|
||||
STOCKHOLDERS’
DEFICIT
|
||||
|
||||
Common
Stock
|
||||
$0.0001
par value; 500,000,000 shares authorized;
|
||||
134,687,004
issued and outstanding
|
13,469
|
|||
Additional
paid-in capital
|
21,904,316
|
|||
Subscription
receivable
|
(40,000
|
)
|
||
Deficit
accumulated during the exploration stage
|
(14,418,100
|
)
|
||
Total
Stockholders' Deficit
|
7,459,685
|
|||
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
8,757,144
|
|
|
|
FOR
|
|||||||
|
|
|
THE CUMULATIVE
|
|||||||
|
|
|
PERIOD FROM
|
|||||||
|
FOR THE YEARS ENDED
|
FEBRUARY 21, 2001
|
||||||||
|
MAY 31
|
(INCEPTION)
|
||||||||
|
2008
|
2007
|
TO MAY 31, 2008
|
|||||||
|
|
|
|
|||||||
Net
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
|
||||||||||
Operating
Expenses
|
||||||||||
Exploration
expenditures
|
3,140,838
|
1,228,807
|
4,389,655
|
|||||||
Stock
based compensation expense
|
4,883,059
|
1,301,372
|
6,184,431
|
|||||||
General
and administrative expenditures
|
1,980,357
|
552,025
|
2,542,218
|
|||||||
Professional
and consulting fees
|
732,921
|
642,835
|
1,423,132
|
|||||||
Total
Operating Expenses
|
10,736,725
|
3,725,039
|
14,539,436
|
|||||||
|
||||||||||
Other
income:
|
||||||||||
Consulting
services
|
71,880
|
—
|
71,880
|
|||||||
Interest
income
|
17,569
|
31,887
|
49,456
|
|||||||
Total
Other Income
|
89,449
|
31,887
|
121,336
|
|||||||
|
||||||||||
Net
Loss
|
$
|
(10,647,276
|
)
|
$
|
(3,693,152
|
)
|
$
|
(14,418,100
|
)
|
|
|
||||||||||
Loss
Per Share,
basic and diluted
|
$
|
(0.10
|
)
|
$
|
(0.06
|
)
|
||||
|
||||||||||
*Weighted
Average Number Of Common Shares Outstanding,
basic and diluted
|
103,975,510
|
59,430,964
|
|
|
|
FOR
|
|||||||
|
|
|
THE
CUMULATIVE
|
|||||||
|
|
|
PERIOD
FROM
|
|||||||
|
FOR THE YEARS ENDED
|
FEBRUARY
21, 2001
(INCEPTION)
|
||||||||
|
MAY 31
|
TO MAY 31,
|
||||||||
|
2008
|
2007
|
2008
|
|||||||
Cash
Flows From Operating Activities:
|
|
|
|
|||||||
Net
loss
|
$
|
(10,647,276
|
)
|
$
|
(3,693,152
|
)
|
$
|
(14,418,100
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
Stock
based compensation expense
|
4,883,059
|
1,301,372
|
6,184,431
|
|||||||
Stock
issued for consulting services
|
38,750
|
222,500
|
261,250
|
|||||||
Amortization
expense
|
354,285
|
118,095
|
472,380
|
|||||||
Allowance
for bad debt - notes receivable
|
362,656
|
—
|
362,656
|
|||||||
Increase
in accounts receivable
|
(75,945
|
)
|
—
|
(75,945
|
)
|
|||||
Increase
in prepaid expenses and other current assets
|
(57,850
|
)
|
(56,781
|
)
|
(128,631
|
)
|
||||
Increase
in accounts payable and accrued liabilities
|
230,724
|
76,514
|
315,363
|
|||||||
Net
cash used in operating activities
|
(4,911,598
|
)
|
(2,031,453
|
)
|
(7,026,596
|
|||||
|
||||||||||
Cash
Flows From Investing Activities:
|
||||||||||
Cash
of acquired subsidiary
|
—
|
201,054
|
201,054
|
|||||||
Cash
investment in subsidiary
|
—
|
(10,000
|
)
|
(10,000
|
)
|
|||||
Net
cash provided by investing activities
|
—
|
191,054
|
191,054
|
|||||||
|
||||||||||
Cash
Flows From Financing Activities:
|
||||||||||
Advances
from shareholder
|
75,000
|
10,000
|
117,820
|
|||||||
Payments
to shareholders against advances
|
(75,000
|
)
|
(42,820
|
)
|
(117,820
|
)
|
||||
Debt
repayment
|
—
|
(198,000
|
)
|
(198,000
|
)
|
|||||
Advances
on note receivables
|
(50,000
|
)
|
(703,995
|
)
|
(753,995
|
)
|
||||
Proceeds
from issuance of common stock
|
6,176,539
|
3,503,000
|
9,732,103
|
|||||||
Net
cash provided by financing activities
|
6,126,539
|
2,568,185
|
8,780,108
|
|||||||
|
||||||||||
Increase
In Cash & Cash Equivalents
|
1,214,941
|
727,786
|
1,944,567
|
|||||||
Cash
& Cash Equivalents, Beginning Of Period
|
729,626
|
1,840
|
—
|
|||||||
Cash
& Cash Equivalents, End Of Period
|
1,944,567
|
729,626
|
1,944,567
|
|||||||
|
||||||||||
Supplemental
Disclosure Of Cash Flow Information
|
||||||||||
Cash
paid for:
|
||||||||||
Interest
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Income
taxes
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Supplemental
Disclosure of Non Cash Transactions
|
||||||||||
Shares
issued to acquire subsidiary
|
$
|
—
|
$
|
—
|
$
|
6,400,000
|
|
ACCUMULATED
|
||||||||||||||||||
COMMON STOCK
|
DEFICIT
|
||||||||||||||||||
ADDITIONAL
|
DURING THE
|
||||||||||||||||||
PAID-IN
|
SUBSCRIPTION
|
EXPLORATION
|
|||||||||||||||||
NUMBER
|
AMOUNT
|
CAPITAL
|
RECEIVABLE
|
STAGE
|
TOTAL
|
||||||||||||||
Issuance
of common stock for cash
|
|
|
|
|
|
|
|||||||||||||
Founders’
shares
|
40,000,000
|
$
|
1,000
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
1,000.00
|
||||||||
Initial
shares
|
6,875,272
|
3,688
|
47,877
|
—
|
—
|
51,565
|
|||||||||||||
Net
loss for the period
|
—
|
—
|
—
|
—
|
(35,809
|
)
|
(35,809
|
)
|
|||||||||||
Balance,
May 31, 2001
|
46,875,272
|
4,688
|
47,877
|
—
|
(35,809
|
)
|
16,756
|
||||||||||||
Net
income for the year
|
—
|
—
|
—
|
—
|
15,723
|
15,723
|
|||||||||||||
Balance,
May 31, 2002
|
46,875,272
|
4,688
|
47,877
|
—
|
(20,086
|
)
|
32,479
|
||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
(16,847
|
)
|
(16,847
|
)
|
|||||||||||
Balance,
May 31, 2003
|
46,875,272
|
4,688
|
47,877
|
—
|
(36,933
|
)
|
15,632
|
||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
(18,846
|
)
|
(18,846
|
)
|
|||||||||||
Balance,
May 31, 2004
|
46,875,272
|
4,688
|
47,877
|
—
|
(55,779
|
)
|
(3,214
|
)
|
|||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
(11,544
|
)
|
(11,544
|
)
|
|||||||||||
Balance,
May 31, 2005
|
46,875,272
|
4,688
|
47,877
|
—
|
(67,323
|
)
|
(14,758
|
)
|
|||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
(10,348
|
)
|
(10,348
|
)
|
|||||||||||
Balance,
May 31, 2006
|
46,875,272
|
4,688
|
47,877
|
—
|
(77,671
|
)
|
(25,106
|
)
|
|||||||||||
Merger
with Thatcher Mining Pte. Ltd.
|
32,000,000
|
3,200
|
6,396,800
|
—
|
6,400,000
|
||||||||||||||
Stock
issued for cash
|
17,615,000
|
1,762
|
3,501,239
|
—
|
3,503,000
|
||||||||||||||
Stock
issued for services
|
1,112,500
|
111
|
222,389
|
—
|
222,500
|
||||||||||||||
Issuance
of shares under stock compensation plan
|
125,000
|
13
|
342,488
|
—
|
342,500
|
||||||||||||||
Stock
based compensation expense
|
—
|
—
|
958,872
|
—
|
958,872
|
||||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
|
(3,693,152
|
)
|
(3,693,152
|
)
|
|||||||||||
Balance,
May 31, 2007
|
97,727,772
|
9,773
|
11,469,664
|
—
|
(3,770,823
|
)
|
7,708,614
|
||||||||||||
Stock
issued for cash
|
34,957,600
|
3,496
|
5,473,042
|
—
|
—
|
5,476,528
|
|||||||||||||
Stock
issued for services
|
55,000
|
6
|
38,745
|
—
|
—
|
38,750
|
|||||||||||||
Issuance
of shares under stock compensation plan
|
1,946,700
|
195
|
674,909
|
(40,000
|
)
|
—
|
635,104
|
||||||||||||
Stock
options granted to employees
|
—
|
—
|
4,247,957
|
—
|
—
|
4,247,957
|
|||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
(10,647,276
|
)
|
(10,647,276
|
)
|
|||||||||||
Balance,
May 31, 2008
|
134,687,072
|
$
|
13,469
|
$
|
21,904,316
|
$
|
(40,000
|
)
|
$
|
(14,418,100
|
)
|
$
|
7,459,685
|
Loan
advances
|
325,000
|
|||
Accrued
interest
|
37,656
|
|||
Loan
balance
|
362,656
|
|||
Reserve
|
(362,656
|
)
|
||
Total
|
-
|
Prepaid
expenses
|
$
|
111,542
|
||
Deposits
|
11,765
|
|||
|
$
|
123,307
|
Accounts
payable and accrued expenses at May 31, 2008 are as
follows:
|
Accounts
payable
|
$
|
424,847
|
||
Accrued
expenses
|
172,612
|
|||
|
$
|
597,459
|
Officers
& Directors
|
|
|||
Martin
Hurley
|
$
|
32,943
|
||
Jorge
Nigaglioni
|
3,154
|
|||
William
Bloking
|
16,341
|
|||
Antonio
Varano
|
3,061
|
|||
Related
Parties
|
||||
Asia
Consultancy Pte Ltd
|
(934
|
)
|
||
|
$
|
54,565
|
Gross
Value of Agreements
|
$
|
7,085,706
|
||
Amortization
|
(472,380
|
)
|
||
Net
Intangible assets
|
$
|
6,613,326
|
2009
|
$
|
354,285
|
||
2010
|
354,285
|
|||
2011
|
354,285
|
|||
2012
|
354,285
|
|||
2013
|
354,285
|
|||
After
|
4,814,901
|
|||
Total
|
$
|
6,613,326
|
Quarter
Ended
|
Shares Issued
|
|||
August
31, 2007
|
205,000
|
|||
November
30, 2007
|
—
|
|||
February
29, 2008
|
250,000
|
|||
May
31, 2008
|
1,491,666
|
|||
|
1,946,666
|
Cash
|
$
|
201,054
|
||
Notes
receivable
|
187,424
|
|||
Prepaid
expenses and other current assets
|
19,907
|
|||
Intangible
assets
|
12,718,168
|
|||
Total
Assets
|
$
|
13,126,553
|
||
|
||||
Accounts
payable and accrued liabilities
|
$
|
271,091
|
||
Notes
payable
|
198,000
|
|||
Total
liabilities
|
$
|
469,091
|
||
|
||||
Net
asset acquired
|
$
|
12,657,462
|
||
|
||||
Consideration
paid:
|
||||
Total
cost of investment
|
$
|
7,025,000
|
||
Total
Acquisition cost
|
$
|
12,657,462
|
||
Negative
goodwill
|
$
|
(5,632,562
|
)
|
Statement of Operations
|
May 31, 2008
|
May 31, 2007
|
Cumulative Period
From Inception
February 21, 2001
to May 31, 2008
|
|||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||
|
|
|
|
|||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
|
||||||||||
Expenses
|
||||||||||
Exploration
expenditures
|
3,140,838
|
1,731,071
|
4,891,909
|
|||||||
Stock
based compensation expense
|
4,883,059
|
1,301,372
|
6,184,431
|
|||||||
Professional
and consulting fees
|
732,921
|
735,903
|
1,516,210
|
|||||||
General
and administrative expenditures
|
1,979,907
|
594,257
|
2,584,449
|
|||||||
Total
Expenses
|
(10,736,725
|
)
|
(4,362,603
|
)
|
(15,176,999
|
)
|
||||
|
||||||||||
Interest
and Other Income
|
89,449
|
33,539
|
122,988
|
|||||||
|
||||||||||
Net
Loss
|
$
|
(10,647,276
|
)
|
$
|
(4,329,064
|
)
|
$
|
(15,054,011
|
)
|
|
|
||||||||||
Earnings
Per Share
|
||||||||||
Basic
|
$
|
(0.10
|
)
|
$
|
(0.01
|
)
|
·
|
carrying
amounts of the VIE are consolidated into the financial statements
of the
Company as the primary beneficiary (referred as "Primary Beneficiary"
or
"PB");
|
·
|
inter-company
transactions and balances, such as revenues and costs, receivables
and
payables between or among the Primary Beneficiary and the VIE(s)
are
eliminated in their entirety; and
|
·
|
because
there is no direct ownership interest by the Primary Beneficiary
in the
VIE, equity of the VIE is eliminated with an offsetting credit to
minority
interest.
|
|
2008
|
2007
|
|||||
Stock
Option Plan
|
|
|
|||||
Risk-free
interest rate
|
3.08
|
%
|
4.67
|
%
|
|||
Dividend
yield
|
0
|
%
|
0
|
%
|
|||
Volatility
|
122
|
%
|
91
|
%
|
|||
Expected
life
|
10
years
|
10
years
|
|
Available For
Grant
|
Shares
|
Weighted
Average
Exercise Plan
|
Aggregate
Intrinsic Value
|
|||||||||
Outstanding
at May 31, 2007
|
1,225,000
|
10,650,000
|
$
|
1.44
|
$
|
0
|
|||||||
Granted
|
-2,865,000
|
2,865,000
|
$
|
0.29
|
|||||||||
Exercised
|
—
|
-2,001,667
|
$
|
0.38
|
|||||||||
Cancelled
|
4,081,667
|
-4,081,667
|
—
|
||||||||||
Plan
Shares Expired
|
—
|
—
|
—
|
|
|||||||||
Outstanding
at May 31, 2008
|
2,441,667
|
7,431,667
|
$
|
1.28
|
$
|
0
|
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||
Range of
Exercise Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
|||||||||||||
$ 0.30-$0.50
|
6,040,000
|
9.2
|
$
|
0.45
|
3,776,083
|
9.2
|
$
|
0.23
|
|
Year Ended
May 31, 2008
|
Year Ended
May 31, 2007
|
|||||
Manpower
|
$
|
1,552,421
|
$
|
500,325
|
|||
Site
Expenses
|
816,333
|
407,740
|
|||||
Equipment
|
481,205
|
178,899
|
|||||
Travel
|
290,879
|
141,843
|
|||||
|
$
|
3,140,838
|
$
|
1,228,807
|
US$
|
2008
|
2007
|
|||||
Loss
subject to United States
|
$
|
7,277,585
|
$
|
1,607,647
|
|||
Loss
subject to Singapore
|
2,322,657
|
2,085,505
|
|||||
Loss
subject to Indonesia
|
1,047,034
|
—
|
|||||
Total
Loss
|
$
|
10,647,276
|
$
|
3,693,152
|
(US$)
|
2008
|
2007
|
|||||
Net
Operating Loss Carry forwards
|
$
|
4,637,000
|
$
|
1,674,019
|
|||
Total
Deferred Tax Assets
|
1,577,000
|
669,608
|
|||||
Less:
Valuation Allowance
|
(1,577,000
|
)
|
(669,608
|
)
|
|||
Net
Deferred Tax Assets
|
$
|
—
|
$
|
—
|
|
May 31, 2008
|
May 31, 2007
|
|||||
Tax
expense (credit) at U.S. statutory rate-federal
|
34
|
%
|
34
|
%
|
|||
State
tax expense net of federal tax
|
6
|
%
|
6
|
%
|
|||
Net
operating loss carry-forward
|
(40
|
)%
|
(40
|
)%
|
|||
Foreign
income tax:
|
|||||||
Singapore
|
20
|
%
|
20
|
%
|
|||
Indonesia
|
35
|
%
|
0
|
%
|
|||
Net
operating loss carry-forward
|
(55
|
)%
|
(20
|
)%
|
|||
Tax
expense at actual rate
|
0
|
%
|
0
|
%
|
(US$)
|
2008
|
2007
|
|||||
Net
Operating Loss Carry forwards
|
$
|
2,322,657
|
$
|
2,085,505
|
|||
Total
Deferred Tax Assets
|
464,531
|
417,101
|
|||||
Less:
Valuation Allowance
|
(464,531
|
)
|
(417,101
|
)
|
|||
Net
Deferred Tax Assets
|
$
|
—
|
$
|
—
|
(US$)
|
2008
|
2007
|
|||||
Net
Operating Loss Carry forwards
|
$
|
1,047,034
|
$
|
—
|
|||
Total
Deferred Tax Assets
|
366,462
|
—
|
|||||
Less:
Valuation Allowance
|
(366,462
|
)
|
—
|
||||
Net
Deferred Tax Assets
|
$
|
—
|
$
|
—
|
Years
Ending May 31,
|
|
|||
2009
|
$
|
16,000
|
ASSETS
|
||||
|
||||
Current
Assets
|
||||
Cash
and cash equivalents
|
$
|
1,190,573
|
||
Other
receivable
|
75,450
|
|||
Prepaid
expenses and other current assets
|
246,427
|
|||
Total
Current Assets
|
1,512,450
|
|||
|
||||
Intangible
assets, net
|
6,524,754
|
|||
|
||||
Total
Assets
|
$
|
8,037,204
|
||
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
|
||||
Current
Liabilities
|
||||
Accounts
payable
|
$
|
462,597
|
||
Accrued
liabilities
|
520,928
|
|||
Total
Current Liabilities
|
983,525
|
|||
|
||||
Stockholders’
Equity
|
||||
Common
Stock
|
||||
Authorized:
|
||||
500,000,000
voting common shares, par value $0.0001 Issued and
outstanding:
|
||||
143,175,272
common shares
|
14,342
|
|||
Additional
paid-in capital
|
22,813,435
|
|||
Subscription
receivable
|
(20,000
|
)
|
||
Deficit
Accumulated During The Exploration Stage
|
(15,754,098
|
)
|
||
Total
Stockholders' Equity
|
7,053,680
|
|||
|
||||
Total
Liabilities and Stockholders' Equity
|
$
|
8,037,204
|
|
|
FOR THE CUMULATIVE
|
||||||||
|
|
PERIOD FROM
|
||||||||
|
|
FEBRUARY 21
|
||||||||
|
FOR THE THREE MONTH PERIODS ENDED
|
2001 (INCEPTION) TO
|
||||||||
|
AUGUST 31
|
AUGUST 31
|
||||||||
|
2008
|
2007
|
2008
|
|||||||
|
|
|
|
|||||||
Net
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
|
||||||||||
Operating
Expenses
|
||||||||||
Exploration
expenditures
|
379,916
|
1,425,746
|
4,769,571
|
|||||||
Stock
based compensation expense
|
209,992
|
1,527,396
|
6,394,423
|
|||||||
General
and administrative expenditures
|
411,760
|
376,317
|
2,953,989
|
|||||||
Professional
and consulting fees
|
398,051
|
210,277
|
1,821,183
|
|||||||
Total
Operating Expenses
|
1,399,719
|
3,539,736
|
15,939,156
|
|||||||
|
||||||||||
Other
income:
|
||||||||||
Consulting
services
|
53,305
|
-
|
125,185
|
|||||||
Interest
income
|
10,417
|
12,835
|
59,873
|
|||||||
Total
other income
|
63,722
|
|
185,058
|
|||||||
|
||||||||||
Net
Loss
|
$
|
(1,335,997
|
)
|
$
|
(3,526,901
|
)
|
$
|
(15,754,098
|
)
|
|
|
||||||||||
Net
Loss Per Common Share, basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
||||
|
||||||||||
*Basic
and Diluted Weighted Average Number Of Common Shares
Outstanding
|
141,803,173
|
97,884,923
|
|
|
FOR THE CUMULATIVE
|
||||||||
|
|
PERIOD FROM
|
||||||||
|
FOR THE THREE MONTH PERIODS ENDED
|
FEBRUARY 21, 2001
|
||||||||
|
AUGUST 31
|
(INCEPTION) TO
|
||||||||
|
2008
|
2007
|
AUGUST 31, 2008
|
|||||||
Cash
Flows In Operating Activities:
|
|
|
||||||||
|
|
|
||||||||
Net
loss for the period
|
$
|
(1,335,997
|
)
|
$
|
(3,526,901
|
)
|
$
|
(15,754,098
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
Stock
based compensation expense
|
209,992
|
1,527,396
|
6,394,423
|
|||||||
Stock
issued for consulting services
|
-
|
-
|
261,250
|
|||||||
Amortization
expense
|
88,572
|
88,572
|
560,952
|
|||||||
Allowance
for Bad Debt - Note Receivable
|
-
|
-
|
362,656
|
|||||||
(Increase)
/ decrease in accounts receivable
|
495
|
-
|
(75,450
|
)
|
||||||
Increase
in prepaid expenses and other current assets
|
(123,121
|
)
|
(13,584
|
)
|
(251,752
|
)
|
||||
Increase
in accounts payable and accrued liabilities
|
406,065
|
875,033
|
721,428
|
|||||||
Net
cash used in operating activities
|
(753,994
|
)
|
(1,049,484
|
)
|
(7,780,590
|
)
|
||||
|
||||||||||
Cash
Flows In Investing Activities:
|
||||||||||
Cash
of acquired subsidiary
|
-
|
-
|
201,054
|
|||||||
Cash
investment in subsidiary
|
-
|
-
|
(10,000
|
)
|
||||||
Net
cash provided by investing activities
|
-
|
-
|
191,054
|
|||||||
|
||||||||||
Cash
Flows In Financing Activities:
|
||||||||||
Advances
from shareholder
|
-
|
-
|
117,820
|
|||||||
Payments
to shareholders
|
-
|
-
|
(117,820
|
)
|
||||||
Issuance
of notes payable
|
-
|
-
|
-
|
|||||||
Debt
repayments
|
-
|
-
|
(198,000
|
)
|
||||||
Advances
on notes receivable
|
-
|
(50,000
|
)
|
(753,995
|
)
|
|||||
Proceeds
from issuance of common stock
|
-
|
725,000
|
9,732,103
|
|||||||
Net
cash provided by financing activities
|
-
|
675,000
|
8,780,108
|
|||||||
|
||||||||||
Increase/(Decrease)
In Cash & cash equivalents
|
(753,994
|
)
|
(374,484
|
)
|
1,190,573
|
|||||
|
||||||||||
Cash
And Cash Equivalents, Beginning Of Period
|
1,944,567
|
729,626
|
-
|
|||||||
|
||||||||||
Cash
And Cash Equivalents, End Of Period
|
$
|
1,190,573
|
$
|
355,142
|
1,190,573
|
|||||
|
||||||||||
Supplemental
Disclosure Of Cash Flow Information
|
||||||||||
Cash
paid during the period
|
||||||||||
Interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Income
Taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
|
||||||||||
Supplemental
Disclosure of Non Cash Transactions
|
||||||||||
|
||||||||||
Shares
issued to acquire subsidiary
|
6,400,000
|
|
ACCUMULATED
|
||||||||||||||||||
COMMON STOCK
|
DEFICIT
|
||||||||||||||||||
ADDITIONAL
|
DURING THE
|
||||||||||||||||||
PAID-IN
|
SUBSCRIPTION
|
EXPLORATION
|
|||||||||||||||||
NUMBER
|
AMOUNT
|
CAPITAL
|
RECEIVABLE
|
STAGE
|
TOTAL
|
||||||||||||||
Issuance
of common stock for cash
|
|
|
|
|
|
|
|||||||||||||
Founders’
shares
|
40,000,000
|
$
|
1,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,000.00
|
||||||||
Initial
shares
|
6,875,272
|
3,688
|
47,877
|
-
|
-
|
51,565
|
|||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
-
|
(35,809
|
)
|
(35,809
|
)
|
|||||||||||
Balance,
May 31, 2001
|
46,875,272
|
4,688
|
47,877
|
-
|
(35,809
|
)
|
16,756
|
||||||||||||
Net
income for the year
|
-
|
-
|
-
|
-
|
15,723
|
15,723
|
|||||||||||||
Balance,
May 31, 2002
|
46,875,272
|
4,688
|
47,877
|
-
|
(20,086
|
)
|
32,479
|
||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(16,847
|
)
|
(16,847
|
)
|
|||||||||||
Balance,
May 31, 2003
|
46,875,272
|
4,688
|
47,877
|
-
|
(36,933
|
)
|
15,632
|
||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(18,846
|
)
|
(18,846
|
)
|
|||||||||||
Balance,
May 31, 2004
|
46,875,272
|
4,688
|
47,877
|
-
|
(55,779
|
)
|
(3,214
|
)
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(11,544
|
)
|
(11,544
|
)
|
|||||||||||
Balance,
May 31, 2005
|
6,875,272
|
4,688
|
47,877
|
-
|
(67,323
|
)
|
(14,758
|
)
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(10,348
|
)
|
(10,348
|
)
|
|||||||||||
Balance,
May 31, 2006
|
46,875,272
|
4,688
|
47,877
|
-
|
(77,671
|
)
|
(25,106
|
)
|
|||||||||||
Merger
with Thatcher Mining Pte. Ltd.
|
32,000,000
|
3,200
|
6,396,800
|
-
|
6,400,000
|
||||||||||||||
Stock
issued for cash
|
17,615,000
|
1,762
|
3,501,239
|
-
|
3,503,000
|
||||||||||||||
Stock
issued for services
|
1,112,500
|
111
|
222,389
|
-
|
222,500
|
||||||||||||||
Issuance
of shares under stock compensation plan
|
125,000
|
13
|
342,488
|
-
|
342,500
|
||||||||||||||
Stock
based compensation expense
|
-
|
-
|
958,872
|
-
|
958,872
|
||||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
|
(3,693,152
|
)
|
(3,693,152
|
)
|
|||||||||||
Balance,
May 31, 2007
|
97,727,772
|
9,773
|
11,469,664
|
-
|
(3,770,823
|
)
|
7,708,614
|
||||||||||||
Stock
issued for cash
|
34,957,600
|
3,496
|
5,473,042
|
-
|
-
|
5,476,528
|
|||||||||||||
Stock
issued for services
|
55,000
|
6
|
38,745
|
-
|
-
|
38,750
|
|||||||||||||
Issuance
of shares under stock compensation plan
|
1,946,700
|
195
|
674,909
|
(40,000
|
)
|
-
|
635,104
|
||||||||||||
Stock
options granted to employees
|
-
|
-
|
4,247,957
|
-
|
-
|
4,247,957
|
|||||||||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
(10,647,276
|
)
|
(10,647,276
|
)
|
|||||||||||
Balance,
May 31, 2008
|
134,687,072
|
$
|
13,469
|
$
|
21,904,316
|
$
|
(40,000
|
)
|
$
|
(14,418,100
|
)
|
$
|
7,459,685
|
||||||
Stock
issued for cash
|
8,729,100
|
873
|
699,127
|
-
|
-
|
700,000
|
|||||||||||||
Stock
options granted to employees
|
-
|
-
|
209,992
|
20,000
|
-
|
229,992
|
|||||||||||||
Net
loss for the three month period ended August 31, 2008
|
-
|
-
|
-
|
-
|
(1,335,997
|
)
|
(1,335,997
|
)
|
|||||||||||
Balance,
August 31, 2008
|
143,416,172
|
$
|
14,342
|
$
|
22,813,435
|
$
|
(20,000
|
)
|
$
|
(15,754,098
|
)
|
$
|
7,053,680
|
Loan
advances
|
325,000
|
|||
Accrued
interest
|
44,409
|
|||
Loan
balance
|
369,409
|
|||
Reserve
|
(369,409
|
)
|
||
Total
|
-
|
Prepaid
expenses
|
$
|
211,158
|
||
Deposits
|
35,269
|
|||
Total
Prepaid expenses
|
$
|
246,427
|
Accounts
payable
|
$
|
462,597
|
||
Accrued
expenses
|
520,928
|
|||
Total
Accounts payable and accrued expenses
|
$
|
983,525
|
Officers
& Directors
|
|
|||
Jorge
Nigaglioni
|
$
|
35,735
|
||
William
Bloking
|
70,051
|
|||
Andrew
Caminschi
|
22,540
|
|||
Antonio
Varano
|
9,698
|
|||
Related
Parties
|
||||
Mining
House Ltd.
|
15,087
|
|||
|
$
|
153,112
|
Gross
Value of Agreements
|
$
|
7,085,706
|
||
Amortization
|
(560,952
|
)
|
||
Net
Intangible assets
|
$
|
6,524,754
|
2008
|
$
|
265,714
|
||
2009
|
354,285
|
|||
2010
|
354,285
|
|||
2011
|
354,285
|
|||
2012,
|
354,285
|
|||
After
|
4,841,900
|
|||
Total
|
$
|
6,524,754
|
|
Three Months Ended
August 31, 2008
|
|||
Manpower
|
$
|
322,910
|
||
Site
Expenses
|
29,044
|
|||
Equipment
|
12,027
|
|||
Travel
|
15,935
|
|||
|
$
|
379,916
|
Stock
Option Plan
|
|
|||
Risk-free
interest rate
|
1.69
|
%
|
||
Dividend
yield
|
0
|
%
|
||
Volatility
|
113.0
|
%
|
||
Expected
life
|
10
years
|
|
Available For
Grant
|
Shares
|
Weighted
Average Exercise
Plan
|
|||||||
Outstanding
at May 31, 2007
|
1,225,000
|
10,650,000
|
$
|
1.44
|
||||||
Granted
|
-2,865,000
|
2,865,000
|
$
|
0.29
|
||||||
Exercised
|
-
|
-2,001,667
|
$
|
0.38
|
||||||
Cancelled
|
4,081,667
|
-4,081,667
|
||||||||
Plan
Shares Expired
|
-
|
|||||||||
Outstanding
at May 31, 2008
|
2,441,667
|
7,431,667
|
$
|
1.28
|
||||||
Granted
|
-1,250,000
|
1,250,000
|
$
|
0.12
|
||||||
Exercised
|
-
|
-
|
$
|
-
|
||||||
Cancelled
|
4,063,750
|
-4,063,750
|
-
|
|||||||
Plan
Shares Expired
|
-
|
-
|
-
|
|||||||
Outstanding
at August 31, 2008
|
5,255,417
|
4,617,917
|
$
|
0.40
|
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||||
Range of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in thousands)
|
Number
Exercisable
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||||||||||||||
$
0.12-$0.50
|
2,306,250
|
9.4
|
$
|
0.40
|
$
|
10
|
1,317,333
|
9.25
|
$
|
0.46
|
$
|
2
|
Year
Ending August 31, 2009
|
$
|
60,852
|
SEC
registration fee
|
$
|
647.64
|
||
Legal
fees and expenses
|
25,000
|
|||
Accountants’
fees and expenses
|
$
|
7,500
|
||
Miscellaneous
|
2,000
|
|||
Total
|
$
|
35,147.64
|
KAL
ENERGY, INC.
|
||
By:
|
/s/
Jorge Nigaglioni
|
|
Name:
|
Jorge
Nigaglioni
|
|
Title:
|
Chief
Financial Officer
|
Name
|
Title
|
Date
|
||
/s/
William
Bloking
|
President
and Chairman of the Board
|
October
28, 2008
|
||
William
Bloking
|
(Principal
Executive Officer)
|
|||
/s/
Jorge Nigaglioni
|
Chief
Financial Officer
|
October
28, 2008
|
||
Jorge
Nigaglioni
|
(Principal
Financial and Accounting Officer)
|
|||
*
|
Director
|
October
28, 2008
|
||
Andrew
Caminschi
|
||||
*
|
Director
|
October
28, 2008
|
||
Antonio
Varano
|
*By:
|
/s/
Jorge Nigaglioni
|
Jorge
Nigaglioni
|
|
Attorney-in-fact
|
Exhibit No.
|
|
Description
|
2.1
|
|
Agreement
and Plan of Reorganization, dated as of December 29, 2006, by and
between
KAL Energy, Inc. and Thatcher Mining Pte. Ltd (incorporated by
reference
to Exhibit 2.1 to our Current Report on Form 8-K filed with the
Securities
and Exchange Commission on January 8, 2007).
|
|
|
|
3.1
|
|
Certificate
of Incorporation of KAL Energy, Inc. (incorporated by reference
to Exhibit
3.1 to our Registration Statement on Form SB-2 filed with the Securities
and Exchange Commission on July 26, 2002).
|
|
|
|
3.1.1
|
|
Certificate
of Amendment to Certificate of Incorporation of KAL Energy, Inc.,
filed
with the Delaware Secretary of State on March 2, 2007 (incorporated
by
reference to Exhibit 3.1.1 to our Registration Statement on Form
SB-2, as
amended, filed with the Securities and Exchange Commission on May
15,
2007).
|
|
|
|
3.2
|
|
Bylaws
of KAL Energy, Inc. (incorporated by reference to Exhibit 3.2 to
our
Registration Statement on Form SB-2 filed with the Securities and
Exchange
Commission on July 26, 2002).
|
5.1
|
Opinion of
Stradling Yocca Carlson & Rauth, a Professional
Corporation.**
|
|
|
|
|
10.1
|
|
KAL
Energy, Inc. 2007 Stock Incentive Plan (incorporated by reference
to
Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities
and Exchange Commission on March 8, 2007).+
|
|
|
|
10.2
|
|
Form
of Stock Option Agreement (I) under the KAL Energy, Inc. 2007 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to our
Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
March 8, 2007).+
|
|
|
|
10.3
|
|
Form
of Stock Option Agreement (II) under the KAL Energy, Inc. 2007
Stock
Incentive Plan (incorporated by reference to Exhibit 10.3 to our
Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
March 8, 2007).+
|
10.4
|
|
Cooperation
and Investment Agreement, dated as of January 7, 2007, by and among
PT
Bunyut Bara Mandiri, Thatcher Mining Pte Ltd., Fitri S. Astuty
Goodwin and
Sri Purwani (incorporated by reference to Exhibit 10.3 to our Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
February 15, 2007).
|
|
|
|
10.5
|
|
Cooperation
and Investment Agreement, dated as of January 7, 2007, by and among
PT
Graha Panca Karsa, Thatcher Mining Pte Ltd., Fitri S. Astuty Goodwin
and
Sri Purwani (incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
February 15, 2007).
|
|
|
|
10.6
|
|
Royalty
Agreement, dated as of December 29, 2006, by and among Essendon
Capital
Ltd., Carlton Corp., Concord International Inc., Thatcher Mining
Pte Ltd.
and KAL Energy (incorporated by reference to Exhibit 10.5 to our
Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
February 15, 2007).
|
|
|
|
10.6.1
|
Amendment
No. 1 to Royalty Agreement, dated as of October 1, 2008, by and
between
KAL Energy, Concord International and Thatcher Mining Pte. Ltd
(incorporated by reference to Exhibit 10.1 to our Current Report
on Form
8-K filed with the Securities and Exchange Commission on October
6,
2008).
|
|
10.7
|
|
Form
of Subscription Agreement (incorporated by reference to Exhibit
10.1 to
our Current Report on Form 8-K filed with the Securities and Exchange
Commission on October 17, 2007).
|
|
|
|
10.8
|
|
Form
of Warrant to Purchase Common Stock (incorporated by reference
to Exhibit
10.2 to our Current Report on Form 8-K filed with the Securities
and
Exchange Commission on October 17, 2007).
|
|
|
|
10.9
|
|
Form
of Subscription Agreement for Private Placement Offering of Common
Stock
(incorporated by reference to Exhibit 10.1 to our Current Report
on Form
8-K filed with the Securities and Exchange Commission on March
17,
2008).
|
|
|
|
10.10
|
|
Form
of Amended and Restated Subscription Agreement (incorporated by
reference
to Exhibit 10.1 to our Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 30, 2008).
|
|
|
|
10.11
|
Engagement
Letter Agreement, dated as of September 9, 2008, by and between
KAL Energy
and Grayling Global (incorporated by reference to Exhibit 10.1
to our
Amendment No. 1 to Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 17, 2008).
|
|
10.12
|
Compensation
Agreement, dated as of September 9, 2008, by and between KAL Energy
and
William Bloking (incorporated by reference to Exhibit 10.2 to our
Amendment No. 1 to Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 17, 2008).+
|
|
10.13
|
Form
of Forfeiture Agreement, dated as of September 17, 2008, by and
between
KAL Energy and the stockholder named therein (incorporated by reference
to
Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 22, 2008).
|
|
10.14
|
Employment
Agreement, dated as of October 1, 2008, by and between KAL Energy
and
Jorge Nigaglioni (incorporated by reference to Exhibit 10.2 to
our Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
October 6, 2008).+
|
|
10.15
|
Employment
Agreement, dated as of October 1, 2008, by and between KAL Energy
and
Andrew Caminschi (incorporated by reference to Exhibit 10.2 to
our Current
Report on Form 8-K filed with the Securities and Exchange Commission
on
October 6, 2008).+
|
16.1
|
|
Letter
dated March 12, 2007 from Morgan & Company to the Securities and
Exchange Commission (incorporated by reference to Exhibit 16.1 to
our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on March 12, 2007).
|
|
|
|
23.1
|
|
Consent
of Kabani and Company, Inc., Independent Registered Public Accounting
Firm.*
|
|
|
|
23.2
|
Consent
of Stradling Yocca Carlson & Rauth (see
Exhibit 5.1).**
|
|
24.1
|
|
Power
of Attorney (included on the signature page hereto).**
|
* |
Filed
herewith
|
** |
Previously
filed
|
+ |
Indicates
management contract or compensatory plan or
arrangement
|