Attached files
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| EX-31.1 - CERTIFICATION - First Liberty Power Corp | ex311.htm |
| EX-32.1 - CERTIFICATION - First Liberty Power Corp | ex321.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JULY 31, 2010
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to________________
Commission file number 000-52928
FIRST LIBERTY POWER CORP.
(Exact name of registrant as specified in its charter)
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Nevada
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45-0560329
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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114 West Magnolia St., #400-136, Bellingham, WA
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98225
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code (702) 990-8402
Securities registered under Section 12(b) of the Act:
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None
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N/A
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Title of each class
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Name of each exchange on which registered
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Securities registered under Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
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Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Yes No X
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Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
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Yes No X
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Indicate by checkmark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Yes X No
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Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
Non-accelerated filer
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(Do not check if a smaller reporting company)
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Accelerated filer
X Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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X Yes No
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The aggregate market value of voting and non-voting common equity held by non-affiliates was approximately $42,000 based upon 840,000 shares held by non-affiliates and a closing market price of $0.05 per share on January 31, 2010, the last business day of the registrant’s most recently completed second fiscal quarter. For purposes of this computation, all executive officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are, in fact, affiliates of the Registrant.
As of November 15, 2010, there were 68,425,000 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibits incorporated by reference are referred to in Part IV.
TABLE OF CONTENTS
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Page
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PART I
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Item 1
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Business
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Item 1A
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Risk Factors
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3 |
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Item 1B
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Unresolved Staff Comments
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3 |
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Item 2
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Properties
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Item 3
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Legal Proceedings
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Item 4
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(Removed and Reserved)
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3 |
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PART II
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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4 |
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Item 6
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Selected Financial Data
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4 |
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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5 |
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8
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Financial Statements and Supplementary Data
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Item 9
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A(T)
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Controls and Procedures
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Item 9B
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Other Information
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PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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Item 11
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Executive Compensation
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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11 |
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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Item 14
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Principal Accounting Fees and Services
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PART IV
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Item 15
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Exhibits, Financial Statement Schedules
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SIGNATURES
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14 |
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PART I
EXPLANATORY NOTE
Explanatory Note
This Form 10-K/A (Amendment No.1) is being filed by First Liberty Power Corp. (the “Company”) to amend the Company’s Form 10-K for the year ended July 31, 2010, which was filed with the Securities and Exchange Commission (“SEC”) on November 19, 2010 (“Initial 10-K”). This Form 10-K/A (Amendment No.1) is filed to amend the Initial 10-K in response to comments received from FINRA. Among other amendments, we have included Items 1B, 9, 9A(T), and 9B which were inadvertently removed from our initial Form 10-K. We have further amended the exhibits list to correctly denote the certifying party’s name, and we have amended the name of the Company on the signature page to correct a filing agent error. We have also removed certain disclosure elements that are not required by smaller reporting companies, in Items 1A and 7, and inserted certain required disclosure in Items 5 and 14.
Except as noted above, no attempt has been made in this Amendment to modify or update the other disclosures presented in the 10-K/A. This Amendment does not reflect events occurring after the filing of the original 10-K (i.e., those events occurring after July 31, 2010) or modify or update those disclosures that may be affected by subsequent events. Such subsequent matters are addressed in subsequent reports filed with the SEC. Accordingly, this Amendment should be read in conjunction with the 10-K and our other filings with the SEC.
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our current principal executive officer and current principal financial officer are filed as exhibits to this Amendment.
Forward Looking Statements
This Amended Annual Report on Form 10-K/A ("Annual Report") contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These risks include, by way of example and not in limitation:
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·
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the uncertainty that we will not be able to successfully identify and evaluate a suitable business opportunity;
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risks related to the large number of established and well-financed entities that are actively seeking suitable business opportunities;
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risks related to the failure to successfully manage or achieve growth of a new business opportunity; and
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·
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other risks and uncertainties related to our business strategy.
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This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.
Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 are unavailable to us.
Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock.
As used in this Annual Report, the terms "we," "us," "Company", "our" and "First Liberty" mean First Liberty Power Corp., unless otherwise indicated.
1
Available Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports that we file with the Securities and Exchange Commission, or SEC, are available at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding reporting companies.
ITEM 1. BUSINESS
The address of our principal executive office is 114 West Magnolia Street, #400 – 136, Bellingham, WA 98225. Our telephone number is 702-990-8402.
Our common stock is quoted on the OTC Bulletin Board under the symbol "FLPC".
We were incorporated in the State of Nevada under the name “Quuibus Technology, Inc.” on March 28, 2007, to engage in the business of developing and offering a server-based software product for the creation of wireless communities. On November 26, 2009, our founding Directors and officers resigned, and Glyn R. Garner was elected a Director and appointed president, secretary and treasurer of our company. Due to our inability to commence viable operations in the software production industry, new management of our Company began to evaluate various business alternatives available to our company to ensure our survival and to preserve our shareholder’s investment in our common shares.
In accordance with approval by the Board of Directors, effective December 22, 2009, the Nevada Secretary of State effected a forward stock split of our authorized and issued and outstanding shares of common stock on a one (1) old for 27 new basis, such that our authorized capital increased from 20,000,000 shares of common stock with par value of $0.001 to 540,000,000 shares of common stock with a par value of $0.001 and, correspondingly, our issued and outstanding shares of common stock increased from 2,525,000 shares of common stock to 68,175,000 shares of common stock. Also, effective December 22, 2009, we changed our name from “Quuibus Technology, Inc.” to “First Liberty Power Corp.” by way of a merger with our wholly owned subsidiary First Liberty Power Corp. which was formed solely for the purpose of the change of name. The change of name and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening for trading on February 4, 2010, under the new stock symbol “FLPC”. The change of name was effected to better reflect the new business direction of our Company.
On December 24, 2009, we entered into two purchase agreements granting our Company exclusive exploration licenses for lithium and lithium carbonate exploration in Nevada and vanadium and uranium exploration in Utah.
On March 1, 2010, we appointed Mr. Jon Rud as vice-president of exploration of our Company.
On March 11, 2010, we closed a private placement whereby we issued 720,000 units for gross proceeds of $260,000. Each unit consists of one common share and one share purchase warrant. Each whole common share purchase warrant shall entitle the holder to purchase one share of common stock in the capital of our Company for a period of twelve months from closing at a price of $0.50 per warrant share.
We do not have any subsidiaries.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Our Current Business
We are an exploration stage company engaged in the exploration of mineral properties.
On December 24, 2009, we entered into two purchase agreements with GeoExplor Corp. Under the agreements, we have been granted an exclusive exploration license in regards to the mineral properties described in the agreements. One agreement is in regards to claims located in Esmeralda County, Nevada, for Lithium and Lithium Carbonate exploration (the "Lithium Agreement"), and one agreement is in regards to claims located in San Juan County, Utah, for Vanadium and Uranium exploration (the "Van-Ur Agreement"). Pursuant to both Agreements, upon the completion of the required payments and work commitments, GeoExplor shall transfer title to the properties to our company and shall retain a 2% royalty, on which we shall have the option to purchase one-half, or 1%, for $1,000,000.
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In regards to the Lithium Agreement we are required to: (1) make cash payments of $490,500 over a four year period, of which initial payments of $115,500 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 have been issued; and (3) comply with a work commitment of $1,000,000 within four years of the date of the Agreement.
In regards to the Van-Ur Agreement we are required to (1) make cash payments of $480,000 over a four year period, of which initial payments of $80,000 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 have been issued; and (3) comply with a work commitment of $1,000,000 within four years of the date of the Agreement.
On March 1, 2010, we entered into a consulting agreement with Mr. John Rud, our vice president of exploration, wherein Mr. Rud has agreed to provide consulting services to our Company for a period of 12 months. For services rendered, Mr. Rud has agreed to receive 250,000 shares of our common stock valued at $80,000.
On May 3 2010, we entered into a consulting agreement with Mr. John Hoak, wherein Mr. Hoak has agreed to provide, among other things, consulting services to our Company. The agreement is effective March 24, 2010, and continues to March 24, 2012. In consideration for agreeing to provide such consulting services, we have issued to Mr. Hoak 250,000 shares of our common stock valued at $187,500.
Employees
As of November 15, 2010, we have no employees as we have been unable to secure sufficient financing to hire full time or part time staff. Our sole officer and Director provides services to us on an as-needed basis.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1A. RISK FACTORS
As a “smaller reporting company”, we are not required to provide the information required by this Item.
ITEM 2. PROPERTIES
Executive Offices
The address of our principal executive office is 114 West Magnolia Street, #400 – 136, Bellingham, WA 98225. Our telephone number is 702-990-8402.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against our Company, nor of any proceedings that a governmental authority is contemplating against us.
ITEM 4. [REMOVED AND RESERVED]
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Market Information
Our Common Stock is traded on the over-the-counter market and quoted on the OTCBB under the symbol “FLPC.”
The table below sets forth the range of high and low bid information for our Common Shares as quoted on the OTCBB for each of the quarters during the fiscal year ended July 31, 2010 (no quotes are available for the previous fiscal year as our stock had not traded):
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For the Quarter ended
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High
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Low
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October 31, 2009 (partial)
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$0.10
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$0.10
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January 31, 2010
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$0.10
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$0.10
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April 30, 2010
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$1.10
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$0.001
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July 31, 2010
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$1.07
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$0.26
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The quotations provided may reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders of our Common Stock
On November 15, 2010, the shareholders’ list of our common stock showed 10 registered shareholders and 68,425,000 shares outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our future dividend policy will be determined from time to time by our Board of Directors.
Securities Authorized for Issuance under Equity Compensation Plans
As of July 31, 2010, we had not adopted an equity compensation plan and had not granted any stock options.
Recent Sales of Unregistered Securities
On March 11, 2010, the Company subscribed 720,000 units in a private placement at $0.50 per unit. Each unit consisted of one common share and one detachable warrant. Each whole common share purchase warrant entitles the holder to purchase one share of common stock at a price of $0.50 for a period of twelve months commencing from closing. As of July 31, 2010, the warrants had not been issued and, therefore, not valued. The common stock subscribed has been valued at $0.50 per share.
Purchases of Equity Securities by the Issuer and Affiliated Purchases
During each month within the fourth quarter of the fiscal year ended July 31, 2009, neither we nor any “affiliated purchaser,” as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our common stock or other securities.
ITEM 6. SELECTED FINANCIAL DATA.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion should be read in conjunction with our audited 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.
Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
We are an exploration stage company engaged in the exploration of mineral properties.
On December 24, 2009, we entered into two purchase agreements with GeoExplor Corp. Under the agreements, we have been granted an exclusive exploration license in regards to the mineral properties described in the agreements. One agreement is in regards to claims located in Esmeralda County, Nevada, for Lithium and Lithium Carbonate exploration (the "Lithium Agreement"), and one agreement is in regards to claims located in San Juan County, Utah, for Vanadium and Uranium exploration (the "Van-Ur Agreement"). Pursuant to both Agreements, upon the completion of the required payments and work commitments, GeoExplor shall transfer title to the properties to our company and shall retain a 2% royalty, on which we shall have the option to purchase one-half, or 1%, for $1,000,000.
In regards to the Lithium Agreement we are required to: (1) make cash payments of $490,500 over a four year period, of which initial payments of $115,500 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 have been issued; and (3) comply with a work commitment of $1,000,000 within four years of the date of the Agreement.
In regards to the Van-Ur Agreement we are required to (1) make cash payments of $480,000 over a four year period, of which initial payments of $80,000 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 have been issued; and (3) comply with a work commitment of $1,000,000 within four years of the date of the Agreement.
On March 1, 2010, we entered into a consulting agreement with Mr. John Rud, our vice president of exploration, wherein Mr. Rud has agreed to provide consulting services to our Company for a period of 12 months. For services rendered, Mr. Rud has agreed to receive 250,000 shares of our common stock valued at $80,000.
On May 3 2010, we entered into a consulting agreement with Mr. John Hoak, wherein Mr. Hoak has agreed to provide, among other things, consulting services to our Company. The agreement is effective March 24, 2010 and continues to March 24, 2012. In consideration for agreeing to provide such consulting services, we have issued to Mr. Hoak 250,000 shares of our common stock valued at $187,500.
Cash Requirements
We anticipate a cash requirement in the amount of $205,000 during the next 12 months. Accordingly, we will require additional funds to implement our exploration and development programs. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our exploration program.
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Over the next 12 months we anticipate that we will incur the following cash requirements:
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Amount
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General operating fees
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$ | 35,000 | ||
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Professional Fees
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20,000 | |||
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Exploration and Development Costs
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150,000 | |||
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Total
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$ | 205,000 | ||
Capital Expenditures
We do not intend to invest in capital expenditures during the twelve-month period ending July 31, 2011.
General and Administrative Expenses
We expect to spend $35,000 during the twelve-month period ending July 31, 2011 on general and administrative expenses including legal and auditing fees, rent, office equipment and other administrative related expenses.
Product Research and Development
We do not anticipate expending any funds on research and development, manufacturing and engineering over the twelve months ending July 31, 2011.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve months ending July 31, 2011.
Personnel Plan
As of July 31, 2010, our only employee was our Director and officer.
We do not expect any material changes in the number of employees over the next 12 month period. We do and will continue to outsource contract employment as needed.
We engage contractors from time to time to consult with us on specific corporate affairs or to perform specific tasks in connection with our exploration programs.
Results of Operations
Revenues
We had no revenues for the period from May 29, 2007 (date of inception), through July 31, 2010.
Expenses
Our expenses for the twelve month period ended July 31, 2010 and 2009 were $205,727 and $20,196, respectively. During the period from May 29, 2007 (date of inception), through July 31, 2010, we incurred expenses of $268,019. These expenses were comprised primarily of office rent, legal expenses, accounting expenses, SEC filing fees, transfer agent fees, as well as bank fees.
Net Income (Loss)
Our net loss for the twelve-month period ended July 31, 2010 and 2009 was $220,105 and $20,196, respectively. During the period from May 29, 2007 (date of inception), through July 31, 2010, we incurred a net loss of $282,397. This loss consisted of office rent, legal expenses, accounting expenses, SEC filing fees, transfer agent fees, as well as bank fees. Since inception, we have issued 68,175,000 shares of common stock.
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Purchase or Sale of Equipment
We do not expect to purchase or sell any plant or significant equipment.
Liquidity and Capital Resources
As of July 31, 2010, our total current assets were $383,182, and our total current liabilities were $439,854 and we had a working capital deficiency of $56,672. Our financial statements report a net loss of $220,105 for the year ended July 31, 2010, and a net loss of $282,397 for the period from March 28, 2007 (date of inception) through July 31, 2010.
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.
In their audit report relating to our financial statements for the period ended July 31, 2010, and 2009, our independent accountants indicated that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our lack of revenue resulting in a net loss position and insufficient funds to meet our business objectives. All of these factors continue to exist and raise doubt about our status as a going concern.
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Consolidated Financial Statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company”, we are not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
7
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXLORATION STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
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Page
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Index to Financial Statements July 31, 2010 and 2009
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F-1
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Report of Independent Registered Public Accounting Firm
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F-2
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Balance Sheets as of July 31, 2010, and 2009
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F-3
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Statements of Operations for the Years Ended July 31, 2010, and 2009, and Cumulative from Inception
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F-4
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Statement of Stockholders’ Equity (Deficit) for the Period from Inception through July 31, 2010
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F-5
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Statements of Cash Flows for the Years Ended July 31, 2010, and 2009, and Cumulative from Inception
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F-6
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Notes to Financial Statements July 31, 2010, and 2009
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F-7 to F-13
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F-1
REPORT OF REGISTERED INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of First Liberty Power Corp.:
We have audited the accompanying balance sheets of First Liberty Power Corp. (formerly Quuibus Technology Inc., and a Nevada corporation in the exploration stage) as of July 31, 2010, and 2009, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended July 31, 2010, and cumulative from inception (March 28, 2007) through July 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Liberty Power Corp. as of July 31, 2010, and 2009, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2010, and cumulative from inception (March 28, 2007) through July 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is in the exploration stage, and has not established any source of revenue to cover its operating costs. As such, it has incurred an operating loss since inception. Further, as of July 31, 2010, and 2009, the cash resources of the Company were insufficient to meet its planned business objectives. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 2 to the financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Respectfully submitted,
/s/ Etania Audit Group P.C.
Cedar City, Utah,
November 5, 2010
F-2
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS (NOTE 2)
AS OF JULY 31, 2010, AND 2009
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July 31,
2010
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July 31,
2009
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ASSETS
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CURRENT ASSETS:
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Cash in bank
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$ | 172,271 | $ | 138 | ||||
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Prepaid consulting fees
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210,911 | - | ||||||
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Total current assets
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383,182 | 138 | ||||||
|
PROPERTY AND EQUIPMENT:
|
||||||||
|
Mineral properties
|
275,000 | - | ||||||
|
Total property and equipment
|
275,000 | - | ||||||
|
TOTAL ASSETS
|
$ | 658,182 | $ | 138 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Accounts payable – Trade
|
$ | 147,092 | $ | 4,705 | ||||
|
Accrued liabilities
|
33,001 | 3,500 | ||||||
|
Due to stockholder
|
9,761 | 1,000 | ||||||
|
Loan payable
|
250,000 | - | ||||||
|
Total current liabilities
|
439,854 | 9,205 | ||||||
|
Total liabilities
|
439,854 | 9,205 | ||||||
| Commitments and Contingencies | ||||||||
|
STOCKHOLDERS’ EQUITY (DEFICIT):
|
||||||||
|
Common stock, par value $0.001 per share; 540,000,000 shares authorized; 68,425,000 and 68,175,000 shares issued and outstanding in 2010, and 2009, respectively
|
68,425 | 68,175 | ||||||
|
Discount on common stock
|
- | (14,950 | ) | |||||
|
Additional paid in capital
|
172,300 | - | ||||||
|
Common stock subscribed - 720,000 shares of common stock
|
360,000 | - | ||||||
|
Stock subscription receivable
|
(100,000 | ) | - | |||||
|
(Deficit) accumulated during the exploration stage
|
(282,397 | ) | (62,292 | ) | ||||
|
Total stockholders' equity (deficit)
|
218,328 | (9,067 | ) | |||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$ | 658,182 | $ | 138 | ||||
The accompanying notes to financial statements are an integral part of these balance sheets.
F-3
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS (NOTE 2)
FOR THE YEARS ENDED JULY 31, 2010, AND 2009,
AND CUMULATIVE FROM INCEPTION (MARCH 28, 2007)
THROUGH JULY 31, 2010
|
Cumulative
|
||||||||||||
|
July 31,
|
From
|
|||||||||||
|
2010
|
2009
|
Inception
|
||||||||||
|
REVENUES
|
$ | - | $ | - | $ | - | ||||||
|
EXPENSES:
|
||||||||||||
|
Exploration costs
|
67,711 | - | 67,711 | |||||||||
|
General and administrative-
|
||||||||||||
|
Accounting and audit fees
|
16,900 | 9,500 | 34,400 | |||||||||
|
Legal fees – Other
|
20,014 | 3,024 | 38,205 | |||||||||
|
Transfer agent fees
|
1,311 | 1,450 | 15,280 | |||||||||
|
SEC filing fees
|
620 | 4,622 | 9,395 | |||||||||
|
Consulting fees
|
86,589 | - | 86,589 | |||||||||
|
Office rent
|
1,440 | 1,441 | 4,321 | |||||||||
|
Legal fees – Incorporation fees
|
- | - | 475 | |||||||||
|
Bank and currency exchange fees
|
3,042 | 159 | 3,455 | |||||||||
|
Office supplies and miscellaneous
|
8,100 | - | 8,188 | |||||||||
|
Total general and administrative expenses
|
138,016 | 20,196 | 200,308 | |||||||||
|
(LOSS) FROM OPERATIONS
|
(205,727 | ) | (20,196 | ) | (268,019 | ) | ||||||
|
OTHER INCOME (EXPENSE):
|
||||||||||||
|
Interest (expense)
|
(14,378 | ) | - | (14,378 | ) | |||||||
|
(LOSS) BEFORE INCOME TAXES
|
(220,105 | ) | (20,196 | ) | (282,397 | ) | ||||||
|
PROVISION FOR INCOME TAXES
|
- | - | - | |||||||||
|
NET (LOSS)
|
$ | (220,105 | ) | $ | (20,196 | ) | $ | (282,397 | ) | |||
|
(LOSS) PER COMMON SHARE:
|
||||||||||||
|
(Loss) per common share – Basic and Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED
|
68,229,795 | 68,175,000 | ||||||||||
The accompanying notes to financial statements are an integral part of these statements.
F-4
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS’ EQUITY (NOTE 2)
FOR THE PERIOD FROM INCEPTION (MARCH 28, 2007)
THROUGH JULY 31, 2010
|
(Deficit)
|
||||||||||||||||||||||||||||||||
|
Discount
|
Accumulated
|
|||||||||||||||||||||||||||||||
|
on
|
Additional
|
Common
|
Stock
|
During the
|
||||||||||||||||||||||||||||
|
Common Stock
|
Common
|
Paid-in
|
Stock
|
Subscription
|
Exploration
|
|||||||||||||||||||||||||||
|
Shares
|
Amount
|
Stock
|
Capital
|
Subscribed
|
Receivable
|
Stage
|
Totals
|
|||||||||||||||||||||||||
|
Balance – March 28, 2007
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||
|
Common stock issued for cash
|
43,200,000 | 43,200 | (23,200 | ) | - | - | - | - | 20,000 | |||||||||||||||||||||||
|
Net (loss) for the period
|
- | - | - | - | - | - | (520 | ) | (520 | ) | ||||||||||||||||||||||
|
Balance - July 31, 2007
|
43,200,000 | 43,200 | (23,200 | ) | - | - | - | (520 | ) | 19,480 | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Common stock issued for cash
|
24,975,000 | 24,975 | 21,525 | - | - | - | - | 46,500 | ||||||||||||||||||||||||
|
Deferred offering costs
|
- | - | (13,750 | ) | - | - | - | - | (13,750 | ) | ||||||||||||||||||||||
|
Forgiveness of related party debt
|
- | - | 475 | - | - | - | - | 475 | ||||||||||||||||||||||||
|
Net (loss) for the period
|
- | - | - | - | - | - | (41,576 | ) | (41,576 | ) | ||||||||||||||||||||||
|
Balance July 31, 2008
|
68,175,000 | 68,175 | (14,950 | ) | - | - | - | (42,096 | ) | 11,129 | ||||||||||||||||||||||
|
Net (loss) for the period
|
- | - | - | - | - | - | (20,196 | ) | (20,196 | ) | ||||||||||||||||||||||
|
Balance July 31, 2009
|
68,175,000 | 68,175 | (14,950 | ) | - | - | - | (62,292 | ) | (9,067 | ) | |||||||||||||||||||||
|
Common stock subscribed for cash-
720,000 shares
|
- | - | - | - | 360,000 | (100,000 | ) | - | 260,000 | |||||||||||||||||||||||
|
Common stock issued for services
|
250,000 | 250 | 14,950 | 172,300 | - | - | - | 187,500 | ||||||||||||||||||||||||
|
Net (loss) for the period
|
- | - | - | - | - | - | (220,105 | ) | (220,105 | ) | ||||||||||||||||||||||
|
Balance July 31, 2010
|
68,425,000 | $ | 68,425 | $ | - | $ | 172,300 | $ | 360,000 | $ | (100,000 | ) | $ | (282,397 | ) | $ | 218,328 | |||||||||||||||
The accompanying notes to financial statements are an integral part of this statement.
F-5
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS (NOTE 2)
FOR THE YEARS ENDED JULY 31, 2010 AND 2009
AND CUMULATIVE FROM INCEPTION (MARCH 28, 2007)
THROUGH JULY 31, 2010
|
Cumulative
|
||||||||||||
|
July 31,
|
From
|
|||||||||||
|
2010
|
2009
|
Inception
|
||||||||||
|
OPERATING ACTIVITIES:
|
||||||||||||
|
Net (loss)
|
$ | (220,105 | ) | $ | (20,196 | ) | $ | (282,397 | ) | |||
|
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
|
||||||||||||
|
Stock subscribed and issued for consulting services
|
56,589 | - | 57,064 | |||||||||
|
Changes in net assets and liabilities -
|
37,387 | 4,505 | 42,092 | |||||||||
|
Accounts payable - Trade
|
5,555 | - | 5,555 | |||||||||
|
Accrued liabilities
|
29,501 | (120 | ) | 33,001 | ||||||||
|
NET CASH (USED IN) OPERATING ACTIVITIES
|
(96,628 | ) | (15,811 | ) | (150,240 | ) | ||||||
|
|
||||||||||||
|
INVESTING ACTIVITIES:
|
||||||||||||
|
Mineral properties acquired
|
(250,000 | ) | - | (250,000 | ) | |||||||
|
NET CASH (USED IN) OPERATING ACTIVITIES
|
(250,000 | ) | - | (250,000 | ) | |||||||
|
FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from unit subscriptions
|
260,000 | - | 260,000 | |||||||||
|
Proceeds from the issuance of common stock
|
- | - | 66,500 | |||||||||
|
Proceeds from former shareholder loan
|
8,761 | 1,000 | 9,761 | |||||||||
|
Proceeds from loan
|
250,000 | - | 250,000 | |||||||||
|
Deferred offering costs
|
- | - | (13,750 | ) | ||||||||
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
518,761 | 1,000 | 572,511 | |||||||||
|
NET INCREASE (DECREASE) IN CASH
|
172,133 | (14,811 | ) | 172,271 | ||||||||
|
CASH – BEGINNING OF PERIOD
|
138 | 14,949 | - | |||||||||
|
CASH – END OF PERIOD
|
$ | 172,271 | $ | 138 | $ | 172,271 | ||||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
|
Cash paid during the period for:
|
||||||||||||
|
Interest
|
$ | - | $ | - | $ | - | ||||||
|
Income taxes
|
$ | - | $ | - | $ | - | ||||||
The accompanying notes to financial statements are an integral part of these statements.
F-6
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(1) Summary of Significant Accounting Policies
Basis of Presentation and Organization
First Liberty Power Corp. (“First Liberty Power” or the “Company” and formerly Quuibus Technology, Inc.) is a Nevada corporation in the exploration stage. The Company was incorporated under the laws of the State of Nevada on March 28, 2007. The original business plan of the Company was focused on developing and offering a server-based software product for the creation of wireless communities. In December 2009, the Company changed its business direction. The Company’s primary focus is on exploration of domestic strategic energy and mineral properties to supply the emerging demand for clean energy. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.
In addition, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the Securities and Exchange Commission, and raise capital of up to $60,000 from a self-underwritten offering of 1,200,000 shares of newly issued common stock in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed an offering of its registered common stock as explained in Note 4.
On December 22, 2009, the Company declared a 1 for 27 forward stock split of its issued and outstanding common stock. The Company authorized common stock increased from 20,000,000 shares of common stock with a par value of $0.001 to 540,000,000 shares of common stock with a par value of $0.001, and correspondingly, the Company issued and outstanding shares of common stock increased from 2,525,000 shares of common stock to 68,175,000 shares of common stock.
Effective December 22, 2009, the Company changed its name from “Quuibus Technology, Inc.” to “First Liberty Power Corp.” by way of a merger with its wholly owned subsidiary First Liberty Power Corp., which was formed solely for the change of name.
Cash and Cash Equivalents
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Mineral Properties
The Company is primarily engaged in the business of the acquisition, exploration, development, mining, and production of domestic strategic energy and mineral properties, with emphasis on lithium, vanadium, and uranium. Mineral claim and other property acquisition costs are capitalized as incurred. Such costs are carried as an asset of the Company until it becomes apparent through exploration activities that the cost of such properties will not be realized through mining operations. Mineral exploration costs are expensed as incurred, and when it becomes apparent that a mineral property can be economically developed as a result of establishing proven or probable reserve, the exploration costs, along with mine development cost, are capitalized. The costs of acquiring mineral claims, capitalized exploration costs, and mine development costs are recognized for depletion and amortization purposes under the units-of-production method over the estimated life of the probable and proven reserves. If mineral properties, exploration, or mine development activities are subsequently abandoned or impaired, any capitalized costs are charged to operations in the current period.
F-7
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(1) Summary of Significant Accounting Policies (continued)
Revenue Recognition
The Company is in the exploration stage and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.
Loss per Common Share
Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding during the years ended July 31, 2010, and 2009.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC Topic740, Income Taxes. Under FASB ASC Topic 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of July 31, 2010, and 2009, the carrying value of the Company’s financial instruments approximated fair value due to the short-term nature and maturity of these instruments.
Deferred Offering Cost
The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated. For the year ended July 31, 2008, the Company offset $13,750 in deferred offering costs to additional paid-in capital.
F-8
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(1) Summary of Significant Accounting Policies (continued)
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
Estimates
The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of July 31, 2010, and 2009, and expenses for the years ended July 31, 2010, and 2009, and cumulative from inception. Actual results could differ from those estimates made by management.
(2) Exploration Stage Activities and Going Concern
The Company is currently in the exploration stage and has engaged in limited operations. Initial operations through July 31, 2010, include capital formation activities, organization, target market identification, and marketing plans. The original business plan of the Company was focused on developing and offering a server-based software product for the creation of wireless communities. In December 2009, the Company changed its business direction to the exploration and development of domestic strategic energy and mineral properties. The Company’s goal is to seek mineral resources to capitalize on the anticipated explosive demand for sustainable clean power.
During the period from March 28, 2007, through July 31, 2010, the Company was incorporated and issued 43,200,000 shares (post forward stock split) to its Directors for cash proceeds of $20,000. In addition, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $60,000 from a self-underwritten offering of 32,400,000 shares (post forward stock split) of newly issued common stock in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed an offering of its registered common stock as explained in Note 4. The Company also intends to conduct additional capital formation activities through the issuance of its common stock and to further conduct its operations.
While management of the Company believes that the Company will be successful in its planned operating activities, there can be no assurance that it will be able to be successful in the development of its product, sale of its planned product, and services that will generate sufficient revenues to sustain its operations.
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception and has no revenues to offset its operating costs. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
F-9
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(3) Change in Management
On November 26, 2009, Mr. Yavuz Konur resigned as Chief Technical Officer and a Director of the Company.
On November 26, 2009, Mr. Hossein Mohseni resigned as the President, Secretary, Treasurer, and a Director of the Company.
On November 26, 2009, the Company appointed Mr. Glyn R. Garner as the President, Secretary, Treasurer, and a Director of the Company.
On March 1, 2010, the Company appointed Mr. John Rud as Vice President of Exploration of the Company.
On May 13, 2010, the Company appointed Mr. John Hoak as a Director of the Company.
(4) Common Stock
The Company is authorized to issue 540,000,000 shares (post forward stock split) of $0.001 par value common stock. All common stock shares have equal voting rights, are non-assessable, and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the Directors of the Company.
On July 6, 2007, the Company issued 43,200,000 shares of common stock to its Directors at a price of $0.00046 per share for cash proceeds of $20,000.
In addition, in 2007, the Company commenced a capital formation activity to effect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $60,000 from a self-underwritten offering of 32,400,000 shares (post forward stock split) of newly issued common stock at a price of $0.0019 per share in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on November 13, 2007, and declared effective on November 21, 2007. On February 18, 2008, the Company completed the self-underwritten offering of 24,975,000 shares (post forward stock split) of its registered common stock, par value of $0.001 per share, at an offering price of $0.0019 per share for proceeds of $46,500.
On December 24, 2009, the Company agreed to issue 500,000 shares (post forward stock split) of common stock to GeoExplor Corp. pursuant the Mineral Property Purchase Agreement. (See Note 8 for additional information). The 500,000 shares of common stock were valued at $25,000 based on the 2008 self-underwritten offering price. As of July 31, 2010, these shares have not been issued.
On March 1, 2010, the Company entered into a consulting agreement with Mr. John Rud, wherein Mr. Rud has agreed to provide, among other things, consulting services to the Company for a period of 12 months. The Company agreed to issue to Mr. Rud 250,000 shares of the Company common stock for services rendered valued at $80,000. As of July 31, 2010, these shares of common stock have not been issued.
On March 11, 2010, the Company subscribed 720,000 units in a private placement at $0.50 per unit. Each unit consisted of one common share and one detachable warrant. Each whole common share purchase warrant entitles the holder to purchase one share of common stock at a price of $0.50 for a period of twelve months commencing from closing. As of July 31, 2010, the warrants had not been issued and, therefore, not valued. The common stock subscribed has been valued at $0.50 per share.
On May 13, 2010, the Company entered into a consulting agreement and issued 250,000 shares of common stock to Mr. John Hoak, a Director of the Company, for consulting services to be rendered. The services were valued at $187,500.
F-10
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(5) Income Taxes
The provision (benefit) for income taxes for the years ended July 31, 2010, and 2009, was as follows (assuming a 15 percent effective tax rate):
|
Year Ended July 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Current Tax Provision:
|
||||||||
|
Federal
|
||||||||
|
Taxable income
|
$ | - | $ | - | ||||
|
Total current tax provision
|
$ | - | $ | - | ||||
|
Deferred Tax Provision:
|
||||||||
|
Federal-
|
||||||||
|
Loss carryforwards
|
$ | 33,016 | $ | 3,029 | ||||
|
Change in valuation allowance
|
(33,016 | ) | (3,029 | ) | ||||
|
Total deferred tax provision
|
$ | - | $ | - | ||||
The Company had deferred income tax assets as of July 31, 2010, and 2009, as follows:
|
July 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Loss carryforwards
|
$ | 42,359 | $ | 9,343 | ||||
|
Less - Valuation allowance
|
(42,359 | ) | (9,343 | ) | ||||
|
Total net deferred tax assets
|
$ | - | $ | - | ||||
The Company provided a valuation allowance equal to the deferred income tax assets for the years ended July 31, 2010, and 2009, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards. As of July 31, 2010, the Company had approximately $282,397 (July 31, 2009 - $62,292) in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and begin to expire in the year 2027.
(6) Related Party Transactions
During the year ended July 31, 2008, an officer, Director, and stockholder of the Company personally paid for expenses on behalf of the Company in the amount of $475. As of July 31, 2008, this individual forgave the Company of this debt.
As of July 31, 2010, an officer, former Director and stockholder of the Company had loaned $9,761 (July 31, 2009- $1,000) to the Company for working capital purposes. The loan is unsecured, non-interest bearing, and has no specific terms for repayment.
F-11
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(7) Loan Payable
On December 24, 2009, the Company borrowed $200,000 from a third party under a promissory note. The loan is unsecured, bears interest at 10 percent per annum, and is due and payable on or before December 23, 2010. On March 15, 2010, the Company borrowed an additional $50,000. The loan is unsecured, bears interest at 10 percent per annum, and is due on or before March 15, 2011. As of July 31, 2010, $14,378 of interest related to the loans was accrued.
(8) Contracts and Agreements
Mineral Property Purchase Agreement
On December 24, 2009, the Company entered into two property purchase agreements with GeoExplor Corp., which granted an exclusive exploration licenses to the mineral properties described in the agreements. One agreement is in regards to claims located in Esmeralda County, Nevada, for Lithium and Lithium Carbonate exploration ( the “Lithium Agreement”), and one agreement is in regards to claims located in San Juan County, Utah, for Vanadium and Uranium exploration (the “Van-Ur Agreement”). In regards to the Lithium Agreement, the Company is required to (1) make cash payments of $490,500 over a four year period, of which initial payments of $115,500 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 shares of common stock were issuable upon execution of the agreement; and (3) comply with a work commitment of $1,000,000 within four years of the date of the agreement. In regards to the Van-Ur Agreement, the Company is required to (1) make cash payments of $480,000 over a four year period, of which initial payments of $80,000 have been made; (2) issue a total of 1,000,000 restricted shares of common stock over a three year period, of which 250,000 shares of common stock were issuable upon execution of the agreement; and (3) comply with a work commitment of $1,000,000 within four years of the date of the Agreement. Pursuant to both Agreements, upon the completion of the required payments and work commitments, GeoExplor shall transfer title to the properties to the Company, and will retain a 2 percent royalty, on which, the Company will have the option to purchase one-half, or 1%, for $1,000,000.
(9) Recent Accounting Pronouncements
On May 22, 2009, the FASB issued FASB Statement No. 164, (FASB ASC 958), “Not-for-Profit Entities: Mergers and Acquisitions”. SFAS No. 164 (FASB ASC 958) is intended to improve the relevance, representational faithfulness, and comparability of the information that a not-for-profit entity provides in its financial reports about a combination with one or more other not-for-profit entities, businesses, or nonprofit activities. To accomplish that, this Statement establishes principles and requirements for how a not-for-profit entity:
|
a.
|
Determines whether a combination is a merger or an acquisition.
|
|
b.
|
Applies the carryover method in accounting for a merger.
|
|
c.
|
Applies the acquisition method in accounting for an acquisition, including determining which of the combining entities is the acquirer.
|
|
d.
|
Determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of a merger or an acquisition.
|
This Statement also improves the information a not-for-profit entity provides about goodwill and other intangible assets after an acquisition by amending FASB Statement No. 142, Goodwill and Other Intangible Assets, to make it fully applicable to not-for-profit entities.
SFAS No. 164 (FASB ASC 958) is effective for mergers occurring on or after December 15, 2009, and acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. Early application is prohibited. The management of First Liberty Power Corp. does not expect the adoption of this pronouncement to have material impact on its financial statements.
F-12
FIRST LIBERTY POWER CORP.
(FORMERLY QUUIBUS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2010, AND 2009
(9) Recent Accounting Pronouncements (continued)
On May 28, 2009, the FASB issued FASB Statement No. 165, (FASB ASC 855), “Subsequent Events.” SFAS No. 165 (FASB ASC 855) establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before financial statements are issued or are available to be issued. Specifically, Statement 165 (FASB ASC 855) provides:
|
1.
|
The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements.
|
|
2.
|
The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements.
|
|
3.
|
The disclosures that an entity should make about events or transactions that occurred after the balance sheet date.
|
In accordance with this Statement, an entity should apply the requirements to interim or annual financial periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on the financial statements of the Company.
In June 2009, the FASB issued FASB Statement No. 166, (FASB ASC 860), “Accounting for Transfers of Financial Assets- an amendment of FASB Statement No, 140.” SFAS No. 166 (FASB ASC 860) is a revision to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities” and will require more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures.
This statement is effective for financial asset transfers occurring after the beginning of an entity's first fiscal year that begins after November 15, 2009. The management of First Liberty Power Corp. does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In June 2009, the FASB issued FASB Statement No. 167, (FASB ASC 810), "Amendments to FASB Interpretation No. 46(R).” SFAS No. 167 (FASB ASC 810) amends certain requirements of FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities” and changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance.
This statement is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The management of First Liberty Power Corp. does not expect the adoption of this pronouncement to have a material impact on its financial statements.
In June 2009, the FASB issued FASB Statement No. 168, (FASB ASC 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162.” SFAS No. 168 (FASB ASC 105) establishes the FASB Accounting Standards Codification (the "Codification") to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (“GAAP”). The Codification did not change GAAP, but reorganizes the literature.
SFAS No. 168 (FASB ASC 105) is effective for interim and annual periods ending after September 15, 2009. The management of First Liberty Power Corp. does not expect the adoption of this pronouncement to have a material impact on its financial statements.
F-13
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
In the fiscal years ended July 31, 2009 and 2008, there have been no changes in the Company’s accounting policies, nor have there been any disagreements with our accountants.
ITEM 9A(T). CONTROLS AND PROCEDURES
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
|
-
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
|
-
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
|
-
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of July 31, 2010, our principal executive officer and principal financial officer assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, he concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our principal executive officer and principal financial officer considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside Directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our principal executive officer and principal financial officer in connection with the audit of our financial statements as of July 31, 2010.
Our principal executive officer and principal financial officer believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, our principal executive officer and principal financial officer believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors result in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
8
This Annual Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this Annual Report.
Management's Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside Directors to our Board of Directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside Directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside Directors on our Board.
We anticipate that these initiatives will be at least partially, if not fully, implemented in our fiscal year ending July 31, 2011.
Changes in Internal Controls over Financial Reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
9
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officer and Directors
Our officers and Directors and their ages and positions are as follows:
|
Name
|
Age
|
Position
|
|
Glyn Garner
|
50
|
President and Director
|
Mr. Garner owned a successful general contracting company in London, England. Since 1996 to date, Mr. Garner owns and operates Black and White Construction in Antigua, Dominica, St. Marten and St. Kitts where he builds high end homes and developments.
Committees of the Board of Directors
To date, our Board of Directors has not established a nominating and governance committee, a compensation committee, nor an audit committee
Code of Ethics
We currently do not have a Code of Ethics.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, Directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to us for the period ended July 31, 2009, no Section 16(a) reports required to be filed by our executive officers, Directors and greater-than-10% stockholders were not filed on a timely basis.
The particulars of compensation paid to the following persons during the fiscal period ended July 31, 2009, are set out in the summary compensation table below:
|
·
|
our Chief Executive Officer (Principal Executive Officer);
|
|
·
|
our Chief Financial Officer (Principal Financial Officer);
|
|
·
|
each of our three most highly compensated executive officers, other than the Principal Executive Officer and the Principal Financial Officer, who were serving as executive officers at the end of the fiscal year ended July 31, 2010; and
|
|
·
|
up to two additional individuals for whom disclosure would have been provided under the item above but for the fact that the individual was not serving as our executive officer at the end of the fiscal year ended July 31, 2010;
|
(collectively, the “Named Executive Officers”):
10
|
SUMMARY COMPENSATION TABLE
|
|||||||||
|
Name
|
Fiscal Year Ended July 31,
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
|
Option Awards
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Nonqualified Deferred Compensation Earnings
($)
|
All Other Compensation
($)
|
Total
($)
|
|
Glyn Garner (1)
|
2010
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Hossein Mohseni (2)
|
2010
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
(1)
|
Mr. Garner has been our President and Director since December 4, 2009
|
|
(2)
|
Mr. Mohseni resigned as our President and Director on December 4, 2009
|
Outstanding Equity Awards at Fiscal Year-End
None
Option Grants and Exercises
There were no option grants or exercises by any of the executive officers named in the Summary Compensation Table above.
Employment Agreements
We have not entered into employment and/or consultant agreements with our Directors and officers.
Compensation of Directors
All Directors receive reimbursement for reasonable out-of-pocket expenses in attending board of directors meetings and for promoting our business. From time to time we may engage certain members of the board of directors to perform services on our behalf. In such cases, we compensate the members for their services at rates no more favorable than could be obtained from unaffiliated parties. Our Directors have not received any compensation for the fiscal year ended July 31, 2009.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The table below sets forth the number and percentage of shares of our common stock owned as of October 26, 2009, by the following persons: (i) stockholders known to us who own 5% or more of our outstanding shares, (ii) each of our Directors, and (iii) our officers and Directors as a group. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned.
|
Title of Class
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial Ownership
|
Percentage of Class (1)
|
|
Common Stock
|
Glyn Garner
|
43,200,000
|
63.1%
|
|
All officers as a Group
|
43,200,000
|
63.1%
|
|
(1)
|
Based on 68,425,000 shares of our common stock outstanding.
|
Changes in Control
There are no existing arrangements that may result in a change in control of our company.
11
Securities authorized for issuance under equity compensation plans.
None
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We have not entered into any transaction since the last fiscal year nor are there any proposed transactions that exceed one percent of the average of our total assets at year end for the last three completed fiscal years in which any of our Directors, executive officers, stockholders or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
For the year ended July 31, 2010, Etania Audit Group P.C. (previously Davis Accounting Group P.C.) billed us for $4,500 in audit fees.
Review Fees
Etania Audit Group P.C. (previously Davis Accounting Group P.C.), billed us $6,000 for reviews of our quarterly financial statements in 2010 that are not reported under Audit Fees above.
Tax and All Other Fees
We did not pay any fees to Etania Audit Group P.C. (previously Davis Accounting Group P.C.) for tax compliance, tax advice, tax planning or other work during our fiscal year ended July 31, 2010.
Pre-Approval Policies and Procedures
We have implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, our board of directors pre-approves all services to be provided by Moore and Associates, Chartered and the estimated fees related to these services.
12
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit
|
Description
|
|
3.1
|
Articles of Incorporation. (Attached as an exhibit to our Registration Statement on Form SB-2 originally filed with the SEC on November 9, 2007 and incorporated herein by reference.)
|
|
3.2
|
Bylaws. (Attached as an exhibit to our Registration Statement on Form SB-2 originally filed with the SEC on November 13, 2007 and incorporated herein by reference.)
|
|
31.1
|
Certification of Glyn Garner pursuant to Rule 13a-14(a), filed herewith.
|
|
32.1
|
Certification of Glyn Garner pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
FIRST LIBERTY POWER CORP.
|
|||
|
Date:
|
December 15, 2010
|
By:
|
/s/ Glyn Garner
|
|
Name:
|
Glyn Garner
|
||
|
Title:
|
President, Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Date:
|
December 15, 2010
|
By:
|
/s/ Glyn Garner
|
|
Name:
|
Glyn Garner
|
||
|
Title:
|
President, Director
|
||
|
Date:
|
December 15, 2010
|
By:
|
/s/ Don Nicholson
|
|
Name:
|
Don Nicholson
|
||
|
Title:
|
Director
|
14