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EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED - Tuffnell Ltd.ex32-1.htm
v2.4.0.6
Stockholders' Equity and Warrants
12 Months Ended
Sep. 30, 2012
Equity [Abstract]  
Stockholders' Equity and Warrants

Note 4. Stockholders’ equity and warrants

 

The Company's articles of incorporation provide for the authorization of three hundred million (300,000,000) shares of common stock with par value of $0.001. Common stock holders have all the rights and obligations that normally pertain to stockholders of Nevada corporations. As of September 30, 2012 and 2011 the Company had 250,540,001 and 241,873,334 shares of common stock issued and outstanding, respectively.

 

During the period from July 26, 2007 (inception) to September 30, 2008, the Company issued 126,000,000 shares of common stock to a director of the Company for $3,500.

 

In October 2008 the Company raised $30,400 through a private offering which included 38 shareholders, and the issuance of 109,440,000 shares of common stock.

 

In November 2008 the Board of Directors of the Company approved a 1 for 18 forward stock split. The stock split is presented retroactively throughout the financial statements and footnotes.

 

On April 26, 2010, the Company closed a private placement of 2,000,000 units at $0.25 per unit for a total offering price of $500,000. The units were offered by the Company pursuant to an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended. Each unit consists of one common share of the Company and one non-transferable share purchase warrant. The warrants are exercisable at a price of $0.38 per share commencing April 26, 2010 and expired on April 26, 2012. The private placement was fully subscribed to by a non-U.S. corporation. The relative fair valve of the share purchase warrant was $141,702.

 

In the first quarter of fiscal 2011, the Company closed a private placement of 1,000,000 units at $0.15 per unit for a total offering price of $150,000. The units were offered by the Company in reliance upon an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended. Each unit consists of one share of common stock of the Company and one non-transferable share purchase warrant. The warrants are exercisable at a price of $0.25 per share and expire on November 5, 2012. The private placement was fully subscribed to by a non-U.S. corporation and the shares were issued on January 14, 2011. The relative fair valve of the share purchase warrant was $43,190.

 

On February 9, 2011, the Company closed a private placement of 1,066,668 common shares at $0.1875 per share for a total offering price of $200,000.  The shares were offered by the Company pursuant to an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended.  The private placement was fully subscribed to by a non-U.S. corporation.

 

On March 18, 2011, the Company filed a certificate of change with the Secretary of State of the State of Nevada which increased the authorized number of shares of common stock from 75,000,000 shares to 300,000,000 shares, $0.001 par value

 

Following a Directors’ resolution by written consent, the Company’s Board of Directors approved a 4 for 1 common stock split effected in the form of a dividend of the Company’s issued and outstanding common stock, effective March 24, 2011. The Company had 59,876,667 common shares issued and outstanding prior to the stock-split and 239,506,668 common shares issued and outstanding following the stock-split. The stock-split is presented retroactively within these Financial Statements.

 

On April 8, 2011, the Company closed a private placement of 1,500,000 units at $0.20 per unit for a total offering price of $300,000.  The units were offered by the Company pursuant to an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended.  Each unit consists of one share of common stock of the Company and one non-transferable share purchase warrant.  The warrants are exercisable at a price of $0.25 per share and expire on April 15, 2013.  The private placement was fully subscribed to by a non-U.S. corporation. These shares were issued on May 11, 2011. The relative fair value of the warrants was $100,349.

 

On September 19, 2011, the Company closed a private placement of 866,666 units at $0.09 per unit for a total offering price of $78,000.  The units were offered by the Company pursuant to an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended.  Each unit consists of one share of common stock of the Company and one non-transferable share purchase warrant.  The warrants are exercisable at a price of $0.11 per share and expired on September 19, 2012.  The private placement was fully subscribed to by a non-U.S. corporation. These shares were issued on September 19, 2011. The relative fair value of the warrants was $24,125.

 

On November 3, 2011, the Company closed the private placement of 2,000,000 shares at $0.05 per share, for a total offering price of $100,000.  

 

On February 9, 2012, the Company closed the private placement of 6,666,667 shares at $0.015 per share, for a total offering price of $100,000.  

 

Warrants Outstanding 
Warrants                         
Exercise       September 30,               September 30, 
Price   Expiration   2011               2012 
        Beginning Balance   Additions   Exercise   Expired   Ending Balances 
$0.38    Apr-12    2,000,000    -    -    (2,000,000)   - 
$0.25    Nov-12    666,668    -    -    -    666,668 
$0.25    Nov-12    333,332    -    -    -    333,332 
$0.25    Apr-13    1,500,000    -    -    -    1,500,000 
$0.11    Sep-12    866,666    -    -    (866,666)   - 
           5,366,666    -    -    (2,866,666)   2,500,000 

 

The BlackScholes Pricing Model was used to value the warrants issued with the following assumptions.

 

   September 30,
2011
 
     
Dividend   0.00% 
Risk-free rate for term   0.08% - 0.195% 
Volatility   99.57% - 134% 
Maturity date   1 - 2 years 
      

 

Stock Options

On December 1, 2011, the Company established a 2011 Stock Option Plan (the "Plan) for its directors, officers, consultants and advisors in which 35,000,000 shares of common stock were authorized for issuance under the Plan. Pursuant to the Plan, grants of shares can be made to employees, officers, directors, consultants and independent contractors of non-qualified stock options as well as stock options to employees that qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986 (“Code”). The Plan is administered by the Option Committee of the Board of Directors (the “Committee”), which has, subject to specified limitations, the full authority to grant options and establish the terms and conditions for vesting and exercise thereof. Options are generally granted with an exercise price equal to the external market price of the Entity’s stock at the date of grant; those option generally vest based on 1-4 years of continuous service and have 10-year terms from date of grant.

 

The fair value of the stock options granted was estimated using the Black-Scholes option pricing model and is amortized over the related service period of the underlying options. This model requires management to make estimates of the expected volatility of its common shares, the expected term of the option to exercise, the expected future forfeiture rate, and future interest rates. The risk free interest rate is based on the U.S. Treasury Bond rate. The Company has not paid dividends and does not expect to pay dividends in the immediate future. The expected volatility is based on the historical performance of the common shares of the Company. The expected life of the stock options was estimated to be the term of the options.

 

A summary of changes in stock options during the year ended September 30, 2012, is as follows:

 

   Number of
Stock Options
   Exercise
Price
 
Balance, September 30, 2011   -    - 
Granted   6,000,000   $0.03 
Exercised   -    - 
Expired   -    - 
 Forfeited   -    - 
Balance, September 30, 2012   6,000,000   $0.03 
Options exercisable, end of year   600,000   $0.03 

These options shall vest as follows: 10% immediately upon grant, and 30% on each of 12, 24, 36 months from the date of the grant.

 

As at September 30, 2012, the following stock options were outstanding:

 

Date of Grant   Options
Granted
   Options
Exercisable
   Exercise
Price
   Expiration
date
                 
 December 1, 2011    6,000,000    600,000   $0.03   December 1, 2021
      6,000,000    600,000         

 

The Black-Scholes Pricing Model was used to value the stock options issued with the following assumptions.

 

   September 30,
2012
 
Dividend   0.00% 
Risk-free rate for term   2.110% 
Volatility   156% 
Maturity date   10