Fonon Corp - FORM 10-K - March 27, 2013

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EX-31.1 - EXHIBIT 31.1 - Fonon Corp	v337746_ex31-1.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-51443

MABWE MINERALS INC.

(Exact name of registrant as specified in its charter)

Wyoming	36-4739442
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

41 Howe Lane, Freehold, N.J.	07728
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (732) 252-5146

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ No x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ Nox

Indicate by check mark 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 the Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ¨	Accelerated filer ¨

	Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨ No x

The aggregate market value of the voting and non-voting stock held by non-affiliates computed by reference to the price at which the common equity was sold as of the last business day of the registrant’s second quarter of 2012 (June 30, 2012) of $0.02 per share was $176,166.98. For the purpose of this calculation, shares owned by officers, directors and 10% or more stockholders known to the registrant have been deemed to be owned by affiliates. This determination of affiliate status is not a determination for other purposes.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court of law. Yes ¨ No ¨

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

The number of shares outstanding of registrant’s common stock, $0.001 par value per share, as of March 5, 2013 is 135,585,750.

TABLE OF CONTENTS

		Page
	PART I

Item 1.	Business	2
Item 1A.	Risk Factors	2
Item 1B.	Unresolved Staff Comments	2
Item 2.	Properties	2
Item 3.	Legal Proceedings	2
Item 4.	Mine Safety Disclosures	2

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3
Item 6.	Selected Financial Data	4
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 7A	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Data	8
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8
Item 9A	Controls and Procedures	8
Item 9B.	Other Information	9

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	9
Item 11.	Executive Compensation	11
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	13
Item 13.	Certain Relationships and Related Transactions, and Director Independence	13
Item 14.	Principal Accountant Fees and Services	14

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	15
Signatures
Index to Financial Statements		F-1

PART I

Cautionary statement regarding forward-looking statements.

When used in this report on Form 10-K (this “Report”), the words “plan,” “estimate,” “expect,” “believe,” “should,” “would,” “could,” “anticipate,” “may,” “forecast,” “project,” “pro forma,” “goal,” “continues,” “intend,” “seek” and other expressions that convey uncertainty of future events or outcomes are intended to identify “forward-looking statements.” We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date of this Report. While forward-looking statements represent management's best judgment as to what may occur in the future, they are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events as well as those presently anticipated or projected. These factors include, but are not limited to, adverse economic conditions, entry of new and stronger competitors, capital availability, unexpected costs and failure to establish relationships with and capitalize upon access to new customers. We disclaim any obligations subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

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Item 1. Business.

Our Strategy

We intend to explore for non-gold industrial minerals and to have as our core operations the mining and distribution of non-gold metals and minerals. Further we will possibly acquire companies involved in such activities and ancillary services through equity swap arrangements where it is mutually beneficial to do so. We are not yet engaged in any exploration of industrial minerals but through our partners and interests we have begun surveying, site preparation and exploration activities in preparation of mining activities that we expect to commence in the first half of 2013.

Competition

We operate in a competitive industry with many established and well-recognized competitors. There is aggressive competition within the minerals industry to discover and acquire mineral properties considered to have commercial potential. We compete for the opportunity to participate in promising exploration projects with other entities, many of which have greater resources than us. In addition, we compete with others in efforts to obtain financing to acquire and explore mineral properties, acquire and utilize mineral exploration equipment and hire qualified mineral exploration personnel.

Employees

As of December 31, 2012 we had 1 full-time employee, our President and CEO, Al Pietrangelo.

Item 1A. Risk Factors.

Not Applicable

Item 1B. Unresolved Staff Comments.

Not applicable

Item 2. Properties.

None

Item 3. Legal Proceedings

From time to time, we may be involved in various claims, lawsuits, disputes with third parties, actions involving allegations of discrimination or breach of contract actions incidental to the operation of our business. However, we are not currently involved in any litigation which we believe could have a materially adverse effect on our financial condition or results of operations.

Item 4. Mine Safety Disclosures.

Not Applicable

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock trades under the symbol “MBMI” on the OTCQB. The following table sets forth, for the quarters indicated, the high and low bid information for our common stock as reported by OTC Markets Inc, www.otcmarkets.com a research service that compiles quote information reported on the National Association of Securities Dealers composite feed or other qualified inter-dealer quotation medium. The quotations reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

	2012
Fiscal Quarter Ended	High		Low
31-Dec	$	0.2499	$	0.06
30-Sep	$	0.25	$	0.0056
30-Jun	$	0.085	$	0.02
31-Mar	$	0.1	$	0.022

	2011
Fiscal Quarter Ended	High		Low
31-Dec	$	1.30	$	0.3
30-Sep	$	0.5	$	0.06
30-Jun	$	0.8	$	0.02
31-Mar	$	0.15	$	0.02

Holders

On March 8, 2013, we had 135,585,750 shares of our common stock outstanding held by 408 record shareholders. This number of shareholders does not include beneficial owners, including holders whose shares are held in nominee or “street” name.

Dividends

We have never paid a cash dividend with respect to our common stock, and do not expect to pay cash dividends in the foreseeable future as management feels it is in the best interests of the shareholders to reinvest any surplus capital into the operations in order to grow the company.

Recent Sales of Unregistered Securities

On December 17, 2012 3,000,000 shares of our common stock were acquired by the holder of a majority of our issued and outstanding shares of common stock, Raptor Resources Holdings Inc.(“RRHI”), to facilitate a restructuring transaction with prior RRHI principals. Also 35,000 shares were issued for accounting services rendered.

On October 29, 2012 30,000 shares were issued for accounting services rendered.

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On October 27, 2012 Mabwe Minerals Inc. entered into an equity swap agreement whereby 5,000,000 shares of our common stock were issued to WGB Kinsey and Co in exchange for a 25% ownership interest in that company.

These issuances were made in reliance upon the exemption from registration available under Section 4(2) of the Securities Act, among others, as transactions not involving a public offering. This exemption was claimed on the basis that these transactions did not involve any public offering and the purchasers in each offering were accredited or sophisticated and had sufficient access to the kind of information registration would provide. In each case, appropriate investment representations were obtained and certificates representing the securities were issued with restrictive legends.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition for the fiscal years ended December 31, 2012 and 2011. This discussion should be read in conjunction with our consolidated financial statements and related notes thereto beginning on page F-1 of this Report. This Report contains trend analysis and other forward-looking statements that involve risks and uncertainties, such as statements concerning future operating results; developments in markets and strategic focus; and future economic, business and regulatory conditions. Such forward-looking statements are generally accompanied by words such as “plan,” “estimate,” “expect,” “believe,” “should,” “would,” “could,” “anticipate,” “may,” “forecast,” “project,” “pro forma,” “goal,” “continues,” “intend,” “seek” and other words that convey uncertainty of future events or outcomes. The cautionary statements included in the “Risk Factors” section under Item 1A above or elsewhere in this Report should be read as being applicable to all forward-looking statements wherever they may appear. Our actual future results could differ materially from those discussed herein. We disclaim any obligations subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Overview

We were organized under the laws of the State of Colorado on January 22, 2001 under the name Pacific InterMedia, Inc. We originally were engaged in the business of offering EDGAR filing services to companies outsourcing the formatting and electronic filing of registration statements, periodic reports and other forms with the U. S. Securities and Exchange Commission (“SEC” or the “Commission”), but generated minimal revenues from these operations. On October 17, 2003, we completed a business combination transaction with Raptor Networks Technology, Inc., a California corporation (“Raptor”), whereby we acquired all of the issued and outstanding capital stock of Raptor in a cashless common stock share-for-share exchange in which Raptor became our wholly-owned subsidiary. Upon the completion of this acquisition transaction, we changed our name to Raptor Networks Technology, Inc. (the “Company”), terminated our EDGAR filing services operations and, by and through our subsidiary Raptor, became engaged in the data network switching industry.

On December 5, 2011, we entered into a Stock Purchase Agreement, dated December 2, 2011 (“Stock Purchase Agreement”), with Raptor Resources Holdings Inc. ("Raptor Resources") (RRHI:QB) (formerly Lantis Laser Inc. (LLSR.QB)) pursuant to which we agreed to issue Raptor Resources 109,928,311 shares of our common stock or 55% of our issued and outstanding shares of common stock in exchange for 5,000,000 shares of unregistered Raptor Resources common stock. All officers and directors of Raptor resigned at the time of execution of the Stock Purchase Agreement. Raptor Resources effected a 1:10 reverse stock split, received 80% of the fully diluted shares of Raptor's common stock on a post-split basis, changed the name of Raptor to Mabwe Minerals Inc. and had the company engage in the exploration and mining of industrial minerals and ceased any involvement with the historical business of Raptor. We are now a majority owned subsidiary of Raptor Resources. The name change to Mabwe Minerals Inc. and the 1:10 reverse split were effective upon approval by FINRA on June 28, 2012. In accordance with the Stock Purchase Agreement all our former outstanding convertible notes that were acquired by California Capital Equity, LLC ("CCE"), were converted to our shares of common stock in exchange for 5,000,000 shares of Raptor Resources Common Stock prior to our 1:10 reverse split and an additional 13,510,752 shares of Mabwe Minerals Inc. common stock on a post-split basis.

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CRITICAL ACCOUNTING POLICIES

Critical Accounting Estimates and Judgments

Derivative Financial Instruments

Our senior convertible notes are classified as non-conventional convertible debt. In the case of non-conventional convertible debt, we bifurcate our embedded derivative instruments and record them at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any prior change in fair value will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, we will record a non-operating, non-cash charge. If the fair value of the derivative is lower at the subsequent balance sheet date, we will record non-operating, non-cash income. As of June 28, 2012 all derivative instruments and associated liabilities were converted to equity.

To determine the fair value of the derivative instruments, we make certain assumptions regarding the expected term of exercise. Because the expected term of the warrants impacts the volatility and risk-free interest rates used in the Black-Scholes calculations, these must be selected for the same time period as the expected term of the warrants.

Stock-based Compensation

We calculate stock-based compensation by estimating the fair value of each option using the Black-Scholes option pricing model. Our determination of fair value of share-based payment awards are made as of their respective dates of grant using that option pricing model and is affected by our stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behavior. The Black-Scholes option pricing model was developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, the existing valuation models may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with applicable accounting standards using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. The calculated compensation cost is recognized on a straight-line basis over the vesting period of the option. As of June 30, 2012, the 2005 Plan had a total of 0 options outstanding as all participants had resigned.

Deferred Income Taxes

We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. We have considered estimated future taxable income an ongoing tax planning strategies in assessing the amount needed for the valuation allowance.

Selected Financial Data

The following table sets forth selected financial data regarding our financial position and operating results for discontinued operations. This data should be read in conjunction with our consolidated financial statements and related notes thereto beginning on page F-1 of this Report.

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MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS

	For the Twelve Months Ended
	December 31,
	2012		2011
REVENUE, NET	$	-	$	367,012
COST OF SALES		-		222,288
GROSS PROFIT		-		144,724
OPERATING EXPENSES
Salary expense and salary related costs		-		353,198
Research and development		-		5,537
General and administrative		-		158,435
Total operating expenses		-		517,170
Loss from operations		-		(372,446	)
GAIN (LOSS) ON DISPOSAL OF DISCONTINUED OPERATIONS
Loss on foreclosure		-		(431,034	)
Gain on sale of intellectual property		-		384,000
Loss on sale of property and equipment		-		(1,697	)
Miscellaneous income		-		532,887
Total gain (loss) on disposal of discontinued operations		-		484,156
Income (loss) before income taxes		-		111,710
Income tax benefit		-		-
NET INCOME (LOSS)		-		111,710

In 2012, total revenues amounted to $0 compared to $367,012 in 2011. On June 17, 2011, Raptor Acquisition, LLC, a wholly-owned subsidiary of California Capital Equity, LLC (“CCE”) purchased all of the convertible notes that we had issued and that were payable from the previous note holders in an outside transaction. On July 6, 2011, CCE provided us with a notice of default on the notes payable and demanded repayment in full. CCE also informed us of their intent to exercise their rights and remedies against our assets. On August 1, 2011, CCE, in its capacity as a secured lender, held a public foreclosure sale of substantially all of our assets. CCE was the only bidder and our assets were acquired for $100,000. On July 1, 2011, we sold an exclusive, worldwide, perpetual, irrevocable, fully paid, transferable and sublicensable right and license in all of our registered patent and patent applications for $384,000. We lost any rights to our intellectual property. Since our carrying value of the intellectual property was $0, we recorded a gain on its sale of $384,000.

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Gross Profit

Gross profit decreased from $144,724 in 2011 to $0 in 2012 due to the discontinuance of operations, and the sale of all our assets in June 2011 resulted on our inability to generate any revenues and any profits.

Operating Expenses

The increase in operating expenses in 2012 resulted primarily because we discontinued operations as a service-related company and has entered the exploration stage on June 29, 2012 with the focus of engaging in the mining of non-gold industrial metals. As the company prepares to begin a new line of continuing operations it has realized related expenses. This change of model resulted in significant increases of professional fees, consulting fees, research and development and G&A, as further explained below.

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Salary Expense

Employee costs amounted to $0 in 2012 compared to $353,198 in 2011. The change in salary expenses resulted from the discontinuance of operations and the resignation of all former employees. The company has no employees under a salary arrangement.

Liquidity and Capital Resources

Our independent registered public accounting firm with respect to our consolidated financial statements included an explanatory paragraph related to our ability to continue as a going concern in their reports for each of our fiscal years ended December 31, 2012 and 2011. Reports of independent registered public accounting firms questioning a company's ability to continue as a going concern generally are viewed very unfavorably by analysts and investors. There are a number of risks and challenges associated with such a qualified report including, but not limited to, a significant impediment to our ability to raise additional capital or seek financing from entities that will not conduct such transactions in the face of such increased level of risk of insolvency and loss, increased difficulty in attracting talent and the diversion of the attention of executive officers and other key employees to raising capital or financing rather than devoting time to the day-to-day operations of our business. We urge potential investors to review the report of our independent registered public accounting firm and our consolidated financial statements and related notes beginning on page F-1 of this Report, the cautionary statements included in the “Risk Factors” section under Item 1A of this Report and to seek independent advice concerning the substantial risks related thereto before making a decision to invest in us, or to maintain an investment in us.

For the years ended December 31, 2012 and 2011, we had a net profit of $5,555,638 and a net loss of $6,439,166, respectively. The net profit realized in the most recent year was a result of a gain recognized of $6,308,136 resulting from the elimination of the liability for conversion of warrants that were retired in the 1:10 reverse split effective upon approval by FINRA on June 28, 2012. In accordance with the Stock Purchase Agreement all our former outstanding convertible notes that were acquired by California Capital Equity, LLC ("CCE"), were converted to our shares of common stock in exchange for 5,000,000 shares of Raptor Resources Common Stock prior to our 1:10 reverse split and 13,510,752 shares of Mabwe Minerals Inc. Common Stock on a post-split basis.

Since our inception, including the year ended December 31, 2012, we have realized negligible revenues and have financed our operations almost exclusively from cash on hand raised through the sale of our securities and borrowings. As of December 31, 2012 we had stockholders equity of $968,825 compared to a stockholders deficit in 2011 of $24,236,767. This reversal was primarily due to the elimination of the liability for conversion of warrants that were retired in the 1:10 reverse split effective upon approval by FINRA on June 28, 2012. In accordance with the Stock Purchase Agreement all our former outstanding convertible notes that were acquired by California Capital Equity, LLC ("CCE"), were converted to our shares of common stock in exchange for 5,000,000 shares of Raptor Resources Common Stock prior to our 1:10 reverse split and 13,510,752 shares of Mabwe Minerals Common Stock on a post-split basis.

Since inception, the Company has incurred losses and realized negligible revenues from product sales. Our government design services contract, which funded a major portion of the Company's operating expenses, expired in April 2011 and all funds generated from this contract were depleted as of September 2011. As of June 29, 2012 the Company entering the exploration stage thus commencing a new business line of continuing operations.

As disclosed in previous filings, the Company shifted its principal operating model from product sales to licensing; enabling a substantial reduction in headcount, footprint and infrastructure that reduced operating expense run rates substantially. This shift in business model was not successful as the Company did not generate any revenues from licensing agreements until July 5, 2011, at which time the Company entered into an agreement with California Capital Equity, LLC (“CCE”) granting CCE an exclusive license (even as to the Company), leaving the Company without any continuing rights in or to its intellectual property.

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As of July 31, 2011, all of our convertible notes payable had fully matured. On August 1, 2011 CCE exercised its right as a secured lender against the Company’s assets since the Company was unable to pay its outstanding notes that were due and payable and held a public foreclosure sale of substantially all of the Company’s assets. CCE acquired all of these assets at a price of $100,000, which price was credited against the outstanding notes. As a result of the public sale on August 1, 2011, the Company retained no material assets with which to continue its operations. The Company sought companies or businesses with an interest in utilizing the Company as a public shell vehicle and in August 2011 signed a non binding Letter of Intent with Raptor Resources Holdings Inc. (formerly Lantis Laser Inc. (OTCQB: RRHI) which on June 28, 2012 consummated the acquisition of an 80% controlling equity interest in the Company. Raptor Resources Holdings Inc. issued 5 million shares of their common stock to CCE and itself received 10,992,831 (post reverse split adjusted) shares in the Company to attain a 55% ownership as of June 28, 2012. The Company filed a Schedule 14C that was effective June 28, 2012 to amend its charter to increase the authorized shares of common stock of the Company to 500,000,000 shares. The Company issued 79,078,817 additional shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80%, and issued 13,510,752 shares of company stock to CCE in consideration of the conversion of CCE’s convertible notes outstanding to the company’s common stock. The convertible notes previously issued by Raptor Networks Technology, Inc. were converted and the Company engaged in a 1:10 reverse stock split. Former shareholders of Raptor Networks Technology, Inc. (“RPTN”) were reissued 1 share of Mabwe Minerals Inc. for each 10 shares of RPTN. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post split basis. All shares herein are reflected post-split in accordance with the Staff Accounting Bulletin.

These conditions, among others, raise substantial doubt about our ability to continue as a going concern and our independent registered public accounting firm has qualified their opinions with respect to our consolidated financial statements to include an explanatory paragraph related to our ability to continue as a going concern in their reports for each of our fiscal years ended December 31, 2003 through December 31, 2012.

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The accompanying financial statements do not reflect any adjustments which might be necessary if we are unable to continue as a going concern.

Item 8. Financial Statements and Supplementary Data.

The financial statements and corresponding notes to the financial statements called for by this item appear under the caption “Index to Financial Statements” beginning on Page F-1 of this Report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not Applicable

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer are Al Pietrangelo) have concluded, based on their evaluation as of December 31, 2012, that the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) are not effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, including to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding whether or not disclosure is required, since we do not have separate persons performing the functions of CEO and CFO.

-8-

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2012, since we do not have separate persons performing the functions of CEO and CFO.

Our internal control over financial reporting is supported by written policies and procedures, that:

	(1)	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
	(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and
	(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our 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. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this report.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2012, there was a change in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Set forth below is certain information with respect to our directors and executive officers.

Name	Age	Position with Company
Al Pietrangelo	55	Chief Executive Officer, President, Director and Chairman of the Board
Tapiwa Gurupira	36	Director

-9-

Al Pietrangelo (age 55), is our Chief Executive Officer, President and Chairman of the Board since December 5, 2011 pursuant to the Stock Purchase Agreement with Raptor Resources Holdings Inc(f/k/aLantis Laser Inc.). Mr. Pietrangelo has served as President, CEO and Chairman of the Board of Directors of TAG Minerals Inc., an affiliate of Raptor Resources Holdings Inc. since 2010. From 2006 to 2010 Mr. Pietrangelo was CEO and Director of Rock of Angels Capital Corp., Rock of Angels Acquisition Corp. and Rock of Angels Holdings Inc. From 2005 to 2006 Mr. Pietrangelo was President and a Director of 4 Star Capital Management Inc. From 2002 to 2004 Mr. Pietrangelo served as Secretary and Director of Hypervelocity, Inc. We believe that Mr. Pietrangelo has the management background to assist Raptor in its growth and the expertise to assist it in the public markets. Mr. Pietrangelo obtained a B.S. in Business Administration from the University of South Florida.

Tapiwa Gurupira (age 36) has served as the President of African Operations and Director of Raptor Resources Holdings Inc. since 2011. He is also a Director of TAG Minerals Inc. since 2010. While working towards his Master’s degree he devised a way to separate dry mixtures of particles that was patented, and a company, Triboflow Separations, LLC, was formed with Mr. Gurupira serving as Chief Engineer. Through Mr. Gurupira’s efforts, Triboflow was awarded a grant of $2M under the NIST Advanced Technology Program. In 2006, Mr. Gurupira joined Breen Solutions, LLC in Pittsburgh, PA, a company specializing in equipment to monitor and regulate emissions at coal combustion power plants as Project Manager. Since returning to Zimbabwe, he has established key relationships within the mining sector and is the Managing Director of TAG Minerals Zimbabwe (Private) Limited and Director of Mabwe Minerals Zimbabwe (Private) Limited. Mr. Gurupira has a Masters of Science degree in Mechanical Engineering from the University of Kentucky.

Family Relationships

There are no family relationships among our executive officers and directors.

Board’s Role in Risk Oversight

The Board consists of two members: Al Pietrangelo and Tapiwa Gurupira, who both are both actively participating in the management of Mabwe Minerals Inc. and Mabwe Minerals Zimbabwe (PVT) LTD, respectively. The Company’s Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The Audit Committee oversees management of financial risks. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks.

Board Committees

Our Board of Directors serves as the Audit, Nominating and Governance Committees since there are no separately designated committees. Neither of our directors is an “independent director” as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules.

-10-

Code of Ethics

Our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from provisions of these codes that relate to one or more of the items set forth in Item 406(b) of Regulation S-B by describing on our Internet website, located at http://raptorresourcesholdings.com, within four business days following the date of a waiver or a substantive amendment, the date of the waiver or amendment, the nature of the amendment or waiver and the name of the person to whom the waiver was granted.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of copies of these reports furnished to us during 2012 and thereafter, or written representations received by us from reporting persons that no other reports were required, we believe that all Section 16(a) filing requirements applicable to our reporting persons during 2012 were complied with.

Item 11. Executive Compensation

Compensation of Executive Officers

The following section contains information about the compensation paid to our executive officers and directors during the years ended December 31, 2012 and 2011.

Summary Compensation Table

The following table provides information concerning the compensation for the years ended December 31, 2012 and 2011 for our principal executive officer and our principal financial officer, who were the only persons that served as executive officers during 2012 and 2011 (collectively, the “named executive officers”).

Summary Compensation Table

Name and Principal Positions	Year		Salary		Bonus		Stock Awards ⁽¹⁾		Option Awards		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation ⁽²⁾		Total
Al Pietrangelo CEO/President		2012	$	-	$	-	$	20,000	$	-	$	-	$	-	$	9,002	$	29,002
Al Pietrangelo CEO/President		2011	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Tapiwa Gurupira, President of African Operations		2012	$	-	$	-	$	20,000	$	-	$	-	$	-	$	-	$	-
Tapiwa Gurupira, President of African Operations		2011	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Thomas M. Wittenschlaeger, CEO/President (Former)		2012	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Thomas M. Wittenschlaeger, CEO/President (Former)		2011	$	162,460	$	-	$	-	$	-	$	-	$	-	$	-	$	162,460
Bob Van Leyen, CFO (Former)		2012	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Bob Van Leyen, CFO (Former)		2011	$	142,051	$	-	$	-	$	-	$	-	$	-	$	-	$	142,051

(1)

These amounts are equal to the aggregate grant date fair value, computed in accordance with ASC 718, but without giving effect to estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions with respect to these option grants, refer to Note 1 of our financial statements and related notes beginning on page F-1 of this Report. See our “Outstanding Equity Awards at December 31, 2012” table below for more information on options held by the named executive officers.

(2)

Mainly consists of life and health insurance premiums which are, for the executive officers, fully paid by the company.

-11-

Employment Agreements and Executive Compensation

There are no employment contracts, termination agreements or change-in-control arrangements between us and any of our named executive officers. The Boar d of Directors reviews and, if deemed appropriate, adjusts the annual salaries of our named executive officers on at least an annual basis. The Board of Directors may from time to time grant performance or similar cash bonuses to our named executive officers at its discretion. The Board of Directors may also periodically award options or warrants to our named executive officers under our existing option and incentive plans at its discretion.

Outstanding Equity Awards At Fiscal Year End

The following table sets forth information about outstanding equity awards held by our named executive officers as of December 31, 2012 (post 1:10 reverse split adjusted). Both Messrs. Wittenschlager and Leyen resigned following the sale of majority control of Raptor Networks Technology to Lantis Laser under the Stock Purchase Agreement dated December 2, 2011.

Outstanding Equity Awards at December 31, 2012

Stock Awards

Equity

Incentive

Plan

Option Awards

Plan

Awards:

Equity

Awards:

Market or

Incentive

Number

Payout

Plan

Market

Value of

Number

Awards:

Shares

Value of

Unearned

Number of

or Units

Shares or

Shares,

Securities

Units of

Units

Units or

Underlying

Stock

or Other

Other

Unexercised

Option

That Have

Rights That

Options

Unearned

Exercise

Option

Not

Have Not

(#)

Options

Price

Expiration

Vested

Name

Exercisable

Unexercised

(#)

($)

Date

(#)

($)

(#)

($)

Thomas M. Wittenschlaeger

6,000

3,000

0.67

1/2/2016

Bob van Leyen

4,067

2,333

0.67

1/2/2016

Compensation of Directors

We have only one director who is also a named executive officer. No compensation was paid to any director other than what is disclosed under our Summary Compensation Table, above.

Stock Option Plan

There currently are no active in-effect stock option plans.

-12-

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of March 5, 2013, certain information with respect to the beneficial ownership of our stock by (i) each of our named executive officers, (ii) each of our directors, (iii) each person known to us to be the beneficial owner of more than 5% of each class of our outstanding voting securities, and (iv) all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to the securities. To our knowledge, except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Shares of common stock underlying derivative securities, if any, that currently are exercisable or convertible or are scheduled to become exercisable or convertible for or into shares of common stock within 60 days after the date of the table are deemed to be outstanding in calculating the percentage ownership of each listed person or group but are not deemed to be outstanding as to any other person or group. Percentage of beneficial ownership is based on 135,585,750 shares of common

	Number of Shares of Common Stock			Percent of Common Stock
Name of Beneficial Owner⁽¹⁾	Beneficially Owned			Beneficially Owned
Raptor Resources Holdings Inc.		90,071,649	⁽¹⁾		66.4	%
WGB Kinsey and Co		6,000,000			4.4	%
All executive officers and directors as a group (2 persons)		2,000,000	⁽²⁾		1.5	%

(1)

Unless otherwise indicated, the address is c/o Mabwe Minerals Inc., 41 Howe Lane, Freehold, New Jersey 07728.

(2)

Represents 1,000,000 shares of common stock for each Al Pietrangelo and Tapiwa Gurupira.

Equity Compensation Plan Information

The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our equity compensation plans as of December 31, 2012.

	Number of Shares to be		Weighted Average		Number of Securities
Plan Category	Issued Upon Exercise		Exercise Price		Available for Issuance
Warrants for Services, Investors and brokers⁽¹⁾		60,071	$	$4.40	N/A
Total		60,071	$	$4.40	N/A

(1) The only warrants outstanding were issued to a broker January 17, 2007 and are set to expire on January 17, 2014

Item 13. Certain Relationships and Related Transactions and Director Independence

Certain Relationships and Related Transactions

None.

Director Independence

Our Board of Directors has two members, Al Pietrangelo, who is President and CEO, and, Tapiwa Gurupira therefore, does not qualify as an “independent directors” as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules.

-13-

Item 14. Principal Accounting Fees and Services

The following table sets forth the aggregate fees billed to us for the fiscal years ended December 31, 2012 and 2011 independent auditing firm, KBL, LLP.

	Fiscal 2012		Fiscal 2011
Audit Fees ⁽¹⁾	$	16,500	$	27,500
Audit-Related Fees ⁽²⁾	$	-	$	16,020
Tax Fees ⁽³⁾	$	-	$	0
All Other Fees ⁽⁴⁾	$	-	$	-

(1)

Audit Fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by our accountants in connection with statutory and regulatory filings or engagements.

(2)

Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” This category includes fees related to due diligence services pertaining to potential business acquisitions/disposition; and consultation regarding accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standard or interpretation by the SEC, FASB or other regulatory or standard-setting bodies as well as general assistance with implementation of the requirements of SEC rules or listing standards promulgated pursuant to the Sarbanes-Oxley Act of 2002.

(3)

Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance, planning and advice.

(4)

All Other Fees consist of fees for products and services other than the services reported above.

Our Audit Committee is responsible for approving all Audit, Audit-Related, Tax and Other Services. The Audit Committee pre-approves all auditing services and permitted non-audit services, including all fees and terms to be performed for us by our independent registered public accounting firm at the beginning of the fiscal year. Non-audit services are reviewed and pre-approved by project at the beginning of the fiscal year. Any additional non-audit services contemplated by our company after the beginning of the fiscal year are submitted to the Audit Committee chairman for pre-approval prior to engaging the independent auditor for such services. Such interim pre-approvals are reviewed with the full Audit Committee at its next meeting for ratification.

-14-

Part IV

Item 15. Exhibits and Financial Statement Schedules

Exhibit Number		Description
2.1		Agreement and Plan of Merger dated August 23, 2003 between Pacific InterMedia, Inc., and Raptor Networks Technology, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on October 22, 2003)
2.2		Amendment to Agreement and Plan of Merger dated October 15, 2003 between Pacific InterMedia, Inc., and Raptor Networks Technology, Inc. (incorporated herein by reference to Exhibit 2.2 to the Company’s Form 8-K filed with the SEC on October 22, 2003)
3.1		Articles of Incorporation, as amended as of June 8, 2005 (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 10-KSB for fiscal year ended December 31, 2004, filed with the SEC on April 15, 2005)
3.2		Articles of Amendment to Articles of Incorporation increasing Company’s authorized common stock to 75,000,000 shares, effective June 9, 2005 (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on June 15, 2005)
3.3		Articles of Amendment to Articles of Incorporation increasing authorized common stock to 110,000,000 shares, effective May 31, 2006 (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on June 5, 2006)
3.4		Articles of Amendment to Articles of Incorporation (Profit) of Raptor Networks Technology, Inc. as filed with the Colorado Secretary of State on April 30, 2007 (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on May 4, 2007)
3.5		Bylaws (incorporated herein by reference to Exhibit 3.2 to Registration Statement on Form SB-2, Registration No. 333-74846, filed with the SEC on December 10, 2001)
3.6		Amendment to Bylaws – Article II, Section 1 (incorporated herein by reference to Exhibit 3.3 to the Company’s Form 10-KSB for fiscal year ended December 31, 2004, filed with the SEC on April 15, 2005)
3.7		Action with Respect to Bylaws certified by the Secretary of Raptor Networks Technology, Inc. on May 2, 2007 (incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on May 4, 2007)
10.1		Stock Purchase Agreement between Lantis Laser Inc. and Raptor Networks Technology, Inc. dated December 2, 2011 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K, filed with the SEC on December 8, 2011)
10.2		First Amended and Restated 2005 Stock Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 10-QSB for fiscal quarter ended June 30, 2007, filed with the SEC on August 21, 2007)
10.3		Form of 2005 Stock Plan Stock Option Agreement (incorporated herein by reference to Exhibit 10.19 to the Company’s Form 10-KSB for fiscal year ended December 31, 2005, filed with the SEC on April 3, 2006)
10.4		Form of 2005 Stock Plan Stock Option Agreement (incorporated herein by reference to Exhibit 10.19 to the Company’s Form 10-KSB for fiscal year ended December 31, 2005, filed with the SEC on April 3, 2006)
21		Subsidiaries of the Registrant (incorporated herein by reference to Exhibit 21 to the Company’s Form 10-KSB for fiscal year ended December 31, 2005, filed with the SEC on April 3, 2006)
31.1^x		Certification of the Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2^x		Certification of the Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1^x		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2^x		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

		^xFiled herewith.
		** This exhibit is a management contract or a compensatory plan or arrangement.

-15-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 27, 2013	MABWE MINERALS INC.

	By:	/s/ Al Pietrangelo
		Al Pietrangelo
		Chief Executive Officer
		(principal executive officer)

Dated: March 27, 2013	MABWE MINERALS INC.

	By:	/s/ Al Pietrangelo
		Al Pietrangelo
		Chief Financial Officer
		(principal financial officer)

Pursuant to requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Capacity	Date

/s/ Al Pietrangelo	Director	March 27, 2013
Al Pietrangelo

-16-

Mabwe Minerals Inc.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Financial Statements

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations	F-4

Consolidated Statements of Stockholders’ Deficit	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Mabwe Minerals Inc.

(formerly Raptor Networks Technology, Inc.)

We have audited the accompanying consolidated balance sheets of Mabwe Minerals Inc. (formerly Raptor Networks Technology, Inc.) (the “Company”) (an exploration stage company) as of December 31, 2012 and 2011 and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years ended December 31, 2012 and 2011, and the exploration stage period June 29, 2012 through December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Company’s 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 consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mabwe Minerals Inc. (formerly Raptor Networks Technology, Inc.) (an exploration stage company) as of December 31, 2012 and 2011, and the results of its consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years ended December 31, 2012 and 2011, and the exploration stage period June 29, 2012 through December 31, 2012 in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has sustained significant operating losses and needs to obtain additional financing or restructure its current obligations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KBL, LLP

New York, NY

March 25, 2013

F-2

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

	December 31, 2012			December 31, 2011
ASSETS
CURRENT ASSETS
Cash	$	17,605		$	2,323
Prepaid Expenses		76,411			-

Total current assets		94,016			2,323

OTHER ASSETS
Investment - W.G.B. Kinsey & Co (Pvt) Ltd		555,275
Mineral Rights		433,000			-

Total Other Assets		988,275			-

INTANGIBLE ASSETS
Goodwill		25,000			-
Total Intangible Assets		25,000			-

TOTAL ASSETS	$	1,107,291		$	2,323

STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	59,753		$	1,044,056
Related Party Payable (Net)		2,427			-
Note Payable Dodge Mines		13,500			-
Loan payable other		42,786			-
Liability for stock to be issued		20,000			-
Detachable warrant liabilities		-			392,310
Conversion option liabilities		-			11,789,870
Senior convertible notes payable		-			11,012,854

Total current liabilities		138,466			24,239,090

TOTAL LIABILITIES		138,466			24,239,090

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, no par value; 5,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.001 par; 500,000,000 shares authorized; 131,980,750 and 19,801,181 shares issued and outstanding		131,981			19,801
Additional paid-in capital		86,112,423			66,574,646
Accumulated deficit (PRIOR to exploration stage)		(85,075,965	)		(90,831,214	)
Deficits accumulated during the exploration stage		(199,614	)		-

Total Stockholders’ Equity (Deficit)		968,825			(24,236,767	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	1,107,291		$	2,323

The accompanying notes are an integral part of these consolidated financial statements.

F-3

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

							For the period
							June 29, 2012
	For the Years Ended						through
	December 31,			December 31,			December 31, 2012
	2012			2011			(exploration stage)

Continuing Operations:
OPERATING EXPENSES
Professional, consulting and marketing fees	$	103,607		$	-		$	73,632
Research and development		108,038			-			108,038
General and administrative		74,590			51,399			70,433

Total operating expenses		286,235			51,399			252,103

Loss from Continuing Operations		(286,235	)		(51,399	)		(252,103	)

OTHER INCOME (EXPENSE)
Interest income		-			5			-
Gain on Investment - W.G.B. Kinsey - Equity Method		55,275			-			55,275
Change in fair value of conversion option and warrant liabilities		6,308,136			(5,245,032	)		-
Amortization of discount on convertible debt		-			(192,247	)		-
Interest expense		(521,538	)		(1,062,203	)		(2,786	)
Miscellaneous Expense		-			-			-

Total other income (expense)		5,841,873			(6,499,477	)		52,489

Income (loss) before income taxes		5,555,638			(6,550,876	)		(199,614	)

Income tax benefit		-			-			-

Net income (loss) from continuing operations		5,555,638			(6,550,876	)		(199,614	)

Discontinued operations:
Gain on disposal of discontinued operations		-			484,156			-
Loss from discontinued operations		-			(372,446	)		-

Loss from discontinued operations, net of tax		-			111,710			-

NET INCOME (LOSS)	$	5,555,638		$	(6,439,166	)	$	(199,614	)

Income (loss) per share - basic
Continuing operations	$	0.08		$	(0.74	)	$	-
Discontinued operations	$	-		$	0.01		$	-
Weighted average number of shares outstanding - basic (RESTATED 1:10 Reverse Split for prior year)		72,463,024			8,808,098			123,426,341

Income (loss) per share - diluted
Continuing operations	$	0.06		$	(0.74	)	$	-
Discontinued operations	$	-		$	0.01		$	-
Weighted average number of shares outstanding - diluted (RESTATED 1:10 Reverse Split for prior year)		85,487,553			8,808,098			143,191,788

The accompanying notes are an integral part of these consolidated financial statements.

F-4

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

											Defict
					Additional						Accumulated
	Common Stock				Paid in			Accumulated			During the
	Shares		Amount		Capital			Deficit			Exploration Stage			Total


Balance, January 1, 2011		8,808,350	$	8,808	$	66,585,639		$	(84,392,048	)	$	-		$	(17,797,601	)

Shares of stock issued to Raptor Resources Holdings Inc in the acquisition of 55% ownership		10,992,831		10,993		(10,993	)		-			-			-

Net loss		-		-		-			(6,439,166	)		-			(6,439,166	)

Balance, December 31, 2011		19,801,181	$	19,801	$	66,574,646		$	(90,831,214	)	$	-		$	(24,236,767	)

Conversion of convertible notes, warrants and derivative liability to common shares		13,510,752		13,511		18,434,071			-			-			18,447,582

Shares issued to RRHI for investment		79,078,817		79,079		(79,079	)		-			-			-

Net income through June 28, 2012		-		-		-			5,755,249			-			5,755,249

Shares issued for sevices and prepaid expenses		6,590,000		6,590		145,785			-			-			152,375

Shares issued for cash		5,000,000		5,000		245,000			-			-			250,000

Shares issued for Lantis/RRHI Restructure		3,000,000		3,000		297,000			-			-			300,000

Shares issued for equity purchase (WGB Kinsey & Co)		5,000,000		5,000		495,000						-			500,000

Net loss for the period June 29, 2012 through December 31, 2012		-		-		-			-			(199,614	)		(199,614	)

Balance, December 31, 2012		131,980,750	$	131,981	$	86,112,423		$	(85,075,965	)	$	(199,614	)	$	968,825

The accompanying notes are an integral part of these consolidated financial statements.

F-5

MABWE MINERALS INC.

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							For the period
							June 29, 2012
							through
	For the Years ended December 31,						December 31, 2012
	2012			2011			(exploration stage)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	5,555,638		$	(6,439,166	)	$	(199,614	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		-			6,728			-
Amortization of discount on convertible debt and debt issuance costs		-			192,247			-
Common Stock issues for services		82,350			-			82,350
Change in fair value of conversion option and warrant liabilities		(6,308,136	)		5,245,032			-
Gain on disposal of discontinued operations		-			(523,980	)		-
Change in inventory reserve		-			(90,367	)		-
Change in fair value of investment		(55,275	)		-			(55,275	)
Changes in operating assets and liabilities:
Accounts receivable		-			143,568			-
Inventories		-			106,247			-
Prepaid expenses and other assets		(6,386	)		78,517			(6,386	)
Deposits		-			1,560			-
Accounts payable and accrued liabilities		581,378			825,418			30,817
Deferred revenue		-			(11,108	)		-
Net cash used in operating activities		(150,431	)		(465,304	)		(148,108	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of intellectual property		-			384,000			-
Proceeds from sale of property and equipment		-			850			-
Net cash provided by investing activities		-			384,850			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		42,786			-			42,786
Proceeds from related parties, net of repayments		(103,573	)		-			(103,573	)
Proceeds from private placement, net of fees (including cash received for shares to be issued) - preferred and common stock		270,000			-			270,000
Repayments made on note payable for Dodge Mines		(43,500	)		-			(43,500	)
Net cash provided by financing activities		165,713			-			165,713
Net decrease in cash and cash equivalents		15,282			(80,454	)		17,605
CASH AT BEGINNING OF YEAR		2,323			82,777			-
CASH AT END OF YEAR	$	17,605		$	2,323		$	17,605
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	20,872		$	-
Cash paid for income taxes	$	-		$	1,600		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Accrued interest payable added to principal balance	$	2,786		$	252,508		$	2,786
Increase in debt discount for conversion option liabilities resulting from accrued interest added to principal balance	$	-		$	135,096		$	-
Reduction in Note Payable as a result of foreclosure	$	-		$	100,000		$	-
Conversion of debt to equity	$	-		$	-		$	-
Goodwill acquired by related party payable	$	25,000		$	-		$	25,000
Prepaid expenses incurred as a result of issuance of common stock	$	145,000		$	-		$	145,000
Dodge Mines and related debt acquired from related party payable	$	406,000		$	-		$	406,000
Common stock issued for investment in Kinsey	$	500,000		$	-		$	500,000

The accompanying notes are an integral part of these consolidated financial statements.

F-6

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation

The Company was incorporated under the laws of the state of Colorado on January 22, 2001 under the name Pacific InterMedia, Inc. (“Pacific”).

On October 17, 2003, Pacific completed a business combination transaction with Raptor Networks Technology, Inc. (“Raptor”), a closely-held California corporation, through acquisition of all of the issued and outstanding common stock of Raptor in exchange for authorized but previously unissued restricted common stock of Pacific. Immediately prior to completion of the acquisition transaction, Pacific had a total of 4,034,000 shares of its common stock issued and outstanding comprised of 1,034,000 registered shares held by approximately 25 stockholders and 3,000,000 shares of restricted stock held by Pacific’s founder and sole officer and director.

As a material aspect of the acquisition, Pacific re-acquired and cancelled the 3,000,000 restricted shares as consideration for transfer of its remaining assets consisting of cash and office equipment to the officer and director, leaving only the registered common stock, 1,034,000 shares, as all of its issued and outstanding capital stock prior to completion of the Raptor acquisition.

Pursuant to terms of the acquisition agreement, all of the issued and outstanding common stock of Raptor, 19,161,256 shares, was acquired by Pacific, share-for-share, in exchange for its authorized but previously unissued common stock. Upon completion of the acquisition, Raptor became a wholly owned subsidiary of Pacific and the Raptor shareholders became shareholders of Pacific. Unless otherwise indicated, all references in these financial statements to “the Company” include Pacific and its wholly owned subsidiary, Raptor. All intercompany transactions have been eliminated in consolidation. On December 3, 2003, Pacific changed its name to Raptor Networks Technology, Inc.

The acquisition transaction had been treated as a reverse merger, with Raptor considered the accounting acquirer.

The Company was a provider of integrated high-speed Ethernet switching systems which enable new emerging high bandwidth critical applications. The data network market areas that the Company is targeting include video, storage, Internet Protocol telephony and technology refresh. The Company is currently focusing on the United States market. Principal operations had commenced, although minimal revenues had been recognized to date.

F-7

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation (Continued)

The Company’s service contract with a Government prime contractor was almost depleted as of March 31, 2011 and consequently, revenues for the quarter under review amounted to close to zero. Taking into account the current status of the U.S. Government budget and the fact that the Company no longer has any rights in or to its intellectual property, the Company was no longer able to generate future revenue in that line of business.

In September 2008, the Company shifted its principal operating model from product sales to licensing enabling a reduction in headcount, footprint and infrastructure that reduced operating expense run rates substantially. This shift in business model had not been successful as the Company had not generated any revenues from licensing agreements until July 5, 2011, at which time the Company entered into an agreement with California Capital Equity, LLC (“CCE”) granting CCE an exclusive license (even as to the Company) leaving the Company without any continuing rights in or to its intellectual property. In addition, on August 1, 2011, all of the Company’s remaining assets were sold during a public foreclosure sale. For further details on these transactions, see the disclosures in the Forms 8-K filed by the Company on July 11, 2011 and August 4, 2011. As a result of the above transactions, the Company classified all of its operations as discontinued operations, except certain general and administrative expenses related to the public shell company, such as EDGAR fees, audit fees and legal expenses related to review of public filings and amounts related to the Company’s convertible debt.

All of our convertible notes payable have matured and the Company did not pay the principal balances and accrued interest at maturity or thereafter. The note holders exercised their right as a secured lender against the Company’s assets and held a public foreclosure sale of substantially all of the Company’s assets and acquired all of these assets at a price of $100,000, which price was credited against the outstanding notes on August 1, 2011. As a result of the public sale on August 1, 2011, the Company retains no material assets with which to continue its operations. The Company is seeking companies or businesses with an interest in utilizing the Company as a public shell vehicle and in August 2011 signed a non binding “Letter of Intent” with an interested party for a possible merger. This transaction was completed in December 2011, when Raptor Resources Holdings Inc. (formerly Lantis Laser Inc.) acquired an 80% controlling equity stake in the Company. In addition to Raptor Resources Holdings Inc. issuing 5 million shares of their common stock to CCE, they were issued 109,928,311 shares in the Company to attain a 55% ownership as of December 31, 2011. The Company filed a Form 14C to amend its charter to increase the authorized shares of common stock of the Company to 500,000,000 shares, and then issued an additional, 79,078,817 shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80%, and simultaneously issued 13,510,752 shares of stock to CCE in consideration for the conversion of the convertible notes outstanding to common stock. The convertible notes previously issued by Raptor Networks Technology, Inc. were converted and the Company then engaged in a 1:10 reverse stock split. Former shareholders of Raptor Networks Technology, Inc. (“RPTN”) were reissued 1 share of Mabwe Minerals Inc. for each 10 shares of RPTN. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post split basis. All shares herein are reflected post-split in accordance with the Staff Accounting Bulletin.

Effective with the change in control and conversion of notes and liabilities to equity, the Company entered the exploration stage on June 29, 2012.

On July 18, 2012 Mabwe Minerals Inc. acquired a 49% interest in Mabwe Minerals Zimbabwe (PVT) LTD ("MAB-Z") with the issuance of 25,000 shares of Raptor Resources Holdings Inc. Series B Preferred Convertible Stock ("Series B Preferred Stock"). Each share of Series B Preferred Stock is convertible into 50 common shares of Raptor Resources Holdings Inc. and 25 common shares of Mabwe Minerals Inc., both subject to a one year holding period. The remaining 51% ownership in MAB-Z is held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-Z will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-Z. MAB-Z is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.

F-8

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Presentation (Continued)

The Company formally, on September 30, 2012, appointed Tapiwa Gurupira, a 41% stakeholder of MAB-Z as a Director of Mabwe Minerals Inc.

On October 27, 2012, the Company, MAB-Z, and WGB Kinsey & Company (“Kinsey”) entered into an Equity Exchange Agreement (“Equity Exchange Agreement”). In accordance with the Equity Exchange Agreement, the Company issued 5,000,000 shares of their common stock to Kinsey in exchange for a 25% ownership for MAB-Z in Kinsey. Additionally, should the value of the 5,000,000 shares of common stock fail to be valued at $5,000,000 on December 31, 2013, the Company must issue additional shares of common stock to achieve that value for Kinsey. The common shares issued have been valued at $500,000, as the price of MBMI common stock was trading at $0.10 per share, and no valuation has been provided for Kinsey at this time.

Kinsey, based in Zimbabwe, Africa, has operated since 1955 in the mining and construction industry. They own their own mining equipment, including a fleet of articulated dump trucks, front and wheeled loaders, excavators, dozers and graders. With both open pit and open cast mining experience ranging from chrome to platinum to gold, they possess all the experience necessary to efficiently perform all the mining operations at the Dodge Mines.

Presentation as a Going Concern

The accompanying consolidated 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 a loss from continued operations of $286,235 and $51,399 for the years ended December 31, 2012 and 2011, respectively. The Company also has an accumulated deficit of $85,275,579 and a working capital deficit of $44,450 at December 31, 2012.

All of our convertible notes payable have matured and the Company did not pay the principal balances and accrued interest at maturity or thereafter. The note holders exercised their right as a secured lender against the Company’s assets and held a public foreclosure sale of substantially all of the Company’s assets and acquired all of these assets at a price of $100,000, which price was credited against the outstanding notes on August 1, 2011. As a result of the public sale on August 1, 2011, the Company retains no material assets with which to continue its operations. The Company is seeking companies or businesses with an interest in utilizing the Company as a public shell vehicle and in August 2011 signed a non binding “Letter of Intent” with an interested party for a possible merger. There can be no assurance, however, that such a transaction will ultimately be consummated. This transaction was completed in December 2011, when Raptor Resources Holdings Inc. (formerly Lantis Laser Inc.) acquired an 80% controlling equity stake in the Company. In addition to Raptor Resources Holdings Inc. issuing 5 million shares of their common stock to CCE, they were issued 109,928,311 shares in the Company to attain a 55% ownership as of December 31, 2011. The Company filed a Form 14C to amend its charter to increase the authorized shares of common stock of the Company to 500,000,000 shares, and then issued an additional 79,078,817 shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80%, and simultaneously issued 13,510,752 shares of stock to CCE in consideration for the conversion of the convertible notes outstanding to common stock. The convertible notes previously issued by Raptor Networks Technology, Inc. were converted and the Company engaged in a 1:10 reverse stock split. Former shareholders of Raptor Networks Technology, Inc. (“RPTN”) were reissued 1 share of Mabwe Minerals Inc. for each 10 shares of RPTN. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post split basis. All shares herein are reflected post-split in accordance with the Staff Accounting Bulletin.

F-9

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Presentation as a Going Concern (Continued)

The items discussed above raise substantial doubts about the Company's ability to continue as a going concern. In light of these factors, management believes that with the investment in Kinsey and production anticipated to commence by the second quarter of 2013 on the Dodge Mines, the Company will be well positioned to succeed.

The financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Exploration Stage Company

As of June 29, 2012 the Company moved from an Operating Stage Company to an Exploration Stage Company as a result of the execution of the change in ownership control to the majority controlling interest by Raptor Resources Holdings Inc. This transaction was FINRA deemed effective June 28, 2012 and exploration stage activities commenced on June 29, 2012. In accordance with ASC 915 the Company will be reporting and disclosing additional information in addition to reporting and disclosure requirements otherwise prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company has adopted the provisions of ASC 810-10-5, “Consolidation of VIEs”. ASC 810-10-5 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIEs residual returns.

Mabwe Minerals Inc. on July 18, 2012, acquired a 49% interest in Mabwe Minerals Zimbabwe (PVT) LTD (MAB-Z) through the issuance of 25,000 shares of Raptor Resources Holdings Inc. Series B Preferred Convertible Stock. Each share of the Series B Preferred Convertible Stock is convertible into 50 common shares of Raptor Resources Holdings Inc. and 25 common shares of Mabwe Minerals Inc. both subject to a 1 year holding period. The remaining 51% ownership in MAB-Z is held by a Director of the Company, a Zimbabwe resident, Tapiwa Gurupira (41%) with the remaining portion owned by Asswell Gurupira (10%). MAB-Z will be the operating arm of Mabwe Minerals, Inc., with the Company being the primary beneficiary of all the activities of its subsidiary, Mabwe Minerals Zimbabwe (PVT) LTD.

As a result of this investment by Mabwe Minerals Inc. funded by Preferred Convertible Series B Stock of Raptor Resources Holdings Inc., MAB – Z has been identified by the Company as a VIE. The value of the Series B Preferred Convertible Stock is $25,000, which is reflected as Goodwill on the Consolidated Balance Sheet at December 31, 2012.

The initial transaction is recorded at cost.

F-10

MABWE MINERALS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Noncontrolling Interests

In accordance with ASC 810-10-45, Noncontrolling Interests in Consolidated Financial Statements, the Company classifies controlling interests as a component of equity within the balance sheets. The Company has retroactively applied the provisions in ASC 810-10-45 to the financial information for the period ended December 31, 2012. There was no activity from December 2, 2011 through June 28, 2012 in MAB-Z, the Company’s majority-owned subsidiary.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on net earnings, financial position or cash flows.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include the recoverability of long-lived assets, the valuation of stock-based compensation and the valuation allowance of the deferred tax asset. Actual results could differ from those estimates.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the assets’ estimated useful lives as follows: computer equipment, furniture and fixtures and testing equipment are depreciated over three years and office equipment is depreciated over five years. Repairs and maintenance of a routine nature are charged as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations. For the years ended December 31, 2012 and 2011 there is no property or equipment included in the accompanying consolidated balance sheets.

Convertible Debenture and Beneficial Conversion Feature

If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount. In those circumstances, the convertible debt will be recorded net of the discount related to the BCF. The Company amortizes the discount to interest expense over the life of the debt using the straight-line method, which approximates the effective interest method.

Derivative Financial Instruments

In accounting for non-conventional convertible debt, the Company bifurcates its embedded derivative instruments. The Company’s derivative financial instruments consist of embedded derivatives related to non-conventional debentures entered into with certain investors. These embedded instruments related to the debenture include the conversion feature, liquidated damages related to registration rights and default provisions. The accounting treatment of derivative financial instruments requires that the Company record the derivatives and related warrants at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value will be recorded as non-operating, non-cash income or expense at each reporting period. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the derivative is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income.

F-11

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Revenue Recognition

Prior to the change in business, the Company recorded revenues when the following criteria were met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price to the customer is fixed or determinable; and (iv) collection of the sales price is reasonably assured. Delivery occurs when goods are shipped and title and risk of loss have passed to the customer. Revenue is deferred in all instances where the earnings process is incomplete. The Company recognized revenue from distribution sales when all contingencies were satisfied and upon persuasive evidence of a sale to end users until such time that historical sell through ratios had been developed. Payments received before all of the relevant criteria for revenue recognition were satisfied were recorded as deferred revenue in the accompanying consolidated balance sheets. Revenues and costs of revenues from consulting contracts were recognized during the period in which the service was performed. All revenues were reported net of any sales discounts or taxes.

Since the Company entered the Exploration Stage, no revenues have been recorded.

Research and Development Costs

Research and development (R&D) costs consist of labor, surveying, mapping, engineering and licensing as well as any development costs necessary to prepare site Dodge Mine Blocks 1-6 for mining operations.

Compensated Absences

The Company does not currently have a policy concerning due to the fact that full time employee exist under a time based compensation agreement.

Impairment or Disposal of Long-Lived Assets

The Company reviews its long-lived assets and certain related intangibles for impairment periodically, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. There were no assets that were considered to be impaired as of December 31, 2012 and 2011.

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates for the periods in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company records a valuation allowance if based on the weight of available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized. In determining the possible realization of deferred tax assets, the Company considers future taxable income from the following sources: (i) the reversal of taxable temporary differences, (ii) taxable income from future operations and (iii) tax planning strategies that, if necessary, would be implemented to accelerate taxable income into periods in which net operating losses might otherwise expire.

The Company also recognizes the income tax effect of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. If recognized, the tax portion of the adjustment would affect the effective tax rate.

F-12

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Uncertainty in Income Taxes

The Company follows ASC 740-10, Accounting for Uncertainty in Income Taxes. This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. ASC 740-10 is effective for fiscal years beginning after December 15, 2006. Management has adopted ASC 740-10 for 2008, and they evaluate their tax positions on an annual basis. The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest or penalties since its inception.

The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The tax years for 2009 to 2011 remain open for examination by federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax year.

Fair Value of Financial Instruments

Unless otherwise indicated, the fair value of all reported assets and liabilities which represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such instruments.

Stock-Based Compensation

The Company accounts for stock-based compensation at fair value using the Black-Scholes Option pricing model. All stock-based compensation cost is measured at the grant date using the Black-Sholes Option Pricing Model, based on the fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations.

Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate that the Company presently uses is 10%.

No options were granted during the years ended December 31, 2012 or 2011.

Earnings or Loss per Common Share

Basic earnings or loss per share is computed by dividing the net income or loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the year ended December 31, 2011 basic and diluted earnings per share were the same.

F-13

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820 resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements, as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

In September 2011, FASB issued ASU 2011-08, Testing Goodwill for Impairment, which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-step impairment test is no longer required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

F-14

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures.

There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

3.	Discontinued Operations

On July 5, 2011, the Company entered into an agreement with California Capital Equity, LLC (“CCE”) granting CCE an exclusive license (even as to the Company) leaving the Company without any continuing rights in or to its intellectual property. Additionally, as of July 31, 2011, the Company had defaulted on all of its secured and unsecured notes payable. On August 1, 2011 all of the Company’s remaining assets were sold during a public foreclosure sale pursuant to remedies available under the terms of the secured notes. For further details on these transactions, see the disclosures in the Forms 8-K filed by the Company on July 11, 2011 and August 4, 2011. As a result of the above transactions, the Company classified all of its operations as discontinued operations, except certain general and administrative expenses related to the public shell company, such as EDGAR fees, audit fees and legal expenses related to review of public filings and expenses related to the convertible debt.

Following are operating results included in discontinued operations for the years ended:

F-15

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.	Discontinued Operations (Continued)

MABWE MINERALS INC.
(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS

	For the Twelve Months Ended
	December 31,
	2012		2011
REVENUE, NET	$	-	$	367,012
COST OF SALES		-		222,288
GROSS PROFIT		-		144,724
OPERATING EXPENSES
Salary expense and salary related costs		-		353,198
Research and development		-		5,537
General and administrative		-		158,435
Total operating expenses		-		517,170
Loss from operations		-		(372,446	)
GAIN (LOSS) ON DISPOSAL OF DISCONTINUED OPERATIONS
Loss on foreclosure		-		(431,034	)
Gain on sale of intellectual property		-		384,000
Loss on sale of property and equipment		-		(1,697	)
Miscellaneous income		-		532,887
Total gain (loss) on disposal of discontinued operations		-		484,156
Income (loss) before income taxes		-		111,710
Income tax benefit		-		-
NET INCOME (LOSS)		-		111,710

F-16

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Loss on Foreclosure

On June 17, 2011, Raptor Acquisition, LLC, a wholly-owned subsidiary of California Capital Equity, LLC (“CCE”) purchased all of the convertible notes payable from the previous note holders in an outside transaction. On July 6, 2011, CCE provided the Company with notice of default on the notes payable and demanded repayment in full. They also informed of their intent to exercise their rights and remedies against the Company’s assets. On August 1, 2011, CCE, in its capacity as a secured lender, held a public foreclosure sale of substantially all of the Company’s assets. CCE was the only bidder and the assets of the Company were acquired for $100,000.

The following assets were acquired by CCE, resulting in a loss on foreclosure of $431,034 for the year ended December 31, 2011.

Net proceeds	$	100,000
Net book value of assets acquired:
Inventories		510,083
Property and equipment		20,951
		531,034
Loss on foreclosure	$	(431,034	)

5. Gain on Sale of Intellectual Property

Effective July 1, 2011, the Company sold an exclusive, worldwide, perpetual, irrevocable, fully paid, transferable and sublicensable right and license in all of the Company’s registered patent and patent applications for $384,000. The license is exclusive even to the Company, such that the Company no longer has any rights to its intellectual property. Since the Company’s carrying value of its intellectual property was $0, the Company recorded a gain on the sale of intellectual property of $384,000 for the year ended December 31, 2011.

Stock-Based Compensation

2005 Stock Plan

The Company has one stock-based compensation plan, the 2005 Stock Plan (the “2005 Plan"). Under the 2005 Plan, 3,000,000 shares of stock are reserved for issuance to eligible employees, non-employee directors and certain consultants. The 2005 Plan is administered by the board of directors or committee of the board of directors, who have sole discretion to set vesting, expiration and other terms of awards under the 2005 Plan. As of December 31, 2012, the 2005 Plan had a total of 0 options outstanding as all participants had resigned.

Non-Plan Options

Prior to approval of the 2005 Plan, the Company granted stock options out-of-plan. These non-plan options provided for the periodic issuance of stock options to employees and non-employee members of the board of directors. The vesting period for the non-plan stock options was over a three-year term, commencing on the first anniversary of the date of grant. The maximum contractual term of stock options granted under these out-of-plan options was eight years. As of December 31, 2012, there were 0 non-plan options outstanding as all participants had resigned.

F-17

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation (Continued)

Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The fair value is determined using the Black-Scholes Option pricing model.

No options were granted during the year ended December 31, 2012.

For the years ended December 31, 2012 and 2011, the Company recognized $0, respectively, of stock-based compensation costs as a result of the issuance of options to employees.

Stock option activity was as follows for the year ended December 31, 2012:

						Weighted-Average
				Weighted-		Remaining			Aggregate
	Number of			Average		Contract Term			Intrinsic
	Options			Exercise Price		(Years)			Value

Outstanding, January 1, 2012		146,200		$	1.21		2.79
Granted		-			-
Forfeited / Expired		(146,200	)		1.21		(2.79	)
Exercised		-			-

Outstanding, December 31, 2012		0		$	-		-		$	-
Exercisable, December 31, 2012		0		$	-		-		$	-

Related Party Loans

With the acquisition of MAB-Z the chief revenue producing asset of mining rights of the Dodge Mine Blocks 1-6 and the associated note payable were transferred from fully consolidated subsidiary of Raptor Resources Holdings Inc. TAG-Z to MAB-Z a fully consolidated variable interest entity of Mabwe Minerals Inc., majority owned subsidiary of Raptor Resources Holdings Inc. The value transferred to MAB-Z for the Mining rights of Dodge Mine blocks 1-6 has a book value of $433,000 offset by a note payable $57,000 at the time of transfer. This value of $376,000 in related party loans is further offset by net payment of expenses incurred by and paid on behalf of consolidating parent Raptor Resources Holdings Inc. Though the balance in the related party payable is nearly identical to that of the Dodge Mine Blocks Net asset there have been several invoices flow through the account in either direction they nearly zero out. The value of the Note Payable for the Dodge Mines at December 31, 2012 was $13,500, as the Company paid $43,500 during the six months ended December 31, 2012. Also in this related party activity is the charge for the 25,000 shares of stock that were issued by Raptor Resources Holdings Inc. to acquire MAB-Z. This transaction has also resulted in recording of Goodwill on the books of MAB-Z, as the value of the 25,000 shares of Series B Preferred Convertible Stock of Raptor Resources Holdings Inc. has a value of $25,000. The Company is the ultimate beneficiary of that payment. Further consideration was exchanged but no other asset was created. Management performed an evaluation of the goodwill at December 31, 2012, and determined that no impairment adjustment was necessary at this time.

F-18

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans Payable – Other

Effective July 26, 2012 MAB-Z entered into a one year financing short term loan agreement with OVERSEAS TRADE AND FINANCING LIMITED for an amount of $40,000 with accrued interest at the rate of 12% . The balance with interest and fees of $42,786 at December 31, 2012 must be fully repaid within 360 days of the effective date. Failure to pay as prescribed or duly extend loan period will result in the accrual of late charges at a rate of 6% per annum. Extension and drawdown fees are 1% and 2% respectively.

Investment

The investment has been accounted for as an equity investment under ASC 323. In accordance with the ASC, the investment will be maintained at fair value, and increased or decreased based upon the net income or loss of Kinsey as well as any contributions made and dividends paid. The Company’s investment increased $55,275 as a result of the incremental profit of Kinsey for the period October 29, 2012 through December 31, 2012 at 25% ownership by MAB-Z.

10.

Fair Value Disclosures

ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820-10 are described below:

	Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
	Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
	Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC 820-10, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As a result of the conversion of the convertible notes and warrants associated with those notes on June 28, 2012, all Level 3 financial liabilities the Company had, were adjusted to $0. Therefore, no longer exist.

The table below sets forth a summary of the fair values of the Company’s financial assets and liabilities as of December 31, 2012:

F-19

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.

Fair Value Disclosures (Continued)

	Total		Level 1		Level 2		Level 3

ASSETS:
Investment, equity method	$	555,275	$	-	$	555,275	$	-

	$	555,275	$	-	$	555,275	$	-

The table below sets forth a summary of the fair values of the Company’s financial assets and liabilities as of December 31, 2011:

	Total		Level 1		Level 2		Level 3

LIABILITIES:
Conversion option liabilities	$	11,789,870	$	-	$	-	$	11,789,870
Detachable warrant liabilities		392,310		-		-		392,310

	$	12,182,180	$	-	$	-	$	12,182,180

11. Securities Purchase Agreements

The Company entered into four separate securities purchase agreements (the “2006 SPA,” the “2007 SPA,” the “April 2008 SPA” and the “July 2008 SPA,” collectively the “SPAs”) with three institutional investors in connection with private placement transactions that provided for, among other things, the issuance of senior convertible notes (the “2006 Notes,” the “2007 Notes,” the “April 2008 Notes” and the “July 2008 Notes,” collectively the “Notes”), warrants to purchase shares of common stock (the “2006 Warrants,” the “2007 Warrants,” “the April 2008 Warrants,” the “July 2008 Warrants” and the “Replacement Warrants,” collectively the “Warrants”) and the issuance of common stock (the “March 2008 Stock” and the “July 2008 Stock”). Following is a summary of the securities issued pursuant to the terms of the SPAs. Effective June 28, 2012 all “Notes” were converted to equity and thus retired, In addition, all warrants issued in connection with these “Notes” were forfeited. The table below represents value at conversion (all warrants are reflected pre-split).

F-20

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Securities Purchase Agreements (Continued)

Transaction	Date of Financing		Initial Principal Amount of Notes		Series of Warrants Issued	Initial Number of Warrants Issued to the Investors			Shares of Common Stock Issued

2006 SPA	July 30, 2006	(1)	$	8,804,909	L and M		39,797,031			-
2007 SPA	July 31, 2007			3,500,000	N, O and P		6,047,886			-
April 2008 SPA	April 1, 2008			3,125,000	Q		6,250,000			3,125,000
July 2008 SPA	July 28, 2008			1,250,000	R		8,750,000	(2)		1,250,000

			$	16,679,909			60,844,917			4,375,000

(1) The information presented reflects the January 22, 2007 amendment.

(2) Includes 2,500,000 Series R warrants and 6,250,000 Replacement Warrants.

On July 27, 2010, the Company issued an unsecured convertible note payable (the “July 2010 Note”) to one of the investors from the previous financings in the principal amount of $176,471. All outstanding notes payable are collectively referred to as (the “Notes”).

Effective June 28, 2012 all “Notes” were converted to equity and thus retired;, the table above represents value at conversion.

Warrants

A summary of the balances as of June 28, 2012 and December 31, 2011follows:

	Principal Balance		Discount on Notes Payable		Conversion Option Liability		Detachable Warrant Liability
2006 Notes	$	3,987,137	$	-	$	1,586,278	$	35,897

2007 Notes		3,084,046		-		2,140,396		35,927

April 2008 Notes		2,288,392		-		1,532,240		101,276

July 2008 Notes		476,808		-		319,257		40,510

July 2010 Notes		176,471				118,160		-

Balance, June 28, 2012	$	10,012,854	$	-	$	5,696,331	$	213,610

F-21

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Securities Purchase Agreements (Continued)

Warrants

	Principal Balance		Discount on Notes Payable		Conversion Option Liability		Detachable Warrant Liability
2006 Notes	$	4,987,137	$	-	$	5,228,538	$	256,662

2007 Notes		3,084,046		-		3,269,846		69,029

April 2008 Notes		2,288,392		-		2,560,521		47,585

July 2008 Notes		476,808		-		533,509		19,034

July 2010 Notes		176,471		-		197,456		-

Balance, December 31, 2011	$	11,012,854	$	-	$	11,789,870	$	392,310

As a result of the conversion to retire the notes, all warrants were cancelled.

12. Warrants

Warrants granted to investors, brokers and other service providers are summarized as follows:

	Warrant		Weighted Average
	Shares		Exercise Price
Outstanding at December 31, 2011		7,051,413	$	5.10
Granted		-		-
Cancelled/forfeited		6,991,342		5.10
Exercised		-		-
Outstanding at December 31, 2012		60,071	$	4.40

The only warrants outstanding were issued to a broker January 17, 2007 and are set to expire on January 17, 2014.

13.

Acquisition

Effective July 18, 2012, the Company’s acquired a 49% interest of Mabwe Minerals Zimbabwe (PVT) LTD (MAB-Z) for 25,000 shares of Series B Convertible Preferred Stock of Raptor Resources Holdings Inc. The value of this transaction was $25,000.

MAB – Z was essentially a newly formed entity. The $25,000 was recorded as Goodwill.

Net Assets Purchased
Goodwill		25,000

Purchase Price	$	25,000

F-22

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Stockholders’ Deficit

The Company’s authorized capital consists of 500,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, no par value per share.

During the three months ended December 31, 2012, the Company issued: 5,000,000 shares of common stock valued at $500,000 to purchase for MAB-Z, a 25% ownership in Kinsey per the Equity Exchange Agreement; 65,000 shares of common stock valued at $6,500 for services rendered; and 3,000,000 shares of common stock to two former officers of Raptor Resources Holdings Inc. to offset the related party debt outstanding with Raptor Resources Holdings Inc.

During the three months ended September 30, 2012, the Company issued 11,525,000 shares of common stock for cash (5,000,000 shares for $250,000) and services (6,525,000 for $145,875) thus diluting the controlling interest percentage of Raptor Resources Holdings Inc, to 73%.

During 2012, the Company executed a 1:10 reverse stock split where every ten (10) shares of stock was converted to one (1) share.. No fractional shares were issued resulting in a negligible increase to the total outstanding shares on a post split basis. All shares are reflected on a post-split basis unless indicated.

On June 28, 2012, the Company issued 79,078,817 shares of common stock to Raptor Resources Holdings Inc. to bring the total percentage equity owned by Raptor Resources Holdings Inc. to 80%, and simultaneously issued 13,510,752 shares of stock to CCE in consideration for the conversion of the convertible notes outstanding to common stock, .During 2011, the Company issued 10,992,831 shares of common stock (on a post split basis) to Raptor Resources Holdings Inc.(f/k/a Lantis Laser Inc.) representing 55% of the Company. The transaction was treated as an equity transaction, and Raptor Resources Holdings Inc. issued 5,000,000 shares of their stock to CCE in exchange for the conversion of their debt to common stock of the Company. Upon the Company’s successful amendment to their charter which enabled them to increase the authorized shares to 500,000,000 and also issue CCE an additional 13,510,752 shares of the Company’s stock.

There were no shares of common stock issued during 2011.

As of December 31, 2012, the Company has 131,980,750 shares issued and outstanding.

15. Income Taxes

The Company computes and records taxes payable based upon determination of taxable income which is different from pre-tax financial statement income. Such differences arise from the reporting of financial statement amounts in different periods for tax purposes. The timing differences are a result of different accounting methods being used for financial and tax reporting.

The Company’s total deferred tax assets and deferred tax liabilities were as follows at December 31:

F-23

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Income Taxes (Continued)

	2012			2011
Deferred tax assets:
Non-benefited tax losses and credits		27,738,000			37,712,000
Total deferred tax assets		27,738,000			37,712,000
Deferred tax liabilities		-			-
Net book value of assets		-			-
Total deferred tax liabilities		-			-
Total net deferred tax assets		27,738,000			37,712,000
Valuation allowance		(27,738,000	)		(37,712,000	)
Net deferred tax assets	$	-		$	-

A valuation allowance has been established against the realization of the deferred tax assets since the Company has determined that the operating loss carryforwards may not be realized.

The Company has federal and state net operating loss carryforwards of approximately $81,584,000 and $80,831,000, respectively expiring between 2032 and 2025, respectively.

Internal Revenue Code Section 382 imposes limitation on our ability to utilize net operating losses if we experience an ownership change and for the NOL’s acquired in the acquisitions of subsidiaries. An ownership change may result from transactions increasing the ownership percentage of 5% or greater stockholders in the stock of the corporation by more than 50 percentage points over a three-year period. The value of the stock at the time of an ownership change is multiplied by the applicable long-term tax exempt interest rate to calculate the annual limitation. Any unused annual limitation may be carried over to later years. The Company in June 2012, experienced a greater than 50% ownership change, so the rules of IRC section 382 apply.

At December 31, 2012 and 2011, the amount of gross unrecognized tax benefits before valuation allowances and the amount that would favorably affect the effective income tax rate in future periods after valuation allowances were zero.

The Company files income tax returns in U.S. federal and various state jurisdictions. The Company is beyond the statute of limitations subjecting it to U.S. federal and state income tax examinations by tax authorities for years before 2009. The Company is not currently subject to any income tax examinations by any tax authority. Should a tax examination be opened, management does not anticipate any tax adjustments, if accepted, that would result in a material change to its financial position.

16. Commitment

Services Rendered Agreement

The Company entered into a Services Rendered Agreement with WGB Kinsey and Company in august 2012. Under the agreement, the Company agreed to issue 1,000,000 shares of common stock to Kinsey in exchange for Kinsey to allocate the necessary resources to mine the Dodge Mines at a rate consistent with the Company’s ability to grow their transportation capacity which currently represents 140,000 metric tons. No production has taken place during the period ended December 31, 2012. It is anticipated that production will commence during the second quarter of fiscal 2013.

F-24

MABWE MINERALS INC. AND SUBSIDIARY

(FORMERLY RAPTOR NETWORKS TECHNOLOGY, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. Subsequent Events

On February 8, 2013, MAB-Z was issued as beneficiary an irrevocable documentary letter of credit from Baker Hughes Oilfield Operations, Inc. in the documentary credit amount of $3,000,000 per lot of crude barite (or a total of $9,000,000) to pay for shipments from Beira, Mozambique to any U.S. Gulf port of three lots of barite meeting the specifications set forth in the letter of credit. The first shipment must be made between June 1, 2013 and August 31, 2013, the second shipment must be made between September 1, 2013 and November 30, 2013 and the third shipment must be made between December 1, 2013 and March 1, 2014.

In February 2013, the Company issued 2,400,000 shares of common stock and 1,400,000 one-year warrants for cash. Additionally, the Company issued 105,000 shares of common stock and 105,000 one-year warrants for services rendered.

During January 2013, the Company issued 1,100,000 shares of common stock. 100,000 shares were issued for consulting services rendered and 1,000,000 shares were issued to enter into a 12 month management services advisory contract with Raptor Resources Holdings Inc. In addition, under this contract 20,000 shares of Preferred Series B Convertible stock of Raptor Resources Holdings Inc. were issued which entitles the owner after a 1 year holding period as part of its conversion to be awarded 25 shares for each share of Preferred Series B tendered or 500,000 total shares.

F-25

Fonon Corp - FORM 10-K - March 27, 2013

Attached files

Fonon Corp Reports