Globetech Ventures
Corp.
(A development stage company)
Consolidated Financial
Statements
September 30, 2004
in Canadian dollars
Globetech Ventures
Corp.
(A development stage
company)
Consolidated Balance
Sheets
(in Canadian
dollars)
|
September 30,
|
2004
|
2003
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
Cash and cash equivalents
|
$
304,387
|
$
8,720
|
|
Accounts receivable
|
2,275
|
6,179
|
|
|
306,662
|
14,899
|
|
|
|
|
|
Equipment (note 4)
|
2,936
|
4,122
|
|
|
|
|
|
|
$
309,598
|
$
19,021
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
Accounts payable and accrued
liabilities
|
$
206,838
|
$
191,475
|
|
Due to related parties (note
5(c))
|
-
|
180,733
|
|
Loans from related parties (note
5(a))
|
267,848
|
585,277
|
|
|
474,686
|
957,485
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY
(DEFICIENCY)
|
|
|
|
|
|
|
|
Capital stock
|
|
|
|
Authorized
|
|
|
|
20,000,000 common shares of no par
value
|
|
|
|
Issued 13,939,613 common shares
(2003 – 9,489,939)
|
33,519,983
|
27,873,683
|
|
Contributed surplus (note
7)
|
2,429,100
|
-
|
|
Deficit accumulated during the
development stage
|
(36,114,171)
|
(28,812,147)
|
|
|
(165,088)
|
(938,464)
|
|
|
|
|
|
|
$
309,598
|
$
19,021
|
Nature of operations
and going concern (note 1)
Contingencies (note
11)
“Casey
Forward” _____________
“Dr. K.
Sachdeva” ___________
Director
Director
The accompanying notes
form an integral part of these consolidated financial
statements
Globetech Ventures
Corp.
(A development stage
company)
Consolidated Statements
of Operations and Deficit
(in Canadian
dollars)
|
|
For the year ended September
30
|
|
|
|
Period from December 1991 to
September 30, 2004
|
2004
|
2003
|
2002
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
846,207
|
$
-
|
$
-
|
$
-
|
|
|
Cost of revenues
|
1,362,702
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
(516,495)
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Accounting and legal
|
1,053,996
|
108,992
|
31,240
|
20,488
|
|
|
Amortization
|
608,963
|
1,186
|
1,677
|
2,373
|
|
|
Consulting fees
|
730,965
|
163,148
|
8,732
|
38,151
|
|
|
Directors fees
|
97,149
|
-
|
-
|
-
|
|
|
Interest and bank charges
|
618,881
|
45,361
|
61,221
|
35,921
|
|
|
Interest on long term debt
|
164,704
|
-
|
-
|
-
|
|
|
Management fees
|
396,117
|
41,117
|
30,000
|
30,000
|
|
|
Office and miscellaneous
|
961,605
|
9,295
|
17,439
|
49,091
|
|
|
Public relations
|
698,578
|
86,204
|
16,844
|
57,918
|
|
|
Regulatory and transfer agent fees
|
152,826
|
10,962
|
4,455
|
5,199
|
|
|
Repairs and maintenance
|
497,118
|
-
|
-
|
-
|
|
|
Salaries and wages
|
1,483,601
|
-
|
19,213
|
17,373
|
|
|
Telephone
|
312,833
|
7,245
|
5,583
|
6,524
|
|
|
Travel and promotion
|
1,571,035
|
70,092
|
8,348
|
16,826
|
|
|
Stock-based compensation (note 7(b))
|
2,429,100
|
2,429,100
|
-
|
-
|
|
|
|
11,777,471
|
2,972,702
|
204,752
|
279,864
|
|
|
Income (loss) before other items
|
(12,293,966)
|
(2,972,702)
|
(204,752)
|
(279,864)
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
Equity loss from investment
|
(102,449)
|
-
|
-
|
-
|
|
|
Foreign exchange gain (loss)
|
(193,483)
|
(16,424)
|
17,874
|
(204)
|
|
|
Gain on settlement or write-down of
debt
|
237,100
|
112,214
|
-
|
-
|
|
|
Impairment of notes receivable
|
(1,367,945)
|
-
|
-
|
(77,555)
|
|
|
Interest income
|
339,772
|
96
|
68
|
159
|
|
|
Miscellaneous income
|
114,695
|
-
|
8,317
|
-
|
|
|
Write-down of investment
|
(89,626)
|
-
|
-
|
-
|
|
|
Write-down of mineral properties
|
(4,857,651)
|
(4,425,208)
|
-
|
-
|
|
|
Recovery (write-off) of subsidiaries
|
(18,968,185)
|
-
|
131,322
|
37,751
|
|
|
|
(24,887,772)
|
(4,329,322)
|
157,581
|
(39,849)
|
|
|
Income (loss) from operations before
income taxes and non-controlling interest
|
(37,181,738)
|
(7,302,024)
|
(47,171)
|
(319,713)
|
|
|
Non-controlling interest
|
1,067,567
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Net income (loss) for the period
|
(36,114,171)
|
(7,302,024)
|
(47,171)
|
(319,713)
|
|
|
|
|
|
|
|
|
|
Retained earnings (deficit), beginning of
year
|
-
|
(28,812,147)
|
(28,764,976)
|
(28,445,263)
|
|
|
|
|
|
|
|
|
|
Retained earnings (deficit), end of
year
|
$ (36,114,171)
|
$ (36,114,171)
|
$ (28,812,147)
|
$ (28,764,976)
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
(0.60)
|
$
0.00
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares – Basic
and diluted
|
|
12,246,150
|
9,489,939
|
9,489,939
|
The accompanying notes
form an integral part of these financial statements
Globetech Ventures
Corp.
(A development stage
company)
Consolidated Statement
of Shareholders’ Equity (Deficiency)
(in Canadian
dollars)
|
|
Number of
shares
|
Common
shares issued
and fully paid
|
Equity portion
of convertible
notes
|
Deficit
accumulated
during the
development
stage
|
Total
|
|
|
|
|
|
|
|
|
Balance December, 1991
|
-
|
$
-
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Private placements
|
1,280,001
|
159,500
|
-
|
-
|
159,500
|
|
Loss for the period
|
-
|
-
|
-
|
(32,080)
|
(32,080)
|
|
Balance September 30, 1992
|
1,280,001
|
159,500
|
-
|
(32,080)
|
127,420
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
By way of prospectus
|
600,000
|
360,000
|
-
|
-
|
360,000
|
|
Exercise of options
|
112,000
|
67,200
|
-
|
-
|
67,200
|
|
Exercise of warrants
|
100,000
|
60,000
|
-
|
-
|
60,000
|
|
Issuance of shares for
property
|
150,000
|
90,000
|
-
|
-
|
90,000
|
|
Share issue costs
|
-
|
(83,205)
|
-
|
-
|
(83,205)
|
|
Loss for the year
|
-
|
-
|
-
|
(105,902)
|
(105,902)
|
|
Balance September 30, 1993
|
2,242,001
|
653,495
|
-
|
(137,982)
|
515,513
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Private placement
|
400,000
|
576,000
|
-
|
-
|
576,000
|
|
Share issue costs
|
-
|
(60,622)
|
-
|
-
|
(60,622)
|
|
Loss for the year
|
-
|
-
|
-
|
(403,571)
|
(403,571)
|
|
Balance September 30, 1994
|
2,642,001
|
1,168,873
|
-
|
(541,553)
|
627,320
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Private placements
|
418,000
|
1,121,400
|
-
|
-
|
1,121,400
|
|
Exercise of options
|
204,000
|
347,440
|
-
|
-
|
347,400
|
|
Issuance of shares for finders
fees
|
35,069
|
99,570
|
-
|
-
|
99,570
|
|
Share issue costs
|
-
|
(108,570)
|
-
|
-
|
(108,570)
|
|
Loss for the year
|
-
|
-
|
-
|
(343,044)
|
(343,044)
|
|
Balance September 30, 1995
|
3,299,070
|
2,628,713
|
-
|
(884,597)
|
1,744,116
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Private placements
|
1,488,000
|
6,178,000
|
-
|
-
|
6,178,000
|
|
Exercise of options
|
1,128,584
|
4,161,930
|
-
|
-
|
4,161,930
|
|
Issuance of shares for finders
fees
|
75,624
|
197,379
|
-
|
-
|
197,379
|
|
Share issue costs
|
-
|
(365,874)
|
-
|
-
|
(365,874)
|
|
Loss for the year
|
-
|
-
|
-
|
(1,533,474)
|
(1,533,474)
|
|
Balance September 30, 1996
|
5,991,278
|
12,800,148
|
-
|
(2,418,071)
|
10,382,077
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Exercise of options
|
243,000
|
639,730
|
-
|
-
|
639,730
|
|
Exercise of warrants
|
845,447
|
3,696,723
|
-
|
-
|
3,696,723
|
|
Issued on conversion of
debt
|
2,464,950
|
4,821,079
|
-
|
-
|
4,821,079
|
|
Issuance of common shares for
acquisition of subsidiary
|
171,282
|
1,124,745
|
-
|
-
|
1,124,745
|
|
Issuance of shares for finders
fees
|
65,298
|
457,086
|
-
|
-
|
457,086
|
|
Share issue costs
|
-
|
(472,562)
|
-
|
-
|
(472,562)
|
|
Equity portion of convertible
debentures
|
-
|
-
|
169,760
|
-
|
169,760
|
|
Loss for the period
|
-
|
-
|
-
|
(2,822,786)
|
(2,822,786)
|
|
Balance September 30, 1997
|
9,781,255
|
23,066,949
|
169,760
|
(5,240,857)
|
17,995,852
|
|
|
|
|
|
|
|
|
Contingent consideration on
acquisition of subsidiary
|
-
|
(1,086,901)
|
-
|
-
|
(1,086,901)
|
|
Issued on conversion of
debt
|
277,776
|
261,679
|
(59,219)
|
-
|
202,460
|
|
|
10,059,031
|
22,241,727
|
110,541
|
(5,240,857)
|
17,111,411
|
|
|
|
|
|
|
|
|
Capital stock consolidation
(7.5:1)
|
(8,717,827)
|
-
|
-
|
-
|
-
|
|
Issued on conversion of
debt
|
221,234
|
519,691
|
(110,541)
|
-
|
409,150
|
|
Issued on settlement of
debt
|
550,000
|
111,152
|
-
|
-
|
111,152
|
|
Loss for the year
|
-
|
-
|
-
|
(20,236,904)
|
(20,236,904)
|
|
Balance September 30, 1998
|
2,112,438
|
22,872,570
|
(110,541)
|
(25,477,761)
|
(2,605,191)
|
|
|
|
|
|
|
|
|
Issued on settle of debt
|
1,433,364
|
1,604,029
|
-
|
-
|
1,604,029
|
|
Loss for the year
|
-
|
-
|
-
|
(706,147)
|
(706,147)
|
|
Balance September 30, 1999
|
3,545,802
|
24,476,599
|
-
|
(26,183,908)
|
(1,707,309)
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Exercise of options
|
24,100
|
56,321
|
-
|
-
|
56,321
|
|
Exercise of warrants
|
227,273
|
370,612
|
-
|
-
|
370,612
|
|
Issued on conversion of
debt
|
1,830,073
|
1,078,550
|
-
|
-
|
1,078,550
|
|
Issued on settlement of
debt
|
220,748
|
489,660
|
-
|
-
|
489,660
|
|
Subscriptions received in
advance
|
-
|
369,875
|
-
|
-
|
369,875
|
|
Share issue costs
|
-
|
(74,141)
|
-
|
-
|
(74,141)
|
|
Loss for the year
|
-
|
-
|
-
|
(438,663)
|
(438,663)
|
|
Balance, September 30,
2000
|
5,847,996
|
26,767,476
|
-
|
(26,622,571)
|
144,905
|
|
|
|
|
|
|
|
|
Issued on private
placement
|
2,000,000
|
456,840
|
-
|
-
|
456,840
|
|
Issued for subscriptions received in
advance
|
227,273
|
369,875
|
-
|
-
|
369,875
|
|
Subscriptions received in
advance
|
-
|
(369,875)
|
-
|
-
|
(369,875)
|
|
Issued on acquisition of equity
investment (note 4)
|
500,000
|
192,075
|
-
|
-
|
192,075
|
|
Issued on settlement of
debt
|
914,670
|
502,784
|
-
|
-
|
502,784
|
|
Share issue costs
|
-
|
(45,492)
|
-
|
-
|
(45,492)
|
|
Loss for the year
|
-
|
-
|
-
|
(1,822,692)
|
(1,822,692)
|
|
Balance September 30, 2001
|
9,489,939
|
27,873,683
|
-
|
(28,445,263)
|
(571,580)
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
-
|
(319,713)
|
(319,713)
|
|
Balance September 30, 2002
|
9,489,939
|
27,873,683
|
-
|
(28,764,976)
|
(891,293)
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
(47,171)
|
(47,171)
|
|
Balance September 30, 2003
|
9,489,939
|
27,873,683
|
-
|
(28,812,147)
|
(938,464)
|
|
|
|
|
|
|
|
|
Issuance of shares for
cash
|
|
|
|
|
|
|
Private placements
|
1,797,674
|
1,299,990
|
-
|
-
|
1,299,990
|
|
Issued on conversion of
debt
|
652,000
|
432,000
|
-
|
-
|
432,000
|
|
Acquisition of Brazil Gold
Ltda.
|
2,000,000
|
4,050,000
|
-
|
-
|
4,050,000
|
|
Share issue costs
|
-
|
(135,690)
|
-
|
-
|
(135,690)
|
|
Contributed surplus
|
-
|
-
|
2,429,100
|
-
|
2,429,100
|
|
Loss for the year
|
-
|
-
|
-
|
(7,302,024)
|
(7,302,024)
|
|
Balance September 30, 2004
|
13,939,613
|
$
35,519,983
|
$
2,429,100
|
$ (36,114,171)
|
$ (165,088)
|
The accompanying notes
form an integral part of these financial statements
Globetech Ventures
Corp.
(A development stage
company)
Consolidated Statements
of Cash Flows
(in Canadian
dollars)
|
|
For the year ended September
30
|
|
|
|
Period from December 1991 to
September 30, 2004
|
2004
|
2003
|
2002
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
Net income (loss) for the year
|
$ (36,114,171)
|
$ (7,302,024)
|
$
(47,171)
|
$
(319,713)
|
|
|
Items not involving cash
|
|
|
|
|
|
|
Accrued interest and foreign exchange on
converted debt
|
410,821
|
-
|
-
|
-
|
|
|
Accrued interest on notes receivable
|
(83,213)
|
-
|
-
|
-
|
|
|
Amortization
|
608,963
|
1,186
|
1,677
|
2,373
|
|
|
Equity loss from investment
|
102,449
|
-
|
-
|
-
|
|
|
Impairment of notes receivable
|
1,367,945
|
-
|
-
|
77,555
|
|
|
Non-controlling interest
|
(1,067,567)
|
-
|
-
|
-
|
|
|
Share issued on settlement of subsidiary
debt
|
267,370
|
-
|
-
|
-
|
|
|
Write-down of investment
|
89,626
|
-
|
-
|
-
|
|
|
Write-down of mineral properties
|
4,857,651
|
4,425,208
|
-
|
-
|
|
|
Write-down of subsidiaries, net of
cash
|
18,738,788
|
-
|
-
|
-
|
|
|
Write-down of debt
|
(112,214)
|
(112,214)
|
-
|
-
|
|
|
Stock-based compensation
|
2,429,100
|
2,429,100
|
-
|
-
|
|
|
Change in non-cash working capital
|
|
|
|
|
|
|
Accounts receivable
|
(187,080)
|
3,904
|
17,678
|
(22,877)
|
|
|
Inventory
|
(299,208)
|
-
|
-
|
-
|
|
|
Prepaid expenses and advances
|
-
|
-
|
3,054
|
(3,054)
|
|
|
Accounts payable and accrued
liabilities
|
2,874,876
|
127,577
|
24,514
|
(26,954)
|
|
|
Deposit
|
-
|
-
|
(36,522)
|
36,522
|
|
|
Net cash provided from operating
activities
|
(6,115,864)
|
(427,263)
|
(36,770)
|
(256,148)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
Advances from related parties
|
1,284,949
|
-
|
23,433
|
274,463
|
|
|
Net proceeds on issuance of convertible
debentures
|
4,949,465
|
-
|
-
|
-
|
|
|
Shares issued for cash
|
18,575,405
|
1,164,300
|
-
|
-
|
|
|
Net cash provided from financing
activities
|
24,809,819
|
1,164,300
|
23,433
|
274,463
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
Notes receivable advanced
|
(1,284,732)
|
-
|
-
|
(77,555)
|
|
|
Purchase of subsidiaries, net of cash
|
(1,355,771)
|
-
|
-
|
-
|
|
|
Purchase of equipment
|
(12,367,763)
|
-
|
-
|
-
|
|
|
Expenditures on mineral properties
|
(2,429,372)
|
(375,208)
|
-
|
-
|
|
|
Due from related parties
|
(511,590)
|
(66,162)
|
20,186
|
(20,186)
|
|
|
Deposit
|
(440,340)
|
-
|
-
|
-
|
|
|
Net cash used in investing
activities
|
(18,389,568)
|
(441,370)
|
20,186
|
(97,741)
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
304,387
|
295,667
|
6,849
|
(79,426)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of
year
|
-
|
8,720
|
1,871
|
81,297
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of
year
|
$
304,387
|
$
304,387
|
$
8,720
|
$
1,871
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information (Note 9)
The accompanying notes
form an integral part of these financial statements
Globetech Ventures
Corp.
Notes to Consolidated
Financial Statements
September 30,
2004
(in Canadian
dollars)
1.
Nature of Operations
and Going Concern
The Company is
incorporated under the laws of British Columbia, Canada, and its
principal business activities included the acquiring and developing
of mineral properties and the processing of related mineral
resources. During the year ended September 30, 1998, the
Company determined that it was not feasible to continue its mineral
property operations. The Company is currently pursuing and
evaluating potential business ventures in the mineral
field.
These consolidated
financial statements have been prepared in accordance with Canadian
generally accepted accounting principles with the assumption that
the Company will be able to realize its assets and discharge its
liabilities in the normal course of business rather than through a
process of forced liquidation. Continued operations of the
Company are dependent on the Company's ability to receive continued
financial support, complete equity financing, or generate
profitable operations in the future.
2.
Significant
accounting Policies
The following is a
summary of the significant accounting policies used by management
in the preparation of these consolidated financial statements in
accordance with Canadian generally accepted accounting
principles.
a) Basis of
Consolidation
These consolidated
financial statements include the accounts of the Company and its
wholly owned subsidiaries, Sacolco (Pty) Ltd. ("Sacolco"), Glowing
Green Minerals Ltd. ("Glowing"), and its 60% owned subsidiary Qasim
Mining Enterprises Ltd. ("QMEL"). These consolidated financial
statements also include the accounts of the wholly owned
subsidiaries of Sacolco, Impro Mentals (Pty) Ltd. and Sachemco
(Pty) Ltd. All significant inter-company balances and
transactions have been eliminated.
During the year ended
September 30, 1998, the Company determined that it was not feasible
to continue the operations of Sacolco, Glowing and QMEL.
Consequently, all net assets and related costs were
written-off to operations (Note 10).
b) Notes
Receivable
Notes receivable are
stated at the principal amount outstanding or at the Company's
acquisition cost plus accrued interest.
Interest income is
recorded on an accrual basis except on notes receivable classified
as impaired. Notes receivable are classified as impaired when
there is no longer reasonable assurance as to the ultimate
collectability of contractual principal or interest or when the
interest or principal is 90 days past due, unless the note
receivable is both well secured and in the process of collection.
Notes receivable that are determined to be impaired are
valued at the lower of estimated realizable amount based on the
present value of expected future cash flows discounted at the
interest rate inherent in the original note receivable or, at the
fair value of the security underlying the note receivable less
disposition costs.
When a note receivable
is classified as impaired, recognition of interest in accordance
with the contractual terms of the note receivable ceases.
Income on impaired notes receivable is reported as the change
in the net present value of future cash flows. Notes
receivable are restored to an accrual basis when principal and
interest payments are current and there is no longer any reasonable
doubt as to ultimate collectability.
c)
Financial
Instruments
All significant
financial assets, financial liabilities and equity instruments of
the company are either recognized or disclosed in the financial
statements together with other information relevant for making a
reasonable assessment of future cash flows, interest rate risk and
credit risk. Where practicable the fair values of financial
assets and financial liabilities have been determined and
disclosed; otherwise only available information pertinent to fair
value has been disclosed.
d)
Investments
The Company accounts for
its investments in affiliated companies over which it has
significant influence on the equity basis for accounting, whereby
the investments are initially recorded at cost, adjusted to
recognize the Company's share of earnings or losses of the investee
company and reduced by dividends received. Declines in market
value below costs are recognized when such declines are considered
to be other that temporary.
e)
Equipment
Equipment is carried at
cost less accumulated amortizatio
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