Note 4 - Acquisition of Wolfpack Gold (Nevada) Corp.

12 Months Ended

Sep. 30, 2015

Notes

Note 4 - Acquisition of Wolfpack Gold (Nevada) Corp.:

NOTE 4 – ACQUISITION OF WOLFPACK GOLD (NEVADA) CORP.:

On August 15, 2014, we completed our acquisition of all of the issued and outstanding common shares of Wolfpack Gold (Nevada) Corp. (“Wolfpack Nevada”) in accordance with the terms of an Arrangement Agreement, dated May 6, 2014, by and between the Company and the parent company of Wolfpack Nevada, Wolfpack Gold Corp (“Wolfpack”).  The acquisition was approved by the stockholders of both Timberline and Wolfpack.   Wolfpack Nevada was a subsidiary company of Wolfpack, a publicly held Canadian corporation engaged in the exploration of precious metals properties in Nevada.  We acquired Wolfpack Nevada in order to further the exploration and development of mineral properties owned or leased by Wolfpack Nevada, as well as to increase our working capital.

This transaction was accounted for as a business combination.  We acquired all of the shares of Wolfpack Nevada in consideration for the issuance of one share of common stock of Timberline for each 0.75 common shares of Wolfpack.  Pre-acquisition Timberline shareholders own approximately 64% of our issued and outstanding common stock as of the acquisition date and former Wolfpack shareholders own approximately 36%.  

The purchase price of the transaction was $5,151,847, consisting entirely of the issuance of 3,577,672 shares of our common stock.  Of the 3,577,672 shares of common stock issued, 706,407 shares of common stock were issued to Wolfpack in exchange for the cancellation of a $1,000,000 promissory note of Timberline held by Wolfpack, as well as $17,226 of accrued and unpaid interest on the promissory note (see Note 13). 

We incurred $256,223 in expenses specifically related to the acquisition, $236,866 of which is included in professional fees expense, $1,918 is included in mineral exploration expenses, and $17,439 is included in other general and administrative expenses in the consolidated statement of operations for the year ended September 30, 2014.

The acquisition of Wolfpack Nevada closed at 9:00 a.m. pacific time on August 15, 2014.  The closing price of the Company’s common stock on the NYSE MKT on the day prior to this date was $1.44 per share (adjusted for the reverse stock split – See Note 15). 

The purchase price allocation of the acquisition is summarized as follows:

Purchase price:
Shares issued on acquisition	$	5,151,847
Cancellation of promissory note and accrued interest		(1,017,226)
	$	4,134,621
Net assets acquired:
Cash	$	3,554,143
Restricted cash		348,616
Property, mineral rights, and equipment, net		231,862
	$	4,134,621

The unaudited pro forma financial information below represents the combined results of our operations as if the Wolfpack Nevada acquisition had occurred at the beginning of the periods presented.  The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the periods presented, nor is it indicative of future operating results.

		Year ended    September 30,
		2014
Loss from operations	$	(6,910,000)
Net loss		(7,000,000)
Net loss per share available to common stockholders, basic and diluted		$  (1.05)