UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
June 30, 2013
OR
¨ | 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 0-53585
RAPTOR RESOURCES HOLDINGS INC.
(Exact Name Of Registrant As Specified In Its Charter)
Nevada | 65-0813656 |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
41 Howe Lane, Freehold, NJ | 07728 |
(Address of Principal Executive Offices) | (ZIP Code) |
Registrant's Telephone Number, Including Area Code: (732) 252-5146
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 ¨ No x
(the registrant is not yet required to submit Interactive Data)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
Large accelerated filer ¨ | Accelerated filer ¨ | Non-Accelerated filer ¨ | Smaller reporting company x |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: On August 2, 2013 the registrant had 384,206,456 shares of common stock issued and outstanding.
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Item | Description | Page | ||
PART I - FINANCIAL INFORMATION | ||||
ITEM 1. | FINANCIAL STATEMENTS. | 3 | ||
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION. | 4 | ||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 8 | ||
ITEM 4. | CONTROLS AND PROCEDURES. | 8 | ||
PART II - OTHER INFORMATION | ||||
ITEM 1. | LEGAL PROCEEDINGS. | 9 | ||
ITEM 1A. | RISK FACTORS | 9 | ||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 9 | ||
ITEM 3. | DEFAULT UPON SENIOR SECURITIES. | 9 | ||
ITEM 4. | MINE SAFETY DISCLOSURES. | 9 | ||
ITEM 5. | OTHER INFORMATION. | 9 | ||
ITEM 6. | EXHIBITS. | 10 | ||
SIGNATURES | 11 |
2 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3 |
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page(s) | ||
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2013 (UNAUDITED) AND DECEMBER 31, 2012 | F-2 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 WITH CUMULATIVE TOTALS SINCE JANUARY 14, 1998 (INCEPTION) (UNAUDITED) | F-3 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD JANUARY 14, 1998 (INCEPTION) THROUGH JUNE 30, 2013(UNAUDITED) | F-4 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 WITH CUMULATIVE TOTALS SINCE JANUARY 14, 1998 (INCEPTION) (UNAUDITED) | F-5 | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2013 AND 2012 (UNAUDITED) | F-6 |
F-1 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, | DECEMBER 31, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 221,246 | $ | 22,897 | ||||
Prepaid expenses | 293,971 | 76,411 | ||||||
Total Current Assets | 515,217 | 99,308 | ||||||
Fixed assets, net of depreciation | 5,805 | 6,183 | ||||||
Other Assets: | ||||||||
Investment | 355,842 | 555,275 | ||||||
Mineral rights | 433,000 | 433,000 | ||||||
Goodwill | 25,000 | 25,000 | ||||||
Total Other Assets | 813,842 | 1,013,275 | ||||||
TOTAL ASSETS | $ | 1,334,864 | $ | 1,118,766 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
LIABILITIES | ||||||||
Current Liabilities: | ||||||||
Accrued interest - convertible notes | $ | 208,684 | $ | 191,359 | ||||
Accounts payable and accrued expenses | 564,433 | 580,051 | ||||||
Liability for stock to be issued | - | 20,000 | ||||||
Loan Payable - Other | 45,166 | 42,786 | ||||||
Secured Loan | 423,325 | - | ||||||
Note payable - Dodge Mines | - | 13,500 | ||||||
Related party payable | 150 | 150 | ||||||
Convertible notes payable, net of discount and beneficial conversion feature | 349,500 | 349,500 | ||||||
Total Current Liabilities | 1,591,258 | 1,197,346 | ||||||
Total Liabilities | 1,591,258 | 1,197,346 | ||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Preferred stock, $.001 Par Value; 10,000,000 shares authorized | ||||||||
Preferred Series A Stock 3,000,000 shares authorized 1,000,000 issued and outstanding | 1,000 | 1,000 | ||||||
Preferred Convertible Series B Stock ; 2,500,000 shares authorized with 1,187,000 issued and outstanding for 2013 and 1,167,000 issued and outstanding for 2012 | 1,187 | 1,167 | ||||||
Common stock, $.001 Par Value; 990,000,000 shares authorized with 384,206,456 outstanding 329,847,533 issued for 2013 and 2012 | 384,206 | 384,206 | ||||||
Additional paid-in capital | 12,110,388 | 11,902,930 | ||||||
Treasury Stock - 54,358,923 shares of common stock (in excess of par) | (300,000 | ) | (300,000 | ) | ||||
Additional paid-in capital - warrants | 1,310,513 | 1,193,547 | ||||||
Deferred compensation | - | (420,000 | ) | |||||
Deficits accumulated during the exploration stage | (13,646,000 | ) | (12,751,415 | ) | ||||
Total Stockholders’ Equity (Deficit) - Raptor Resources Holdings Inc. | (138,706 | ) | 11,435 | |||||
Noncontrolling interest in subsidiary | (117,688 | ) | (90,015 | ) | ||||
Total Stockholders’ Equity (Deficit) | (256,394 | ) | (78,580 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 1,334,864 | $ | 1,118,766 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-2 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
WITH CUMULATIVE TOTALS SINCE JANUARY 14, 1998 (INCEPTION)
(UNAUDITED)
CUMULATIVE | ||||||||||||||||||||
TOTALS SINCE | ||||||||||||||||||||
THREE MONTHS ENDED | FOR THE SIX MONTHS ENDED | INCEPTION | ||||||||||||||||||
JUNE 30, | JUNE 30, | JANUARY 14, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 1998 | ||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||
Sales | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Research and development | - | - | - | - | 2,129,900 | |||||||||||||||
Exploration costs | 48,746 | - | 79,065 | - | 190,104 | |||||||||||||||
Wages and wage related expenses | 229,525 | 82,200 | 472,025 | 164,400 | 2,418,261 | |||||||||||||||
Professional, consulting and marketing fees | 91,228 | 61,160 | 182,609 | 139,017 | 5,300,902 | |||||||||||||||
Value of stock issued to secure purchase of Raptor | - | - | - | - | 155,000 | |||||||||||||||
Other general and administrative expenses | 81,080 | 54,530 | 127,837 | 89,088 | 1,090,668 | |||||||||||||||
Depreciation | 711 | 1,083 | 1,423 | 1,423 | 140,727 | |||||||||||||||
Total Operating Expenses | 451,290 | 198,973 | 862,959 | 393,928 | 11,425,562 | |||||||||||||||
LOSS BEFORE OTHER INCOME (EXPENSE) | (451,290 | ) | (198,973 | ) | (862,959 | ) | (393,928 | ) | (11,425,562 | ) | ||||||||||
OTHER INCOME (LOSS) | ||||||||||||||||||||
Amortization of debt issuance costs | - | - | - | - | (287,571 | ) | ||||||||||||||
Gain (loss) in investment under equity method | (39,042 | ) | - | (199,433 | ) | - | (311,822 | ) | ||||||||||||
Gain on conversion of notes payable and interest | - | - | - | - | 13,634 | |||||||||||||||
Forgiveness of debt on conversion of debt to equity | - | 132,917 | - | 132,917 | 132,917 | |||||||||||||||
Gain (loss) on investment - Equity Method | - | - | - | - | (150,000 | ) | ||||||||||||||
Gain on sale of equipment | - | - | - | - | 1,066 | |||||||||||||||
Interest expense - debt discount | - | - | - | - | (1,017,246 | ) | ||||||||||||||
Interest income (expense), net | (13,222 | ) | (10,179 | ) | (22,911 | ) | (20,358 | ) | (848,213 | ) | ||||||||||
Total Other Income (Expense) | (52,264 | ) | 122,738 | (222,344 | ) | 112,559 | (2,467,235 | ) | ||||||||||||
COMBINED NET LOSS BEFORE PROVISION FOR INCOME TAXES | (503,554 | ) | (76,235 | ) | (1,085,303 | ) | (281,369 | ) | (13,892,797 | ) | ||||||||||
LESS NET LOSS ATTRIBUTABLE TO NON CONTROLLING INTEREST | (82,461 | ) | - | (190,712 | ) | - | (246,797 | ) | ||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF RAPTOR RESOURCES HOLDINGS INC BEFORE PROVISION FOR INCOME TAXES | (421,093 | ) | (76,235 | ) | (894,591 | ) | (281,369 | ) | (13,646,000 | ) | ||||||||||
Provision for Income Taxes | - | - | - | - | - | |||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHARES | $ | (421,093 | ) | $ | (76,235 | ) | $ | (894,591 | ) | $ | (281,369 | ) | $ | (13,646,000 | ) | |||||
NET LOSS PER BASIC AND DILUTED SHARES | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.14 | ) | ||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 388,475,417 | 382,228,108 | 384,206,456 | 380,921,623 | 96,406,842 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-3 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD JANUARY 14, 1998 (INCEPTION) THROUGH JUNE 30, 2013
(UNAUDITED)
Deficits | ||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||
Additional | Paid-in | During the | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | Paid-in | Capital- | Deferred | Exploration | Noncontrolling | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Warrants | Compensation | Stage | Interest | Total | |||||||||||||||||||||||||||||||||||||
Balance - January 14, 1998 | - | $ | - | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||
Shares issued to founders | - | - | 200 | 200 | - | - | 87 | - | - | - | - | 287 | ||||||||||||||||||||||||||||||||||||
Net loss for the period January 14, 1998 through December 31, 2003 | - | - | - | - | - | - | - | - | - | (408,404 | ) | - | (408,404 | ) | ||||||||||||||||||||||||||||||||||
Balance January 1, 2004 | - | - | 200 | 200 | - | - | 87 | - | - | (408,404 | ) | - | (408,117 | ) | ||||||||||||||||||||||||||||||||||
Shares issued in reverse merger | - | - | 81,788,563 | 81,589 | - | - | (81,876 | ) | - | - | - | - | (287 | ) | ||||||||||||||||||||||||||||||||||
Shares issued in conversion of notes | - | - | 3,211,250 | 3,211 | - | - | 256,318 | - | - | - | - | 259,529 | ||||||||||||||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | - | - | (251,734 | ) | - | (251,734 | ) | |||||||||||||||||||||||||||||||||||
Balance December 31, 2004 | - | - | 85,000,013 | 85,000 | - | - | 174,529 | - | - | (660,138 | ) | - | (400,609 | ) | ||||||||||||||||||||||||||||||||||
Net loss for the year | - | - | - | - | - | - | - | - | - | (347,397 | ) | - | (347,397 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2005 | - | - | 85,000,013 | 85,000 | - | - | 174,529 | - | - | (1,007,535 | ) | - | (748,006 | ) | ||||||||||||||||||||||||||||||||||
Shares and warrants issued in private placement, net of placement fees | - | - | 5,850,000 | 5,850 | - | - | 307,507 | 208,143 | - | - | - | 521,500 | ||||||||||||||||||||||||||||||||||||
Shares issued for services rendered | - | - | 1,500,000 | 1,500 | - | - | 148,500 | - | - | - | - | 150,000 | ||||||||||||||||||||||||||||||||||||
Warrants issued to former noteholders | - | - | - | - | - | - | - | 159,610 | - | - | - | 159,610 | ||||||||||||||||||||||||||||||||||||
Warrants issued to consultant in private placement | - | - | - | - | - | - | - | 17,769 | - | - | - | 17,769 | ||||||||||||||||||||||||||||||||||||
Adjust fair value of warrants issued in private placement | - | - | - | - | - | - | - | 114,930 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Royalty fees forgiven by Lawrence Livermore | - | - | - | - | - | - | 380,000 | - | - | - | - | 380,000 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2006 as previously reported | - | - | - | - | - | - | - | - | - | (771,352 | ) | - | (771,352 | ) | ||||||||||||||||||||||||||||||||||
Prior period adjustment - correction of an error see Note 10 | - | - | - | - | - | - | - | (114,930 | ) | - | 114,930 | - | - | |||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2006 as restated | - | - | - | - | - | - | - | - | - | (656,422 | ) | - | (656,422 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2006 | - | - | 92,350,013 | 92,350 | - | - | 1,010,536 | 385,522 | - | (1,663,957 | ) | - | (175,549 | ) | ||||||||||||||||||||||||||||||||||
Warrants issued to placement agent | - | - | - | - | - | - | - | 292,518 | - | - | - | 292,518 | ||||||||||||||||||||||||||||||||||||
Warrants issued to convertible noteholders | - | - | - | - | - | - | - | 513,132 | - | - | - | 513,132 | ||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes | - | - | - | - | - | - | 505,300 | - | - | - | - | 505,300 | ||||||||||||||||||||||||||||||||||||
Shares issued for services rendered (including prepaid services) | - | - | 6,460,000 | 6,460 | - | - | 2,528,090 | - | - | - | - | 2,534,550 | ||||||||||||||||||||||||||||||||||||
Exercise of warrants | - | - | 163,375 | 163 | - | - | 40,584 | (16,241 | ) | - | - | - | 24,506 | |||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2007 | - | - | - | - | - | - | - | - | - | (2,174,069 | ) | - | (2,174,069 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2007 | - | - | 98,973,388 | 98,973 | - | - | 4,084,510 | 1,174,931 | - | (3,838,026 | ) | - | 1,520,388 | |||||||||||||||||||||||||||||||||||
Exercise of warrants | - | - | 69,850 | 70 | - | - | 17,352 | (6,944 | ) | - | - | - | 10,478 | |||||||||||||||||||||||||||||||||||
Shares issued for services rendered (including prepaid services) | - | - | 1,075,000 | 1,075 | - | - | 228,425 | - | - | - | - | 229,500 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2008 | - | - | - | - | - | - | - | - | - | (4,572,358 | ) | - | (4,572,358 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2008 | - | - | 100,118,238 | 100,118 | - | - | 4,330,287 | 1,167,987 | - | (8,410,384 | ) | - | (2,811,992 | ) | ||||||||||||||||||||||||||||||||||
Exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Shares returned to treasury and retired | (3,000,000 | ) | (3,000 | ) | - | - | 3,000 | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Shares issued upon conversion from note payable | 833,334 | 833 | - | - | 111,049 | - | - | - | - | 111,882 | ||||||||||||||||||||||||||||||||||||||
Shares issued for services rendered (including prepaid services) | - | - | 2,250,000 | 2,250 | - | - | 160,250 | - | - | - | - | 162,500 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2009 | - | - | - | - | - | - | - | - | - | (1,375,669 | ) | - | (1,375,669 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2009 | - | $ | - | 100,201,572 | $ | 100,201 | - | $ | - | $ | 4,604,586 | $ | 1,167,987 | $ | - | $ | (9,786,053 | ) | $ | - | $ | (3,913,279 | ) | |||||||||||||||||||||||||
Shares issued for services rendered (including prepaid services) | - | - | 500,000 | 500 | - | - | 19,500 | - | - | - | - | 20,000 | ||||||||||||||||||||||||||||||||||||
Shares issued upon conversion from note payable | - | - | 39,173,333 | 39,173 | - | - | 2,289,514 | - | - | - | - | 2,328,687 | ||||||||||||||||||||||||||||||||||||
Beneficial conversion feature on convertible notes | - | - | - | - | - | - | 36,207 | - | - | - | - | 36,207 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2010 | - | - | - | - | - | - | - | - | - | (621,397 | ) | - | (621,397 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2010 | - | $ | - | 139,874,905 | $ | 139,874 | - | $ | - | $ | 6,949,807 | $ | 1,167,987 | $ | - | $ | (10,407,450 | ) | $ | - | $ | (2,149,782 | ) | |||||||||||||||||||||||||
Shares issued for services rendered | - | - | 11,150,000 | 11,150 | - | - | 186,068 | - | - | - | - | 197,218 | ||||||||||||||||||||||||||||||||||||
Shares issued upon conversion from note payable and accrued interest | - | - | 35,535,397 | 35,535 | - | - | 164,191 | - | - | - | - | 199,726 | ||||||||||||||||||||||||||||||||||||
Shares issued for acquisition of Ontage Resources | - | - | 5,000,000 | 5,000 | - | - | 145,000 | - | - | - | - | 150,000 | ||||||||||||||||||||||||||||||||||||
Recapitalization due to reverse merger with TAG Minerals Inc. | - | - | 165,000,000 | 165,000 | - | - | (200,278 | ) | (35,278 | ) | ||||||||||||||||||||||||||||||||||||||
Conversion of notes payable and accrued interest to warrants | - | - | - | - | - | - | 921,666 | 100,800 | - | - | - | 1,022,466 | ||||||||||||||||||||||||||||||||||||
Shares issued for cash | - | - | 16,645,298 | 16,646 | - | - | 323,354 | - | - | - | - | 340,000 | ||||||||||||||||||||||||||||||||||||
Shares issued to lender of Raptor | - | - | 5,000,000 | 5,000 | - | - | 150,000 | - | - | - | - | 155,000 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2011 | - | - | - | - | - | - | - | - | - | (977,052 | ) | - | (977,052 | ) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2011 | - | $ | - | 378,205,600 | $ | 378,205 | - | $ | - | $ | 8,639,808 | $ | 1,268,787 | $ | - | $ | (11,384,502 | ) | $ | - | $ | (1,097,702 | ) | |||||||||||||||||||||||||
Shares issued for services rendered | 1,000,000 | 1,000 | - | - | - | - | - | - | - | - | - | 1,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for services rendered | - | - | 1,100,000 | 1,100 | - | - | 22,022 | - | - | - | - | 23,122 | ||||||||||||||||||||||||||||||||||||
Shares issued for cash | - | - | 3,400,856 | 3,401 | - | - | 66,539 | 25,560 | - | - | - | 95,500 | ||||||||||||||||||||||||||||||||||||
Shares issued for services rendered | 915,000 | 915 | - | - | - | - | 914,085 | - | (840,000 | ) | - | - | 75,000 | |||||||||||||||||||||||||||||||||||
Shares issued for conversion of debt | 45,000 | 45 | - | - | - | - | 44,955 | - | - | - | - | 45,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for cash | 182,000 | 182 | - | - | - | - | 181,818 | - | - | - | - | 182,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for conversion of debt | - | - | 1,500,000 | 1,500 | - | - | 73,500 | - | - | - | - | 75,000 | ||||||||||||||||||||||||||||||||||||
Shares Issued in Equity Exchange - Mabwe Minerals Zimbabwe (PVT) LTD | 25,000 | 25 | - | - | - | - | 24,975 | - | - | - | - | 25,000 | ||||||||||||||||||||||||||||||||||||
Share of capital for Mabwe Minerals share issuances | - | - | - | - | - | - | 1,202,375 | - | - | - | - | 1,202,375 | ||||||||||||||||||||||||||||||||||||
Change in noncontrolling interest - initial acquisition | - | - | - | - | - | - | - | - | - | - | (33,930 | ) | (33,930 | ) | ||||||||||||||||||||||||||||||||||
Restructuring agreement with former owners | - | - | - | - | (54,358,923 | ) | (300,000 | ) | 732,853 | (100,800 | ) | - | - | - | 332,053 | |||||||||||||||||||||||||||||||||
Amortization of deferred compensation | - | - | - | - | - | - | - | - | 420,000 | - | - | 420,000 | ||||||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2012 | - | - | - | - | - | - | - | - | - | (1,366,913 | ) | (56,085 | ) | (1,422,998 | ) | |||||||||||||||||||||||||||||||||
Balance December 31, 2012 | 2,167,000 | $ | 2,167 | 384,206,456 | $ | 384,206 | (54,358,923 | ) | $ | (300,000 | ) | $ | 11,902,930 | $ | 1,193,547 | $ | (420,000 | ) | $ | (12,751,415 | ) | $ | (90,015 | ) | $ | (78,580 | ) | |||||||||||||||||||||
Share of capital for Mabwe Minerals share issuances | - | - | - | - | - | - | 140,456 | 53,571 | - | - | 103,473 | 297,500 | ||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | - | - | - | - | - | - | - | - | 210,000 | - | - | 210,000 | ||||||||||||||||||||||||||||||||||||
Shares issued for services rendered (to be rendered) | 20,000 | 20 | - | - | - | - | 19,980 | - | - | - | - | 20,000 | ||||||||||||||||||||||||||||||||||||
Net loss for the three months ended March 31, 2013 | - | - | - | - | - | - | - | - | - | (473,492 | ) | (108,256 | ) | (581,748 | ) | |||||||||||||||||||||||||||||||||
Balance March 31, 2013 | 2,187,000 | $ | 2,187 | 384,206,456 | $ | 384,206 | (54,358,923 | ) | $ | (300,000 | ) | $ | 12,063,366 | $ | 1,247,118 | $ | (210,000 | ) | $ | (13,224,907 | ) | $ | (94,798 | ) | $ | (132,828 | ) | |||||||||||||||||||||
Share of capital for Mabwe Minerals share issuances | - | - | - | - | - | - | 47,022 | 63,395 | - | - | 59,571 | 169,988 | ||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | - | - | - | - | - | - | - | - | 210,000 | - | - | 210,000 | ||||||||||||||||||||||||||||||||||||
Net loss for the three months ended June 30, 2013 | - | - | - | - | - | - | - | - | - | (421,093 | ) | (82,461 | ) | (503,554 | ) | |||||||||||||||||||||||||||||||||
Balance June 30, 2013 | 2,187,000 | $ | 2,187 | 384,206,456 | $ | 384,206 | (54,358,923 | ) | $ | (300,000 | ) | $ | 12,110,388 | $ | 1,310,513 | $ | - | $ | (13,646,000 | ) | $ | (117,688 | ) | $ | (256,394 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
WITH CUMULATIVE TOTALS SINCE JANUARY 14, 1998 (INCEPTION)
(UNAUDITED)
CUMULATIVE | ||||||||||||
FOR THE SIX MONTHS ENDED | TOTALS SINCE | |||||||||||
JUNE 30, | INCEPTION | |||||||||||
2013 | 2012 | JANUARY 14, 1998 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (894,591 | ) | $ | (281,369 | ) | $ | (13,646,000 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation | 1,423 | 1,423 | 140,727 | |||||||||
Noncontrolling interest adjustment | (190,712 | ) | (33,940 | ) | (375,709 | ) | ||||||
Amortization of debt issuance costs | - | - | 287,571 | |||||||||
Interest expense - debt discount | - | - | 504,606 | |||||||||
Interest expense - beneficial conversion feature | - | - | 533,023 | |||||||||
Gain on conversion of notes payable and interest | - | - | (13,634 | ) | ||||||||
Gain on sale of equipment | - | - | (1,066 | ) | ||||||||
Forgiveness of debt on conversion of debt to equity | - | (132,917 | ) | (132,917 | ) | |||||||
(Gain) loss on investment under equity method | 199,433 | - | 311,822 | |||||||||
Loss on investment under cost method | - | - | 150,000 | |||||||||
License fees payable for research and development | - | - | 605,000 | |||||||||
Warrants issued to former noteholders and consultants | - | - | 469,897 | |||||||||
Common stock issued to secure acquisition of Raptor/Mab Z | - | - | 155,000 | |||||||||
Common stock issued for consulting services | 86,988 | 20,375 | 1,343,703 | |||||||||
Preferred stock issued for consulting services | 440,000 | 1,000 | 936,000 | |||||||||
Cash flow effect of reverse merger | - | - | (35,278 | ) | ||||||||
Changes in assets and liabilities | ||||||||||||
Decrease (increase) in prepaid expenses | (237,560 | ) | (5,500 | ) | 1,961,054 | |||||||
Increase (decrease) in accounts payable & accrued expenses | (15,616 | ) | 258,471 | 2,259,148 | ||||||||
Accrued interest on convertible notes | 17,325 | 20,363 | 567,685 | |||||||||
Total adjustments | 301,281 | 129,275 | 9,666,632 | |||||||||
Net cash used in operating activities | (593,310 | ) | (152,094 | ) | (3,979,368 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisitions of fixed assets, net of disposals | (1,045 | ) | - | (145,465 | ) | |||||||
Investment under equity method | - | - | (167,664 | ) | ||||||||
Net cash used in investing activities | (1,045 | ) | - | (313,129 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from notes/loans payable | 425,704 | - | 745,490 | |||||||||
Repayments made on note payable for Dodge Mines | (13,500 | ) | (48,083 | ) | (255,083 | ) | ||||||
Proceeds from exercise of warrants | - | - | 34,984 | |||||||||
Proceeds from convertible notes and warrants, net of debt issuance costs | - | - | 2,284,310 | |||||||||
Payments of license fee payable | - | - | (225,000 | ) | ||||||||
Proceeds from private placement, net of fees (including cash received for shares to be issued) - preferred and common stock | 380,500 | 260,500 | 1,789,500 | |||||||||
Proceeds (payments) from related parties | - | (21,930 | ) | 139,542 | ||||||||
Net cash provided by financing activities | 792,704 | 190,487 | 4,513,743 | |||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 198,349 | 38,393 | 221,246 | |||||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 22,897 | 15,072 | - | |||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 221,246 | $ | 53,465 | $ | 221,246 | ||||||
CASH PAID DURING THE PERIOD FOR: | ||||||||||||
Income taxes | $ | - | $ | - | $ | - | ||||||
Interest expense | $ | - | $ | - | $ | 93,517 | ||||||
SUPPLEMENTAL NONCASH INFORMATION: | ||||||||||||
Conversion of notes and interest for common stock, net of discounts and issuance costs | $ | - | $ | - | $ | 3,011,031 | ||||||
Acquisition of Dodge Mines for Note Payable | $ | - | $ | - | $ | 433,000 | ||||||
Conversion of license fee payable into capital | $ | - | $ | - | $ | 380,000 | ||||||
Common stock issued to secure acquisition of Raptor | $ | - | $ | - | $ | 155,000 | ||||||
Preferred stock issued for goodwill | $ | - | $ | - | $ | 25,000 | ||||||
Warrants issued to former noteholders and consultants | $ | - | $ | - | $ | 469,897 | ||||||
Common stock issued for acquisition | $ | - | $ | - | $ | 150,000 | ||||||
Common stock issued for prepaid expenses | $ | - | $ | - | $ | 2,205,000 | ||||||
Conversion of accrued expenses for note payable-related parties | $ | - | $ | - | $ | 960,000 | ||||||
Conversion of note payable-related parties and accrued interest to warrants | $ | - | $ | - | $ | 1,022,466 | ||||||
Liabilities forgiven related to restructuring with former owners | $ | - | $ | - | $ | 732,853 | ||||||
Conversion of Dodge Mines Note Payable for Preferred Stock | $ | - | $ | 45,000 | $ | 45,000 | ||||||
Forgiveness of debt on conversion of debt to equity | $ | - | $ | 132,917 | $ | 132,917 | ||||||
Effect of reverse merger with TAG Minerals, Inc. | ||||||||||||
Cash | $ | - | $ | - | $ | 24,772 | ||||||
Accounts payable and accrued expenses | - | - | (50 | ) | ||||||||
Effect on retained earnings | - | - | (60,000 | ) | ||||||||
Cash flow effect from reverse merger | $ | - | $ | - | $ | (35,278 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-5 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION |
The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual consolidated financial statements and notes thereto. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s Form 10-K Annual Report at December 31, 2012, which includes audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.
These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the consolidated operations and cash flows for the periods presented.
Lantis Laser, Inc. (the “Company”) was incorporated in the State of New Jersey on January 14, 1998. On November 3, 2004, the Company was acquired by Hypervelocity, Inc., a Nevada corporation.
In the transaction, the Company exchanged 100% of its stock in exchange for 127,718,500 shares of common stock of Hypervelocity, Inc. The transaction was treated for accounting purposes as a reverse merger with Lantis Laser, Inc. being the accounting acquirer. Included in the 127,718,500 shares issued to the shareholders of Lantis Laser, Inc. in the transaction, 6,422,500 shares were issued in conversion of convertible notes payable the Company had entered into in 2001 and 2003. The shares represent the conversion of the original notes, the interest accrued on those notes as well as warrants that were offered and paid for by the note holders. The value of the convertible notes, interest and warrants was $259,529.
On December 9, 2004, Hypervelocity, Inc. changed its name to Lantis Laser Inc. and is domiciled in Nevada.
On June 16, 2006, the Company authorized a 1 for 2 reverse stock split for all issued shares. All shares reflected herein have been retroactively adjusted to account for the reverse stock split.
The Company was formed to commercialize the application of novel technologies in the dental industry. The criteria for selected products include competitive edge, exclusivity and large market potential. The Company was developing its Optical Coherence Tomography ("OCT") "Dental Imaging" as its first product but has suspended further development until it receives the funding to do so. The Company has licensed the exclusive rights for the dental field for the OCT patented technology from Lawrence Livermore National Laboratories. OCT was invented in the early 1990’s at Massachusetts Institute of Technology and it is currently being commercialized in ophthalmology and cardiovascular imaging.
On May 31, 2007, the Company entered into an exclusive licensing agreement for the field of dentistry with The University of Florida Research Foundation for technology relevant to the imaging probe of its Dental Imaging System; the Agreement carries a $1,000 initial licensing fee.
F-6 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
On July 9, 2008, the Company entered into an exclusive license agreement for the field of dentistry for a patent pending technology known as Near Infrared Transillumination Imaging (NIR). The Company paid the initial licensing fee of $10,000. This technology is synergistic with the OCT technology and the Company intends to sell it in a combination OCT/NIR platform and also as a standalone product.
Management of the Company had extensive experience in the dental industry, including technology, development, marketing and distribution, clinical and research dentistry.
OCT is a diagnostic imaging technology that is based on advanced photonics and fiber optics. It enables the capture of cross-sectional images of tissue with an axial resolution of up to ten times that of x-ray, providing tissue characterization and images that cannot be obtained by any other means, including x-ray. Information is captured by shining a near- infrared light through a single optical fiber only .006” diameter deep into the internal structures of the subject tissue.
When the light becomes scattered in the dense biological tissue, a certain component of the reflected light remains unscattered and thus contains good quantitative and structural image information. The OCT technology maps the changing intensities of reflections from the tissue to form an image of the subject area. This image, displayed on a monitor in real time, has an unprecedented amount of diagnostic information and can be manipulated, printed out and stored in a digital format.
On April 22, 2011, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Lantis Acquisition Corp., a Wyoming corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and TAG Minerals Inc., a Wyoming corporation (“TAG”), pursuant to which the Merger Sub was to be merged into TAG (the “Merger”). As a result of the Merger TAG became a wholly-owned subsidiary of the Company. The transaction was completed on May 23, 2011 and the Company issued to the shareholders of TAG 165,000,000 shares of common stock which represented 50% of the total issued and outstanding shares at the time of the Merger in exchange for 100% of their shares in TAG. The Company accounted for this transaction as an acquisition, and Lantis was the surviving company.
TAG is a U.S. based mineral resource acquisition, exploration and development company, with operations conducted through its operating affiliate, TAG Minerals Zimbabwe (Private) Limited (“TAG - Z”). TAG’s strategy is to identify, acquire and exploit mineral properties that have potential.
Concurrent with the Merger Agreement, the Company’s former Chief Executive Officer and Executive Vice President Clinical Affairs and a Director of the Company resigned on May 6, 2011. The Company retained these former executives to continue to head up the dental technology subsidiary of the Company. These two executives received employment contracts dated May 23, 2011.
The President and Chief Executive Officer of TAG were named the new President and Chief Executive Officer of the Company. In addition, the remaining two shareholders of TAG became directors in the Company, with one of these directors resigning in January 2013.
F-7 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
At the time of the Merger, the Board of Directors approved the conversion of an outstanding note for each officer totaling $960,000 plus accrued interest of $62,466 into 14,400,000 cashless warrants. The warrants have a term of five-years, with an exercise price of $0.075. The Company performed a Black-Scholes calculation to establish a value of $100,800 for the warrants.
The gain on the conversion of the related party debt to warrants of $921,666 is reflected in additional paid-in capital in accordance with ASC 850.
The other related party debt of $150,000 at the time of the Merger was converted to a convertible note. The notes will be repaid at the rate of 5% of any funding, whether debt or equity, received by the Company or its subsidiaries, or 5% of net revenues of the Company until repaid in full. The note holders have the right to convert any amounts outstanding and due to them at $0.075 per share at their sole discretion.
In July 2011, TAG-Z, acquired 100% of the capital stock of Ontage Resources (Private) Limited (“Ontage”). Ontage holds a 10% stake in an existing operating gold mining producer, Slashwood Mining (Private) Limited (“Slashwood Mining”). Slashwood Mining is a registered percentage owner of eight custom gold milling centers across various locations in Zimbabwe, along with ownership of 30 mining claims encompassing approximately 2,000 acres. All of the gold milling centers and mining claims are completely outfitted with mining equipment; to include gold-ore crushers, excavators, generators and dump trucks. Slashwood Mining has 200 employees and is forging a path of expansion into mining projects. On December 31, 2012 the Company has permanently impaired the investment in Slashwood Mining, originally valued at $150,000 to $0. The July 2011 TAG-Z, acquisition of 100% of the capital stock of Ontage has been deemed to be worthless as of December 31, 2012. Ontage was a wholly owned subsidiary of TAG-Z a consolidated variable interest entity of the Company and its only activity had been the acquisition of 10% stake in an existing operating gold mining producer, Slashwood Mining.
On September 19, 2011, TAG-Z, entered into a Sale of Shares Agreement, whereby, TAG-Z agreed to pay $433,000 in installments through November 30, 2012 for 100% of the Dodge Mine blocks 1-6, located in Zimbabwe. The property consists of three hydrothermal mountains representing 123 hectares containing multiple deposits of superior grade barite, limestone and talc based on the drilling reports that management received from the previous owner of the Dodge mine blocks. Along with the purchase of the Dodge Mine blocks 1-6, TAG-Z received 50% of the issued and outstanding shares of common stock of Chiroswa Minerals (PVT) Limited (“Chiroswa”), an inactive company originally formed to conduct mining operations on the Dodge Mine. Since Chiroswa is an inactive company, TAG-Z has canceled the Chiroswa shares it received under the Sale of Share Agreement and intends to conduct mining operations on the Dodge blocks itself. As of June 30, 2013, the entire note balance for the Dodge Mines has been paid by the Company. .
Effective December 2, 2011, the Company entered into a Stock Purchase Agreement with Mabwe Minerals Inc. (f/k/a/Raptor Networks Technology, Inc.) (MBMI: OTCQB) (“Mabwe”) under which the Company issued 5,000,000 shares of its common stock to the lender of certain convertible notes of Mabwe, as incentive to convert their promissory notes into shares of common stock. As a result of this transaction, Mabwe issued 55.52% of its issued and outstanding shares of common stock to the Company, Mabwe became a majority owned subsidiary of the Company, and, under the terms of the Agreement, the officers and directors of Mabwe resigned. Al Pietrangelo, President and CEO of the Company, became President and CEO of Mabwe and be the sole member of the Board of Directors. Mabwe conducted a reverse split and issued additional shares of its common stock to allow the Company to hold 80.14% of its issued and outstanding common shares on a post-split basis.
F-8 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
On March 5, 2012, the Company amended its Articles of Incorporation to change its name to Raptor Resources Holdings Inc. to more clearly reflect its new focus on the mining of gold and other industrial minerals and to help build a new brand identity. The name change became effective March 28, 2012.
On June 1, 2012 the Company entered into a contract renegotiation with the owner of Dodge Mines Blocks 1-6, Chiroswa Syndicate (“Chiroswa”) related to the previous agreement for the $433,000 in installment payments for the Dodge Mine blocks 1-6, located in Zimbabwe. Under the new terms of the contract with Chiroswa, Chiroswa accepted 45,000 shares of our Preferred Convertible Series B stock (each share is convertible into 50 shares of Common Stock of Raptor Resources Holdings Inc. (RRHI) and 25 shares of common stock of majority owned Mabwe Minerals Inc. (MBMI)). The Company paid $3,000 as a down payment with $27,000 due upon the retitling of the Dodge Mine Blocks 1-6 into the name of Mabwe Minerals Zimbabwe (PVT) Limited (MAB-Z). An additional $30,000 will be paid in five equal monthly installments beginning October 1, 2012. Under the terms of the amended contract with Chrioswa, it forgave $132,917 of the debt owed and agreed that upon completion of the retitling of the asset into the name of MAB-Z the asset of the Dodge Mine Blocks 1-6 ($433,000) and the remaining liability ($57,000) will be transferred to MAB-Z to support continuing operations and revenue generating activities. The full balance has been repaid to Dodge Mine for mine blocks 1-6 as of June 30, 2013.
On June 28, 2012 the charter of Mabwe increased the number of authorized shares of common stock. Mabwe issued to the Company an additional 79,078,817 shares of its common stock (post 1:10 reverse split) giving the Company at that time ownership of 80.14% of the issued and outstanding shares of Mabwe common stock. As of June 30, 2013 ownership percentage of the Company is 65.61%.
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.
On October 29, 2012, Mabwe Minerals Inc., Mabwe Corporation (PVT) LTD (“MAB-C”), 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-C 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, Mabwe Minerals Inc., 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.
F-9 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
On November 7, 2012 the principals of MAB-Z received approval from the government of Zimbabwe, Africa to form a new parent holding corporation for the purpose of holding MAB-Z and the percentage investment stake in Kinsey. The new company will be called Mabwe Corporation (PVT) LTD (“MAB-C”.) The new corporation will own 100% of MAB-Z and 25% of Kinsey. The Company owns a 49% stake in MAB-C the newly formed corporation; the remaining 51% ownership in MAB-C held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.
On December 17, 2012 the Company entered into a share buyback restructuring agreement with Stanley Baron (former Chief Executive Officer of the Company) and Craig Gimbel (former Executive Vice President of the Company) where Baron and Gimbel returned all of their shares (26,847,423 and 27,511,500 respectively) along with granting exercisable option rights on their warrants to buy Company stock. The number of warrants held by Baron and Gimbel are 8,640,000 and 5,760,000 respectively with an exercise price of $.075/share. Under the terms of this agreement Baron and Gimbel executed an option agreement simultaneously to TAG and the Company to purchase all of the shares back at $.04/share. The agreement terminated the employment agreements and all money owed to Baron and Gimbel including a $150,000 loan from the former employees. As consideration Baron and Gimbel received shares of Mabwe Minerals Inc., a majority owned subsidiary of the Company in the amounts of 1,700,000 and 1,300,000, respectively. Additionally, Baron and Gimbel received from the Company all contracts related to the dental technology business of the Company. There were no assets recorded for this division, and no development done for the past year, as this was inactive. The Company no longer is engaged in the dental technology business. The cancellation of the Baron and Gimbel shares and issuance of the certificate in the name of the Company was January 30, 2013 by the Company’s transfer agent. The closing of the transaction occurred December 17, 2012, and therefore was recorded in the 2012 financial statements.
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 Positions or Emerging Issue 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 basis for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.
F-10 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 1 | - | ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED) |
Going Concern
As shown in the accompanying condensed consolidated financial statements the Company has incurred attributable recurring losses of $421,093 and $894,591 for the three and six months ended June 30, 2013 and losses of $76,235 and $281,369 for the same period in 2012. The Company has incurred a cumulative loss of $13,646,006 since inception (January 14, 1998). The Company has a working capital deficit in the amount of $1,076,041 as of June 30, 2013. The Company is currently in the exploration stage and has merged the gold mining business of TAG and the mining and distribution of non-gold metals and minerals of Mabwe into the Company.
There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period. Management believes that the Company’s capital requirements will depend on many factors. These factors include finding potential acquisition targets for TAG, how these targets can be acquired, i.e. cash, debt or common stock, and generating cash flow either through operations or through private placements to complete the final phase of development. Additionally, the Company continues to convert its debt into equity, and as a result has reduced its working capital deficit.
The Company’s ability to continue as a going concern for a reasonable period is dependent upon management’s ability to raise additional interim capital and, ultimately, achieve profitable operations. There can be no assurance that management will be able to raise sufficient capital, under terms satisfactory to the Company, if at all.
The condensed consolidated financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.
F-11 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 2 | - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Exploration Stage Company
The Company currently has no continuing operations and, in accordance with ASC 915"DEVELOPMENT STAGE ENTITIES," is considered an Exploration Stage Enterprise. The company amended its’ Articles of Incorporation on March 5, 2012 to change their name to Raptor Resources Holdings Inc. to reflect a new business focus on the exploration and mining of gold and other industrial minerals. The company continued to consolidate its’ interest and further separate itself from the former line of business in the December 17, 2012 settlement and restructuring agreement with POII and former principals Stan Baron (former Chief Executive Officer of Lantis Laser Inc.) and Craig Gimbel (former Executive Vice President of Lantis Laser Inc.) by acquiring their interest in the Company (54,358,923 shares of common stock collectively), terminated their employment agreements with the Company, extinguished certain liabilities owed by the Company to Baron and Gimbel and obtained an option to purchase their 14,400,000 warrants.
The Company’s majority owned subsidiary entered the Exploration Stage on June 29, 2012 after the charter of Mabwe increased the number of authorized shares of common stock. Mabwe issued to the Company an additional 79,078,817 shares of its common stock (post 1:10 reverse split) giving the Company at that time ownership of 80.14% of the issued and outstanding shares of Mabwe common stock. The Company has no revenue from continuing operations since January 14, 1998. The Company is actively pursuing revenue from continuing operations through MAB-Z, it’s fully consolidated variable interest entity. Under agreement with Baker Hughes Oilfield Operations, Inc. MAB-Z was issued as beneficiary an irrevocable documentary letter of credit from 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. The Company is discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays the Company experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite.
As a result of the April 22, 2011 Merger, TAG became a wholly-owned subsidiary of the Company. TAG, a U.S. based mineral resource acquisition, exploration and development company, with operations conducted through its operating affiliate, TAG-Z, a fully consolidated variable interest entity of 49% ownership. TAG’s strategy is to identify, acquire and exploit mineral properties that have potential. TAG is augmented by independent financial, geological, and mining professionals who advise the company on its mining and exploration projects throughout Zimbabwe, Africa. TAG-Z will commence their own alluvial surface gold mining operations.
F-12 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, majority-owned subsidiaries and 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.
TAG Minerals Inc. on April 2, 2011 acquired a 49% interest in TAG – Z for a 33% interest in TAG. The remaining 51% ownership in TAG – Z is held by a Director of the Company, a Zimbabwe resident, Tapiwa Gurupira. TAG – Z will be the operating arm of TAG, initially, with the Company being the primary beneficiary of all the activities of its subsidiary, TAG, and its associated company TAG – Z.
As a result of this investment by TAG, TAG – Z has been identified by the Company as a VIE.
The Company as of June 30, 2013 owns 65.61% of Mabwe Minerals Inc. The 34.39% noncontrolling interest is reflected in the condensed consolidated financial statements. This dilution was due to the private placement sale of common stock by its subsidiary, Mabwe Minerals Inc., and stock issued for acquisitions, private placement sales, restructuring and services rendered and to be rendered. Mabwe issued 1,695,000 shares of common stock diluting the interest of Raptor Resources Holdings Inc. from 66.43% last quarter to 65.61% this quarter. This decline represents a .82% decrease in the controlling interest.
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 June 30, 2013. There was no activity from December 2, 2011 through June 30, 2012 in Mabwe, the Company’s majority-owned subsidiary. The Company’s controlling interest was reduced this quarter due to sale of stock through private placement and the issuance of stock for services rendered and to be rendered. The noncontrolling interest on a percentage basis increased by 0.82% to 34.39% in Mabwe Minerals Inc. The noncontrolling interest thus increased to balance of $117,688. The net asset share of the noncontrolling interest of $59,571 at June 30, 2013 was netted with losses of $82,461 compared to a March 31, 2013 net asset share (deficit) of $94,798.
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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to derivative liabilities, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
F-13 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents. Any amounts of cash in financial institutions over FDIC insured limits, exposes the Company to cash concentration risk.
Fair Value of Financial Instruments (other than Derivative Financial Instruments)
The carrying amounts reported in the condensed consolidated balance sheet for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings.
Research and Development
The Company annually incurs costs on activities that relate to research and development of new technology and products. Research and development costs are expensed as incurred. Certain of these costs would be reduced by government grants and investment tax credits where applicable. The Company has expensed its payments in connection with the license agreement as research and development costs.
Revenue Recognition
The Company has not recognized revenues to date. The Company anticipates recognizing revenue in accordance with the contracts it enters into for their gold and other industrial metals and minerals mining business.
Income Taxes
Under ASC 740 the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Uncertainty in Income Taxes
Under ASC 740-10-25 recognition and measurement of uncertain income tax positions is required using a “more-likely-than-not” approach. Management evaluates their tax positions on an annual basis and has determined that as of June 30, 2013 no additional accrual for income taxes is necessary.
Advertising Costs
The Company expenses the costs associated with advertising as incurred. Advertising expenses for the three and six months ended June 30, 2013 and 2012 are included in professional, consulting and marketing fees in the condensed consolidated statements of operations.
F-14 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 2 | - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Fixed Assets
Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; computer equipment – 3-5 years, and machinery - 5 years.
When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.
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 June 30, 2013 and December 31, 2012.
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 condensed 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.
(Loss) Per Share Attributable to Common Shareholders of the Company
Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share ("EPS") include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share on the condensed consolidated statement of operations due to the fact that the Company reported a net loss and to do so would be anti-dilutive for the periods presented.
F-15 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 2 | - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
The following is a reconciliation of the computation for basic and diluted EPS:
Cumulative | ||||||||||||
Totals since | ||||||||||||
June 30, | June 30, | 14-Jan-98 | ||||||||||
2013 | 2012 | (Inception) | ||||||||||
Net loss attributed to common shares | $ | (894,591 | ) | $ | (281,369 | ) | $ | (13,646,000 | ) | |||
Weighted-average common shares Outstanding (Basic) | 384,206,456 | 380,921,623 | 90,721,027 | |||||||||
Weighted-average common stock | ||||||||||||
Equivalents | ||||||||||||
Convertible Notes | 6,990,000 | 10,190,000 | 10,190,000 | |||||||||
Preferred Stock (Series B) | 59,350,000 | 10,500,000 | - | |||||||||
Warrants | 30,457,900 | 30,457,900 | 28,886,066 | |||||||||
Weighted-average commons shares Outstanding (Diluted) | 481,004,356 | 432,069,523 | 129,797,093 |
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 2012 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.
Goodwill
Effective July 18, 2012, Mabwe Minerals Inc. 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 resulted in the Company recording Goodwill as part of the purchase transaction. MAB-Z is the operating arm of the Company and at the time of the purchase it’s net assets consisted chiefly of mining rights associated with the main line of business of the company. Management periodically 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. At December 31, 2012, management has determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount and thus no need to adjust for impairment.
F-16 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 2 | - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Subsequent Events
In accordance with ASC 855 “Subsequent Events”, the Company is required to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or the date the financial statements were available to be issued.
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 condensed 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.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2013, as compared to the recent accounting pronouncements disclosed in the Company’s Annual Report on Form 10-K that are of material significance, or have potential material significance, to the Company.
NOTE 3 | - | FIXED ASSETS AND MINING RIGHTS |
Fixed Assets:
Fixed assets as of June 30, 2013 (unaudited) and December 31, 2012 were as follows:
Estimated | (Unaudited) | |||||||||
Useful Lives | June 30, | December 31, | ||||||||
(Years) | 2013 | 2012 | ||||||||
Computer Equipment | 3-5 | $ | 3,521 | $ | 2,476 | |||||
Machinery | 5 | 6,800 | 6,800 | |||||||
10,321 | 9,276 | |||||||||
Less: accumulated depreciation | (4,516 | ) | (3,093 | ) | ||||||
Fixed assets, net | $ | 5,805 | $ | 6,183 |
There was $711 and $1,423 charged to operations for depreciation expense for the three and six months ended June 30, 2013, respectively.
F-17 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 3 | - | FIXED ASSETS AND MINING RIGHTS (CONTINUED) |
Mining Rights:
On September 19, 2011, TAG-Z, entered into a Sale of Shares Agreement whereby TAG-Z paid $433,000 in installments through November 30, 2012 for 100% of the Dodge Mine blocks 1-6, located in Zimbabwe. The property consists of three hydrothermal mountains representing 123 hectares containing multiple deposits of superior grade barite, limestone and talc based on the drilling reports that management received from the previous owner of the Dodge mine blocks. Along with the purchase of the Dodge Mine blocks 1-6, TAG-Z received 50% of the issued and outstanding shares of common stock of Chiroswa Minerals (PVT) Limited (“Chiroswa”), an inactive company originally formed to conduct mining operations on the Dodge Mine. Since Chiroswa is an inactive company, TAG-Z has canceled the Chiroswa shares it received under the Sale of Share Agreement and intends to conduct mining operations on the Dodge blocks itself.
On January 9, 2012, TAG-Z expanded the property along the hydrothermal mountain range adding an additional 500 hectares bringing the total Dodge Mine property size to 623 hectares. The only cost expended was the acquisition of a prospecting license to determine feasibility of claim development recorded as exploration cost.
On June 1, 2012 entered into a contract renegotiation with the owner of Dodge Mines Blocks 1-6, Chiroswa Syndicate, related to the previous agreement for the $433,000 in installment payments of the Dodge Mine blocks 1-6, located in Zimbabwe. Under amended terms of the contract Chiroswa accepted 45,000 shares of the Company's Preferred Convertible Series B stock (each share is convertible into 50 shares of Common Stock of Raptor Resources Holdings Inc. (RRHI) and 25 shares Common Stock of majority owned Mabwe Minerals Inc. (MBMI)). The deal was secured with a $3,000 down payment with $27,000 due upon the retitling of the Dodge Mine blocks 1-6 into the Name of Mabwe Minerals Zimbabwe (PVT) Limited (MAB-Z). An additional $30,000 will be paid in five equal monthly installments that commenced October 1, 2012. This transaction resulted in the forgiveness of $132,917 of the debt owed.
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 Note Payable for the Dodge Mines at June 30, 2013 was paid in full, as the Company paid $13,500 during the six months ended June 30, 2013. 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.
F-18 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 4 | - | CONVERTIBLE NOTES |
Original Noteholders
In April and May 2007, the Company issued 5% Senior Convertible Three Year Notes to investors in the amount of $2,526,500, which equaled the gross proceeds raised by the Company (the “Convertible Notes”). The Convertible Notes are convertible to shares of the Company’s common stock anytime in the three-year period at a fixed conversion price of $.15. The Convertible Notes will convert into 16,843,333 shares of the Company’s common stock. In May 2009, convertible notes of $125,000 were converted, at a fixed conversion rate of $.15 per share, into 833,334 shares of common stock. This conversion reduced the outstanding principal to a balance of $2,401,500. In an effort to reduce the liabilities of the Company, on July 1, 2010 the Company offered Convertible Note holders the opportunity to convert their Convertible Notes to common stock at $0.05 per share including any and all outstanding interest that has been accrued from the original $0.15 conversion price.
In addition, the Company offered to reset the exercise price of the warrants that were issued with the Convertible Notes to $0.075 from $0.15 and $0.25 and extend the warrants for a further three years from the original date of issue for all warrant holders.
Approximately 90% of Convertible Note holders have agreed to accept the terms of the conversion. Through June 30, 2010, Convertible Notes of $2,117,000, including $404,413 of accrued interest was converted to 42,340,000 shares of common stock. This conversion reduced the outstanding principal balance to a balance of $409,500. The Company determined that there was no material modification to the debt instrument under ASC 47-50-40, as the embedded conversion option immediately before and after the modification of the debt instrument was under the 10% threshold.
The convertible note holders received 6,737,333 detachable warrants with their notes. The warrants were exercisable for five years at an exercise price of $.25. The Placement Agent received 2,947,583 exercisable at $.25 for five years. The Company separately valued the warrants at $513,132, and recorded a debt discount in that amount which is being amortized to interest expense over the three-year Convertible Notes period. The Company has recorded an additional discount of $505,300 as the value of the beneficial conversion option.
Proceeds of the $2,526,500 were allocated as follows:
i) Convertible Notes - $2,013,368; and
ii) Warrants (also Debt Discount) - $513,132
The debt discount of $1,018,432 was amortized using the effective interest method over the life of the Convertible Notes of three years. As part of the transaction, the Company incurred $292,190 of debt issuance costs.
On December 28, 2012, one of the Convertible Noteholders signed their notice of conversion to convert $60,000 in principal and accrued interest in the amount of $28,110 for 1,500,000 shares of common stock in the amount of $75,000 ($0.05 conversion price). The transaction resulted in a gain of $13,110 on conversion. The transaction was reflected in the financial statements for 2012 as the conversion notice was dated December 28, 2012. The share certificate was not issued until January 31, 2013.
Interest expense on the Original Noteholders Convertible Notes for the three and six months ended June 30, 2013 was $8,618 and $17,325 compared to $10,179 and 20,358 for the same period in 2012 and $208,684 is accrued at June 30, 2013. A total of $404,413 of accrued interest was converted into common stock at the time of the Convertible Note conversions in 2010 and 2011.
F-19 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 4 | - | CONVERTIBLE NOTES (CONTINUED) |
As a result of the Company’s failure to timely pay the interest in May 2009, the convertible notes are in technical default. Therefore, the Company has reclassified the debt to current liabilities. The summary of the Convertible Notes is as follows at June 30, 2013:
$349,500 Convertible Notes at 10% interest per annum due on demand | $ | 349,500 |
NOTE 5 | - | CONVERTIBLE NOTES – RELATED PARTIES |
In May 2011, the Company converted two 5% interest bearing notes with the former directors of the Company, and now officers of the dental technology subsidiary in the amount of $149,017 into new Convertible Notes totaling $150,000. The $983 variance was recorded by the Company as an expense. The Convertible Notes will be repaid at the rate of 5% of any funding, whether debt or equity, received by the Company or its subsidiaries, or 5% of net revenues of the Company. The Convertible Note holders have the right to convert any amounts outstanding and due to them at $0.075 per share at their sole discretion.
Under the terms of the December 17, 2012 agreement the $150,000 balance of this note was forgiven. The forgiveness was recorded as an adjustment to additional paid in capital as the amount was due to a related party.
There are no material related party loans outstanding as of June 30, 2013
NOTE 6 | - | RELATED PARTY LOANS |
The Company had entered into employment agreements with its two senior officers through December 31, 2009. The agreements obligated the Company to pay these officers $200,000 per year through December 31, 2009. Total commitment for the Company was $960,000. The amount was due December 31, 2012; however, there was no prepayment penalty. Concurrent with the Merger, the directors who were owed the $960,000 plus $62,466 in accrued interest that remained outstanding agreed to convert these amounts into 14,400,000 warrants. The warrants have a term of five-years, with an exercise price of $0.075. The Company performed a Black-Scholes calculation to determine the value of the warrants, and they were determined to have a value of $100,800. The gain on the conversion of the related party debt to warrants of $921,666 is reflected in additional paid-in capital. Under the terms of the December 17, 2012, restructuring agreement, the Company may call the shares at a price of $.04 per share.
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. As of June 30, 2013, the Note Payable relating to the Dodge Mines was repaid. 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 related party payable balance has a contra balance due to the issuance of Mabwe stock in the amount of $70,000 for an advisory contract with the Company. Mabwe is also paying liabilities of the Company relating to legal, accounting and filing fees.
F-20 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 7 | - | NOTE PAYABLE – OTHER |
Effective July 26, 2012 Mabwe Minerals Zimbabwe (PVT) LTD entered into a one year financing short term loan agreement with Overseas Trade and Financing Limited for a line of $40,000 with accrued interest at the rate of 12% . The balance with interest and fees of $45,166 at June 30, 2013 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. As MAB-Z is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore reflected on condensed consolidated financial statements.
NOTE 8 | - | NOTE PAYABLE – DODGE MINES |
On September 19, 2011, TAG-Z, entered into a Sale of Shares Agreement, whereby, TAG-Z agreed to pay $433,000 in installments through November 30, 2012 for 100% of the Dodge Mine blocks 1-6, located in Zimbabwe. The property consists of three hydrothermal mountains representing 123 hectares containing multiple deposits of superior grade barite, limestone and talc based on the drilling reports that management received from the previous owner of the Dodge mine blocks. Along with the purchase of the Dodge Mine blocks 1-6, TAG-Z received 50% of the issued and outstanding shares of common stock of Chiroswa Minerals (PVT) Limited (“Chiroswa”), an inactive company originally formed to conduct mining operations on the Dodge Mine. Since Chiroswa is an inactive company, TAG-Z has canceled the Chiroswa shares it received under the Sale of Share Agreement and intends to conduct mining operations on the Dodge blocks itself.
As of June 1, 2012, this transaction was restructured. Under the new terms of this transaction the prior owner of Chiroswa Syndicate accepted 45,000 shares of Preferred Convertible Series B stock (each share is convertible into 50 shares of common stock of the Company and 25 shares of common stock of majority owned Mabwe Minerals Inc. (MBMI)). The transaction was secured with a $3,000 down payment with $27,000 due upon the retitling of the Dodge Mine Blocks 1-6 into the name of Mabwe Minerals Zimbabwe (PVT) Limited. An additional $30,000 will be paid in five equal monthly installments commencing October 1 2012. This transaction resulted in the forgiveness of $132,917 of the debt owed.
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. The net value of this transfer was $376,000. The Note Payable for the Dodge Mines at June 30, 2013 was paid in full, as the Company paid $13,500 during the six months ended June 30, 2013. 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.
F-21 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 9 | - | INVESTMENT – EQUITY METHOD |
On October 29, 2012, MBMI, MAB-C and Kinsey entered into an Equity Exchange Agreement (“Equity Exchange Agreement”). In accordance with the Equity Exchange Agreement, Mabwe Minerals Inc. issued 5,000,000 shares of their common stock to Kinsey in exchange for a 25% ownership for MAB-C 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, Mabwe Minerals Inc. 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.
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. Mabwe Minerals Inc.’s investment decreased $39,042 and $199,433 as a result of the quarterly loss attributable from Kinsey for the three and six months ended June 30, 2013 in proportion to the 25% ownership by MAB-C.
NOTE 10 | - | LICENSE AND ROYALTY FEES |
Lawrence Livermore
The Company on September 14, 2001, entered into a Limited Exclusive Patent License Agreement for Optical Coherence Tomography for Human and Animal Dentistry with The Regents of the University of California (Lawrence Livermore National Laboratories). Pursuant to this license agreement, the Company entered into an installment note with Lawrence Livermore National Laboratories. In the license agreement, the Company agreed to pay to Lawrence Livermore a total of $175,000 in installments commencing September 2001. The $175,000 note did not include annual minimum royalty fees or interest. The first installment was a license issue fee of $15,000 which was paid by the Company. The second installment of $50,000 was the second part of the issue fee that was to be paid in nine monthly installments commencing April 2003 was partially paid by the Company ($26,000). The last installment was originally due December 31, 2005 but it was extended by Lawrence Livermore to October 1, 2006 in the amount of $110,000. The total due under the license agreement was $134,000, prior to a payment made by the Company in October 2006 of $50,000.
Upon payment of this amount, the parties had agreed to amend the agreement they had for payment of the balance of $84,000 along with the unpaid royalty fees of $380,000 for 2003, 2004 and 2005 as noted below. The Company incurred $10,000 of maintenance fees in February 2007 and paid these on February 28, 2007.
In addition to the license fee, the Company had agreed to pay minimum royalties to Lawrence Livermore beginning in 2004. Prior to the amendment of the agreement, the Company had not paid any of the royalties to Lawrence Livermore.
The royalties due were for 2003 $30,000, for 2004 $100,000 and for 2005 $250,000. These fees were to be paid February 28 of each year for the prior calendar year. The royalties due were $380,000.
F-22 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 10 | - | LICENSE AND ROYALTY FEES (CONTINUED) |
The parties had agreed on December 22, 2006 to amend the agreement. The Company agreed to pay Lawrence Livermore a total of $144,000 in three installments; $10,000 by February 28, 2007 (which was for maintenance fees for 2007 and paid by the Company), $84,000 by July 28, 2007 (which was paid by the Company on July 9, 2007), and the final $50,000 by December 31, 2007 (which was paid by the Company on December 11, 2007). The $380,000 of minimum royalties have been forgiven by Lawrence Livermore and reclassified to additional paid in capital as of December 22, 2006.
On January 1, 2008, the Company paid minimum annual royalty fees of $20,000 for 2008.
On February 18, 2009, the Company and Lawrence Livermore entered into an Amended License Agreement, which has been amended nine times, most recently in Amendment Nine dated June 23, 2011 whereby, the Lawrence Livermore extended the due dates of the minimum royalty fees for 2009 ($20,000), 2010 ($20,000), 2011 ($20,000) and 2012 ($20,000) until June 30, 2012 and The remaining minimum royalty fees for 2013 and thereafter were to be due as follows: 2013 ($60,000) due February 28, 2013; 2014 ($100,000) due February 28, 2014; and 2015 and thereafter for the life of the Agreement ($250,000) due February 28, 2015, and February 28 of each year thereafter for the life of the Agreement, however, In the restructuring agreement with the former officers of the Company, the Company agreed to transfer this license agreement to a newly formed company of the former officers for their relinquishment of the common stock held by them in the Company as well as the forgiveness of certain liabilities. The outstanding liability related to minimum fees for prior years is the responsibility of the Company and remained as a liability.
The $80,000 that remains outstanding to Lawrence Livermore is accrued for as of June 30, 2013.
LightLab
The Company entered into a Non-Exclusive License Agreement for Imaging Patents between themselves and LightLab Imaging, LLC on August 8, 2001.
The License Agreement had an original term of five years, commencing two years after the original agreement date, which would expire August 8, 2008, and the license could be renewed. The minimum royalty requirements were based on Net Sales by the Company. Since the Company generated no sales in the periods, there were no amounts due. On December 19, 2006, the Company and LightLab Imaging, Inc. negotiated an amendment whereby the new term of the agreement is, unless terminated by either party to remain in effect for three years following whichever of the following events occurs first: i) the Company’s release of a licensed product; ii) the Company’s first commercial sale of a licensed product, or; iii) July 1, 2007 (July 1, 2010). The Company on September 18, 2007 paid LightLab Imaging, LLC $50,000. This Agreement had terminated and will not be renewed as the main scanning patent licensed in this Agreement expires in 2011, before the Company intends to introduce its OCT product into the market.
There were no amounts outstanding to LightLab as of June 30, 2013.
F-23 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 10 | - | LICENSE AND ROYALTY FEES (CONTINUED) |
University of Florida
On May 31, 2007, the Company entered into an exclusive licensing agreement for the field of dentistry with The University of Florida Research Foundation for novel technology relevant to the imaging probe of its Dental Imaging System. The Agreement carries a $1,000 initial licensing fee with royalty payments to commence in 2008.
The Company had paid the minimum fees in 2008 and the minimum royalty for 2009, amounting to $630 originally due by December 31, 2009 has been deferred until the first anniversary of the first commercial sale and is in accounts payable as it is unpaid as of September 30, 2012. The Company paid some patent fees in 2009, 2010 and 2011 to the University of Florida. In addition, the first year of sale under the agreement has been amended to 2012 from 2009.
In the restructuring agreement with the former officers of the Company, the Company agreed to transfer this license agreement to a newly formed company of the former officers for their relinquishment of the common stock held by them in the Company as well as the forgiveness of certain liabilities.
University of California – San Francisco
On July 9, 2008, the Company entered an exclusive license agreement for near-infrared transillumination for the imaging of early dental decay with The Regents of the University of California. The agreement required the payment of an initial non-refundable license fee of $10,000 and annual maintenance fees of $5,000. The agreement also requires the payment of certain milestone payments based on patent allowance and FDA approval.
The Company had amended this agreement six times, most recently on December 8, 2011, whereby milestones were updated to provide adequate time for the Company to complete development, obtain FDA clearance and transition to marketing and manufacturing.
In the restructuring agreement with the former officers of the Company, the Company agreed to transfer this license agreement to a newly formed company of the former officers for their relinquishment of the common stock held by them in the Company as well as the forgiveness of certain liabilities.
F-24 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 11 | - | COMMITMENTS |
SERVICES RENDERED AGREEMENT
Mabwe Minerals Inc. entered into a Services Rendered Agreement with WGB Kinsey and Mabwe Minerals Inc. in August 2012. Under the agreement, Mabwe Minerals Inc. 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 Mabwe Minerals Inc.’s ability to grow their transportation capacity which currently represents 140,000 metric tons. No production has taken place during the six month period ended June 30, 2013. It is anticipated that production will commence the third quarter of fiscal 2013.
LETTER OF CREDIT
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. The Company is discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays the Company experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite.
NOTE 12 | - | STOCKHOLDERS’ EQUITY (DEFICIT) |
Series A Preferred Stock
The Company removed the 1,000,000 shares of preferred stock from its charter, and on January 23, 2007, amended its articles of incorporation to create a class of preferred stock, and authorized the issuance of 10,000,000 shares of preferred stock at $.001 par value. On January 24, 2012, the Company amended its articles of incorporation to authorize the issuance of 3,000,000 shares of Series A preferred stock, par value $.001. Each share of Series A preferred stock has 300 votes and votes with the holders of common stock on all matters which require a vote of the shareholders.
During the year ended December 31, 2012, 1,000,000 shares of Series A preferred stock has been issued for services rendered at par value of $1,000.
No Series A preferred stock was issued in the three and six months ended June 30, 2013.
The total issued and outstanding Series A Preferred Stock at June 30, 2013 is the 1,000,000 shares.
F-25 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
Preferred Convertible Series B Stock
As of June 30, 2013, the Company authorized 2,500,000 shares of Preferred Convertible Series B Stock. Each share of Preferred Convertible Series B Stock is convertible into 50 shares of the Company’s common stock and 25 shares of the Company’s majority owned subsidiary, Mabwe Minerals Inc.
During the six months ended June 30, 2013 the Company issued 20,000 shares for an advisory agreement with for services to be provided throughout the year.
During the year ended December 31, 2012, the Company issued the following Preferred Convertible Series B Stock at the value of $1.00 per share:
182,000 shares of stock for cash in the amount of $182,000.
45,000 shares of stock for the conversion of $45,000 of debt related to the loan outstanding for the Dodge Mines.
25,000 shares of stock for the acquisition of the Company’s majority owned subsidiary Mabwe Minerals Inc’s purchase of its subsidiary, MAB-Z, valued at $25,000.
915,000 shares of stock for services rendered or to be rendered to the Company valued at $915,000.Of this amount $840,000 was deferred compensation for the period July 1, 2012 through June 30, 2013, of which $420,000 has been amortized through December 31, 2012.
As of June 30, 2013, the Company has 1,187,000 Preferred Convertible Series B Stock issued and outstanding.
Common Stock
As of June 30, 2013, the Company has 990,000,000 shares of common stock authorized with a par value of $.001. On December 9, 2004, the Company increased the authorized shares from 250,000,000 to 990,000,000.
During the six months ended June 30, 2013 there were no shares issued in the Company and there 384,206,456 shares issued and outstanding.
During the year ended December 31, 2012, the Company issued the following:
3,400,856 shares of common stock for cash of $95,500 at prices ranging between $0.022 and $0.03 for an average of $.028 per share. In addition to these shares, the Company issued 1,571,834 warrants to these investors. The Company determined the value attributable to the warrants under an implied fair value calculation to be 25,560, and the value of the common shares to be $69,940. 1,100,000 shares of common stock for services rendered valued at $23,122.
F-26 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 12 | - | STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) |
Common Stock (Continued)
1,500,000 shares of common stock for the conversion of $60,000 in principal and accrued interest in the amount of $28,110. The conversion price was $0.05 as stipulated in the agreement, which amounted to $75,000, and the Company recognized a gain of $13,110 on conversion. The transaction was reflected in the financial statements for 2012 as the conversion notice was dated December 28, 2012. The share certificate was not issued until January 31, 2013.
Two former executives of the Company surrendered 54,358,923 shares of the Company’s common stock which is now held as treasury stock by the Company. This transaction resulted in the Company’s recognition of treasury stock in the amount of $300,000. This surrendering of the stock by the two former officers, and reissuance of the certificate in the name of the Company occurred on January 30, 2013, however, is reflected in the 2012 financials as the closing occurred on December 17, 2012.
During the year ended December 31, 2011, the Company issued:
16,440,977 shares of common stock in conversion of $50,000 in convertible notes to Asher Enterprises, and 689,655 shares of common stock to convert $2,000 of accrued interest to Asher Enterprises.
165,000,000 shares of common stock for 100% of the shares of TAG Minerals Inc., in a reverse merger.
16,071,432 shares of common stock to convert $80,000 of convertible note payables.
11,150,000 shares of common stock for services rendered in the amount of $193,218.
2,333,333 shares of common stock to convert $50,000 of convertible notes to old noteholders and to convert $17,726 in accrued interest.
16,645,298 shares of common stock for $340,000 cash.
5,000,000 shares of common stock as a deposit for an acquisition for TAG Z valued at $150,000.
5,000,000 shares of common stock to a certain lender of Raptor as incentive to convert their notes into common shares of Raptor valued at $155,000.
During the year ended December 31, 2010, the Company issued:
500,000 shares to Agoracom for consulting services. These shares were valued at $.04 per share or $20,000.
The Company also converted $1,942,000 of convertible notes, at a fixed conversion rate of $0.05 per share, less discount, net of accrued interest, into 39,173,333 shares of common stock at a fixed conversion price of $0.05 per share. The Company also converted $386,687 of accrued interest on these converted notes to additional paid in capital.
F-27 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 12 | - | STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) |
Common Stock (Continued)
During the year ended December 31, 2009:
The Company issued 2,000,000 shares to various consultants for administrative services and public and investor relation services. These shares were valued at various prices between $.10 and $.04 per share or $150,000. In addition, the Company issued 250,000 shares to convert a payable to a consultant ($12,500).
The Company converted $125,000 of convertible notes, at a fixed conversion rate of $.15 per share, less discount, beneficial conversion feature and issuance costs net of accrued interest, into 833,334 shares of common stock at a fixed conversion price of $.15 per share. The Company incurred additional charges to interest expense and amortization of debt issuance costs to reflect the conversion of these notes. This resulted in a reduction of additional paid in capital in the amount of $13,118.
The Company received 3,000,000 shares of stock in settlement of its complaints against Ice Cold Stocks, LLC and DC International Consulting LLC. These shares were returned to the Treasury and retired.
During the year ended December 31, 2008, the Company issued 575,000 shares to various consulting companies for public and investor relation services and 500,000 shares to a vendor in connection with a strategic supply agreement related to an Optical Coherence Tomography (OCT) engine for use in future products. These shares were valued between $.21 and $.26 per share or $229,500. In addition, a former noteholder who received warrants in 2006 exercised his warrants at $.15 per share for 69,850 shares of common stock for a cash value paid to the Company of $10,478. In addition, two former noteholders who received warrants in 2006 exercised their warrants at $.15 per share in 2007 for a cash value paid to the Company of $24,506.
During the year ended December 31, 2006, the Company completed a private placement resulting in the sale of 5,850,000 shares of its common stock at a price per share of $.10. For every 1.8 share of common stock purchased, the investors received one warrant. The Company valued each component in accordance with APB 14. The Company received, net of fees, $521,500 through December 31, 2006. The Company also issued 1,500,000 to a consulting company for public and investor relation services. These shares were valued at $.10 per share or $150,000.
On June 16, 2006, the Company authorized a reverse 1 for 2 stock split on all issued shares. All shares herein have been reflected retroactive to the stock split.
For the year ended December 31, 2005, the Company issued no shares of common stock.
During 2004, the only shares issued were in connection with the reverse merger between Lantis Laser, Inc. and Hypervelocity, Inc. The total shares issued were 127,718,500 which included the 6,422,500 shares issued for the conversion of the notes, done simultaneously with the merger.
F-28 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 12 | - | STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) |
Stockholders Equity – Issued by consolidated majority owned subsidiary MBMI
MBMI 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.
Preferred Stock – MBMI
MBMI has no issued and outstanding preferred stock as of June 30, 2013
Common Stocks – MBMI
During the three months ended June 30, 2013, 1,600,000 shares of stock were issued through a private placement for cash in the amount of $160,000. The stock was issued with 1,600,000 warrants which are exercisable for one year at $.15 per share. Also issued during the period were 25,000 shares as payment for accounting services rendered valued at $2,500 and 70,000 shares as payment for promotional services rendered valued at $7,848. The controlling interest of the controlling interest, Raptor Resources Holdings Inc., was diluted to 65.61% based on new issuances of common stock that quarter.
During the three months ended March 31, 2013, 1,000,000 shares were issued for $70,000 ($.07/share) through a private placement. 1,000,000 shares were also issued at a value of $70,000 ($.07/share) on behalf of Raptor Resources Holdings Inc., as payment for an advisory agreement in lieu of cash. 100,000 shares were issued for public relations services to be provided over the first six months of 2013 at a value $7,000. Also during this period 1,505,000 shares were issued through private placement for cash along with 1,505,000 warrants that are exercisable for 1 year at $.15/share. . The controlling interest of the controlling interest, Raptor Resources Holdings Inc., was diluted to 66.43% based on new issuances of common stock that quarter.
During the year ended December 31, 2012, Mabwe Minerals Inc. issued: 5,000,000 shares of common stock valued at $500,000 to purchase for MAB-C (variable interest entity of Mabwe Minerals Inc.), a 25% ownership in Kinsey per the Equity Exchange Agreement.
5,000,000 shares of common stock were issued for cash of $250,000
6,590,000 shares of common stock valued at $152,375 were issued for services rendered and to be rendered
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.
As of June 30, 2013 Mabwe Minerals Inc. has issued and outstanding of 137,280,750
Warrants – MBMI
During the three months ended June 30, 2013, 1,600,000 warrants were issued through a private placement for cash in conjunction with private placement stock sale. Warrants that are exercisable for 1 year at $.15/share
During the three months ended March 31, 2013, 1,505,000 warrants were issued through a private placement for cash in conjunction with private placement stock sale. Warrants that are exercisable for 1 year at $.15/share.
F-29 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 12 | - | STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED) |
Warrants
The Company granted 3,250,000 warrants to the investors who took part in the private placement of $585,000 based on a 1: 1.8 conversion ratio. The warrants were valued in accordance with APB 14 at a value of $208,143 utilizing the Black-Scholes method.
The Company granted 178,750 warrants to a consultant who assisted the Company in their private placement. The Company valued these warrants utilizing the Black-Scholes method and expensed them in their condensed consolidated statements of operations. The warrants have a fair value of $17,769.
The Company granted 6,737,333 warrants to the convertible noteholder investors who took part in the debt offering based on a 4:10 conversion ratio. The warrants were valued in accordance with APB 14 at a value of $513,132 utilizing the Black-Scholes method.
The Company granted 2,947,583 warrants to the placement agent who managed the issuance of the 5% Senior Convertible Note. The Company valued these warrants utilizing the Black-Scholes method and expensed them in their condensed consolidated statements of operations. The warrants have a fair value of $292,518.
In September 2010, the Company agreed to reset the warrant exercise price to $0.075 per share and extend the maturity of the warrant an additional three years.
In May 2011, the Company converted $1,022,466 in related party notes and accrued interest into 14,400,000 warrants. The warrants have a term of five-years, with an exercise price of $0.075. The Company performed a Black-Scholes calculation to determine the value of the warrants, and it was determined to have a value of $100,800. The gain on the conversion of the related party debt to warrants of $921,666 is reflected in additional paid-in capital.
In February 2012, the Company granted a total of 1,088,000 warrants along with shares of common stock in exchange for cash, and in April 2012, the Company granted 483,834 warrants along with shares of common stock in exchange for cash.
The following is a breakdown of the warrants:
Warrants | Exercise Price | Date Issued | Term | |||||
3,250,000 | $ | 0.075 | 9/28/2006 | 8 Years | ||||
1,372,400 | $ | 0.075 | 9/28/2006 | 8 Years | ||||
178,750 | $ | 0.075 | 9/28/2006 | 8 Years | ||||
6,737,333 | $ | 0.075 | 5/1/2007 | 8 Years | ||||
2,947,583 | $ | 0.075 | 5/17/2007 | 8 Years | ||||
14,400,000 | $ | 0.075 | 5/23/2011 | 5 Years | ||||
1,088,000 | $ | 0.075 | 2/7/2012 | 2 Years | ||||
483,834 | $ | 0.075 | 4/10/2012 | 2 Years | ||||
Total: 30,457,900 |
The warrant agreements contain no clauses regarding adjustments to exercise price, net settlement provisions, and registration rights or liquidated damages clauses.
F-30 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 13 | - | PROVISION FOR INCOME TAXES |
Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
At June 30, 2013, deferred tax assets consist of the following:
Net operating losses | $ | 4,480,091 | ||
Valuation allowance | (4,480,091 | ) | ||
$ | - |
At June 30, 2013, the Company had a net operating loss carryforward in the amount of $13,176,738 available to offset future taxable income through 2033. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended June 30, 2013 and 2012 is summarized as follows:
2013 | 2012 | |||||||
Federal statutory rate | (34.0 | )% | (34.0 | )% | ||||
State income taxes, net of federal benefits | 3.3 | 3.3 | ||||||
Valuation allowance | 30.7 | 30.7 | ||||||
0 | % | 0 | % |
NOTE 14 | - | INVESTMENT |
In July 2011, TAG-Z, acquired 100% of the capital stock of Ontage Resources (Private) Limited (“Ontage”). Ontage holds a 10% stake in an existing operating gold mining producer, Slashwood Mining (Private) Limited (“Slashwood Mining”). Slashwood Mining is a registered percentage owner of eight custom gold milling centers across various locations in Zimbabwe, along with ownership of 30 mining claims encompassing approximately 2,000 acres. All of the gold milling centers and mining claims are completely outfitted with mining equipment; to include gold-ore crushers, excavators, generators and dump trucks. Slashwood Mining has 200 employees and is forging a path of expansion into mining projects. On December 31, 2012 the Company has permanently impaired the investment in Slashwood Mining, originally valued at $150,000 to $0. The July 2011 TAG-Z, acquisition of 100% of the capital stock of Ontage has been deemed to be worthless as of December 31, 2012. Ontage was a wholly owned subsidiary of TAG-Z a consolidated variable interest entity of the Company and its only activity had been the acquisition of 10% stake in an existing operating gold mining producer, Slashwood Mining.
F-31 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 15 | - | FAIR VALUE MEASUREMENTS |
The Company adopted certain provisions of ASC Topic 820. ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The Company determines the fair value of its liabilities, on a recurring basis using significant observable inputs. The fair value measurement of these liabilities is consistent with ASC 820, "Fair Value Measurements" ASC 820 did not have an impact on the consolidated financial position or results of operations; however, the required disclosure for the six months ended June 30, 2013 is as follows:
ASC 820 classifies these inputs into the following hierarchy:
Level 1 inputs: Quoted prices for identical instruments in active markets.
Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 inputs: Instruments with primarily unobservable value drivers.
The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investment-Equity Method | - | 355,842 | - | 355,842 | ||||||||||||
Investment-Cost Method | - | - | - | - | ||||||||||||
Convertible notes | - | - | 349,500 | 349,500 |
F-32 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED)
NOTE 16 | - | ACQUISITION |
Effective July 18, 2012, Mabwe Minerals Inc. 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. As MAB-Z is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore reflected on condensed consolidated financial statements.
Net Assets Purchased | ||||
Goodwill | 25,000 |
NOTE 17. | Securitized Loans |
Effective May 16, 2013 MAB-Z entered into a one year securitized financing short term agreement with CBZ Bank Limited in the amount of $420,000. As security under this agreement Kinsey pledged as security two Bell HD2045 Hydraulic Excavators appraised at a combined value of $739,000. The loan is to be paid in monthly installments beginning in December in the amount of $35,000 plus interest expiring on June 30, 2014 upon which time all monies are due and payable and must be repaid in full. The interest rate on the loan is 15% per year. Upon funding of this loan a 3% establishment fee was charged and deducted from the proceeds. The Company may in the future obtain funding through securitizations and other attempts to raise capital until cash flow operations are self-sustaining in the support of continuing operations.
F-33 |
RAPTOR RESOURCES HOLDINGS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2013 AND 2012 (UNAUDITED
NOTE 18 | - | SUBSEQUENT EVENTS |
On July 3, 2013, Mabwe Minerals Inc. issued 90,000 shares of common stock for accounting services rendered and to be rendered throughout the balance of this calendar year.
On July 10, 2013, Mabwe Minerals Inc. 49% owned affiliate, Mabwe Minerals Zimbabwe (Private) Ltd., received an Environmental Impact Assessment Certificate ("EIA") dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining and processing of barite at Dodge Mine in Zimbabwe for Baker Hughes and several other prospective customers for high end barite.
On July 19, 2013, the Company issued 75,000 shares of Series B Convertible Preferred Stock to Lion Capital Group LLC, a Wyoming LLC, equally owned by Al Pietrangelo, Tapiwa Gurupia, J. Louis Schlegel IV and Dean Harrison as a milestone achieving bonus for the EIA license grant to allow commencement of mining operations at Dodge Mine.
On July 31, 2013, Mabwe Minerals Inc. (“Mabwe Minerals”), entered into a Master Distributor Agreement with Steinbock Minerals Ltd. and its affiliate Yasheya Ltd. to market, sell, distribute, ship and deliver Mabwe Minerals’ Dodge Mine barite to their customers.
On August 7, 2013, Mabwe Minerals Inc. issued 2,000,000 shares of common stock for the amount of $500,000 through private placement.
F-34 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION
Forward-Looking Statements; Market Data
As used in this Quarterly Report, the terms "we", "us", "our", "Registrant" and the "Company" means Lantis Laser, Inc., a Nevada corporation, and its wholly-owned subsidiary, Lantis Laser, Inc., a New Jersey corporation. To the extent that we make any forward-looking statements in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report, we emphasize that forward-looking statements involve risks and uncertainties and our actual results may differ materially from those expressed or implied by our forward-looking statements. Our forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Generally, forward-looking statements include phrases with words such as "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.
Overview
We were incorporated under the laws of the State of Nevada in February 1998 under the name Beekman Enterprises, Inc. In November 2004, we acquired Lantis Laser, Inc., a New Jersey corporation formed in January 1998 (“Lantis New Jersey”), in a reverse-triangular merger and succeeded to its business as our sole line of business. In connection with the merger, we changed our name to “Lantis Laser Inc.” We amended our Articles of Incorporation on March 5, 2012 to change our name to Raptor Resources Holdings Inc. to reflect our new business focus on the exploration and mining of gold and other industrial minerals.
We were developing our Optical Coherence Tomography ("OCT") Dental Imaging System as our first product but have suspended further development until we receive further funding to continue development of our light based imaging modalities. We were formed to commercialize the application of novel technologies in the dental industry. We have the exclusive rights to OCT for applications in the dental field under a license agreement with Lawrence Livermore National Laboratories and an exclusive license for dental applications of near-infrared transillumination (patent application pending) from the Regents of the University of California. Our products are subject to obtaining FDA marketing clearance before being sold to the dental market.
On April 22, 2011, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire TAG Minerals Inc. ("TAG"). We consummated the merger on May 23, 2011 and issued to the shareholders of TAG 165,000,000 shares of our common stock which represented 50% of our total issued and outstanding shares at the time of the merger in exchange for 100% of their shares in TAG. As a result of the merger TAG is now a wholly-owned subsidiary of Lantis Laser.
TAG is a U.S.-based mineral resource acquisition, exploration and development company, with operations conducted through its operating affiliated company, TAG Minerals Zimbabwe (Private) Limited (“TAG-Z”). The company’s business is managed by its directors and officers who have mineral extraction and commercial experience. TAG’s strategy is to identify, acquire and exploit mineral properties that have potential. TAG is augmented by independent financial, geological, and mining professionals who advise the company on its mining and exploration projects throughout Zimbabwe, Africa.
The President and Chief Executive Officer of TAG were named the new President and Chief Executive Officer of our Company. In addition, the remaining two shareholders of TAG became directors in our Company.
In July 2011, TAG-Z, acquired 100% of the capital stock of Ontage Resources (Private) Limited (“Ontage”). Ontage holds a 10% stake in an existing operating gold mining producer, Slashwood Mining (Private) Limited (“Slashwood Mining”). Slashwood Mining is a registered percentage owner of eight custom gold milling centers across various locations in Zimbabwe, along with ownership of 30 mining claims encompassing approximately 2,000 acres. All of the gold milling centers and mining claims are completely outfitted with mining equipment; to include gold-ore crushers, excavators, generators and dump trucks. Slashwood Mining has 200 employees and is forging a path of expansion into mining projects.
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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. Each share of Stock is convertible into 50 common shares of Raptor Recourses 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, Zimbabwe 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 its subsidiary, Mabwe Minerals Zimbabwe (PVT) LTD. MAB-Z is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.
On October 29, 2012, MBMI, MAB-C, and Kinsey entered into an Equity Exchange Agreement (“Equity Exchange Agreement”). In accordance with the Equity Exchange Agreement, the MBMI issued 5,000,000 shares of their common stock to Kinsey in exchange for a 25% ownership by MAB-C 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, MBMI 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.
On November 7, 2012 the principals of MAB-Z received approval from the government of Zimbabwe, Africa to form a new parent holding corporation for the purpose of holding MAB-Z and the percentage investment stake in Kinsey. The new company will be called Mabwe Corporation (PVT) LTD (“MAB-C”.) The new corporation will own 100% of MAB-Z and 25% of Kinsey. The Company owns a 49% stake in MAB-C the newly formed corporation; the remaining 51% ownership in MAB-C held by a director of the Company, Zimbabwean resident, Tapiwa Gurupira (41% ownership), with the remaining portion owned by Asswell Gurupira (10% ownership). MAB-C will be the operating arm of Mabwe Minerals Inc., with the Company being the primary beneficiary of all the activities of MAB-C. MAB-C is a Variable Interest Entity (VIE) with respect to guidance under ASC 810-10-5 and is therefore consolidated.
On December 17, 2012 we entered into a settlement and restructuring agreement with PAX ORAL IMAGING INC. (“POII”) and former principals Stan Baron (former Chief Executive Officer of Lantis Laser Inc.) and Craig Gimbel (former Executive Vice President of Lantis Laser Inc.) to acquire their interest in the Company (54,358,923 shares of common stock collectively), terminated their employment agreements with the Company, extinguished certain liabilities owed by the Company to Baron and Gimbel and obtained an option to purchase their 14,400,000 warrants. As a result of this agreement, all licenses, contract rights, trademarks, patents, copyrights and assets related to the Near Infrared Technology Business in which Lantis was engaged, including OCT and NIR, were transferred to POII. As further consideration, Baron and Gimbel were issued a combined 3,000,000 shares of common stock of MBMI, our majority owned subsidiary.
On December 31, 2012, the July 2011 TAG-Z acquisition of 100% of the capital stock of Ontage has been deemed to be worthless. The investment has been deemed worthless because Ontage had as its only activity the acquisition of a 10% stake in an existing operating gold mining producer, Slashwood Mining. The Company has permanently impaired the investment in Slashwood Mining, originally valued at $150,000 to $0 thus determining that it was necessary to recognize a loss of $150,000 related to the write-off of the investment.
5 |
Results of Operations
Three and Six Months Ended June 30, 2013 Compared to Three and Six Months Ended June 30, 2012.
The following is derived from, and should be read in conjunction with, our condensed consolidated financial statements, and related notes for the three and six months ended June 30, 2013 and 2012.
Operating revenues. We are an exploration stage company. To date, we have not generated any operating revenues, nor have we generated operating revenues since our inception in February 1998. Our other wholly subsidiary, TAG Minerals Inc. has not yet commenced its mining activities. Revenues from anticipated production are expected to commence in the third quarter of 2013 as a result of operations of majority owned Mabwe Minerals Inc. The first shipment was set to be made between June 1, 2013 and August 31, 2013. The Company is discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays the Company experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite.
Net loss from operations. For the three months ended June 30, 2013, our consolidated net loss from operations prior to elimination of non-controlling interest was $503,554 compared to $76,235 for the same period in the prior year, representing an increased loss of $427,319. The increase in our loss from operations was mainly due to increased compensation expense for key individual contributors who received Preferred Series B Convertible Stock in this quarter for services rendered resulting in compensation of $210,000. The Company also entered into two agreements where services were paid for with stock in lieu of cash with the portion amortized in this quarter was $33,525. Additional costs incurred for MAB-Z relative to pre-production site prep and other exploration costs amounted to $48,746. Professional, consulting and marketing fees increased to $91,228 in the three months ended June 30, 2013 as compared to $61,160 in the same period last year.
For the six months ended June 30, 2013, our consolidated net loss from operations prior to elimination of non-controlling interest was $1,085,303 compared to $281,369 for the same period in the prior year, representing an increased loss of $803,934. The increase in our loss from operations was mainly due to increased compensation expense for key individual contributors who received Preferred Series B Convertible Stock in this quarter for services rendered resulting in compensation of $420,000. The Company also entered into two agreements where services were paid for with stock in lieu of cash with the portion amortized in this quarter was $97,025. Additional costs incurred for MAB-Z relative to pre-production site prep and other exploration costs amounted to $79,065. Professional, consulting and marketing fees increased to $182,609 in the six months ended June 30, 2013 as compared to $139,017 in the same period last year.
Total other expenses(income). Other expense was $52,264 and $222,345 for the three and six months ended June 30, 2013, respectively, compared to other income of $122,738 and $112,559 for the three and six months ended June 30, 2012. The increase in expense was attributable to the pro rata share of the loss in the investment in Kinsey by the majority owned subsidiary MAB-C. The share of the loss in Kinsey was mainly due to their company’s fulfillment of some large contract as they prepare to support MAB-Z once in production along with increased depreciation cost of new equipment. The other income from the 2012 in the amount of $132,917 was realized under the terms of the amended contract with Chrioswa, for debt forgiveness of the debt owed of MAB-Z for the asset of the Dodge Mine Blocks 1-6 which supports the continuing operations and revenue generating activities. For the three months ended June 30, 2013 there was an increase in accrued interest due to the secured note obtained by MAB-Z compared with the same period in the prior year. There was a negligible increase in the accrued interest cost on the convertible note in the six months ended June 30, 2013 versus the same three months in the prior year.
6 |
Net loss. We had a net loss attributable to common shares of $421,093 and $894,591 or $0.00 per share, for the three and six months ended June 30, 2013, compared to a net loss attributable to common shares of $76,235 and $281,369 or $0.00 per share, for the same period in the prior year. The increase in the net loss is mainly related to the fact we have yet to commence operations and the expenses are accelerating ahead of commencement of operations. Additionally the consolidation of Mabwe Minerals Inc. and the acquisition of Mabwe Corporation have resulted in further loss. Exploration costs for the three and six months ended June 30, 2013 were $48,746 and $79,065. Professional, consulting and marketing fees increased to $91,228 and $182,609 for the three and six months ended June 30, 2013 as compared to $61,160 and $139,017 in the same period last year. Wages and wage related expense increased to $229,525 and $472,025 as compared to $82,200 and $164,400 in the same period last year. This increase was due to the amortization of compensation expense in the form of stock in the amount of $420,000.
Liquidity and Capital Resources
Total assets. On June 30, 2013, we had total assets of $1,334,864, compared to $1,118,766 on December 31, 2012. We had cash and cash equivalents of $221,246 on June 30, 2013 compared to $22,897 at December 31, 2012. Our fixed assets (net of depreciation), which did not change significantly, were $5,805 on June 30, 2013, compared to $6,183 on December 31, 2012. Prepaid expense increased to $293,971 on June 30, 2013 from $76,411 on December 31, 2012. This change was largely due to prepayment for services to be provided to MAB-Z in conjunction with mining site preparation. Goodwill was recorded as a result of related party activity and the charge for the 25,000 shares of stock we issued to acquire interest in 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 our Series B Preferred Convertible Stock has a value of $25,000.
Total liabilities. We had total liabilities of $1,591,258, on June 30, 2013 compared to $1,197,346 for the period ended December 31, 2012, due primarily to the secured loan and proceeds thereof entered into on May 16, 2013 MAB-Z as a one year securitized financing short term agreement with CBZ Bank Limited in the amount of $420,000.
Accrued interest on convertible notes on June 30, 2013 was $208,684 compared to $191,359 at December 31, 2012. At June 30, 2013, we had a negative working capital of $1,076,044 compared to a negative working capital of $1,098,038 on December 31, 2012. These conditions raise substantial doubt about our ability to continue as a going concern within the next 12 months.
Going Concern. 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 in the third quarter of 2013 on the Dodge Mines, the Company will be well positioned to succeed. The Company may in the future obtain funding through securitizations and other attempts to raise capital until cash flow operations are self-sustaining in the support of continuing operations.
Cash flow from operations. During the six months ended June 30, 2013, we had a negative cash flow from operations of $593,311 compared to negative cash flow from operations of $152,094 during the same period in the prior year. Our higher negative cash flow from operations was mainly due to increased outlay of cash as we incur development and start-up costs in our majority owned subsidiary for exploration, site preparation and legal fees.
7 |
Cash flow from investing activities. The sole investing activity was for the purchase of one piece of computer equipment during the six month period ended June 30, 2013.
Cash flow from financing activities. During the six months ended June 30, 2013, we received $792,705 net cash from financing activities from compared to $190,487 in the same period in 2012. We received $380,500 proceeds from a private placement of the common stock of MBMI, net of fees, compared to $260,500 received in the same period in 2012. Payments for the liability associated with Dodge Mine Blocks 1-6 in the current were made in the amount of $13,500 compared to $48,083 paid in the same period in the prior year. The Company may in the future obtain funding through securitizations and other attempts to raise capital until cash flow operations are self-sustaining in the support of continuing operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and our Chief Financial Officer (currently the same person), after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded that our disclosure controls and procedures are not effective based on their evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15 on the basis that we have not been funded sufficiently for us to employ an additional person to serve as our Chief Financial Officer.
Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls. Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
8 |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
In March, April and May 2007, the Company issued 5% senior convertible three year notes to investors in the amount of $2,526,500, which equaled the gross proceeds raised by the Company (the “Convertible Notes”). Through March 31, 2010, Convertible Notes of $2,117,000, including $404,413 of accrued interest was converted to 42,340,000 shares of common stock. This conversion reduced the outstanding principal balance of the Convertible Notes to $349,500.
The Company is in default on the redemption of these remaining Notes which were due to be redeemed three years after the date of issue, and payment of interest, due to lack of sufficient cash resources.
ITEM 4. MINES SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
None.
9 |
ITEM 6. EXHIBITS
(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.
Exhibit No. | Description | |
31.1 * | 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 * | 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 * | 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* | 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 | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |
101 PRE* | XBRL Taxonomy Extension Presentation Linkbase | |
*Filed herewith |
10 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Date: August 16, 2013
/s/ Al Pietrangelo | |
Al Pietrangelo, CEO and CFO |
11 |
EXHIBIT 31.1
I, Al Pietrangelo, certify that:
1. I have reviewed this Form 10-Q for the period ended June 30, 2013 of Raptor Resources Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 16, 2013
/s/ Al Pietrangelo Al Pietrangelo President and Chief Executive Officer (principal executive officer) |
EXHIBIT 31.2
I, Al Pietrangelo, certify that:
1. I have reviewed this Form 10-Q for the period ended June 30, 2013 of Raptor Resouces Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 16, 2013
/s/ Al Pietrangelo Al Pietrangelo Chief Financial Officer (principal financial officer) |
EXHIBIT 32.1
RAPTOR RESOURCES INC.
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Raptor Resources Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Al Pietrangelo, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 16, 2013
/s/ Al Pietrangelo
Al Pietrangelo
Chief Executive Officer
(principal executive officer)
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
RAPTOR RESOURCES INC.
CERTIFICATION OF
CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Raptor Resources Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Al Pietrangelo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 16, 2013
/s/ Al Pietrangelo
Al Pietrangelo
Chief Financial Officer
(principal financial officer)
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
COMMITMENTS
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2013
|
|||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments Disclosure [Text Block] |
SERVICES RENDERED AGREEMENT Mabwe Minerals Inc. entered into a Services Rendered Agreement with WGB Kinsey and Mabwe Minerals Inc. in August 2012. Under the agreement, Mabwe Minerals Inc. 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 Mabwe Minerals Inc.’s ability to grow their transportation capacity which currently represents 140,000 metric tons. No production has taken place during the six month period ended June 30, 2013. It is anticipated that production will commence the third quarter of fiscal 2013. LETTER OF CREDIT 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. The Company is discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays the Company experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite. |
FAIR VALUE MEASUREMENTS (Details) (Fair Value, Measurements, Recurring [Member], USD $)
|
Jun. 30, 2013
|
---|---|
Investment-Equity Method | $ 355,842 |
Investment-Cost Method | 0 |
Convertible notes | 349,500 |
Fair Value, Inputs, Level 1 [Member]
|
|
Investment-Equity Method | 0 |
Investment-Cost Method | 0 |
Convertible notes | 0 |
Fair Value, Inputs, Level 2 [Member]
|
|
Investment-Equity Method | 355,842 |
Investment-Cost Method | 0 |
Convertible notes | 0 |
Fair Value, Inputs, Level 3 [Member]
|
|
Investment-Equity Method | 0 |
Investment-Cost Method | 0 |
Convertible notes | $ 349,500 |
CONVERTIBLE NOTES
|
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Debt Disclosure [Abstract] | ||||||||||
Long-term Debt [Text Block] |
Original Noteholders In April and May 2007, the Company issued 5% Senior Convertible Three Year Notes to investors in the amount of $2,526,500, which equaled the gross proceeds raised by the Company (the “Convertible Notes”). The Convertible Notes are convertible to shares of the Company’s common stock anytime in the three-year period at a fixed conversion price of $.15. The Convertible Notes will convert into 16,843,333 shares of the Company’s common stock. In May 2009, convertible notes of $125,000 were converted, at a fixed conversion rate of $.15 per share, into 833,334 shares of common stock. This conversion reduced the outstanding principal to a balance of $2,401,500. In an effort to reduce the liabilities of the Company, on July 1, 2010 the Company offered Convertible Note holders the opportunity to convert their Convertible Notes to common stock at $0.05 per share including any and all outstanding interest that has been accrued from the original $0.15 conversion price. In addition, the Company offered to reset the exercise price of the warrants that were issued with the Convertible Notes to $0.075 from $0.15 and $0.25 and extend the warrants for a further three years from the original date of issue for all warrant holders. Approximately 90% of Convertible Note holders have agreed to accept the terms of the conversion. Through June 30, 2010, Convertible Notes of $2,117,000, including $404,413 of accrued interest was converted to 42,340,000 shares of common stock. This conversion reduced the outstanding principal balance to a balance of $409,500. The Company determined that there was no material modification to the debt instrument under ASC 47-50-40, as the embedded conversion option immediately before and after the modification of the debt instrument was under the 10% threshold. The convertible note holders received 6,737,333 detachable warrants with their notes. The warrants were exercisable for five years at an exercise price of $.25. The Placement Agent received 2,947,583 exercisable at $.25 for five years. The Company separately valued the warrants at $513,132, and recorded a debt discount in that amount which is being amortized to interest expense over the three-year Convertible Notes period. The Company has recorded an additional discount of $505,300 as the value of the beneficial conversion option. Proceeds of the $2,526,500 were allocated as follows: i) Convertible Notes - $2,013,368; and ii) Warrants (also Debt Discount) - $513,132 The debt discount of $1,018,432 was amortized using the effective interest method over the life of the Convertible Notes of three years. As part of the transaction, the Company incurred $292,190 of debt issuance costs. On December 28, 2012, one of the Convertible Noteholders signed their notice of conversion to convert $60,000 in principal and accrued interest in the amount of $28,110 for 1,500,000 shares of common stock in the amount of $75,000 ($0.05 conversion price). The transaction resulted in a gain of $13,110 on conversion. The transaction was reflected in the financial statements for 2012 as the conversion notice was dated December 28, 2012. The share certificate was not issued until January 31, 2013. Interest expense on the Original Noteholders Convertible Notes for the three and six months ended June 30, 2013 was $8,618 and $17,325 compared to $10,179 and 20,358 for the same period in 2012 and $208,684 is accrued at June 30, 2013. A total of $404,413 of accrued interest was converted into common stock at the time of the Convertible Note conversions in 2010 and 2011. As a result of the Company’s failure to timely pay the interest in May 2009, the convertible notes are in technical default. Therefore, the Company has reclassified the debt to current liabilities. The summary of the Convertible Notes is as follows at June 30, 2013:
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SUBSEQUENT EVENTS
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6 Months Ended | ||||
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Jun. 30, 2013
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Subsequent Events [Abstract] | |||||
Subsequent Events [Text Block] |
On July 3, 2013, Mabwe Minerals Inc. issued 90,000 shares of common stock for accounting services rendered and to be rendered throughout the balance of this calendar year. On July 10, 2013, Mabwe Minerals Inc. 49% owned affiliate, Mabwe Minerals Zimbabwe (Private) Ltd., received an Environmental Impact Assessment Certificate ("EIA") dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining and processing of barite at Dodge Mine in Zimbabwe for Baker Hughes and several other prospective customers for high end barite. On July 19, 2013, the Company issued 75,000 shares of Series B Convertible Preferred Stock to Lion Capital Group LLC, a Wyoming LLC, equally owned by Al Pietrangelo, Tapiwa Gurupia, J. Louis Schlegel IV and Dean Harrison as a milestone achieving bonus for the EIA license grant to allow commencement of mining operations at Dodge Mine. On July 31, 2013, Mabwe Minerals Inc. (“Mabwe Minerals”), entered into a Master Distributor Agreement with Steinbock Minerals Ltd. and its affiliate Yasheya Ltd. to market, sell, distribute, ship and deliver Mabwe Minerals’ Dodge Mine barite to their customers. On August 7, 2013, Mabwe Minerals Inc. issued 2,000,000 shares of common stock for the amount of $500,000 through private placement. |
Securitized Loans (Details Textual) (USD $)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
C B Z Bank Limited [Member]
M A B Z [Member]
|
|
Debt Instrument, Issuance Date | May 16, 2013 | ||
Secured Debt | $ 423,325 | $ 0 | $ 420,000 |
Mortgaged Property, Value | 739,000 | ||
Debt Instrument, Frequency of Periodic Payment | monthly | ||
Debt Instrument, Periodic Payment | $ 35,000 | ||
Debt Instrument, Maturity Date | Jun. 30, 2014 | ||
Debt Instrument, Interest Rate at Period End | 15.00% | ||
DebtInstrument Establishment Fee Percentage | 3.00% |
STOCKHOLDERS' EQUITY (DEFICIT)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] |
Series A Preferred Stock The Company removed the 1,000,000 shares of preferred stock from its charter, and on January 23, 2007, amended its articles of incorporation to create a class of preferred stock, and authorized the issuance of 10,000,000 shares of preferred stock at $.001 par value. On January 24, 2012, the Company amended its articles of incorporation to authorize the issuance of 3,000,000 shares of Series A preferred stock, par value $.001. Each share of Series A preferred stock has 300 votes and votes with the holders of common stock on all matters which require a vote of the shareholders. During the year ended December 31, 2012, 1,000,000 shares of Series A preferred stock has been issued for services rendered at par value of $1,000. No Series A preferred stock was issued in the three and six months ended June 30, 2013. The total issued and outstanding Series A Preferred Stock at June 30, 2013 is the 1,000,000 shares. Preferred Convertible Series B Stock As of June 30, 2013, the Company authorized 2,500,000 shares of Preferred Convertible Series B Stock. Each share of Preferred Convertible Series B Stock is convertible into 50 shares of the Company’s common stock and 25 shares of the Company’s majority owned subsidiary, Mabwe Minerals Inc. During the six months ended June 30, 2013 the Company issued 20,000 shares for an advisory agreement with for services to be provided throughout the year. During the year ended December 31, 2012, the Company issued the following Preferred Convertible Series B Stock at the value of $1.00 per share: 182,000 shares of stock for cash in the amount of $182,000. 45,000 shares of stock for the conversion of $45,000 of debt related to the loan outstanding for the Dodge Mines. 25,000 shares of stock for the acquisition of the Company’s majority owned subsidiary Mabwe Minerals Inc’s purchase of its subsidiary, MAB-Z, valued at $25,000. 915,000 shares of stock for services rendered or to be rendered to the Company valued at $915,000.Of this amount $840,000 was deferred compensation for the period July 1, 2012 through June 30, 2013, of which $420,000 has been amortized through December 31, 2012. As of June 30, 2013, the Company has 1,187,000 Preferred Convertible Series B Stock issued and outstanding. Common Stock As of June 30, 2013, the Company has 990,000,000 shares of common stock authorized with a par value of $.001. On December 9, 2004, the Company increased the authorized shares from 250,000,000 to 990,000,000. During the six months ended June 30, 2013 there were no shares issued in the Company and there 384,206,456 shares issued and outstanding. During the year ended December 31, 2012, the Company issued the following: 3,400,856 shares of common stock for cash of $95,500 at prices ranging between $0.022 and $0.03 for an average of $.028 per share. In addition to these shares, the Company issued 1,571,834 warrants to these investors. The Company determined the value attributable to the warrants under an implied fair value calculation to be 25,560, and the value of the common shares to be $69,940. 1,100,000 shares of common stock for services rendered valued at $23,122. 1,500,000 shares of common stock for the conversion of $60,000 in principal and accrued interest in the amount of $28,110. The conversion price was $0.05 as stipulated in the agreement, which amounted to $75,000, and the Company recognized a gain of $13,110 on conversion. The transaction was reflected in the financial statements for 2012 as the conversion notice was dated December 28, 2012. The share certificate was not issued until January 31, 2013. Two former executives of the Company surrendered 54,358,923 shares of the Company’s common stock which is now held as treasury stock by the Company. This transaction resulted in the Company’s recognition of treasury stock in the amount of $300,000. This surrendering of the stock by the two former officers, and reissuance of the certificate in the name of the Company occurred on January 30, 2013, however, is reflected in the 2012 financials as the closing occurred on December 17, 2012. During the year ended December 31, 2011, the Company issued: 16,440,977 shares of common stock in conversion of $50,000 in convertible notes to Asher Enterprises, and 689,655 shares of common stock to convert $2,000 of accrued interest to Asher Enterprises. 165,000,000 shares of common stock for 100% of the shares of TAG Minerals Inc., in a reverse merger. 16,071,432 shares of common stock to convert $80,000 of convertible note payables. 11,150,000 shares of common stock for services rendered in the amount of $193,218. 2,333,333 shares of common stock to convert $50,000 of convertible notes to old noteholders and to convert $17,726 in accrued interest. 16,645,298 shares of common stock for $340,000 cash. 5,000,000 shares of common stock as a deposit for an acquisition for TAG Z valued at $150,000. 5,000,000 shares of common stock to a certain lender of Raptor as incentive to convert their notes into common shares of Raptor valued at $155,000. During the year ended December 31, 2010, the Company issued: 500,000 shares to Agoracom for consulting services. These shares were valued at $.04 per share or $20,000. The Company also converted $1,942,000 of convertible notes, at a fixed conversion rate of $0.05 per share, less discount, net of accrued interest, into 39,173,333 shares of common stock at a fixed conversion price of $0.05 per share. The Company also converted $386,687 of accrued interest on these converted notes to additional paid in capital. During the year ended December 31, 2009: The Company issued 2,000,000 shares to various consultants for administrative services and public and investor relation services. These shares were valued at various prices between $.10 and $.04 per share or $150,000. In addition, the Company issued 250,000 shares to convert a payable to a consultant ($12,500). The Company converted $125,000 of convertible notes, at a fixed conversion rate of $.15 per share, less discount, beneficial conversion feature and issuance costs net of accrued interest, into 833,334 shares of common stock at a fixed conversion price of $.15 per share. The Company incurred additional charges to interest expense and amortization of debt issuance costs to reflect the conversion of these notes. This resulted in a reduction of additional paid in capital in the amount of $13,118. The Company received 3,000,000 shares of stock in settlement of its complaints against Ice Cold Stocks, LLC and DC International Consulting LLC. These shares were returned to the Treasury and retired. During the year ended December 31, 2008, the Company issued 575,000 shares to various consulting companies for public and investor relation services and 500,000 shares to a vendor in connection with a strategic supply agreement related to an Optical Coherence Tomography (OCT) engine for use in future products. These shares were valued between $.21 and $.26 per share or $229,500. In addition, a former noteholder who received warrants in 2006 exercised his warrants at $.15 per share for 69,850 shares of common stock for a cash value paid to the Company of $10,478. In addition, two former noteholders who received warrants in 2006 exercised their warrants at $.15 per share in 2007 for a cash value paid to the Company of $24,506. During the year ended December 31, 2006, the Company completed a private placement resulting in the sale of 5,850,000 shares of its common stock at a price per share of $.10.For every 1.8 share of common stock purchased, the investors received one warrant. The Company valued each component in accordance with APB 14. The Company received, net of fees, $521,500 through December 31, 2006. The Company also issued 1,500,000 to a consulting company for public and investor relation services. These shares were valued at $.10 per share or $150,000. On June 16, 2006, the Company authorized a reverse 1 for 2 stock split on all issued shares. All shares herein have been reflected retroactive to the stock split. For the year ended December 31, 2005, the Company issued no shares of common stock. During 2004, the only shares issued were in connection with the reverse merger between Lantis Laser, Inc. and Hypervelocity, Inc. The total shares issued were 127,718,500 which included the 6,422,500 shares issued for the conversion of the notes, done simultaneously with the merger. Stockholders Equity Issued by consolidated majority owned subsidiary MBMI MBMI 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. Preferred Stock MBMI MBMI has no issued and outstanding preferred stock as of June 30, 2013 Common Stocks MBMI During the three months ended June 30, 2013, 1,600,000 shares of stock were issued through a private placement for cash in the amount of $160,000. The stock was issued with 1,600,000 warrants which are exercisable for one year at $.15 per share. Also issued during the period were 25,000 shares as payment for accounting services rendered valued at $2,500 and 70,000 shares as payment for promotional services rendered valued at $7,848. The controlling interest of the controlling interest, Raptor Resources Holdings Inc., was diluted to 65.61% based on new issuances of common stock that quarter. During the three months ended March 31, 2013, 1,000,000 shares were issued for $70,000 ($.07/share) through a private placement. 1,000,000 shares were also issued at a value of $70,000 ($.07/share) on behalf of Raptor Resources Holdings Inc., as payment for an advisory agreement in lieu of cash. 100,000 shares were issued for public relations services to be provided over the first six months of 2013 at a value $7,000. Also during this period 1,505,000 shares were issued through private placement for cash along with 1,505,000 warrants that are exercisable for 1 year at $.15/share. . The controlling interest of the controlling interest, Raptor Resources Holdings Inc., was diluted to 66.43% based on new issuances of common stock that quarter. During the year ended December 31, 2012, Mabwe Minerals Inc. issued: 5,000,000 shares of common stock valued at $500,000 to purchase for MAB-C (variable interest entity of Mabwe Minerals Inc.), a 25% ownership in Kinsey per the Equity Exchange Agreement. 5,000,000 shares of common stock were issued for cash of $250,000 6,590,000 shares of common stock valued at $152,375 were issued for services rendered and to be rendered 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. As of June 30, 2013 Mabwe Minerals Inc. has issued and outstanding of 137,280,750 Warrants MBMI During the three months ended June 30, 2013, 1,600,000 warrants were issued through a private placement for cash in conjunction with private placement stock sale. Warrants that are exercisable for 1 year at $.15/share During the three months ended March 31, 2013, 1,505,000 warrants were issued through a private placement for cash in conjunction with private placement stock sale. Warrants that are exercisable for 1 year at $.15/share. Warrants The Company granted 3,250,000 warrants to the investors who took part in the private placement of $585,000 based on a 1: 1.8 conversion ratio. The warrants were valued in accordance with APB 14 at a value of $208,143 utilizing the Black-Scholes method. The Company granted 178,750 warrants to a consultant who assisted the Company in their private placement. The Company valued these warrants utilizing the Black-Scholes method and expensed them in their condensed consolidated statements of operations. The warrants have a fair value of $17,769. The Company granted 6,737,333 warrants to the convertible noteholder investors who took part in the debt offering based on a 4:10 conversion ratio. The warrants were valued in accordance with APB 14 at a value of $513,132 utilizing the Black-Scholes method. The Company granted 2,947,583 warrants to the placement agent who managed the issuance of the 5% Senior Convertible Note. The Company valued these warrants utilizing the Black-Scholes method and expensed them in their condensed consolidated statements of operations. The warrants have a fair value of $292,518. In September 2010, the Company agreed to reset the warrant exercise price to $0.075 per share and extend the maturity of the warrant an additional three years. In May 2011, the Company converted $1,022,466 in related party notes and accrued interest into 14,400,000 warrants. The warrants have a term of five-years, with an exercise price of $0.075. The Company performed a Black-Scholes calculation to determine the value of the warrants, and it was determined to have a value of $100,800. The gain on the conversion of the related party debt to warrants of $921,666 is reflected in additional paid-in capital. In February 2012, the Company granted a total of 1,088,000 warrants along with shares of common stock in exchange for cash, and in April 2012, the Company granted 483,834 warrants along with shares of common stock in exchange for cash. The following is a breakdown of the warrants:
The warrant agreements contain no clauses regarding adjustments to exercise price, net settlement provisions, and registration rights or liquidated damages clauses. |
STOCKHOLDERS' EQUITY (DEFICIT) (Details Textual) (USD $)
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1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 185 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2012
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Jun. 30, 2012
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Jun. 30, 2010
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Mar. 31, 2007
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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Dec. 31, 2008
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Dec. 31, 2007
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Dec. 31, 2006
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Dec. 31, 2004
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Jun. 30, 2013
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Dec. 28, 2012
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Apr. 02, 2011
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Sep. 30, 2010
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May 31, 2007
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Apr. 30, 2007
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Jun. 30, 2013
Warrant One [Member]
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Dec. 31, 2006
Warrant One [Member]
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Jun. 30, 2013
Warrant Two [Member]
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Jun. 30, 2013
Warrant Three [Member]
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Jun. 30, 2013
Warrant Four [Member]
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Jun. 30, 2013
Warrant Five [Member]
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Jun. 30, 2013
Warrant Six [Member]
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Jun. 30, 2013
Warrant Seven [Member]
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Jun. 30, 2013
Warrant Eight [Member]
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May 31, 2011
Warrant [Member]
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Dec. 31, 2009
Public Relations Services [Member]
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Dec. 31, 2006
Public Relations Services [Member]
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Dec. 31, 2011
Convertible Notes Payable [Member]
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Dec. 31, 2012
Kinsey Company [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
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Dec. 31, 2012
Mabwe Mineral [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
Accounting Services [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
Promotional Services [Member]
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Mar. 31, 2013
Mabwe Mineral [Member]
Public Relations Services [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
Public Relations Services [Member]
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Nov. 07, 2012
Mabwe Mineral [Member]
M A B Z [Member]
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Jul. 18, 2012
Mabwe Mineral [Member]
M A B Z [Member]
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Dec. 31, 2012
Mabwe Mineral [Member]
Kinsey Company [Member]
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Nov. 07, 2012
Mabwe Mineral [Member]
Kinsey Company [Member]
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Dec. 31, 2012
Common Stock [Member]
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Dec. 31, 2011
Common Stock [Member]
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Dec. 31, 2010
Common Stock [Member]
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Dec. 31, 2009
Common Stock [Member]
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Dec. 31, 2006
Common Stock [Member]
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Dec. 31, 2004
Common Stock [Member]
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Jun. 30, 2013
Common Stock [Member]
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Mar. 31, 2013
Common Stock [Member]
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Dec. 31, 2008
Common Stock [Member]
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Dec. 31, 2007
Common Stock [Member]
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Dec. 31, 2005
Common Stock [Member]
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Dec. 31, 2003
Common Stock [Member]
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Jan. 13, 1998
Common Stock [Member]
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Dec. 31, 2012
Treasury Stock [Member]
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Dec. 31, 2011
Treasury Stock [Member]
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Dec. 31, 2010
Treasury Stock [Member]
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Dec. 31, 2009
Treasury Stock [Member]
|
Dec. 31, 2006
Treasury Stock [Member]
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Dec. 31, 2004
Treasury Stock [Member]
|
Jun. 30, 2013
Treasury Stock [Member]
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Mar. 31, 2013
Treasury Stock [Member]
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Dec. 31, 2008
Treasury Stock [Member]
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Dec. 31, 2007
Treasury Stock [Member]
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Dec. 31, 2005
Treasury Stock [Member]
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Dec. 31, 2003
Treasury Stock [Member]
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Jan. 13, 1998
Treasury Stock [Member]
|
Jun. 30, 2013
Private Placement [Member]
Mabwe Mineral [Member]
|
Mar. 31, 2013
Private Placement [Member]
Mabwe Mineral [Member]
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Dec. 31, 2011
Asher Enterprises [Member]
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Dec. 31, 2011
Tag Minerals Inc [Member]
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Dec. 31, 2010
Agoracom [Member]
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Dec. 31, 2008
Former Note Holder One [Member]
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Dec. 31, 2007
Former Note Holder One [Member]
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Dec. 31, 2006
Former Note Holder One [Member]
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Dec. 31, 2007
Former Note Holder Two [Member]
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Dec. 31, 2011
Convertible Noteholder Investors [Member]
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Dec. 31, 2007
Convertible Noteholder Investors [Member]
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Dec. 31, 2004
Convertible Noteholder Investors [Member]
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Jun. 30, 2013
Convertible Noteholder Investors [Member]
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Dec. 31, 2007
Convertible Noteholder Investors [Member]
Private Placement [Member]
|
Dec. 31, 2012
Maximum [Member]
|
Dec. 09, 2004
Maximum [Member]
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Dec. 31, 2012
Minimum [Member]
|
Dec. 09, 2004
Minimum [Member]
|
Dec. 31, 2012
Weighted Average [Member]
|
Dec. 31, 2012
Series A Preferred Stock [Member]
|
Jun. 30, 2013
Series A Preferred Stock [Member]
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Dec. 31, 2012
Series B Preferred Stock [Member]
|
Jun. 30, 2013
Series B Preferred Stock [Member]
|
Dec. 31, 2012
Series B Preferred Stock [Member]
M A B Z [Member]
|
Jun. 30, 2013
Series B Preferred Stock [Member]
Subsequent Event [Member]
|
Jun. 30, 2013
Series B Preferred Convertible Stock [Member]
|
Dec. 31, 2012
Series B Preferred Convertible Stock [Member]
|
Dec. 31, 2012
Series B Preferred Convertible Stock [Member]
Dodge Mine Blocks [Member]
|
Mar. 31, 2013
Advisory Agreement [Member]
Mabwe Mineral [Member]
|
Jun. 30, 2013
Advisory Agreement [Member]
Mabwe Mineral [Member]
|
Jun. 30, 2013
Advisory Agreement [Member]
Series B Preferred Convertible Stock [Member]
|
|
Common stock, shares authorized | 990,000,000 | 990,000,000 | 990,000,000 | 500,000,000 | 500,000,000 | 990,000,000 | 250,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 5,000,000 | 3,000,000 | 3,000,000 | 2,500,000 | 2,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Par Or Stated Value Per Share Issued For Services | $ 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Sale Price per Share, Issued for Services | $ 0.03 | $ 0.022 | $ 0.028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Voting Rights | 300 votes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued For Services | 2,000,000 | 1,500,000 | 6,590,000 | 25,000 | 70,000 | 100,000 | 0 | 11,150,000 | 1,500,000 | 0 | 0 | 0 | 500,000 | 1,000,000 | 915,000 | 20,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for services rendered | $ 1,000 | $ 197,218 | $ 150,000 | $ 150,000 | $ 150,000 | $ 152,375 | $ 2,500 | $ 7,848 | $ 7,000 | $ 0 | $ 11,150 | $ 1,500 | $ 0 | $ 20,000 | $ 1,000 | $ 25,000 | $ 70,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Development Stage Entities, Stock Issued, Shares, Issued for Cash | 5,000,000 | 1,600,000 | 1,000,000 | 182,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Development Stage Entities, Stock Issued, Value, Issued for Cash | 95,500 | 250,000 | 160,000 | 70,000 | 182,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note, Stock Split | post 1:10 reverse split | On June 16, 2006, the Company authorized a 1 for 2 reverse stock split for all issued shares. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant Issued During Period | 1,571,834 | 1,600,000 | 1,505,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock, shares issued | 329,847,533 | 329,847,533 | 329,847,533 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock, shares outstanding | 384,206,456 | 384,206,456 | 384,206,456 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | 1,167,000 | 1,187,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,167,000 | 1,187,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock value | 1,000 | 1,000 | 1,167 | 1,187 | 1.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,400,856 | 16,645,298 | 0 | 0 | 165,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | 95,500 | 340,000 | 3,401 | 16,646 | 0 | 0 | 70,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Warrants, Exercise Price | $ 0.25 | $ 0.075 | $ 0.15 | $ 0.075 | $ 15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Conversion Of Convertible Securities | 250,000 | 39,173,333 | 833,334 | 3,211,250 | 0 | 0 | 0 | 16,440,977 | 16,071,432 | 2,333,333 | 45,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period For Conversion Of Convertible Securities Aggregate Value | 12,500 | 50,000 | 80,000 | 45,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion Of Accrued Interest | 28,110 | 2,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock issued for acquisitions | 500,000 | 150,000 | 5,000 | 0 | 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 5,000,000 | 0 | 165,000,000 | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 33.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Payable | 14,400,000 | 17,726 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Issued To Lender As Incentive | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Value Issued To Lender As Incentive | 155,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion Of Stock Shares Converted To Accrued Interest | 689,655 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued As Deposit Acquisitions Shares | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued As Deposit Acquisitions Value | 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | 2,117,000 | 60,000 | 1,942,000 | 125,000 | 1,022,466 | 50,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion Of Accrued Interest Converted To Common Stock | 386,687 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Received In Settlement Of Complaints Against Related Party | 3,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Valued Maximum Per Share | $ 0.26 | $ 0.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Valued Minimum Per Share | $ 0.21 | $ 0.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 16,843,333 | 1,500,000 | 42,340,000 | 833,334 | 16,440,977 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense and Amortization Of Debt Issuance Cost | 13,118 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, Value, Outstanding | 229,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Issued To Related Party For Public and Investor Relation Services | 575,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares Issued To Related Party For Strategic Supply Agreement | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise Price | 0.075 | 0.075 | 0.075 | 0.075 | 0.075 | 0.075 | 0.075 | 0.075 | 0.075 | 0.15 | 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,250,000 | 178,750 | 69,850 | 6,737,333 | 2,947,583 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | 10,478 | 24,506 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | For every 1.8 share of common stock purchased, the investors received one warrant | 4:10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number Of Share Issued For Service Rendered | 11,150,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fees Received From Private Placement | 521,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale Of Common Stock Shares Through Private Placement | 5,850,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share | $ 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares Issued For Conversion Of Merger | 127,718,500 | 6,422,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 25.00% | 65.61% | 65.61% | 49.00% | 49.00% | 25.00% | 66.43% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Stock, Description | Each share of Preferred Convertible Series B Stock is convertible into 50 shares of the Companys common stock and 25 shares of the Companys majority owned subsidiary, Mabwe Minerals Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization | 420,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock - 54,358,923 shares of common stock (in excess of par) | (300,000) | (300,000) | (300,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock, Number of Shares Held | 54,358,923 | 54,358,923 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain Loss On Conversion Of Convertible Securities | 13,110 | 921,666 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period For Services Rendered Aggregate Value | 23,122 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period Shares Services Rendered | 1,100,000 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Common Shares | 69,940 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 27,000 | 75,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Issued During Period, Issued For Cash | 1,600,000 | 1,505,000 | 1,505,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Expiry Period | 1 year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Exercise Price | $ 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Warrants | 25,560 | 208,143 | 17,769 | 513,132 | 292,518 | 100,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Issued During Period Shares Issued For Debt | 3,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares, Issued | 137,280,750 | 137,280,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares, Outstanding, Beginning Balance | 137,280,750 | 137,280,750 | 384,206,456 | 378,205,600 | 139,874,905 | 100,201,572 | 92,350,013 | 85,000,013 | 384,206,456 | 384,206,456 | 100,118,238 | 98,973,388 | 85,000,013 | 200 | 0 | (54,358,923) | 0 | 0 | 0 | 0 | 0 | (54,358,923) | (54,358,923) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Liability, Current | 840,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds From Issuance Of Private Placement | $ 380,500 | $ 260,500 | $ 1,789,500 | $ 585,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term | 8 years | 8 years | 8 years | 8 years | 8 years | 5 years | 2 years | 2 years | 5 years |
SUBSEQUENT EVENTS (Details Textual) (USD $)
|
12 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jun. 30, 2013
Mabwe Minerals Inc [Member]
Subsequent Event [Member]
|
Jun. 30, 2013
Mabwe Minerals Inc [Member]
Subsequent Event [Member]
M A B Z [Member]
|
Jun. 30, 2013
Mabwe Minerals Inc [Member]
Private Placement [Member]
Subsequent Event [Member]
|
Jun. 30, 2013
Series B Convertible Preferred Stock [Member]
Lion Capital Group LLC [Member]
Subsequent Event [Member]
|
|
Subsequent Event, Date | Jul. 03, 2013 | Jul. 10, 2013 | Aug. 07, 2013 | Jul. 19, 2013 | ||
Stock Issued During Period, Shares, Issued For Services | 90,000 | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 49.00% | |||||
Stock Issued During Period, Shares, New Issues | 2,000,000 | 75,000 | ||||
Stock Issued During Period, Value, New Issues | $ 95,500 | $ 340,000 | $ 500,000 |
CONVERTIBLE NOTES (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
$349,500 Convertible Notes at 10% interest per annum due on demand | $ 349,500 | $ 349,500 |
FIXED ASSETS AND MINING RIGHTS (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fixed Assets and Mining Rights [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | Fixed assets as of June 30, 2013 (unaudited) and December 31, 2012 were as follows:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation [Table Text Block] | The following is a reconciliation of the computation for basic and diluted EPS:
|
COMMITMENTS (Details Textual) (USD $)
|
1 Months Ended | ||
---|---|---|---|
Feb. 08, 2013
|
Feb. 08, 2013
Baker Hughes Oilfield Operations, Inc [Member]
|
Aug. 31, 2012
Wgb Kinsey Company [Member]
|
|
Stock Issued During Period, Shares, New Issues | 1,000,000 | ||
Letter Of Credit | $ 9,000,000 | $ 3,000,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 185 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
|
Net loss attributed to common shares | $ (421,093) | $ (76,235) | $ (894,591) | $ (281,369) | $ (13,646,000) |
Weighted-average common shares Outstanding (Basic) | 384,206,456 | 380,921,623 | 90,721,027 | ||
Weighted-average common stock Equivalents | |||||
Convertible Notes | 6,990,000 | 10,190,000 | 10,190,000 | ||
Preferred Stock (Series B) | 59,350,000 | 10,500,000 | 0 | ||
Warrants | 30,457,900 | 30,457,900 | 28,886,066 | ||
Weighted-average commons shares Outstanding (Diluted) | 481,004,356 | 432,069,523 | 129,797,093 |
CONVERTIBLE NOTES - RELATED PARTIES (Details Textual) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 185 Months Ended | 12 Months Ended | 3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2010
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2010
|
Dec. 31, 2009
|
Jun. 30, 2013
|
Dec. 28, 2012
|
Sep. 30, 2010
|
May 31, 2007
|
Apr. 30, 2007
|
Dec. 31, 2011
Convertible Notes Payable [Member]
|
May 31, 2011
Former Director and Officer [Member]
|
|
Debt Conversion, Original Debt, Amount | $ 2,117,000 | $ 60,000 | $ 1,942,000 | $ 125,000 | $ 50,000 | $ 149,017 | |||||||
Convertible Note After Conversion Debt Amount | 150,000 | ||||||||||||
Debt Instrument, Interest Rate During Period | 5.00% | ||||||||||||
Interest expense - debt discount | 0 | 0 | 504,606 | 983 | |||||||||
Percentage Payment Of Covertible Note On Sources | 5.00% | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.15 | $ 0.075 | |||||
Concentration Risk, Percentage | 5.00% | ||||||||||||
Notes Payable, Related Parties, Current | $ 150,000 |
PROVISION FOR INCOME TAXES (Details) (USD $)
|
Jun. 30, 2013
|
---|---|
Net operating losses | $ 4,480,091 |
Valuation allowance | (4,480,091) |
Deferred Tax Assets, Net | $ 0 |
FAIR VALUE MEASUREMENTS (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:
|
NOTE PAYABLE - DODGE MINES (Details Textual) (USD $)
|
1 Months Ended | 12 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Sep. 19, 2011
|
Jun. 30, 2013
Series B Preferred Convertible Stock [Member]
|
Jun. 30, 2013
Dodge Mines [Member]
|
Jun. 30, 2012
Mining Properties and Mineral Rights [Member]
Series B Preferred Convertible Stock [Member]
|
Jun. 30, 2012
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Sep. 19, 2011
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Jun. 30, 2012
M A B Z [Member]
Series B Preferred Convertible Stock [Member]
|
Jun. 30, 2012
M A B Z [Member]
Mining Properties and Mineral Rights [Member]
|
Jun. 30, 2013
M A B Z [Member]
Mining Properties and Mineral Rights [Member]
|
|
Business Acquisition, Contingent Consideration, Potential Cash Payment | $ 433,000 | |||||||||||
Percentage Of Related Party Common Stock Exchanged For Sales Agreement | 100.00% | |||||||||||
Percentage Of Total Issued and Outstanding Shares | 50.00% | |||||||||||
Conversion of Stock, Shares Issued | 45,000 | |||||||||||
Conversion of Stock, Description | Each share of Preferred Convertible Series B Stock is convertible into 50 shares of the Companys common stock and 25 shares of the Companys majority owned subsidiary, Mabwe Minerals Inc. | each share is convertible into 50 shares of Common Stock of Raptor Resources Holdings Inc. (RRHI) and 25 shares of common stock of majority owned Mabwe Minerals Inc. (MBMI)). | ||||||||||
Payments For Retitling Of Debt Instrument | 27,000 | |||||||||||
Payment Of Debt Five Equal Monthly Installment | 30,000 | |||||||||||
Debt Instrument Forgiveness | 132,917 | |||||||||||
Intangible Assets, Net (Excluding Goodwill) | 433,000 | |||||||||||
Notes Payable | 960,000 | 57,000 | ||||||||||
Related Party Transaction, Due from (to) Related Party | 376,000 | |||||||||||
Repayments of Related Party Debt | 13,500 | |||||||||||
Stock Issued During Period, Shares, New Issues | 25,000 | 25,000 | 25,000 | |||||||||
Stock Issued During Period, Value, New Issues | 95,500 | 340,000 | 25,000 | 25,000 | ||||||||
Debt Conversion Converted Instrument Amount Down Payment | $ 3,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, majority-owned subsidiaries and 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. TAG Minerals Inc. on April 2, 2011 acquired a 49% interest in TAG Z for a 33% interest in TAG. The remaining 51% ownership in TAG Z is held by a Director of the Company, a Zimbabwe resident, Tapiwa Gurupira. TAG Z will be the operating arm of TAG, initially, with the Company being the primary beneficiary of all the activities of its subsidiary, TAG, and its associated company TAG Z. As a result of this investment by TAG, TAG Z has been identified by the Company as a VIE. The Company as of June 30, 2013 owns 65.61% of Mabwe Minerals Inc. The 34.39% noncontrolling interest is reflected in the condensed consolidated financial statements. This dilution was due to the private placement sale of common stock by its subsidiary, Mabwe Minerals Inc., and stock issued for acquisitions, private placement sales, restructuring and services rendered and to be rendered. Mabwe issued 1,695,000 shares of common stock diluting the interest of Raptor Resources Holdings Inc. from 66.43% last quarter to 65.61% this quarter. This decline represents a .82% decrease in the controlling interest. |
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Noncontrolling Interests [Policy Text Block] | 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 June 30, 2013. There was no activity from December 2, 2011 through June 30, 2012 in Mabwe, the Company’s majority-owned subsidiary. The Company’s controlling interest was reduced this quarter due to sale of stock through private placement and the issuance of stock for services rendered and to be rendered. The noncontrolling interest on a percentage basis increased by 0.82% to 34.39% in Mabwe Minerals Inc. The noncontrolling interest thus increased to balance of $117,688. The net asset share of the noncontrolling interest of $59,571 at June 30, 2013 was netted with losses of $82,461 compared to a March 31, 2013 net asset share (deficit) of $94,798. |
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Use of Estimates, Policy [Policy Text Block] | 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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to derivative liabilities, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents. Any amounts of cash in financial institutions over FDIC insured limits, exposes the Company to cash concentration risk. |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments (other than Derivative Financial Instruments) The carrying amounts reported in the condensed consolidated balance sheet for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings. |
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Research and Development Expense, Policy [Policy Text Block] | Research and Development The Company annually incurs costs on activities that relate to research and development of new technology and products. Research and development costs are expensed as incurred. Certain of these costs would be reduced by government grants and investment tax credits where applicable. The Company has expensed its payments in connection with the license agreement as research and development costs. |
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Revenue Recognition, Deferred Revenue [Policy Text Block] | Revenue Recognition The Company has not recognized revenues to date. The Company anticipates recognizing revenue in accordance with the contracts it enters into for their gold and other industrial metals and minerals mining business. |
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Income Tax, Policy [Policy Text Block] | Income Taxes Under ASC 740 the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. 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 condensed 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. |
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Income Tax Uncertainties, Policy [Policy Text Block] | Uncertainty in Income Taxes Under ASC 740-10-25 recognition and measurement of uncertain income tax positions is required using a “more-likely-than-not” approach. Management evaluates their tax positions on an annual basis and has determined that as of June 30, 2013 no additional accrual for income taxes is necessary. 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 2012 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. |
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Advertising Costs, Policy [Policy Text Block] | Advertising Costs The Company expenses the costs associated with advertising as incurred. Advertising expenses for the three and six months ended June 30, 2013 and 2012 are included in professional, consulting and marketing fees in the condensed consolidated statements of operations. |
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Fixed Assets [Policy Text Block] | Fixed Assets Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; computer equipment 3-5 years, and machinery - 5 years. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments. |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | 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 June 30, 2013 and December 31, 2012. |
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Earnings Per Share, Policy [Policy Text Block] | (Loss) Per Share Attributable to Common Shareholders of the Company Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share ("EPS") include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share on the condensed consolidated statement of operations due to the fact that the Company reported a net loss and to do so would be anti-dilutive for the periods presented. The following is a reconciliation of the computation for basic and diluted EPS:
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Effective July 18, 2012, Mabwe Minerals Inc. 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 resulted in the Company recording Goodwill as part of the purchase transaction. MAB-Z is the operating arm of the Company and at the time of the purchase it’s net assets consisted chiefly of mining rights associated with the main line of business of the company. Management periodically 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. At December 31, 2012, management has determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount and thus no need to adjust for impairment. |
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Subsequent Events, Policy [Policy Text Block] | Subsequent Events In accordance with ASC 855 “Subsequent Events”, the Company is required to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or the date the financial statements were available to be issued. |
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Revenue Recognition, Policy [Policy Text Block] | 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 condensed 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. |
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New Accounting Pronouncements [Policy Text Block] | Recent Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2013, as compared to the recent accounting pronouncements disclosed in the Company’s Annual Report on Form 10-K that are of material significance, or have potential material significance, to the Company. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Jun. 30, 2013
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] |
Exploration Stage Company The Company currently has no continuing operations and, in accordance with ASC 915"DEVELOPMENT STAGE ENTITIES," is considered an Exploration Stage Enterprise. The company amended its’ Articles of Incorporation on March 5, 2012 to change their name to Raptor Resources Holdings Inc. to reflect a new business focus on the exploration and mining of gold and other industrial minerals. The company continued to consolidate its’ interest and further separate itself from the former line of business in the December 17, 2012 settlement and restructuring agreement with POII and former principals Stan Baron (former Chief Executive Officer of Lantis Laser Inc.) and Craig Gimbel (former Executive Vice President of Lantis Laser Inc.) by acquiring their interest in the Company (54,358,923 shares of common stock collectively), terminated their employment agreements with the Company, extinguished certain liabilities owed by the Company to Baron and Gimbel and obtained an option to purchase their 14,400,000 warrants. The Company’s majority owned subsidiary entered the Exploration Stage on June 29, 2012 after the charter of Mabwe increased the number of authorized shares of common stock. Mabwe issued to the Company an additional 79,078,817 shares of its common stock (post 1:10 reverse split) giving the Company at that time ownership of 80.14% of the issued and outstanding shares of Mabwe common stock. The Company has no revenue from continuing operations since January 14, 1998. The Company is actively pursuing revenue from continuing operations through MAB-Z, it’s fully consolidated variable interest entity. Under agreement with Baker Hughes Oilfield Operations, Inc. MAB-Z was issued as beneficiary an irrevocable documentary letter of credit from 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. The Company is discussing with Baker Hughes Oilfield Operations revised shipment dates in light of the delays the Company experienced in obtaining the Environmental Impact Assessment Certificate dated July 4, 2013 from the Environmental Management Agency of Zimbabwe to allow it to commence mining operations for barite. As a result of the April 22, 2011 Merger, TAG became a wholly-owned subsidiary of the Company. TAG, a U.S. based mineral resource acquisition, exploration and development company, with operations conducted through its operating affiliate, TAG-Z, a fully consolidated variable interest entity of 49% ownership. TAG’s strategy is to identify, acquire and exploit mineral properties that have potential. TAG is augmented by independent financial, geological, and mining professionals who advise the company on its mining and exploration projects throughout Zimbabwe, Africa. TAG-Z will commence their own alluvial surface gold mining operations. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, majority-owned subsidiaries and 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. TAG Minerals Inc. on April 2, 2011 acquired a 49% interest in TAG Z for a 33% interest in TAG. The remaining 51% ownership in TAG Z is held by a Director of the Company, a Zimbabwe resident, Tapiwa Gurupira. TAG Z will be the operating arm of TAG, initially, with the Company being the primary beneficiary of all the activities of its subsidiary, TAG, and its associated company TAG Z. As a result of this investment by TAG, TAG Z has been identified by the Company as a VIE. The Company as of June 30, 2013 owns 65.61% of Mabwe Minerals Inc. The 34.39% noncontrolling interest is reflected in the condensed consolidated financial statements. This dilution was due to the private placement sale of common stock by its subsidiary, Mabwe Minerals Inc., and stock issued for acquisitions, private placement sales, restructuring and services rendered and to be rendered. Mabwe issued 1,695,000 shares of common stock diluting the interest of Raptor Resources Holdings Inc. from 66.43% last quarter to 65.61% this quarter. This decline represents a .82% decrease in the controlling interest. 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 June 30, 2013. There was no activity from December 2, 2011 through June 30, 2012 in Mabwe, the Company’s majority-owned subsidiary. The Company’s controlling interest was reduced this quarter due to sale of stock through private placement and the issuance of stock for services rendered and to be rendered. The noncontrolling interest on a percentage basis increased by 0.82% to 34.39% in Mabwe Minerals Inc. The noncontrolling interest thus increased to balance of $117,688. The net asset share of the noncontrolling interest of $59,571 at June 30, 2013 was netted with losses of $82,461 compared to a March 31, 2013 net asset share (deficit) of $94,798. 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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to derivative liabilities, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with an initial maturity of three months or less to be cash equivalents. Any amounts of cash in financial institutions over FDIC insured limits, exposes the Company to cash concentration risk. Fair Value of Financial Instruments (other than Derivative Financial Instruments) The carrying amounts reported in the condensed consolidated balance sheet for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings. Research and Development The Company annually incurs costs on activities that relate to research and development of new technology and products. Research and development costs are expensed as incurred. Certain of these costs would be reduced by government grants and investment tax credits where applicable. The Company has expensed its payments in connection with the license agreement as research and development costs. Revenue Recognition The Company has not recognized revenues to date. The Company anticipates recognizing revenue in accordance with the contracts it enters into for their gold and other industrial metals and minerals mining business. Income Taxes Under ASC 740 the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Uncertainty in Income Taxes Under ASC 740-10-25 recognition and measurement of uncertain income tax positions is required using a “more-likely-than-not” approach. Management evaluates their tax positions on an annual basis and has determined that as of June 30, 2013 no additional accrual for income taxes is necessary. Advertising Costs The Company expenses the costs associated with advertising as incurred. Advertising expenses for the three and six months ended June 30, 2013 and 2012 are included in professional, consulting and marketing fees in the condensed consolidated statements of operations. Fixed Assets Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; computer equipment 3-5 years, and machinery - 5 years. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments. 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 June 30, 2013 and December 31, 2012. 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 condensed 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. (Loss) Per Share Attributable to Common Shareholders of the Company Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share ("EPS") include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share on the condensed consolidated statement of operations due to the fact that the Company reported a net loss and to do so would be anti-dilutive for the periods presented. The following is a reconciliation of the computation for basic and diluted EPS:
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 2012 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. Goodwill Effective July 18, 2012, Mabwe Minerals Inc. 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 resulted in the Company recording Goodwill as part of the purchase transaction. MAB-Z is the operating arm of the Company and at the time of the purchase it’s net assets consisted chiefly of mining rights associated with the main line of business of the company. Management periodically 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. At December 31, 2012, management has determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount and thus no need to adjust for impairment. Subsequent Events In accordance with ASC 855 “Subsequent Events”, the Company is required to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or the date the financial statements were available to be issued. 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 condensed 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. Recent Accounting Pronouncements There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2013, as compared to the recent accounting pronouncements disclosed in the Company’s Annual Report on Form 10-K that are of material significance, or have potential material significance, to the Company. |
CONVERTIBLE NOTES - RELATED PARTIES
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6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2013
|
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Convertible Notes Related Parties [Abstract] | |||||
Convertible Notes Related Parties [Text Block] |
In May 2011, the Company converted two 5% interest bearing notes with the former directors of the Company, and now officers of the dental technology subsidiary in the amount of $149,017 into new Convertible Notes totaling $150,000. The $983 variance was recorded by the Company as an expense. The Convertible Notes will be repaid at the rate of 5% of any funding, whether debt or equity, received by the Company or its subsidiaries, or 5% of net revenues of the Company. The Convertible Note holders have the right to convert any amounts outstanding and due to them at $0.075 per share at their sole discretion. Under the terms of the December 17, 2012 agreement the $150,000 balance of this note was forgiven. The forgiveness was recorded as an adjustment to additional paid in capital as the amount was due to a related party. There are no material related party loans outstanding as of June 30, 2013 |
FIXED ASSETS AND MINING RIGHTS
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fixed Assets and Mining Rights [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets and Mining Rights [Text Block] |
Fixed Assets: Fixed assets as of June 30, 2013 (unaudited) and December 31, 2012 were as follows:
There was $711 and $1,423 charged to operations for depreciation expense for the three and six months ended June 30, 2013, respectively. Mining Rights: On September 19, 2011, TAG-Z, entered into a Sale of Shares Agreement whereby TAG-Z paid $433,000 in installments through November 30, 2012 for 100% of the Dodge Mine blocks 1-6, located in Zimbabwe. The property consists of three hydrothermal mountains representing 123 hectares containing multiple deposits of superior grade barite, limestone and talc based on the drilling reports that management received from the previous owner of the Dodge mine blocks. Along with the purchase of the Dodge Mine blocks 1-6, TAG-Z received 50% of the issued and outstanding shares of common stock of Chiroswa Minerals (PVT) Limited (“Chiroswa”), an inactive company originally formed to conduct mining operations on the Dodge Mine. Since Chiroswa is an inactive company, TAG-Z has canceled the Chiroswa shares it received under the Sale of Share Agreement and intends to conduct mining operations on the Dodge blocks itself. On January 9, 2012, TAG-Z expanded the property along the hydrothermal mountain range adding an additional 500 hectares bringing the total Dodge Mine property size to 623 hectares. The only cost expended was the acquisition of a prospecting license to determine feasibility of claim development recorded as exploration cost. On June 1, 2012 entered into a contract renegotiation with the owner of Dodge Mines Blocks 1-6, Chiroswa Syndicate, related to the previous agreement for the $433,000 in installment payments of the Dodge Mine blocks 1-6, located in Zimbabwe. Under amended terms of the contract Chiroswa accepted 45,000 shares of the Company's Preferred Convertible Series B stock (each share is convertible into 50 shares of Common Stock of Raptor Resources Holdings Inc. (RRHI) and 25 shares Common Stock of majority owned Mabwe Minerals Inc. (MBMI)). The deal was secured with a $3,000 down payment with $27,000 due upon the retitling of the Dodge Mine blocks 1-6 into the Name of Mabwe Minerals Zimbabwe (PVT) Limited (MAB-Z). An additional $30,000 will be paid in five equal monthly installments that commenced October 1, 2012. This transaction resulted in the forgiveness of $132,917 of the debt owed. 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 Note Payable for the Dodge Mines at June 30, 2013 was paid in full, as the Company paid $13,500 during the six months ended June 30, 2013. 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. |
RELATED PARTY LOANS (Details Textual) (USD $)
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3 Months Ended | 12 Months Ended | 12 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | ||||||||
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Jun. 30, 2010
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2009
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Dec. 31, 2008
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Dec. 31, 2007
|
Dec. 31, 2006
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May 23, 2011
|
Dec. 31, 2012
Series B Preferred Stock [Member]
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Dec. 31, 2012
Former Director and Officer [Member]
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Dec. 31, 2012
Mabwe Mineral [Member]
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Jun. 30, 2013
Mabwe Mineral [Member]
Advisory Agreement [Member]
|
Jun. 30, 2012
Mining Properties and Mineral Rights [Member]
M A B Z [Member]
|
Jun. 30, 2013
Mining Properties and Mineral Rights [Member]
M A B Z [Member]
|
|
Officers' Compensation | $ 200,000 | |||||||||||||
Due to Related Parties, Noncurrent | 960,000 | |||||||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 14,400,000 | |||||||||||||
Investment Warrants, Exercise Price | $ 0.25 | $ 0.075 | $ 0.15 | $ 0.075 | ||||||||||
Warrants Call Price Per Share | $ 0.04 | |||||||||||||
Warrants and Rights Outstanding | 100,800 | |||||||||||||
Gain On Conversion Of Related Party Debt To Warrants Reflected In Additional Paid In Capital | 921,666 | |||||||||||||
Warrant Conversion Period | 5 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Black-Scholes calculation | Black-Scholes calculation | ||||||||||||
Interest Receivable | 62,466 | |||||||||||||
Notes Payable | 960,000 | 57,000 | ||||||||||||
Related Party Transaction, Due from (to) Related Party | 376,000 | |||||||||||||
Intangible Assets, Net (Excluding Goodwill) | 433,000 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 25,000 | |||||||||||||
Shares issued for cash | 95,500 | 250,000 | 25,000 | |||||||||||
Stock Issued During Period, Value, Issued For Services | $ 1,000 | $ 197,218 | $ 150,000 | $ 25,000 | $ 152,375 | $ 70,000 |
CONVERTIBLE NOTES (Tables)
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6 Months Ended | ||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||
Schedule of Debt Conversions [Table Text Block] | The summary of the Convertible Notes is as follows at June 30, 2013:
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ACQUISITION (Tables)
|
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Business Combinations [Abstract] | ||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
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FIXED ASSETS AND MINING RIGHTS (Details Textual) (USD $)
|
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 185 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jun. 30, 2013
|
Sep. 19, 2011
|
Jun. 30, 2013
Series B Preferred Convertible Stock [Member]
|
Jul. 18, 2012
M A B Z [Member]
|
Jun. 30, 2012
M A B Z [Member]
Series B Preferred Convertible Stock [Member]
|
Jun. 30, 2012
Mining Properties and Mineral Rights [Member]
Series B Preferred Convertible Stock [Member]
|
Jun. 30, 2012
Mining Properties and Mineral Rights [Member]
M A B Z [Member]
|
Jun. 30, 2013
Mining Properties and Mineral Rights [Member]
M A B Z [Member]
|
Jun. 30, 2012
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Dec. 31, 2012
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Dec. 31, 2011
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Sep. 19, 2011
Stock Sales Agreement [Member]
Mining Properties and Mineral Rights [Member]
|
Jan. 09, 2012
TAG - Z [Member]
Mining Properties and Mineral Rights [Member]
|
|
Depreciation | $ 711 | $ 1,083 | $ 1,423 | $ 1,423 | $ 140,727 | |||||||||||||||
Business Acquisition, Contingent Consideration, Potential Cash Payment | 433,000 | |||||||||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 49.00% | 100.00% | ||||||||||||||||||
Property Belonged To Previous Owner | 123 hectares | |||||||||||||||||||
Additional Area To Property | 500 hectares | |||||||||||||||||||
Total Accumulated Property | 623 hectares | |||||||||||||||||||
Conversion of Stock, Shares Issued | 45,000 | |||||||||||||||||||
Payment Of Debt Five Equal Monthly Installment | 30,000 | |||||||||||||||||||
Debt Instrument Forgiveness | 132,917 | |||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) | 433,000 | |||||||||||||||||||
Notes Payable | 960,000 | 57,000 | ||||||||||||||||||
Related Party Transaction, Due from (to) Related Party | 376,000 | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 25,000 | 25,000 | 25,000 | |||||||||||||||||
Shares issued for cash | 95,500 | 340,000 | 25,000 | 25,000 | ||||||||||||||||
Conversion of Stock, Description | Each share of Preferred Convertible Series B Stock is convertible into 50 shares of the Companys common stock and 25 shares of the Companys majority owned subsidiary, Mabwe Minerals Inc. | each share is convertible into 50 shares of Common Stock of Raptor Resources Holdings Inc. (RRHI) and 25 shares of common stock of majority owned Mabwe Minerals Inc. (MBMI)). | ||||||||||||||||||
Business Combination, Consideration Transferred, Total | 433,000 | 433,000 | ||||||||||||||||||
Percentage Of Total Issued and Outstanding Shares | 50.00% | |||||||||||||||||||
Repayments Of Notes Payable | 13,500 | 48,083 | 255,083 | |||||||||||||||||
Debt Conversion Converted Instrument Amount Down Payment | 3,000 | |||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 27,000 | $ 75,000 |
ACQUISITION (Details Textual) (USD $)
|
1 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jul. 18, 2012
M A B Z [Member]
|
Jul. 18, 2012
M A B Z [Member]
Series B Preferred Convertible Stock [Member]
|
|
Business Acquisition, Percentage of Voting Interests Acquired | 49.00% | |||
Business Acquisition, Equity Interest Issued Or Issuable, Number Of Shares (in shares) | 25,000 | |||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 25,000 | |||
Goodwill | $ 25,000 | $ 25,000 | $ 25,000 |