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 September 30,
2014
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-52641
INFRASTRUCTURE MATERIALS
CORP.
(Exact name of registrant as specified in its charter)
Delaware |
98-0492752 |
(State of incorporation) |
(I.R.S. Employer Identification No.)
|
1135 Terminal Way, Suite 207B
Reno, NV 89502
USA
(Address of Principal Executive Offices) (Zip Code)
775-322-4448
(Registrants telephone number,
including area code)
With a copy to:
Jonathan H. Gardner
Kavinoky
Cook LLP
726 Exchange St., Suite 800
Buffalo, NY 14210
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 [X] No [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ]
(Do not check if a smaller reporting company) |
Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
Yes [
] No [X]
The number of shares of registrants common stock outstanding
as of October 31, 2014 was 138,304,619.
INFRASTRUCTURE MATERIALS CORP. |
|
FORM 10-Q |
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014
|
TABLE OF CONTENTS |
- 2 -
PART 1 FINANCIAL INFORMATION
ITEM 1. |
Financial Statements
|
INFRASTRUCTURE MATERIALS CORP. |
|
|
INTERIM CONSOLIDATED FINANCIAL STATEMENTS |
|
September 30, 2014 |
|
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
|
|
CONTENTS |
- 3 -
INFRASTRUCTURE MATERIALS CORP. |
Interim Consolidated Balance Sheets as at |
September 30, 2014 and June 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
|
|
September 30, |
|
|
June 30, |
|
|
|
2014 |
|
|
2014 |
|
|
|
$ |
|
|
$ |
|
|
|
(unaudited) |
|
|
(audited) |
|
ASSETS |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash and cash
equivalents |
|
210,421 |
|
|
162,847 |
|
Marketable securities (Note 9)
|
|
57,128 |
|
|
44,325 |
|
Prepaid expenses
and other receivables |
|
58,143 |
|
|
15,109 |
|
|
|
|
|
|
|
|
Total Current Assets
|
|
325,692 |
|
|
222,281 |
|
|
|
|
|
|
|
|
Restricted Cash (Note
5) |
|
61,000 |
|
|
61,000 |
|
Reclamation Deposit (Note 6) |
|
21,600 |
|
|
21,600 |
|
|
|
|
|
|
|
|
Plant and Equipment, net (Note 7) |
|
491,463 |
|
|
517,309 |
|
|
|
|
|
|
|
|
Total Assets |
|
899,755 |
|
|
822,190 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable |
|
28,820 |
|
|
1,056 |
|
Accrued
liabilities |
|
39,613 |
|
|
63,860 |
|
Notes Payable (Note 8) |
|
171,172 |
|
|
- |
|
Total Current
Liabilities |
|
239,605 |
|
|
64,916 |
|
|
|
|
|
|
|
|
Deferred Revenue (Note
9) |
|
429,639 |
|
|
346,836 |
|
Asset Retirement Obligation (Note 10)
|
|
20,127 |
|
|
19,636 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
689,371 |
|
|
431,388 |
|
|
|
|
|
|
|
|
Going Concern (Note 3) |
|
|
|
|
|
|
Commitments and
Contingencies (Note 13) |
|
|
|
|
|
|
Related Party Transactions (Note 14)
|
|
|
|
|
|
|
Subsequent Events
(Note 15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Capital Stock (Note 11) |
|
|
|
|
|
|
Preferred
stock, $0.0001 par value, 50,000,000 shares authorized, none issued and
outstanding |
|
- |
|
|
- |
|
Common stock, $0.0001 par
value, 500,000,000 shares authorized,
138,304,619 issued
and outstanding (June 30, 2014 138,304,619) |
|
13,830 |
|
|
13,830 |
|
Additional Paid in
Capital |
|
24,743,631 |
|
|
24,743,631 |
|
Deficit |
|
(24,547,077 |
) |
|
(24,366,659 |
) |
|
|
|
|
|
|
|
Total Stockholders' Equity |
|
210,384 |
|
|
390,802 |
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders'
Equity |
|
899,755 |
|
|
822,190 |
|
See Condensed Notes to the Interim Consolidated Financial
Statements
-4-
INFRASTRUCTURE MATERIALS CORP. |
Interim Consolidated Statements of Operations and
Comprehensive Loss |
For the three-months ended September 30, 2014 and September
30, 2013 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
|
|
For the |
|
|
For the |
|
|
|
three months |
|
|
three months |
|
|
|
ended |
|
|
ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2014 |
|
|
2013 |
|
|
|
$ |
|
|
$ |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administration |
|
99,602 |
|
|
127,871 |
|
Project expenses
|
|
60,937 |
|
|
242,965 |
|
Depreciation |
|
18,707 |
|
|
22,533 |
|
|
|
|
|
|
|
|
Total Operating
Expenses |
|
179,246 |
|
|
393,369 |
|
|
|
|
|
|
|
|
Loss from Operations
|
|
(179,246 |
)
|
|
(393,369 |
)
|
Other
income-interest |
|
- |
|
|
40 |
|
Interest Expense |
|
(1,172 |
)
|
|
(2,628 |
)
|
|
|
|
|
|
|
|
Loss before Income
Taxes |
|
(180,418 |
)
|
|
(395,957 |
)
|
|
|
|
|
|
|
|
Provision for income taxes |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Net Loss |
|
(180,418 |
)
|
|
(395,957 |
)
|
|
|
|
|
|
|
|
Loss per Weighted Average
Number of Shares Outstanding |
|
|
|
|
|
|
-Basic and Fully Diluted |
|
(0.001 |
) |
|
(0.004 |
) |
|
|
|
|
|
|
|
Weighted Average Number of Shares
Outstanding During the Periods |
|
|
|
|
|
|
-Basic and Fully
Diluted |
|
138,304,619 |
|
|
111,254,326 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net Loss |
|
(180,418 |
)
|
|
(395,957 |
)
|
Other comprehensive loss: |
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
- |
|
|
(20,179 |
)
|
|
|
|
|
|
|
|
Comprehensive Loss |
|
(180,418 |
)
|
|
(416,136 |
)
|
See Condensed Notes to the Interim Consolidated Financial
Statements
-5-
INFRASTRUCTURE MATERIALS CORP. |
Interim Consolidated Statements of Changes in Stockholders
Equity |
For the three-months ended September 30, 2014 and for the
year ended June 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
Common Stock |
|
|
Additional |
|
|
|
|
|
Other |
|
|
Total |
|
|
|
Number |
|
|
|
|
|
Paid-in |
|
|
|
|
|
Comprehensive |
|
|
Stockholders' |
|
|
|
of Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Balance June 30, 2013
(audited) |
|
98,935,486 |
|
|
9,894 |
|
|
23,977,767 |
|
|
(23,335,415 |
)
|
|
(105,043 |
)
|
|
547,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
issued for cash (net) |
|
33,333,333 |
|
|
3,333 |
|
|
462,010 |
|
|
|
|
|
|
|
|
465,343 |
|
Common shares issued on
conversion of debt |
|
6,035,800 |
|
|
603 |
|
|
210,650 |
|
|
|
|
|
|
|
|
211,253 |
|
Gain on
common shares issued on conversion of related party debt |
|
|
|
|
|
|
|
81,747 |
|
|
|
|
|
|
|
|
81,747 |
|
Stock based compensation |
|
|
|
|
|
|
|
11,457 |
|
|
|
|
|
|
|
|
11,457 |
|
Unrealized loss
on marketable securities |
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
- |
|
Other-than-temporary
impairment of marketable securities reclassified to net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
105,043 |
|
|
105,043 |
|
Net loss for the
period |
|
|
|
|
|
|
|
|
|
|
(1,031,244 |
)
|
|
|
|
|
(1,031,244 |
)
|
Balance June 30, 2014 (audited) |
|
138,304,619 |
|
|
13,830 |
|
|
24,743,631 |
|
|
(24,366,659 |
) |
|
- |
|
|
390,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
|
|
|
|
|
|
|
|
|
|
(180,418 |
) |
|
|
|
|
(180,418 |
) |
Balance September 30, 2014
(unaudited) |
|
138,304,619 |
|
|
13,830 |
|
|
24,743,631 |
|
|
(24,547,077 |
)
|
|
- |
|
|
210,384 |
|
See Condensed Notes to the Interim Consolidated Financial
Statements
- 6 -
INFRASTRUCTURE MATERIALS CORP. |
Interim Consolidated Statements of Cash Flows |
For the three-months ended September 30, 2014 and September
30, 2013 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
|
|
For the three |
|
|
For the three |
|
|
|
months ended |
|
|
months ended |
|
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
|
$ |
|
|
$ |
|
Cash Flows from Operating
Activities |
|
|
|
|
|
|
Net loss |
|
(180,418 |
) |
|
(395,957 |
) |
Adjustment for:
|
|
|
|
|
|
|
Depreciation |
|
18,707 |
|
|
22,533 |
|
Gain on disposal of plant and equipment |
|
(3,761 |
)
|
|
- |
|
Stock based
compensation |
|
- |
|
|
5,319 |
|
Accretion of Asset Retirement Obligation (Note 10) |
|
491 |
|
|
679 |
|
Interest accrued
on promissory note (Note 8) |
|
1,172 |
|
|
2,628 |
|
Changes in non-cash working capital |
|
|
|
|
|
|
Prepaid expenses
and other receivables |
|
(43,034 |
) |
|
(46,907 |
) |
Accounts payable |
|
27,764 |
|
|
47,717 |
|
Accrued
liabilities |
|
(24,247 |
) |
|
(31,176 |
) |
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
(203,326 |
) |
|
(395,164 |
) |
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
Cash received for option on claims and included in Deferred revenue
net (Note 9)* |
|
70,000 |
|
|
70,000 |
|
Proceeds from sale
of plant and equipment |
|
10,900 |
|
|
- |
|
|
|
|
|
|
|
|
Net cash provided by investing
activities |
|
80,900 |
|
|
70,000 |
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
Issuance of common shares for cash (net) |
|
- |
|
|
465,343 |
|
Issuance of
promissory notes (Note 8) |
|
170,000 |
|
|
- |
|
Issuance of promissory notes later converted to common shares |
|
- |
|
|
150,000 |
|
|
|
|
|
|
|
|
Net cash
provided by financing activities |
|
170,000 |
|
|
615,343 |
|
|
|
|
|
|
|
|
Net Change in Cash |
|
47,574 |
|
|
290,179 |
|
|
|
|
|
|
|
|
Cash beginning of period |
|
162,847 |
|
|
106,847 |
|
|
|
|
|
|
|
|
Cash end of period |
|
210,421 |
|
|
397,026 |
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information |
|
|
|
|
|
|
Interest Paid |
|
- |
|
|
- |
|
Income taxes
paid |
|
- |
|
|
- |
|
* Excludes receipt of marketable securities for $12,803, being
a non-cash item included in Deferred Revenue
See Condensed Notes to the Interim Consolidated Financial
Statements
-7-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
The accompanying unaudited condensed
consolidated financial statements of Infrastructure Materials Corp. (the
Company), have been prepared in accordance with the instructions to Form 10-Q
and therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with U.S. generally accepted accounting principles (GAAP); however,
such information reflects all adjustments that are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods. The condensed consolidated financial statements should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
together with Managements Discussion and Analysis of Financial Condition and
Results of Operations contained in the Companys Annual Report on Form 10-K for
the year ended June 30, 2014. In the opinion of management, the accompanying
condensed consolidated financial statements reflect all adjustments of a normal
recurring nature considered necessary to fairly state the financial position of
the Company at September 30, 2014 and June 30, 2014, the results of its
operations for the three-month periods ended September 30, 2014 and September
30, 2013, and its cash flows for the three-month periods ended September 30,
2014 and September 30, 2013. In addition, some of the Companys statements in
this Quarterly Report on Form 10-Q may be considered forward-looking and involve
risks and uncertainties that could significantly impact expected results. The
results of operations for the three-month period ended September 30, 2014 are
not necessarily indicative of results to be expected for the full year.
The condensed consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, Infrastructure Materials Corp US (IMC US), Silver Reserve Corp.
(SRC) and Canadian Infrastructure Corp. All material inter-company accounts
and transactions have been eliminated.
Recently Adopted Accounting
Standards
In February 2013, the Financial
Accounting Standards Board (the FASB) issued Accounting Standards
Update (ASU) 2013-04, Liabilities (Topic 405): Obligations Resulting
from Joint and Several Liability Arrangements for which the Total Amount of the
Obligation Is Fixed at the Reporting Date (ASU 2013-04). ASU 2013-04
addresses the recognition, measurement, and disclosure of certain obligations
resulting from joint and several arrangements including debt arrangements, other
contractual obligations, and settled litigation and judicial rulings. This ASU
is effective for public entities for fiscal years, and interim periods within
those years, beginning after December 15, 2013. The adoption of ASU 2013-04 did
not have a material impact on the financial statements of the Company.
In March 2013, the FASB issued ASU
2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for
the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries
or Groups of Assets within a Foreign Entity or of an Investment in a Foreign
Entity (ASU 2013-05). ASU 2013-05 addresses the accounting for the
cumulative translation adjustment when a parent either sells a part or all of
its investment in a foreign entity or no longer holds a controlling financial
interest in a subsidiary or group of assets that is a nonprofit activity or a
business within a foreign entity. The guidance outlines the events when
cumulative translation adjustments should be released into net income and is
intended by FASB to eliminate some disparity in current accounting practice.
This ASU is effective prospectively for fiscal years, and interim periods within
those years, beginning after December 15, 2013. The adoption of ASU 2013-05 did
not have a material impact on the financial statements of the Company.
-8-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
1. |
Basis of Presentation
Contd |
In July 2013, the FASB issued ASU
2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit
When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit
Carryforward Exists (ASU 2013-11), whereby it amended its guidance related
to the presentation of unrecognized tax benefits. The standard provides that an
unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be
presented in the financial statements as a reduction to a deferred tax asset for
a net operating loss carryforward, a similar tax loss, or a tax credit
carryforward, except as follows. To the extent a net operating loss
carryforward, a similar tax loss, or a tax credit carryforward is not available
at the reporting date under the tax law of the applicable jurisdiction to settle
any additional income taxes that would result from the disallowance of a tax
position or the tax law of the applicable jurisdiction does not require the
entity to use, and the entity does not intend to use, the deferred tax asset for
such purpose, the unrecognized tax benefit should be presented in the financial
statements as a liability and should not be combined with deferred tax assets.
This guidance is effective for annual reporting periods beginning on or after
December 15, 2013, and interim periods within those annual periods. The guidance
is to be applied prospectively to all unrecognized tax benefits that exist at
the effective date. The adoption of ASU 2013-11 did not have a material impact
on the financial statements of the Company.
In June 2014, the FASB issued
ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain
Financial Reporting Requirements (ASU 2014-10), which eliminates the
distinction of a development stage entity and certain related disclosure
requirements, including the elimination of inception-to-date information on the
statements of operations, cash flows and changes in stockholders equity. The
amendments in ASU 2014-10 are effective prospectively for annual reporting
periods beginning after December 15, 2014, and interim periods within those
annual periods; however early adoption is permitted. The Company evaluated and
adopted ASU 2014-10 early for the current period presented.
Recently Issued Accounting
Standards
In August 2012, the FASB issued ASU
2012-03, Technical Amendments and Corrections to SEC Sections: Amendments to SEC
Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical
Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB
Accounting Standards Update 2010-22 (SEC Update) (ASU 2012-03). This
update amends various SEC paragraphs pursuant to the issuance of SAB No. 114.
The adoption of ASU 2012-03 is not expected to have a significant impact on our
financial position or results of operations.
-9-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
1. |
Basis of Presentation
Contd |
In April 2014, the FASB issued ASU
2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant,
and Equipment (Topic 360): Reporting Discontinued Operations and
Disclosures of Disposals of Components of an Entity (ASU 2014-08),
which includes amendments that change the requirements for reporting
discontinued operations and require additional disclosures about discontinued
operations. Under the new guidance, only disposals representing a strategic
shift in operations should be presented as discontinued operations. Those
strategic shifts should have a major effect on the organizations operations and
financial results. Additionally, ASU 2014-08 requires expanded disclosures about
discontinued operations that will provide financial statement users with more
information about the assets, liabilities, income, and expenses of discontinued
operations. The new standard is effective for the Company on July 1, 2015. Early
application is permitted. The Company is evaluating the effect that ASU 2014-08
will have on its consolidated financial statements and related disclosures.
In May 2014, the FASB issued ASU
2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09),
which requires an entity to recognize the amount of revenue to which it expects
to be entitled for the transfer of promised goods or services to customers. ASU
2014-09 will replace most existing revenue recognition guidance in U.S. GAAP
when it becomes effective. The new standard is effective for the Company on July
1, 2017. Early application is not permitted. The standard permits the use of
either the retrospective or cumulative effect transition method. The Company is
evaluating the effect that ASU 2014-09 will have on its consolidated financial
statements and related disclosures.
In August 2014, the FASB issued ASU
2014-15 Presentation of Financial StatementsGoing Concern (Subtopic 205-40):
Disclosure of Uncertainties about an Entitys Ability to Continue as a Going
Concern (ASU 2014-15), which provides guidance on determining when and how
to disclose going-concern uncertainties in the financial statements. The new
standard requires management to perform interim and annual assessments of an
entitys ability to continue as a going concern within one year after the date
the financial statements are issued. An entity must provide certain disclosures
if conditions or events raise substantial doubt about the entitys ability to
continue as a going concern. ASU 2014-15 applies to all entities and is
effective for annual periods ending after December 15, 2016, and interim periods
thereafter, with early adoption permitted. The Company is currently assessing
the impact of this guidance.
Management does not believe that any
other recently issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the accompanying financial statements.
-10-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
2. |
Nature of Business and
Operations |
The Companys focus is on the
exploration and development, if feasible, of limestone and precious metals from
its claims in the State of Nevada.
The Company is primarily engaged in the
acquisition and exploration of mineral properties. Mineral property acquisition
costs are initially capitalized in accordance with ASC 805-20-55-37, previously
referenced as the FASB Emerging Issues Task Force ("EITF") Issue 04-2. The
Company assesses the carrying costs for impairment under ASC 360 and evaluates
its carrying value under ASC 930 at each fiscal quarter end. When it has been
determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such
property will be capitalized.
To date, mineral property exploration
costs have been expensed as incurred. To date, the Company has not established
any proven or probable reserves on its mineral properties.
The Companys limestone assets are held
by its wholly owned subsidiary, Infrastructure Materials Corp US (IMC US), a
Nevada corporation that was acquired as of November 2008. As of the date of the
financial statements, IMC US controls 2 limestone projects in Nevada, made up of
68 mineral claims covering approximately 1,405 acres on land owned or controlled
by the United States Department of Interior Bureau of Land Management (the
BLM). IMC US has also acquired 50% of the mineral rights on 680 acres and 25%
of the mineral rights on 160 acres.
On December 18, 2008, the Company
incorporated a second wholly owned subsidiary in the State of Delaware under its
former name, Silver Reserve Corp. (SRC). The Company assigned all fourteen
of its silver/base metal projects in Nevada to SRC. SRC has since terminated its
interests in four of the projects. As of the date of the financial statements,
the remaining ten projects contain 273 mineral claims covering approximately
5,599 acres on BLM land and 17 patented claims and 3 leased patented claims
covering approximately 365 acres. SRC also has a milling facility located in
Mina, Nevada on six BLM mill site claims covering 30 acres.
The Company has not yet determined that
any of its claims, mineral rights, mineral exploration permits or quarry leases
can be economically developed and has expensed related costs to project expense.
The Companys assessment of the claims, mineral exploration permits, mineral
rights and quarry leases may change after further exploration.
-11-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
The Company's financial statements have
been prepared in accordance with GAAP and are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to
continue as a going concern.
The Companys activities are subject to
a number of risks and uncertainties. The Company has had a history of net losses
and must continue to seek financing, either through debt or equity, not only to
finance its operating expenses, but to continue its exploration activities and
its assessments of the commercial viability of its claims. There can be no
assurance that such financing will be available on acceptable terms, if at all,
or that the Company will attain profitable levels of operation. In addition,
strategic acquisitions, if any, could have a dilutive effect on investment.
Failure to make accretive acquisitions and successfully integrate them could
adversely affect the Companys future financial results. Because the Company is
small and has few financial and other resources, the Company may not be able to
succeed in the very competitive industry in which it is engaged.
The Company has incurred a cumulative
loss of $24,547,077 from inception to September 30, 2014. The Company has no
source of operating revenue and expects to incur significant expenses before
establishing operating revenue. Due to continuing operating losses and cash
outflows from continuing operations, the Companys continuation as a going
concern is dependent upon its ability to obtain adequate financing and to reach
profitable levels of operation. In the event that the Company is unable to raise
additional capital, as to which there is no assurance, the Company will not be
able to continue doing business. Historically, the Company has funded operations
through the issuance of capital stock, convertible debentures and redeemable
preferred stock. Prior to December 2011, the Company received net proceeds of
$12,718,365 pursuant to the issuance of such securities. In December 2011, the
Company completed a public offering in Canada of shares of its common stock
(Common Shares) for net proceeds of $2,215,399. In August 2013, the Company
completed a private placement of its Common Shares for net proceeds of $465,343.
In April 2013 and July 2013, the Company borrowed $140,000 and $150,000,
respectively, issuing promissory notes that were converted to Common Shares in
October 2013. In July 2014 and August 2014, the Company borrowed $70,000 and
$100,000, respectively, issuing promissory notes that are payable on demand.
Management's plan is to continue raising additional funds through future equity
or debt financing until it achieves profitable operations from production of
minerals or metals on its properties, if feasible.
-12-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
4. |
Fair Value of Financial
Instruments |
The fair values of financial assets
measured at the balance sheet date of September 30, 2014 were as follows:
|
|
|
|
|
|
Quoted prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
in active |
|
|
Significant |
|
|
|
|
|
|
|
|
|
|
markets for |
|
|
observable |
|
|
Unobservable |
|
|
|
|
Carrying |
|
|
identical assets
|
|
|
inputs |
|
|
inputs |
|
|
Balance sheet |
|
Amount |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
classification and nature |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
210,421 |
|
|
210,421 |
|
|
|
|
|
|
|
|
Marketable securities |
|
57,128 |
|
|
57,128 |
|
|
|
|
|
|
|
|
Restricted Cash |
|
61,000 |
|
|
61,000 |
|
|
|
|
|
|
|
The fair values of financial assets
measured at the balance sheet date of June 30, 2014 were as follows:
|
|
|
|
|
|
Quoted prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
in active |
|
|
Significant |
|
|
|
|
|
|
|
|
|
|
markets for |
|
|
observable |
|
|
Unobservable |
|
|
|
|
Carrying |
|
|
identical assets
|
|
|
inputs |
|
|
inputs |
|
|
Balance sheet |
|
Amount |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
classification and nature |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
162,847 |
|
|
162,847 |
|
|
|
|
|
|
|
|
Marketable securities |
|
44,325 |
|
|
44,325 |
|
|
|
|
|
|
|
|
Restricted Cash |
|
61,000 |
|
|
61,000 |
|
|
|
|
|
|
|
Amounts reflected as Restricted Cash
represent either cash held as collateral or certificates of deposits pledged
toward reclamation liabilities assessed by the BLM. Periodically, the BLM may
require the Company to pledge additional cash as collateral or the Company may
be allowed to remove restrictions on this cash by completing its reclamation
obligations, as the case may be.
In July 2010, the Company posted a
reclamation bond (the Reclamation Bond) of $240,805 pursuant to the Plan of
Operations for its Blue Nose limestone project, as required by the BLM to secure
remediation costs if the project is abandoned or closed. In December 2013, the
Company submitted an application to withdraw its Plan of Operations and to seek
a refund from the BLM of a portion of the Reclamation Bond. In January 2014, the
application was approved and the Company received $219,205 from the BLM as a
partial refund of the Reclamation Bond. The Company must complete certain
reclamation work for the $21,600 balance to be released, but may leave the bond
in place for future exploration programs, even if such reclamation work is
completed.
-13-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
7. |
Plant and Equipment, Net |
Plant and equipment are recorded at
cost less accumulated depreciation. Depreciation is provided commencing in the
month following acquisition using the following annual rate and method:
Computer equipment |
30% |
declining balance method
|
Office furniture and fixtures |
20% |
declining balance method |
Plant and Machinery |
15% |
declining balance method
|
Tools |
25% |
declining balance method |
Vehicles |
20% |
declining balance method
|
Consumables |
50% |
declining balance method |
Molds |
30% |
declining balance method
|
Mobile Equipment |
20% |
declining balance method |
Factory Buildings |
5% |
declining balance method
|
|
|
|
September 30, 2014 |
|
|
June 30, 2014 |
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Accumulated |
|
|
|
|
Cost |
|
|
Depreciation |
|
|
Cost |
|
|
Depreciation |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computer equipment |
|
25,729 |
|
|
18,204 |
|
|
25,729 |
|
|
17,589 |
|
|
Office, furniture and fixtures |
|
3,623 |
|
|
2,860 |
|
|
3,623 |
|
|
2,816 |
|
|
Plant and Machinery |
|
1,514,511 |
|
|
1,105,533 |
|
|
1,514,511 |
|
|
1,089,594 |
|
|
Tools |
|
11,498 |
|
|
8,851 |
|
|
11,498 |
|
|
8,677 |
|
|
Vehicles |
|
48,280 |
|
|
38,854 |
|
|
76,928 |
|
|
59,747 |
|
|
Consumables |
|
64,197 |
|
|
63,941 |
|
|
64,197 |
|
|
63,900 |
|
|
Molds |
|
900 |
|
|
852 |
|
|
900 |
|
|
844 |
|
|
Mobile Equipment |
|
73,927 |
|
|
61,572 |
|
|
73,927 |
|
|
60,925 |
|
|
Factory Buildings |
|
74,849 |
|
|
25,384 |
|
|
74,849 |
|
|
24,761 |
|
|
|
|
1,817,514 |
|
|
1,326,051 |
|
|
1,846,162 |
|
|
1,328,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount |
|
|
|
|
491,463 |
|
|
|
|
|
517,309 |
|
|
Depreciation charges |
|
|
|
|
18,707 |
|
|
|
|
|
90,132 |
|
During the three-months ended September
30, 2014, the Company recorded depreciation expense of $18,707. During the
twelve months ended June 30, 2014, the Company recorded depreciation expense of
$90,132.
-14-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
On July 3, 2014, the Company borrowed
$70,000 from Mont Strategies Inc. (Mont Strategies), a company that is owned
and controlled by a member of the Companys Board of Directors. This loan was
made pursuant to a demand promissory note that bears interest at 4 percent (4%)
per annum and may also be prepaid by the Company at any time without penalty. If
the Company fails to make payment within five business days of demand by Mont
Strategies, the promissory note will bear interest at ten percent (10%) per
annum. The Company intends to use the proceeds of the promissory note for
working capital. For the three-month period ended September 30, 2014, the
Company recorded interest expense of $690 for this promissory note.
On August 18, 2014, the Company
borrowed an additional $100,000 from Mont Strategies. This loan was made
pursuant to a demand promissory note that bears interest at 4 percent (4%) per
annum and may also be prepaid by the Company at any time without penalty. If the
Company fails to make payment within five business days of demand by Mont
Strategies, the promissory note will bear interest at ten percent (10%) per
annum. The Company intends to use the proceeds of the promissory note for
working capital. For the three-month period ended September 30, 2014, the
Company recorded interest expense of $482 for this promissory note.
9. |
Deferred Revenue and Marketable
Securities |
On February 25, 2011, SRC entered into
an option and joint venture agreement (the Option Agreement) with
International Millennium Mining Inc. (IMMI), a wholly owned subsidiary of
International Millennium Mining Corp. (IMMC), to sell an 85% interest in SRCs
NL Extension Project (the NL Project) for total consideration of $350,000 cash
and 1,925,000 shares of IMMCs common stock (together, the Consideration). The
NL Project consists of 18 mineral claims located in Esmeralda County, Nevada,
approximately 6 miles southwest of Silver Peak, Nevada on Highway 47. Under the
terms of the Option Agreement, the Consideration is payable over a five-year
period that ends on September 15, 2015, with IMMIs interest in the NL Project
vesting at the end of such period. Also see Note 13, Commitments and
Contingencies.
As of June 30, 2014, the Company had
received Consideration of $346,836, consisting of 1,225,000 shares of IMMC with
an initial fair market value of $166,836 that is recorded as Marketable
Securities in the Companys Consolidated Balance Sheets and $180,000 in cash. In
September 2014, the Company received additional Consideration of $82,803
consisting of 350,000 shares of IMMCs common stock with a fair market value of
$12,803 and $70,000 in cash. Because IMMIs interest in the NL Project vests at
the end of the five-year period, this Consideration is accounted for in the
Consolidated Balance Sheets as Deferred Revenue, a non-current liability.
Unrealized gains and losses arising from changes in the market value of the
Companys shares of IMMCs common stock are accounted for in the Stockholders
Equity section of the Consolidated Balance Sheets as Accumulated Other
Comprehensive Loss. There were no changes in fair market value during the
three-month period ended September 30, 2014.
-15-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
9. |
Deferred Revenue and Marketable Securities
Contd |
IMMC common shares are traded in Canada
on the TSX Venture Exchange (the Exchange). Pursuant to the Exchanges
policies, IMMCs common shares encountered a trading halt on December 24, 2013,
when IMMC announced a proposed change in business/reverse take-over. The trading
halt continues to date. The Company recorded an other-than-temporary impairment
of $122,511 in the value of these marketable securities that was reclassified to
net loss during the year ended June 30, 2014. This loss included $17,468
representing the decline in the market value of securities for the year ended
June 30, 2014. No impairment loss or change in market value of securities has
been recorded for the three-month period ended September 30, 2014.
On March 5, 2013, SRC executed a Sale
and Purchase Agreement (the Sale Agreement) with IMMI to sell to IMMI (1) all
of SRCs interest in the NL Project and (2) all of its interest in the Option
Agreement. Pursuant to the terms of the Sale Agreement, upon closing IMMI would
pay SRC a purchase price of $425,000 and the Option Agreement would terminate.
Also, upon closing of the Sale Agreement, SRC would transfer 100% of its
interest in the NL Project to IMMI. The terms of the Sale Agreement provided
that all Consideration paid by IMMI under the Option Agreement prior to closing
would be retained by the Company. The closing date was scheduled to occur on or
about April 30, 2013, and was extended several times. In connection with the
closing date extensions, IMMI paid a ten percent (10%) non-refundable deposit of
$42,500 towards the purchase price, which was also accounted for as Deferred
Revenue until such time as the Sale Agreement closed or was cancelled. The terms
of the Sale Agreement provided that all Consideration paid by IMMI under the
Option Agreement prior to closing would be retained by the Company. On October
4, 2013, SRC, elected to terminate the Sale Agreement after IMMI failed to close
the transaction as contemplated. Accordingly, during the year ended June 30,
2014, the non-refundable deposit of $42,500 was forfeited by IMMI and recognized
as Other Income in the Companys Consolidated Statement of Operations. The
Option Agreement, as discussed above, remains in effect.
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
Deferred |
|
|
Marketable |
|
|
Comprehensive |
|
|
|
|
Revenue |
|
|
Securities |
|
|
Loss |
|
|
Balance as of July 1, 2013
|
$ |
307,460
|
|
$ |
49,917 |
|
$ |
(105,043 |
)
|
|
Consideration received during the year ended
June 30, 2014 |
|
81,876 |
|
|
11,876 |
|
|
|
|
|
Other income recognized on
termination of Sale Agreement |
|
(42,500 |
)
|
|
|
|
|
|
|
|
Change in market value of securities for the
year ended June 30, 2014 |
|
|
|
|
(17,468 |
) |
|
(17,468 |
) |
|
Other-than-temporary
impairment of marketable securities reclassified to net loss |
|
|
|
|
|
|
|
122,511 |
|
|
Balance as of June 30, 2014 |
$ |
346,836 |
|
$ |
44,325 |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration received during the period
ending September 30, 2014 |
|
82,803 |
|
|
12,803 |
|
|
|
|
|
Balance as of September 30,
2014 |
$ |
429,639 |
|
$ |
57,128 |
|
$ |
- |
|
-16-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
10. |
Asset Retirement
Obligation |
The Company is required to recognize a
liability for its legal obligation to perform reclamation and disturbance
monitoring activities once any of its projects are abandoned or closed. Although
these activities are conditional upon future events, the Company is required to
make a reasonable estimate of the fair value of the liability. Based on the
existing level of ground disturbance and monitoring requirements, the discounted
asset retirement obligations ("ARO's") were estimated to be $22,455 as of June
30, 2011, assuming payments made over a three-year period. Determination of the
undiscounted ARO and the timing of these obligations were based on internal
estimates using information currently available and existing regulations.
At the end of each reporting period,
AROs are equal to the present value of all estimated future costs required to
remediate any ground disturbances that exist as of the end of the period, using
discount rates applicable at the time of initial recognition of each component
of the liability. A liability for an asset retirement obligation may be incurred
over more than one reporting period if the events that create the obligation
occur over more than one reporting period. Any incremental liability incurred in
a subsequent reporting period shall be considered to be an additional layer of
the original liability. Each layer shall be initially measured at fair value.
Included in this liability are the costs of reclamation and monitoring and
maintenance costs. As of June 30, 2014, the Company revised its estimate of the
present value of its asset retirement obligation to $19,636. A discount rate of
10% was determined to be applicable. The Company recorded accretion expense of
$491 for the three-month period ended September 30, 2014. The Companys entire
ARO relates to the Companys Blue Nose project.
Balance as of June 30, 2014 |
$ |
19,636 |
|
Increase in Asset Retirement Obligation |
|
- |
|
Accretion for the period ending September
30, 2014 |
|
491 |
|
|
|
|
|
Balance as of September 30, 2014 |
$ |
20,127 |
|
11. |
Issuance of Common Shares and
Warrants |
Common Shares:
Three-month period ended September
30, 2014
There were no securities issued during
this period.
-17-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
11. |
Issuance of Common Shares and Warrants
Contd |
Year ended June 30, 2014
On August 28, 2013, the Company
completed a private placement (the Private Placement) of 33,333,333 Common
Shares at a price of $0.014 (CDN$0.015) per share for gross proceeds of $474,203
(CDN$500,000). The Private Placement was exempt from registration under the
Securities Act of 1933, as amended, pursuant to an exemption afforded by
Regulation S promulgated thereunder.
On October 8, 2013, the Company issued
6,035,800 Common Shares as full settlement of a debt conversion transaction (the
Conversion) with Mont Strategies, a company that is owned and controlled by a
member of the Companys Board of Directors. Under the terms of the Conversion,
the Company converted $293,000 of indebtedness owed by the Company to Mont
Strategies (a related party) into 6,035,800 Common Shares at a conversion price
of $0.0485 (CDN$0.05) per share. The amount allocated to Stockholders Equity
based on a fair value of US$0.035 per share was $211,253. The balance of $81,747
represents a gain on the debt settlement with a related party that was also
allocated to the equity section of the Balance Sheet because the member of the
Companys Board of Directors is also a significant shareholder in the Company.
The Conversion was exempt from registration under the Securities Act of 1933, as
amended, pursuant to an exemption afforded by Regulation S promulgated
thereunder.
Warrants:
On December 16, 2011, the Company
completed the sale of 26,000,000 Common Shares to the public in Canada at a
price of $0.096 (CDN$0.10) per share to raise gross proceeds of $2,507,180
(CDN$2,600,000). PI Financial Corp. (PI Financial) acted as lead agent and
received, among other compensation, non-transferable Agent's Warrants valued at
$14,644 entitling PI Financial to acquire 209,850 Common Shares at a price of
$0.096 (CDN$0.10) per share exercisable for 24 months. The fair value of the
Agents Warrants was determined using the Black-Scholes option pricing model
with the following assumptions: risk-free rate of 1.63%, expected dividend yield
of 0%, annualized volatility of 142.45% and expected life of two years. These
Agents Warrants were not granted pursuant to the Companys stock option plan
then in effect. On December 15, 2013, the Agents Warrants expired with none
having been exercised.
-18-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
12. |
Stock Based Compensation |
In July of 2011, the shareholders of
the Company approved an amendment and restatement of the Companys 2006 Stock
Option Plan. This amended and restated stock option plan is referred to herein
as the 2011 Amended Plan. The purpose of the 2011 Amended Plan was to enhance
the Company's stockholder value and financial performance by attracting,
retaining and motivating the Company's officers, directors, key employees and
consultants and to encourage stock ownership by such individuals by providing
them with a means to acquire a proprietary interest in the Company's success
through stock ownership.
The material terms of the 2011 Amended
Plan include (a) officers, directors, employees and consultants who provide
services to the Company may be granted options to acquire Common Shares of the
Company at the fair market value of the stock on the date of grant, (b) options
may have a term of up to 10 years, (c) the Company may issue options in a number
up to a maximum of 10% of the outstanding Common Shares, and (d) outstanding
stock options previously granted pursuant to the 2006 Stock Option Plan will
remain in effect and be exercisable in accordance with, and be deemed to be
issued under, the terms of the 2011 Amended Plan. It was expected that options
issued pursuant to the 2011 Amended Plan would not be qualified options under
the provisions of section 422 of the Internal Revenue Code of 1986, as amended
from time to time.
At the annual meeting of shareholders
on July 16, 2013, the shareholders of the Company approved the Companys 2013
Amended Stock Option Plan (the Current Stock Option Plan), which amends and
restates in its entirety the 2011 Amended Plan. The Current Stock Option Plan
effected minor technical clarifications to the 2011 Amended Plan and did not
materially change its terms.
Three-month period ended September
30, 2014
No options were granted pursuant to the
Current Stock Option Plan during the three-month period ended September 30,
2014.
For the three-month period ended
September 30, 2014, the Company recognized no stock-based compensation costs in
the financial statements.
The following table summarizes the
options outstanding at September 30, 2014:
Outstanding at June 30, 2014
(audited) |
|
8,700,000 |
|
Granted |
|
- |
|
Expired |
|
- |
|
Exercised |
|
- |
|
Forfeited |
|
- |
|
Cancelled |
|
- |
|
Outstanding at September 30, 2014 |
|
8,700,000 |
|
Exercisable at September 30, 2014 |
|
8,700,000 |
|
-19-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
13. |
Commitments and
Contingencies |
On August 1, 2006, the Company acquired
the Pansy Lee Project from Anglo Gold Mining Inc. in exchange for 1,850,000
Common Shares pursuant to an asset purchase agreement dated August 1, 2006 (the
Pansy Lee Purchase Agreement). Pursuant to the Pansy Lee Purchase Agreement, a
2% net smelter royalty pertains to 8 of the 12 claims in this project. In the
event that any one or more of the 8 claims becomes a producing claim, any
revenue generated is subject to a 2% net smelter return royalty where net
smelter returns are based upon gross revenue less deductions as provided in the
Pansy Lee Purchase Agreement.
On May 30, 2008, the Company entered
into an agreement (the Harting Lease Agreement) with Ovidia Harting
(Harting) to lease two patented claims covering approximately 35 acres in
Esmeralda County. The Harting Lease Agreement has a renewable term of 10 years
and permits the Company to explore the area covered by the patented claims. The
Harting Lease Agreement provides for annual payments of $1,000 per claim to
Harting. The Harting Lease Agreement also provides that Company pay the real
estate taxes imposed by Esmeralda County. These two patented claims are subject
to a 3% net smelter return royalty to be calculated and paid to Harting within
45 days after the end of each calendar quarter. The Company may terminate the
Harting Lease Agreement at any time by giving 60 days notice in writing to
Harting.
On November 30, 2009, IMC US entered
into a mineral rights agreement with Perdriau Investment Corp. (Perdriau) to
purchase 50% of the mineral rights, including all easements, rights of way and
appurtenant rights of any type that run with the mineral rights in certain
sections of Elko County, Nevada (the Perdriau Property). The purchase price
was $10 per net acre. IMC US purchased 340 net acres for a total purchase price
of $3,400. In the event that the Perdriau Property becomes a producing property,
Perdriau will be entitled to receive a royalty of $0.25 per ton for material
mined and removed from the Perdriau Property.
On January 15, 2010, IMC US entered
into a mineral rights agreement with Eugene M. Hammond (the Hammond Mineral
Rights Agreement) pursuant to which the Company purchased a 25% interest in any
and all minerals extracted from 160 acres (the Hammond Mineral Rights
Property) covered by the Hammond Mineral Rights Agreement. The purchase price
was $400. In the event that the Hammond Mineral Rights Property becomes a
producing property, Eugene M. Hammond is entitled to receive a royalty of $0.125
per ton on material mined and removed from the Hammond Mineral Rights Property.
The Hammond Mineral Rights Agreement does not cover petroleum.
Effective July 1, 2010, the Company
entered into an employment agreement with an individual to provide business and
administrative services. The employment agreement has a term of one year and is
automatically renewable thereafter. Either party may terminate the employment
agreement upon 60 days notice. According to the terms of the employment
agreement as amended effective March 1, 2012, the Company will pay the
individual no less than $8,333 per month and reimburse related business
expenses.
-20-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
13. |
Commitments and Contingencies
Contd |
On February 25, 2011, SRC entered into
an option and joint venture agreement (the IMMI Option Agreement) with
International Millennium Mining Inc. (IMMI), a wholly owned subsidiary of
International Millennium Mining Corp. (IMMC), to sell an 85% interest in SRCs
NL Extension Project (the NL Project) for total consideration of $350,000 cash
and 1,925,000 shares of IMMCs common stock (the Consideration). The NL
Project consists of 18 mineral claims located in Esmeralda County, Nevada,
approximately 6 miles southwest of Silver Peak, Nevada on Highway 47. Under the
terms of the IMMI Option Agreement, the Consideration is payable over a
five-year period that ends on September 15, 2015, with IMMIs interest in the NL
Project vesting at the end of such period. In the event of early termination of
the IMMI Option Agreement, IMMI is not entitled to the return of Consideration
previously paid to SRC. If the NL Project is determined to be economically
feasible, based upon criteria contained in the IMMI Option Agreement, SRC will
be required to fund its portion of an operating budget proposed by IMMI in order
to retain its 15% interest in the NL Project and to acquire a 15% interest in
IMMIs Nivloc Mine Project (the NL Project and the Nivloc Mine Project,
collectively, the IMMI Project). In the event that SRC decides not to fund its
portion of the budget, its 15% interest would be forfeited, but SRC would be
entitled to a 2% net smelter return royalty if and when the IMMI Project enters
the production phase. Upon funding of the operating budget and SRCs acquisition
of a 15% interest in the IMMI Project, SRC and IMMI would enter into a joint
venture agreement.
Effective February 29, 2012, SRC
entered into a mineral lease agreement (the Gumaskas Agreement) with Joseph W.
Gumaskas (Gumaskas) to lease a patented claim covering approximately 10 acres
(the Claim) in Mineral County, Nevada. Unless terminated earlier by SRC, the
term of the Gumaskas Agreement is ten years and will automatically renew on the
same terms and conditions for additional five-year periods. The Gumaskas
Agreement requires SRC to pay Gumaskas advance minimum royalty payments of $500
annually. In the event that the Claim becomes a producing claim, SRC will pay
Gumaskas a 3% royalty based upon gross revenue less deductions as permitted by
the Gumaskas Agreement. SRC may terminate the Gumaskas Agreement at any time by
giving 60 days advance written notice to Gumaskas.
On May 16, 2014, SRC completed the
purchase of three patented claims covering approximately 59 acres (the
Property) situated in Mineral County, Nevada, from Ralph L. Buhrman and
Jacqueline Buhrman (together, the Buhrmans). The Property was acquired for a
total of $90,000 pursuant to an exploration license with option to purchase (the
Buhrman Agreement) dated as of May 15, 2012. Mineral production from the
Property is subject to a 2% royalty payable to the Buhrmans based upon gross
revenues less deductions as defined by the Buhrman Agreement. SRC has the
exclusive right and option to purchase such royalty at any time for the sum of
$1,000,000 less any payments previously made by SRC to the Buhrmans pursuant to
such royalty.
-21-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
13. |
Commitments and Contingencies
Contd |
Effective as of June 23, 2008, the
Company appointed Mason Douglas as the President of the Company. Mr. Douglas is
also a director of the Company. In connection with the appointment, the Company
entered into a consulting services agreement with a Canadian corporation that is
controlled by Mr. Douglas (the Consulting Agreement). The Consulting Agreement
has a term of one year and is then automatically renewable. Either party may
terminate the Consulting Agreement upon 90 days notice to the other party.
According to the terms of the Consulting Agreement as amended effective March 1,
2012, the Company will pay a fee of $10,417 per month and reimburse related
business expenses. The Consulting Agreement permits Mr. Douglas to fulfill his
duties for the Company from his office in Canada. Mr. Douglas does not receive a
salary from the Company. Effective October 1, 2012, the Company appointed Mr.
Douglas to also serve as its Chief Executive Officer. In connection with this
appointment, the Consulting Agreement was amended to increase the consulting fee
to $155,000 annually, payable in 12 equal monthly installments. By mutual
agreement between the Company and Mr. Douglas, effective as of March 1, 2013,
the consulting fee was changed to an annual rate of $93,000, payable in 12 equal
monthly installments.
On April 23, 2013, the Company received
a summons from the United States District Court, District of Nevada, naming the
Company as a co-defendant in a lawsuit filed by the U.S. Attorney on behalf of
the BLM seeking reimbursement for the cost of putting out a fire that occurred
on May 8, 2008, and other non-quantified damages. The fire damaged approximately
451 acres of land administered by the BLM near Dayton, Nevada. The lawsuit
alleged that the cost of putting out the fire was approximately $510,000. The
Company denied any responsibility for the fire and notified its liability
insurance carrier, which retained counsel to defend the Company. In July 2014,
the Company, along with the other parties to the lawsuit, agreed to settle all
relevant claims for $220,000, which is well below the limits of coverage
provided by the Companys liability insurance policy. The Company has accrued
$5,000 for these claims, which is equal to the Companys deductible on the
relevant liability insurance policy.
The Company has entered into operating
leases for its office space and certain office furniture and equipment. Rent
payments associated with those leases for the three-month periods ended
September 30, 2014, and September 30, 2013, were $6,218 and $6,274,
respectively. As of September 30, 2014, the Companys estimated future minimum
cash payments under non-cancelable operating leases for the year ending June 30,
2015, are $5,433.
Maintaining Claims in Good
Standing
The Company is required to pay to the
BLM on or before September 1st of each year, a fee in the amount of
$155 per mineral claim held by the Company. The total amount paid in August
2014, was $50,995 for 329 claims held by the Company at that date. The BLM fee
for the 18 NL Project claims held by the Company was paid by IMMI pursuant to
the IMMI Option Agreement described above.
The Company is also required to pay on
or before November 1st of each year, annual fees to counties in
Nevada in which the claims are held. In October 2014, the Company paid $3,478 to
six counties in Nevada for annual claims-related fees. The annual county fee for
the 18 NL Project claims held by the Company was paid by IMMI pursuant to the
IMMI Option Agreement described above.
-22-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
13. |
Commitments and Contingencies
Contd |
The Company also holds certain patented
claims and leases other patented claims in Nevada. A patented claim is fee
simple title to the property. Patented claims are subject to taxes assessed by
the local community based on assessment rates set annually.
14. |
Related Party Transactions |
There are no amounts owed to or from
related parties as of September 30, 2014, or June 30, 2014, except as discussed
in Note 8, Notes Payable.
The following transactions were
undertaken in the normal course of operations and are measured at the exchange
amount, which is the amount of consideration established and agreed to by the
Company and the related parties.
Three-months ended September 30,
2014
A corporation owned and operated by
Mason Douglas, the Companys President and Chief Executive Officer and also a
member of the Companys Board of Directors, received $23,250 for his services
for the three-months ended September 30, 2014.
The Company recorded interest expense
of $1,172 for the three-months ended September 30, 2014, pursuant to promissory
notes issued to a corporation that is owned and controlled by a member of the
Companys Board of Directors, Todd Montgomery. Also see Note 8 Notes Payable.
Key management personnel are those
persons that have the authority and responsibility for planning, directing and
controlling the activities of the Company, directly or indirectly. Key
management personnel of the Company include executive officers, other senior
members of the management team, and the Board of Directors. The compensation
paid or payable to key management personnel, or to companies in common with key
management personnel, for services provided as detailed above for the
three-months ended September 30, 2014 was:
Compensation (fees) |
$ |
23,250 |
|
|
|
|
|
Interest expense |
$ |
1,172 |
|
Three-months ended September 30,
2013
A corporation owned and operated by
Mason Douglas, the Companys President and Chief Executive Officer and also a
member of the Companys Board of Directors, received $23,250 for his services
for the three-months ended September 30, 2013.
A law firm, a partner of which is also
a member of the Companys Board of Directors, Brent Walter, received $8,903 for
legal services rendered and expenses incurred on behalf of the Company for the
three-months ended September 30, 2013.
-23-
INFRASTRUCTURE MATERIALS CORP. |
Condensed Notes to Interim Consolidated Financial
Statements |
September 30, 2014 |
(Amounts expressed in US Dollars) |
(Unaudited-Prepared by Management) |
14. |
Related Party Transactions
Contd |
The Companys Corporate Secretary, Anne
Macko, received $14,000 for administrative services provided to the Company for
the three-months ended September 30, 2013.
The Company recorded interest expense
of $2,628 for the three-months ended September 30, 2013, pursuant to promissory
notes issued to a corporation that is owned and controlled by a member of the
Companys Board of Directors, Todd Montgomery.
The compensation paid or payable to key
management personnel, or to companies in common with key management personnel,
for services provided as detailed above for the three-months ended September 30,
2013 was:
Compensation (fees) |
$ |
46,153 |
|
|
|
|
|
Interest expense |
$ |
2,628 |
|
On October 22, 2014, 25,000 options
issued in accordance with the Companys 2006 Stock Option Plan expired.
-24-
Item 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION |
Our name is Infrastructure Materials Corp. and we sometimes
refer to ourselves in this report as Infrastructure Materials or
Infrastructure, or the Company or as we, our, or us.
Forward-Looking Statements
Except for historical information, this report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements involve risks and uncertainties, including, among
other things, statements regarding our business strategy, exploration strategy,
future revenues and anticipated costs and expenses. Such forward-looking
statements include, among others, those statements including the words
expects, anticipates, intends, believes and similar language. Our actual
results may differ significantly from those projected in the forward-looking
statements. Factors that might cause or contribute to such differences include,
but are not limited to, those discussed herein as well as in the RISK FACTORS
section herein. You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this report. We
undertake no obligation to publicly release any revisions to the forward-looking
statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements.
FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2014
PLAN OF OPERATIONS
We will require additional capital to maintain our operations
and implement the further exploration and possible development of our projects.
We expect to raise this capital through the sale of additional securities,
monetizing non-essential corporate assets, short-term debt financing or some
combination of the foregoing. We have limited cash to fund operations and have
taken steps to reduce our operating costs. Management is actively pursuing all
of its options to address the Companys operating capital requirements.
Discussion of Operations and Financial Condition
Three-Month Period ended September 30, 2014
The Company has not yet realized revenues from its planned
operations. Given the present unfavorable climate for raising capital for
mineral exploration, the Company currently plans to spend very little on
exploration efforts. The Company has incurred a cumulative loss of $24,547,077
from inception to September 30, 2014. We expect our operating losses to continue
for so long as we are engaged in mineral exploration and perhaps thereafter. Our
ability to advance projects from the mineral exploration phase and conduct
mining operations or even continue doing business is dependent, in large part,
upon our raising additional equity financing or liquidating assets. The
Companys major financial endeavor over the years has been its effort to raise
capital to pursue its exploration activities. These efforts, as well as other
efforts to generate cash to cover our ongoing operating expenses as a reporting
company in the United States and Canada, continue to be our priority.
-25-
Corporate Structure
The following diagram illustrates the Companys present
structure and ownership of its mineral properties and Milling Facility:
The Companys exploration efforts on its portfolio of limestone
and precious metal projects have been reduced primarily due to diminishing
working capital. Exploration of the Companys precious metals properties held by
our wholly owned subsidiary, Silver Reserve Corp. (SRC), has most recently
been focused on the Clay Peters Project. Management believes that the Clay
Peters Project, as well as the Silver Queen and Klondyke Projects, currently
provide the best opportunity for development of resources that could go to
production. In the event that adequate working capital was to be generated, the
Company expects that it would focus its exploration activities on these
projects. The Company is also considering joint venture opportunities with third
parties to further explore and develop, if warranted, those properties.
The Company also continues to look for joint venture
opportunities to develop mineral deposits of other commodities in high demand or
which we anticipate will be in high demand in the future. We continue to believe
that the United States federal government will embark on major infrastructure
expenditures in the next 10 years. Though we have been disappointed that these
investments have not come sooner, when significant infrastructure investment
does occur, we believe it will create a demand for cement that will exceed the
current sources of supply in certain areas of the United States. Because cement
is made from limestone, we believe our Blue Nose and Morgan Hill limestone
projects provide significant potential for filling an anticipated increased
demand for cement in the States of Nevada, California, Utah, Idaho and
Arizona.
The Company is also looking for opportunities to monetize its
Red Rock milling facility that is located on six mill site claims covering 30
acres of land in Mina, Nevada, as well as non-essential mineral projects. With
the Red Rock mill at its current permitting stage and given its components and
processing capacities, we believe that we have the potential to either sell the
mill or enter into leasing arrangements. The Company intends to use any funds
realized from these efforts towards meeting its operating overhead and further
exploration of its mineral claims, if possible.
-26-
Stock Based Compensation
In July of 2011, the shareholders of the Company approved an
amendment and restatement of the Companys 2006 Stock Option Plan. This amended
and restated stock option plan is referred to herein as the 2011 Amended Plan.
The purpose of the 2011 Amended Plan was to enhance the Company's stockholder
value and financial performance by attracting, retaining and motivating the
Company's officers, directors, key employees and consultants and to encourage
stock ownership by such individuals by providing them with a means to acquire a
proprietary interest in the Company's success through stock ownership.
The material terms of the 2011 Amended Plan include (a)
officers, directors, employees and consultants who provide services to the
Company may be granted options to acquire Common Shares of the Company at the
fair market value of the stock on the date of grant, (b) options may have a term
of up to 10 years, (c) the Company may issue options in a number up to a maximum
of 10% of the outstanding Common Shares, and (d) outstanding stock options
previously granted pursuant to the 2006 Stock Option Plan will remain in effect
and be exercisable in accordance with, and be deemed to be issued under, the
terms of the 2011 Amended Plan. It was expected that options issued pursuant to
the 2011 Amended Plan would not be qualified options under the provisions of
section 422 of the Internal Revenue Code of 1986, as amended from time to time.
At the annual meeting of shareholders on July 16, 2013, the
shareholders of the Company approved the Companys 2013 Amended Stock Option
Plan (the Current Stock Option Plan), which amends and restates in its
entirety the 2011 Amended Plan. The Current Stock Option Plan effected minor
technical clarifications to the 2011 Amended Plan and did not materially change
its terms.
SELECTED FINANCIAL INFORMATION
|
|
Three months |
|
|
Three months |
|
|
|
ended |
|
|
ended |
|
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
|
|
|
|
|
|
Revenues |
|
Nil |
|
|
Nil |
|
Net (Loss) |
|
($180,418 |
) |
|
($395,957 |
) |
(Loss) per share-basic and diluted |
|
(0.001 |
) |
|
(0.004 |
)
|
|
|
As of |
|
|
As of |
|
|
|
September 30, 2014 |
|
|
June 30, 2014 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
899,755 |
|
$ |
822,190 |
|
Total Liabilities |
$ |
689,371 |
|
$ |
431,388 |
|
Cash dividends declared per
share |
|
Nil |
|
|
Nil |
|
Total assets as of September 30, 2014, include cash and cash
equivalents of $210,421, marketable securities of $57,128, prepaid expenses and
other receivables of $58,143, restricted cash of $61,000, reclamation deposits
of $21,600, and plant and equipment of $491,463, net of depreciation. As of June
30, 2014, total assets include cash and cash equivalents of $162,847, marketable
securities of $44,325, prepaid expenses and other receivables of $15,109,
restricted cash of $61,000, reclamation deposits of $21,600, and plant and
equipment of $517,309, net of depreciation.
-27-
The revenues and net loss (unaudited) of the Company for the
quarter ended September 30, 2014 as well as the seven quarterly periods
completed immediately prior thereto are set out below:
|
|
For the |
|
|
For the |
|
|
For the |
|
|
For the |
|
|
For the |
|
|
For the |
|
|
For the |
|
|
For the |
|
|
|
three months |
|
|
three months |
|
|
three months |
|
|
three months |
|
|
three months |
|
|
three months |
|
|
nine months |
|
|
three months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
September |
|
|
June |
|
|
March |
|
|
December |
|
|
September |
|
|
June |
|
|
March |
|
|
December |
|
|
|
2014 |
|
|
2014 |
|
|
2014 |
|
|
2013 |
|
|
2013 |
|
|
2013 |
|
|
2013 |
|
|
2012 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
Nil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(180,418 |
)
|
|
(314,420 |
)
|
|
(162,934 |
)
|
|
(157,933 |
)
|
|
(395,957 |
)
|
|
(333,935 |
)
|
|
(435,887 |
)
|
|
(1,076,238 |
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
Weighted Average Number of Shares Outstanding -Basic
and Fully Diluted |
|
(0.001 |
)
|
|
(0.002 |
)
|
|
(0.001 |
)
|
|
(0.001 |
)
|
|
(0.004 |
)
|
|
(0.003 |
)
|
|
(0.004 |
)
|
|
(0.011 |
)
|
Revenues
No revenue was generated by the Companys operations during the
three-month periods ended September 30, 2014 and September 30, 2013. The Company
has not yet realized any revenue from its operations.
Net Loss
The Companys expenses are reflected in the Statements of
Operation under the category of Operating Expenses. To meet the criteria of
United States generally accepted accounting principles (GAAP), all mineral
property acquisition and exploration costs are expensed as incurred. Mineral
property acquisition costs are initially capitalized in accordance with ASC
805-20-55-37, previously referenced as the FASB Emerging Issues Task Force
("EITF") Issue 04-2. The Company assesses the carrying costs for impairment
under ASC 930 at each fiscal quarter end. The Company has determined that all
property payments are impaired and accordingly the Company has written off the
acquisition costs. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property are capitalized. For the purpose of
preparing financial information, all costs associated with a property that has
the potential to add to the Company's proven and probable reserves are expensed
until a final feasibility study demonstrating the existence of proven and
probable reserve is completed. No costs have been capitalized in the periods
covered by these financial statements. Once capitalized, such costs will be
amortized using the units-of-production method over the estimated life of the
probable reserve.
The significant components of expense that have contributed to
the total operating expense are discussed as follows:
-28-
(a) General and Administration Expense
Included in operating expenses for the three-month period ended
September 30, 2014, is general and administration expense of $99,602 as compared
with $127,871 for the three-month period ended September 30, 2013. General and
administration expense consists of professional, consulting, office and general
and other miscellaneous costs. General and administration expense represents
approximately 56% of the total operating expense for the three-month period
ended September 30, 2014. General and administration expense decreased by
$28,269 in the current three-month period, as compared to the similar
three-month period for the prior year. The decrease in general and
administration expense during the three period ended September 30, 2014, is
mainly due to decreases in expenses for stock based compensation and employee
compensation.
(b) Project Expense
During the three-month period ended September 30, 2014, project
expense was $60,937 as compared to $242,965 for the three-month period ended
September 30, 2013. Project expense represents approximately 34% of the total
operating expenses for the three-month period ended September 30, 2014 and
approximately 62% of the total operating expenses for the three-month period
ended September 30, 2013. Project expense decreased significantly during the
three-month period ended September 30, 2014, primarily due to the Company
conducting a drill program during the three-month period ended September 30,
2013, and the Company retaining fewer BLM claims for the current fiscal year.
Liquidity and Capital Resources
The following table summarizes the Companys cash flow and cash
in hand for the three-month periods:
|
|
September 30,
2014 |
|
|
September 30,
2013 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
210,421
|
|
$ |
397,026
|
|
Working capital |
$ |
86,087 |
|
$ |
93,202 |
|
Cash (used) in operating
activities |
$ |
(203,326 |
)
|
$ |
(395,164 |
)
|
Cash provided by investing activities |
$ |
80,900 |
|
$ |
70,000 |
|
Cash provided by financing
activities |
$ |
170,000
|
|
$ |
615,343
|
|
As of September 30, 2014, the Company had working capital of
$86,087 as compared to $93,202 as of September 30, 2013.
Off-Balance Sheet Arrangements
The Company had no off-balance sheet arrangements as of
September 30, 2014 and September 30, 2013.
-29-
Contractual Obligations and Commercial Commitments
On August 1, 2006, the Company acquired the Pansy Lee Project
from Anglo Gold Mining Inc. in exchange for 1,850,000 Common Shares pursuant to
an asset purchase agreement dated August 1, 2006 (the Pansy Lee Purchase
Agreement). Pursuant to the Pansy Lee Purchase Agreement, a 2% net smelter
royalty pertains to 8 of the 12 claims in this project. In the event that any
one or more of the 8 claims becomes a producing claim, any revenue generated is
subject to a 2% net smelter return royalty where net smelter returns are based
upon gross revenue less deductions as provided in the Pansy Lee Purchase
Agreement.
On May 30, 2008, the Company entered into an agreement (the
Harting Lease Agreement) with Ovidia Harting (Harting) to lease two patented
claims covering approximately 35 acres in Esmeralda County. The Harting Lease
Agreement has a renewable term of 10 years and permits the Company to explore
the area covered by the patented claims. The Harting Lease Agreement provides
for annual payments of $1,000 per claim to Harting. The Harting Lease Agreement
also provides that Company pay the real estate taxes imposed by Esmeralda
County. These two patented claims are subject to a 3% net smelter return royalty
to be calculated and paid to Harting within 45 days after the end of each
calendar quarter. The Company may terminate the Harting Lease Agreement at any
time by giving 60 days notice in writing to Harting.
On November 30, 2009, IMC US entered into a mineral rights
agreement with Perdriau Investment Corp. (Perdriau) to purchase 50% of the
mineral rights, including all easements, rights of way and appurtenant rights of
any type that run with the mineral rights in certain sections of Elko County,
Nevada (the Perdriau Property). The purchase price was $10 per net acre. IMC
US purchased 340 net acres for a total purchase price of $3,400. In the event
that the Perdriau Property becomes a producing property, Perdriau will be
entitled to receive a royalty of $0.25 per ton for material mined and removed
from the Perdriau Property.
On January 15, 2010, IMC US entered into a mineral rights
agreement with Eugene M. Hammond (the Hammond Mineral Rights Agreement)
pursuant to which the Company purchased a 25% interest in any and all minerals
extracted from 160 acres (the Hammond Mineral Rights Property) covered by the
Hammond Mineral Rights Agreement. The purchase price was $400. In the event that
the Hammond Mineral Rights Property becomes a producing property, Eugene M.
Hammond is entitled to receive a royalty of $0.125 per ton on material mined and
removed from the Hammond Mineral Rights Property. The Hammond Mineral Rights
Agreement does not cover petroleum.
Effective July 1, 2010, the Company entered into an employment
agreement with an individual to provide business and administrative services.
The employment agreement has a term of one year and is automatically renewable
thereafter. Either party may terminate the employment agreement upon 60 days
notice. According to the terms of the employment agreement as amended effective
March 1, 2012, the Company will pay the individual no less than $8,333 per month
and reimburse related business expenses.
-30-
On February 25, 2011, SRC entered into an option and joint
venture agreement (the IMMI Option Agreement) with International Millennium
Mining Inc. (IMMI), a wholly owned subsidiary of International Millennium
Mining Corp. (IMMC), to sell an 85% interest in SRCs NL Extension Project
(the NL Project) for total consideration of $350,000 cash and 1,925,000 shares
of IMMCs common stock (the Consideration). The NL Project consists of 18
mineral claims located in Esmeralda County, Nevada, approximately 6 miles
southwest of Silver Peak, Nevada on Highway 47. Under the terms of the IMMI
Option Agreement, the Consideration is payable over a five-year period that ends
on September 15, 2015, with IMMIs interest in the NL Project vesting at the end
of such period. In the event of early termination of the IMMI Option Agreement,
IMMI is not entitled to the return of Consideration previously paid to SRC. If
the NL Project is determined to be economically feasible, based upon criteria
contained in the IMMI Option Agreement, SRC will be required to fund its portion
of an operating budget proposed by IMMI in order to retain its 15% interest in
the NL Project and to acquire a 15% interest in IMMIs Nivloc Mine Project (the
NL Project and the Nivloc Mine Project, collectively, the IMMI Project). In
the event that SRC decides not to fund its portion of the budget, its 15%
interest would be forfeited, but SRC would be entitled to a 2% net smelter
return royalty if and when the IMMI Project enters the production phase. Upon
funding of the operating budget and SRCs acquisition of a 15% interest in the
IMMI Project, SRC and IMMI would enter into a joint venture agreement.
Effective February 29, 2012, SRC entered into a mineral lease
agreement (the Gumaskas Agreement) with Joseph W. Gumaskas (Gumaskas) to
lease a patented claim covering approximately 10 acres (the Claim) in Mineral
County, Nevada. Unless terminated earlier by SRC, the term of the Gumaskas
Agreement is ten years and will automatically renew on the same terms and
conditions for additional five-year periods. The Gumaskas Agreement requires SRC
to pay Gumaskas advance minimum royalty payments of $500 annually. In the event
that the Claim becomes a producing claim, SRC will pay Gumaskas a 3% royalty
based upon gross revenue less deductions as permitted by the Gumaskas Agreement.
SRC may terminate the Gumaskas Agreement at any time by giving 60 days advance
written notice to Gumaskas.
On May 16, 2014, SRC completed the purchase of three patented
claims covering approximately 59 acres (the Property) situated in Mineral
County, Nevada, from Ralph L. Buhrman and Jacqueline Buhrman (together, the
Buhrmans). The Property was acquired for a total of $90,000 pursuant to an
exploration license with option to purchase (the Buhrman Agreement) dated as
of May 15, 2012. Mineral production from the Property is subject to a 2% royalty
payable to the Buhrmans based upon gross revenues less deductions as defined by
the Buhrman Agreement. SRC has the exclusive right and option to purchase such
royalty at any time for the sum of $1,000,000 less any payments previously made
by SRC to the Buhrmans pursuant to such royalty.
-31-
Effective as of June 23, 2008, the Company appointed Mason
Douglas as the President of the Company. Mr. Douglas is also a director of the
Company. In connection with the appointment, the Company entered into a
consulting services agreement with a Canadian corporation that is controlled by
Mr. Douglas (the Consulting Agreement). The Consulting Agreement has a term of
one year and is then automatically renewable. Either party may terminate the
Consulting Agreement upon 90 days notice to the other party. According to the
terms of the Consulting Agreement as amended effective March 1, 2012, the
Company will pay a fee of $10,417 per month and reimburse related business
expenses. The Consulting Agreement permits Mr. Douglas to fulfill his duties for
the Company from his office in Canada. Mr. Douglas does not receive a salary
from the Company. Effective October 1, 2012, the Company appointed Mr. Douglas
to also serve as its Chief Executive Officer. In connection with this
appointment, the Consulting Agreement was amended to increase the consulting fee
to $155,000 annually, payable in 12 equal monthly installments. By mutual
agreement between the Company and Mr. Douglas, effective as of March 1, 2013,
the consulting fee was changed to an annual rate of $93,000, payable in 12 equal
monthly installments.
On April 23, 2013, the Company received a summons from the
United States District Court, District of Nevada, naming the Company as a
co-defendant in a lawsuit filed by the U.S. Attorney on behalf of the BLM
seeking reimbursement for the cost of putting out a fire that occurred on May 8,
2008, and other non-quantified damages. The fire damaged approximately 451 acres
of land administered by the BLM near Dayton, Nevada. The lawsuit alleged that
the cost of putting out the fire was approximately $510,000. The Company denied
any responsibility for the fire and notified its liability insurance carrier,
which retained counsel to defend the Company. In July 2014, the Company, along
with the other parties to the lawsuit, agreed to settle all relevant claims for
$220,000, which is well below the limits of coverage provided by the Companys
liability insurance policy. The Company has accrued $5,000 for these claims,
which is equal to the Companys deductible on the relevant liability insurance
policy.
The Company has entered into operating leases for its office
space and certain office furniture and equipment. Rent payments associated with
those leases for the three-month periods ended September 30, 2014, and September
30, 2013, were $6,218 and $6,274, respectively. As of September 30, 2014, the
Companys estimated future minimum cash payments under non-cancelable operating
leases for the year ending June 30, 2015, are $5,433.
Maintaining Claims in Good Standing
The Company is required to pay to the BLM on or before
September 1st of each year, a fee in the amount of $155 per mineral
claim held by the Company. The total amount paid in August 2014, was $50,995 for
329 claims held by the Company at that date. The BLM fee for the 18 NL Project
claims held by the Company was paid by IMMI pursuant to the IMMI Option
Agreement described above.
The Company is also required to pay on or before November
1st of each year, annual fees to counties in Nevada in which the
claims are held. In October 2014, the Company paid $3,478 to six counties in
Nevada for annual claims-related fees. The annual county fee for the 18 NL
Project claims held by the Company was paid by IMMI pursuant to the IMMI Option
Agreement described above.
The Company also holds certain patented claims and leases other
patented claims in Nevada. A patented claim is fee simple title to the property.
Patented claims are subject to taxes assessed by the local community based on
assessment rates set annually.
-32-
Cash Requirements
At September 30, 2014, the Company had cash and cash
equivalents of $210,421, marketable securities of $57,128 and prepaid expenses
and other receivables of $58,143 for total current assets of $325,692.
Given the present unfavorable climate for raising venture
capital, the Company currently plans to spend very little on exploration
efforts. The Company is investigating all of its options in light of current
market conditions in the capital markets. During the twelve month period ending
September 30, 2015, the Company expects to incur approximately $75,000 of
Project expenses in addition to General and administration expenses. Our ability
to incur Project expenses is subject to our having adequate funds, permitting
programs with the Bureau of Land Management and results of drilling as it
progresses, if drilling should occur. The Company has no firm commitment for
additional financing and may not be able to incur all of the Project and General
and administration expenses planned in the current fiscal year unless additional
capital is raised.
Subsequent Event
On October 22, 2014, 25,000 options issued in accordance with
the Companys 2006 Stock Option Plan expired.
Item
3. |
Quantitative and Qualitative Disclosures
About Market Risk |
Not Applicable.
-33-
Item 4. |
Controls and
Procedures |
CONTROLS AND PROCEDURES
Based on an evaluation, conducted by our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as required by Exchange Act
Rule 13a-15(e), they concluded that our disclosure controls and procedures were
effective as of September 30, 2014, to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act
are:
1. |
recorded, processed, summarized and reported within the
time periods specified by the SEC's rules and forms, and |
|
|
2. |
accumulated and communicated to management, including the
Chief Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required
disclosure. |
Management believes that potential weaknesses in the Companys
internal controls may arise as a result of a lack of segregation of duties and
the existence of related party transactions. Management has added compensating
controls to address the lack of segregation of duties and plans to add further
controls in the future. In connection with related party transactions,
management and the Board have required independent valuations prior to engaging
in related party transactions that are not in the ordinary course of business.
Management has no evidence of any breakdown in its internal controls and
continues to explore methods of reducing and minimizing the risk of a material
misstatement in the Companys financial statements.
Changes in Internal Controls
During the quarter ended September 30, 2014, there have been no
changes to the Companys internal controls over financial reporting that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.
-34-
PART II OTHER INFORMATION
Item 1. |
Legal Proceedings |
On April 23, 2013, the Company received a summons from the
United State District Court, District of Nevada, naming the Company as a
co-defendant in a lawsuit filed by the U.S. Attorney on behalf of the Bureau of
Land Management (the BLM) seeking reimbursement for the cost of putting out a
fire that occurred on May 8, 2008, and other non-quantified damages. The fire
damaged approximately 451 acres of land administered by the BLM near Dayton,
Nevada. The lawsuit alleged that the cost of putting out the fire was
approximately $510,000. The Company denied any responsibility for the fire and
notified its liability insurance carrier, which retained counsel to defend the
Company. In July 2014, the parties to the lawsuit, agreed to settle all relevant
claims for $220,000, which is well below the limits of coverage provided by the
Companys liability insurance policy The Company has accrued $5,000 for this
claim, which is equal to the Companys deductible on the relevant insurance
policy.
The following are certain risk factors that could affect our
business, financial condition, operating results and cash flows. These risk
factors should be considered in connection with evaluating the forward-looking
statements because they could cause actual results to differ materially from
those expressed in any forward-looking statement. The risk factors highlighted
below are not the only ones we face. If any of these events actually occur, our
business, financial condition, operating results or cash flows could be
negatively affected.
1. |
THE COMPANY HAS NO SOURCE OF OPERATING REVENUE AND
EXPECTS TO INCUR SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING
COMPANY, IF IT IS ABLE TO ESTABLISH AN OPERATING COMPANY AT
ALL. |
Currently, the Company has no source of
revenue, limited working capital and no commitments to obtain additional
financing. The Company will require additional working capital to carry out its
exploration programs and to continue its business. The Company has no operating
history upon which an evaluation of its future success or failure can be made.
The ability to achieve and maintain profitability and positive cash flow is
dependent upon:
|
-
|
further exploration of our properties and the
results of that exploration. |
|
|
|
|
- |
raising the capital necessary to conduct this
exploration and preserve the Companys Properties. |
|
|
|
|
- |
raising capital to develop our properties, establish a
mining operation, and operate this mine in a profitable manner if any of
these activities are warranted by the results of our exploration programs
and a feasibility study. |
Because the Company has no operating
revenue, it expects to incur operating losses in future periods as it continues
to spend funds to operate its business and explore its properties. Failure to
raise the necessary capital to continue operations and exploration could cause
the Company to go out of business.
-35-
2. |
WE WILL NEED TO RAISE ADDITIONAL FINANCING TO COMPLETE
FURTHER EXPLORATION. |
|
|
|
We will require significant additional financing in order
to continue our exploration activities and our assessment of the
commercial viability of our properties. There can be no assurance that we
will be successful in our efforts to raise these required funds, or on
terms satisfactory to us. The continued exploration of current and future
mineral properties and the development of our business will depend upon
our ability to establish the commercial viability of our properties and to
ultimately develop cash flow from operations and reach profitable
operations. We currently are engaged in mineral exploration; we have no
revenue from operations and we are experiencing significant cash outflow
from operating activities. If we are unable to obtain additional
financing, we will not be able to continue our exploration activities and
our assessment of the commercial viability of our precious metal and
limestone properties. |
|
|
3. |
WE HAVE RECEIVED A GOING CONCERN COMMENT FROM OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, WHICH MAY NEGATIVELY IMPACT
OUR BUSINESS. |
|
|
|
Due to the fact that we are a mineral exploration company
and have no established source of revenues, the report from Schwartz
Levitsky Feldman LLP, our independent registered public accounting firm,
regarding our consolidated financial statements for the fiscal year ended
June 30, 2014, includes an explanatory paragraph stating that the
financial statements were prepared assuming we will continue as a going
concern. The existence of the going concern comment in our auditors
report may make it more difficult for us to obtain additional financing.
In the event that we are unable to raise additional capital, as to which
there can be no assurance, we may not be able to continue our
operations. |
|
|
4. |
WE HAVE NO RESERVES AND WE MAY FIND THAT OUR PROPERTIES
ARE NOT COMMERCIALLY VIABLE. |
|
|
|
Our properties do not contain reserves in accordance with
the definitions adopted by the Securities and Exchange Commission, and
there is no assurance that any exploration programs that we undertake will
establish reserves. All of our mineral properties are in the exploration
phase as opposed to the development phase and have no known body of
economic mineralization. The known mineralization at these projects has
not yet been determined, and may never be determined to be economic. We
plan to conduct further exploration activities on our properties, which
future exploration may include the completion of feasibility studies
necessary to evaluate whether a commercially mineable mineral exists on
any of our properties. There is a substantial risk that these exploration
activities will not result in discoveries of commercially recoverable
quantities of minerals. Any determination that our properties contain
commercially recoverable quantities of minerals may not be reached until
such time that final comprehensive feasibility studies have been concluded
that establish that a potential mine is likely to be economic. There is a
substantial risk that any preliminary or final feasibility studies carried
out by us will not result in a positive determination that our mineral
properties can be commercially developed. |
-36-
5. |
WE HAVE A HISTORY OF OPERATING LOSSES AND THERE CAN BE NO
ASSURANCES WE WILL BE PROFITABLE IN THE FUTURE. |
|
|
|
We have a history of operating losses, expect to continue
to incur losses, and may never be profitable. Further, we have been
dependent on sales of our equity securities and debt financing to meet our
cash requirements. We have incurred losses totaling $24,547,077 from
inception to September 30, 2014, and incurred losses of $180,418 during
the three-month period ended September 30, 2014. Further, we do not expect
positive cash flow from operations in the near term. There is no assurance
that actual cash requirements will not exceed our estimates. In
particular, additional capital may be required in the event that: (i) the
costs to acquire additional mineral exploration claims are more than we
currently anticipate; or (ii) exploration and/or future potential mining
costs for additional claims increase beyond our expectations. |
|
|
6. |
THE RISKS ASSOCIATED WITH EXPLORATION COULD CAUSE
PERSONAL INJURY OR DEATH, ENVIRONMENTAL DAMAGE AND POSSIBLE LEGAL
LIABILITY. |
|
|
|
We are not currently engaged in mining operations because
we are conducting exploration of our mineral properties. However, our
exploration operations could expose the Company to liability for personal
injury or death, property damage or environmental damage. Although we
carry property and liability insurance, cost effective insurance contains
exclusions and limitations on coverage and may be unavailable in some
circumstances. |
|
|
7. |
BECAUSE OF THE UNIQUE DIFFICULTIES AND UNCERTAINTIES
INHERENT IN MINERAL EXPLORATION VENTURES AND CURRENT DETERIORATION IN
EQUITY MARKETS, WE FACE A HIGH RISK OF BUSINESS FAILURE. |
|
|
|
Investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of
failure of such enterprises. Our prospects are further complicated by a
pronounced deterioration in equity markets and constriction in equity
capital available to finance and maintain our exploration activities. Our
likelihood of success must be considered in light of the problems,
expenses, difficulties, complications and delays encountered in connection
with the exploration of the mineral properties that we plan to undertake
and the difficult economy and market volatility that we are experiencing.
Moreover, most exploration projects do not result in the discovery of
commercially mineable deposits. |
|
|
8. |
OUR BUSINESS IS AFFECTED BY CHANGES IN COMMODITY
PRICES. |
|
|
|
Our ability to raise capital and explore our properties
and the future profitability of those operations is directly related to
the market price of certain minerals such as silver and limestone as well
as the price and availability of cement. The Company is negatively
affected by the current decline in commodity prices |
|
|
9. |
THE COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING
DELAYS. |
|
|
|
The Company could face delays in obtaining permits to
operate on the property covered by the claims. Such delays could
jeopardize financing, if any is available, which could result in having to
delay or abandon work on some or all of the
properties. |
-37-
10. |
THERE ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT
COULD LIMIT YOUR ABILITY TO SELL YOUR SHARES. |
|
|
|
Our common stock is considered a "penny stock" and the
sale of our stock by you will be subject to the "penny stock rules" of the
Securities and Exchange Commission. The penny stock rules require
broker-dealers to take steps before making any penny stock trades in
customer accounts. As a result, the market for our shares could be
illiquid and there could be delays in the trading of our stock which would
negatively affect your ability to sell your shares and could negatively
affect the trading price of your shares. |
|
|
11. |
CURRENT LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE
IMPACTS. |
|
|
|
The capital and credit markets have been experiencing
volatility and disruption. If the current levels of market disruption and
volatility continue or worsen, there can be no assurance that the Company
will not experience adverse effects, which may be material. These effects
may include, but are not limited to, difficulties in raising additional
capital or debt and a smaller pool of investors and funding sources. There
is thus no assurance the Company will have access to the equity capital
markets to obtain financing when necessary or desirable. |
|
|
12. |
WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE
FUTURE. |
|
|
|
We have never declared or paid a dividend on our common
stock. We intend to retain earnings, if any, for use in the operation and
expansion of our business and, therefore, do not anticipate paying any
dividends in the foreseeable future. |
Item 2. |
Unregistered Sales of Equity Securities and
Use of Proceeds |
None.
Item 3. |
Defaults Upon Senior Securities
|
None.
Item 4. |
Mine Safety Disclosures
|
Not applicable.
Item 5. |
Other Information |
None.
-38-
Item 6. |
Exhibits and Reports on Form 8-K
|
-39-
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
|
INFRASTRUCTURE MATERIALS CORP. |
|
|
|
|
|
|
Dated: |
November 12, 2014 |
By:/s/Randal Ludwar |
|
|
Randal Ludwar,
Secretary |
-40-
Exhibit 31.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a)/15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Mason Douglas, certify that:
1. I have reviewed this Quarterly
Report on Form 10-Q of Infrastructure Materials Corp. (the registrant);
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 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; and
5. The registrant's other
certifying officer 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: November 12, 2014
By /s/Mason Douglas
_
Mason Douglas
Chief Executive Officer
Infrastructure Materials Corp.
Exhibit 31.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER PURSUANT TO RULES 13a-14(a)/15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Rakesh Malhotra, certify that:
1. I have reviewed this Quarterly
Report on Form 10-Q of Infrastructure Materials Corp. (the registrant);
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 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; and
5. The registrant's other
certifying officer 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: November 12, 2014
By /s/Rakesh Malhotra _
Rakesh
Malhotra
Chief Financial Officer
Infrastructure Materials Corp.
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, each of the undersigned officers of Infrastructure
Materials Corp. (the "Company"), does hereby certify, to such officer's
knowledge, that:
The
Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the
Form 10-Q) of the Company fully complies with the requirement of section 13(a)
or 15(d) of the Securities Exchange Act of 1934 and the information contained in
the Form 10-Q fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Dated: November 12, 2014 |
|
|
|
|
By:/s/Mason Douglas_ |
Mason Douglas |
Chief Executive Officer |
Infrastructure Materials Corp. |
|
|
Dated: November 12, 2014 |
|
|
|
|
By:/s/Rakesh Malhotra__ |
Rakesh Malhotra |
Chief Financial Officer |
Infrastructure Materials Corp. |
A signed original of this written statement required by Section
906 has been provided to Infrastructure Material Corp. and will be retained by
Infrastructure Materials Corp. and furnished to the Securities and Exchange
Commission or its staff upon request.
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