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2011 Note
On May 1, 2011, the Company issued a 2.00% Convertible Note due April 30, 2012 with a principal amount of $32,000 (the “2011 Note”) for cash. Interest on the 2011 Note is accrued annually effective from May 1, 2011 forward. The 2011 Note is unsecured and repayable on demand. The 2011 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $22,166. As of September 30, 2016, the note has been discounted by $0.
2012 Note
On January 2, 2012, the Company issued a 2.00% Convertible Note due January 1, 2013 with a principal amount of $48,000 (the “2012 Note”) for cash. Interest on the 2012 Note is accrued annually effective from January 2, 2012 forward. The 2012 Note is unsecured and repayable on demand. The 2012 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $48,000. As of September 30, 2016, the note has been discounted by $0.
2013 Note
On January 3, 2013, the Company issued a 2.00% Convertible Note due January 2, 2014 with a principal amount of $12,000 (the “2013 Note”) for cash. Interest on the 2013 Note is accrued annually effective from January 3, 2013 forward. The 2013 Note is unsecured and repayable on demand. The 2013 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $12,000. As of September 30, 2016, the note has been discounted by $0.
2014 Note
On August 25, 2014, the Company issued two 12.00% Convertible Promissory Note due February 25, 2015 with a principal amount of $50,000 each (the “2014 Note”) for cash. Interest on the 2014 Note is accrued annually effective from August 25, 2014 forward. The 2014 Note is unsecured.
The notes are convertible at a conversion price the lesser of (a) $0.25 per share, or (b) the price per share as reported on the Over-the-Counter Bulletin Board on the conversion date. The Note Holders also received Warrants to purchase an aggregate of 800,000 shares of our common stock at an initial exercise price of $0.25 per share. Each of the Warrants has a term of five (5) years.
The embedded conversion feature of the 2014 Notes and Warrants were recorded as derivative liabilities in accordance with relevant accounting guidance due to the variable conversion price of the 2014 Notes. The fair value on the grant date of the embedded conversion feature of the convertible debt was $145,362 as computed using the Black-Scholes option pricing model.
The Company established a debt discount of $100,000, representing the value of the embedded conversion feature inherent in the convertible debt and warrant, as limited to the face amount of the debt. The debt discount is being amortized over the life of the debt using the straight-line method over the terms of the debt, which approximates the effective-interest method. For the year ended September 30, 2014, the Company recorded amortization of the debt discount of $19,566. The balance of the debt discount was $80,434 at September 30, 2014. For the year ended September 30, 2016, the Company recorded amortization of the debt discount of $0. The balance of the debt discount was $0 at September 30, 2016. The face amount of the outstanding note as of September 30, 2016, is $92,300.
- 29 -
2016 Notes
On January 5, 2016, the Company issued a $47,615 Convertible Promissory Note to the McGee Law Firm for services rendered. The Note was due on October 31, 2016 and carried interest at 12.0% per annum. On or after May 1, 2016, at the option of the holder, the then outstanding amount of the Note was convertible into common stock of the Company at a conversion price equal to the lesser of $0.01 per share or 50% of the three lowest closing prices average for the 10 business days prior to the conversion date.
On August 11, 2016, the Company restructured a portion a Convertible Promissory Note issued on January 5, 2016 in conjunction with an assignment of that Note. The restructured Note was a 9.00% Convertible Promissory Note due August 11, 2017 with a principal amount of $30,000. Interest on the 2016 Note is accrued annually effective from September 1, 2016 forward. This Note was unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001. The face amount of the outstanding note as of September 30, 2016, is $0. As of September 30, 2016, the note has been discounted by $0.
On September 13, 2016, the Company restructured a portion a Convertible Promissory Note issued on January 5, 2016 in conjunction with an assignment of that Note. The restructured Note was a 9.00% Convertible Promissory Note due September 13, 2017 with a principal amount of $15,836.32. Interest on the 2016 Note is accrued annually effective from October 1, 2016 forward. The 2016 Note is unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $10,125. As of September 30, 2016, the note has been discounted by $0.
On August 23, 2016, the Company issued a 9.00% Convertible Promissory Note due August 23, 2017 with a principal amount of $25,000 for cash. Interest on the 2016 Note is accrued annually effective from October 1, 2016 forward. The 2016 Note is unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $25,000. As of September 30, 2016, the note has been discounted by $0.
On September 17, 2016, the Company issued a 9.00% Convertible Promissory Note due September 17, 2017 with a principal amount of $25,000 for cash. Interest on the 2016 Note is accrued annually effective from October 1, 2016 forward. The 2016 Note is unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
As this note carries a conversion rate that is less than market rate, the rules of beneficial conversion apply. The difference between the conversion rate and the market rate is classified as a discount on the note and accreted over the term of the note, which with respect to this note is 12 months. The face amount of the outstanding note as of September 30, 2016, is $25,000. As of September 30, 2016, the note has been discounted by $0.
Results of Operations
For the year ended September 30, 2016 and September 30, 2015
Revenues
The Company had $141,187 in revenue for the year ended September 30, 2016 and $32,000; for the year ended September 30, 2015. The increase in revenue of $109,187 is attributable to the sale of timber under the management agreement with Paradise Gardens.
Operating expenses
The Company had operating expenses of $ 899,982 for the year ended September 30, 2016 consisting of general and administrative expenses, as compared with operating expenses of $1,121,574 for the year ended September 30, 2015 consisting of general and administrative expenses. The decrease of $221,592 was attributable to the Company focusing primarily on its Logging Operations, a decrease in expenditure on the Koranga Gold Leases, and a decrease in the cost of the derivative financing.
Net Loss
The Company had a net operating loss of $1,301,909 for the year ended September 30, 2016 compared with a net operating loss of $1,290,613 for the year ended September 30, 2015. The decrease of $11,296 was primarily attributable to the improved revenues from the logging operations and a decrease in expenditure at Koranga.
Operating Activities
Net cash used in operating activities was $419,812 for the year ended September 30, 2016 compared to net cash used in operating activities of $925,854 for the year ended September 30, 2015. The decrease of $506,042 was a result improved revenue from the logging operations and a decrease in expenditure on the infrastructure at Koranga.
Investing Activities
Net cash used in investing activities was $92,086 for the year ended September 30, 2016 compared to $17,050 for the year ended September 30, 2015. This increase resulted from the acquisition of Plant and Equipment for the logging operations.
Financing Activities
Net cash provided by financing activities was $317,184 for the year ended September 30, 2016 compared to $809,414 for the year ended September 30, 2015. The decrease of $492,230 was mainly due to a decrease in the cost of derivative financing.
Liquidity and Capital Resources
As of September 30, 2016, the Company had total current assets of $25,221 and total current liabilities of $3,099,080 resulting in a working capital deficit of $3,073,859. As of September 30, 2015, the Company had total current assets of $10,763 and total current liabilities of $1,923,195 resulting in a working capital deficit of $1,912,432. The decrease in working capital deficit arose mainly due to increase in loans owing to related parties, who provided advances to the Company for working capital purposes. The Company had cash as of September 30, 2016 of $221. The Company intends to fund its exploration through the revenues from the logging activities and the sale of its equity securities. However, there can be no assurance that the Company will be successful doing so. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. We currently believe that the Company will need approximately $2,000,000 over the next 12 months to implement our desired expansion of mining activities and logging activities.
Plan of Operations
The Company’s current plan of operation is to continue and expand our logging operations and to refocus on mining activities after achieving sufficient cash flow from logging and timber sales.
The Company has spent considerable time and effort understanding and developing processes for our logging, processing and sale of finished products. The Company is now ready to deliver to the market place approximately 150 cubic meters of processed timber for sale to both the wholesale and retail markets. We anticipate that the average sales revenue for processed timber will be approximately $750.00 per cubic meter.
Within the next 6 months, the Company plans to (1) acquire and place additional processing equipment in our new Timber yard at Laloki, and (2) acquire additional logging equipment to be deployed as required in Rigo and Kubuna. We have placed deposits on various processing equipment, but we may need to finance the balance of the processing equipment and the additional logging machinery. Once the additional logging and processing equipment is placed, we believe that our capacity will increase to approximately 500 cubic meters per month. Moreover, the new processing equipment will allow us to customize our products to specific customer requirements and offer additional value added timber products, which should help the Company increase profit margins on its timber sales.
With current operations at Rigo and Kubuna, we are optimistic that we can sell an average quantity of 300 cubic meters of timber per month by March of 2017. To support this target, we plan to develop export markets for our finished timber products to avoid relying too heavily on sales to any one region, diversify our customer base and build a more stable sales market. In addition to Rigo and Kubuna, we are investigating additional areas in PNG for potential timber operations to support our projected volume for the next 3 years.
Once we have sustainable excess profits from our logging activities, we plan to renew our mining exploration efforts at Wau. That project needs considerable additional capital to commence any substantial revenue producing activities. At this time, the Company plans to self-fund the mining exploration at Wau with anticipated revenues from its timber operations rather than utilizing third party financing. We anticipate renewed exploration activities at Wau during our 2017 fiscal year.
Recent Sales of Unregistered Securities
On January 5, 2016, the Company issued a $47,615 Convertible Promissory Note to the McGee Law Firm for services rendered. The Note is due on October 31, 2016 and accrues interest at 12.0% per annum. On or after May 1, 2016, at the option of the holder, the then outstanding amount of the Note may be converted into common stock of the Company at a conversion price equal to the lesser of $0.01 per share or 50% of the three lowest closing prices average for the 10 business days prior to the conversion date.
On August 23, 2016, the Company issued a 9.00% Convertible Promissory Note due August 23, 2017 with a principal amount of $25,000 for cash. Interest on the 2016 Note is accrued annually effective from October 1, 2016 forward. The 2016 Note is unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
On September 17, 2016, the Company issued a 9.00% Convertible Promissory Note due September 17, 2017 with a principal amount of $25,000 for cash. Interest on the 2016 Note is accrued annually effective from October 1, 2016 forward. The 2016 Note is unsecured and repayable on demand. The 2016 Note is senior in right to all existing and future indebtedness which is subordinated by its terms and at the option of the Lender, the principal along with any accrued interest may be converted in whole or part into Common Stock at a price of $0.001.
In September 2014 Angel Jade was owned 50% by the King and 50% by Five Arrows. Alexander King and Warren Sheppard were the sole directors. In October of 2014, Five Arrows transferred its shares in Angel Jade to the Company. On October 8, 2014, Angel Jade issued an additional 1% of its shares to Kibush resulting in Angel Jade being held 49% by King (90,000,000 shares) and 51% by Kibush Capital (93,673,470 shares). On November 6, 2014, King agreed to sell Kibush Capital 18,367,350 shares in Angel Jade for the sum of $100,000 of which King has been paid $25,000, resulting in the shares in Angel Jade being held by King 71,632,650, and by Kibush Capital 112,040,720. The agreement is recorded in a document headed ’Share Purchase Form’ dated November 6, 2014. On 6 November 2014 Angel Jade agreed to issue 45,918,375 shares to Kibush Capital for the price of $250,000 of which Kibush Capital has paid $67,358.19, resulting in the shares in Angel Jade being held by King 71,632,650, and by Kibush Capital 157,959,195. The transaction is recorded in the Minutes of a Meeting of Directors of Angel Jade signed by King dated November 6, 2014. On or about November 12, 2015 the shareholding in Angel Jade was adjusted to 71,632,650 shares held by King (30%), and 157,959,195 shares held by Kibush Capital (70%), total issued number of shares in Angel Jade 229,591,845).
On or about May 5, 2016 and without his knowledge or consent, Warren Sheppard was removed as a director of Angel Jade. On or about May 5, 2016 and without the knowledge or consent of Warren Sheppard or Kibush Capital, the issued and outstanding shares in Angel Jade was reduced to 200,001,000. On or about May 5, 2016 and without the knowledge or consent of Kibush Capital or Warren Sheppard, the shareholder records of Angel Jade were altered to show ownership of Angel Jade as follows:
New Century 90,000,000 shares;
4K Nominees 90,000,000 shares;
Five Arrows 500 shares;
Fourth Defendant 20,000,000 shares, and
King holding 500 shares
The Company claims that King’s alteration of the directors and ownership of Angel Jade was oppressive to, unfairly prejudicial to, or unfairly discriminatory against Kibush Capital contrary to section 232 of the Corporations Act 2010. The Company is seeking a declaration that the Kibush Capital is entitled to 70% of the issued shares of the First Defendant; or in the alternative, a declaration that Kibush Capital is entitled to 51% of the issued shares of Angel Jade; damages equal to the $67,358.19 paid to Angel Jade and damages of the $ paid to King. However, there remains a possibility that the litigation may be settled prior to adjudication by the Court.
We are not presently a party to any other litigation.
ITEM 3. LEGAL PROCEEDINGS.
We are currently in litigation with Alexander King (“King”) and other defendants regarding the Company’s ownership of Angel Jade. The action was commenced by the Company on September 12, 2016, in the Supreme Court of Victoria (Australia) as Case No. S ECI 2016 01205, In the matter of Angel Jade Pty Ltd (ACN 146 720 578). The Principal parties are Kibush Capital, Angel Jade, New Century, 4K Nominees and Alexander King.
I take it these are the people cutting trees etc...
That's a good amount of man power
Employees
As of January 15, 2017, the Company has 49 full time employees
Thats my hope also
agree
Need to see action now
On Jan 7th
I asked about AS update
On Feb 6th after receiving no reply, I asked for an update (a month later)
This time I got a quick reply.
Interesting reply.
Looks to me that he has realized that his lender is very toxic and is trying to do something about it.
So we wait and see...
--------------------------
On Feb 6, 2017, at 12:08 AM, Kibush <admin@kibushcapital.com> wrote:
AS Part of our strategy re poison lenders, this represents leverage.
Warren
From: Xxx[mailto:xxx@gmail.com]
Sent: Monday, 6 February 2017 3:51 PM
To: admin@kibushcapital.com
Subject: Re: New AS
Any updates?
On Jan 7, 2017, at 9:32 PM, Xxx<xxx@gmail.com> wrote:
Hi Warren,
When will the new AS actually take effect ?
I see NVSOS site still showing 500 million.
http://nvsos.gov/SOSEntitySearch/CorpDetails.aspx?lx8nvq=ehW3MQKVi6jySiT8%252bgJ%252brA%253d%253d&nt7=0
Regards,
Xxx
For now they cannot be converted
For two reasons
Company is delinquent in there filings
AS has not increased and OS is maxed out
Both of the above needs to happen for any new shares to hit the market
Also want to see how company handles 25k conversion due next week at a discount rate of .00035 based on the low of .0007
Thats 71 million shares and new lows imo
I am waiting for the 10k to explain the 400 million shares of dilution in 3 months.
If it cleared the debt, good
If it fed his posh lifestyle, bad
Based on this I will decide what to do next.
Second time i send this email with zero response...
I would have expected a reply like
"we are working on correcting this"
Warren's silence is unbecoming of a CEO imo...
On Feb 8, 2017, at 9:51 PM, Xxx <@gmail.com> wrote:
Warren,
Companies Business license has expired ?
http://nvsos.gov/SOSEntitySearch/CorpDetails.aspx?lx8nvq=ehW3MQKVi6jySiT8%252bgJ%252brA%253d%253d&nt7=0
Regards,
Xxx
Last tweet Dec 15th
At Rigo first Export Order being processed, we expect at least one container (a container holds 45 cubic metres) to leave pre Christmas.
— Kibush (@kibushcapital) December 15, 2016
Agree
All .0008's today (sells)
Warren needs to step up at the plate
Now !
A tweet, anything...
Correct
Correct
But no dilution possible if AS is not increased !
Thanks
Appreciated
Hope so !
Sill no response from Warren to any of my emails since Jan 18th
Very unlike Warren
Yep
Warren needs to fix that on his return from PNG
Have you received an update lately ?
You have any idea what he is doing there ?
Yes I noticed that ... strange behaviour.
No filings
No email communication
New and old Auditor linked ?
No tweets since Dec
Warren needs to step to the plate before further loss of shareholders.
Retail is starting to bail as per poster who admitted selling his 10 million at a loss obviously.
Until they file
No new shares can hit the market and OS is maxed
So yesterday's trading was all retail
No reply to my many emails
Last reply I got from Warren was the 18th.
Very uncharacteristic of him not to reply for no long.
Also no tweets since Dec 15th
On Jan 18, 2017, at 3:41 PM, Kibush <admin@kibushcapital.com> wrote:
yes
-----Original Message-----
From: Xxx[mailto:xxx@gmail.com]
Sent: Thursday, 19 January 2017 4:19 AM
To: admin@kibushcapital.com
Subject: Please confirm
Warren,
Can you confirm that company may be considering a future buyback of shares ?
See public post below with an email correspondence.
"From: me
Sent: Tuesday, 17 January 2017 2:41 PM
To: admin@kibushcapital.com
Subject: Buying back?
100M shares x $.01 = $1M
Maths checked
Is a buying back shares part of the plan?
From: "Kibush"
Sent: Tuesday, 17 January 2017 2:48 PM
To: K********@*****.com
Subject: Re: Buying back?
Yep. Be patient.
Warren"
Report TOS
Never talked to Warren.
Some here have, so I asked.
Waiting on Warren's reply to many of my emails including the last one below ...
"On Feb 1, 2017, at 7:30 AM,xxx <xxx@gmail.com> wrote:
Warren,
What's the relationship between old and new Auditor ?
http://linkedin.com/in/debra-lindaman-scrudato-1583a84b
http://www.cpadirectory.com/certified-public-accountants/new-jersey/califon-nj/908989/debra-l-lindaman-cpa
Regards,
xxx
I guess not...
Have you spoke to him since ?
7x8 ?
Need an update here ...
Let's go Warren...
10k should shed clarity in what debt is left.
Till then no dilution possible
IR says update coming....
Thanks
Almost 1am there now
It explains Warren's silence to some degree.
----------------------------------------
From: jm@cleardirectionmanagement.com [mailto:jm@cleardirectionmanagement.com] On Behalf Of Jason Murrell
Sent: January-31-17 8:03 PM
To: XXX
Subject: Re: Kibush Capital - ticker DLCR
Hello XXX,
They/he are up in PNG at the moment, collecting data to report back to the shareholders.
Kind regards,
Jason
On 1 February 2017 at 10:24, XXX wrote:
Hello Mr. Murrell,
I am a current shareholder of DLCR and understand the company has changed auditors;
Normally we’ve had contact with the ceo on a fairly regular basis but over the last couple Weeks we have not heard from him. It’s unusual behavior as he has been quite transparent With us. So I’m asking kindly if you’ve been in touch with Mr. Sheppard recently and if you Could share anything with me that would let me/us shareholders know things are ok.
Anything would be greatly appreciated.
Kindest regards,
XXX
--
Cheers,
Jason Murrell
M: 0411 069 696
W: www.cleardirectionmanagement.com
E: jason@cleardirectionmanagement.com
M: PO Box 1299, Blackburn North VIC 3130
There appears to be some link to the old Auditor
Asked Warren for clarity
The other link did not include the old Auditor name
So not sure
More digging needed
Yes, we were not the only ones affected...
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=215980236