I was thinking primarily of the stock used to purchase property, but as of the latest 10Q (pp 10-14) here are the committed shares:
1.) 36,000,000 shares issued for purchase of Champion and Silver Wing mines are 4 year restricted shares (presumably until 3/6/2016).
2.) 260,000 shares for purchase of King Solomon Mine, 250k of which are restricted for two years until 9/18/2014
3.) 50,000 shares for purchase of uranium claims, 25k of which are restricted until 6/13/2013
4.) Brooklyn Mine: "On November 1, 2012 the Company issued 6,397,300 shares of restricted Class A Common Stock, valued at $660,834 on the date of issue to satisfy all terms of the lease." (The restrictions are not disclosed).
5.) Delaware Partnership:
"At September 1, 2012, the Company owed the Delaware Partnership Investor $60,536 (net of unamortized discounts of $136,465), under multiple funding arrangements. During the three months ended November 30, 2012, the Company issued one convertible note under a funding arrangement with the Delaware Partnership Investor, totaling $52,000, which bears interest at 6.25% per annum and matures on October 3, 2013. The note is convertible at any time, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of 50% of the average of the two lowest volume-weighted average closing prices of the Company’s Class A common stock for the ten trading days immediately prior to the date a conversion notice is received by the Company. The Company recorded a discount in the amount of $52,000 related to the conversion feature on the note issued during the three months ended November 30, 2012 (Note 8). During the three months ended November 30, 2012, $85,000 of the convertible notes were converted into common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted). During the three months ended November 30, 2012, the Company recorded $46,930 of debt discount amortization and the carrying value of the notes was $58,678 (net of unamortized discounts of $105,322) as of November 30, 2012."
6.)New York Investor:
"At September 1, 2012, the Company owed the New York Private Investors $69,913 (net of unamortized discount of $12,087), under multiple funding arrangements. During the three months ended November 30, 2012, the Company issued one convertible note for $53,000 under a funding arrangement with the group of New York Private Investors. The note bears interest at 8% per annum. The note matures on July 29, 2013. The note is convertible at any time after 180 days from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of 35% of the average of the three lowest volume-weighted average closing prices of the Company’s Class A common stock for the ten trading days immediately prior to the date a conversion notice is received by the Company. The Company recorded a debt discount of $53,000 relating to the conversion feature of the note. During the three months ended November 30, 2012, $71,000 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted). For the three months ended November 30, 2012, the Company recorded debt discount amortization of $18,614 and the carrying value of the notes as of November 30, 2012 was $18,054 (net of unamortized discounts of $45,945)."
7.) Accounts Payable:
"During the year ended August 31, 2011, the Company entered into an agreement with a vendor whereby the balance owed to the vendor for past services of $28,661 was exchanged for a convertible promissory note bearing interest at 6.5% per annum. The Company is required to make monthly payments under the terms of the note; however, the note holder has the right at its election to convert all or part of the outstanding principal and interest into the Company’s Class A common stock at a conversion rate of 70% of the average of the two lowest volume-weighted average closing prices of the Company’s Class A common stock for the ten trading days immediately prior to the date a conversion notice is received by the Company. The Company recorded a debt discount of $27,550 relating to the conversion feature of the note. In August 2011, the Company and the vendor agreed to increase the amount of the convertible promissory note for additional past services owed totaling $2,081 and agreed to defer the initial monthly payment on the note until January 2012, while all other terms of the note were unchanged. The Company recorded a debt discount of $2,081 related to the conversion feature of the increased portion of the note. For the three months ending November 30, 2012, the Company recorded debt discount amortization of $389 and the carrying value of the note as of November 30, 2012 was $7,904 (net of unamortized discount of $119)."
If I'm reading this correctly, CGFI still owes the following in convertible stock:
- $58,678 to the Delaware investors (convertible any time)
- $18,054 to the New York investor
- $7,904 to a payables vendor
For a total of $84,636 ...although I find this part of the discussion confusing (it's hard to follow the math - maybe someone can clarify).
At the current pps (around $.02)we're talking about around $4,000,000 shares. Even if my math is off and we quadruple this number we're not looking at really significant dilution here.
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